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Q 444: We want to import cosmetic products from overseas. We understand that for doing cosmetic products business in India, we require a trading license (Form 43). However, in our case, we will keep the imported goods in a bonded warehouse. We will re-export the same goods to third country directly from port/bonded warehouse. Do we still require Form 43 for the import?
A: 1. Trading of cosmetic products in India is subject to certain licensing requirements.
2. Importing cosmetic goods into India and selling in India will also require a license under the Drugs and Cosmetics Act.
3. If you import for the sole purpose of re-export, then the requirement of licensing as for domestic trading is not essential.
4. You have to ensure that no part of the goods will be sold in India (domestic).
5. Certain provisions allow for exemptions, such as storing the goods in a bonded warehouse for export purposes.
6. We understand that you will store the goods in a designated area called Custom Bonded Warehouse.
7. In this bonded warehouse, the imported goods can be stored without payment of Customs duties, until they are re-exported.
8. The goods stored in bonded warehouses will be as per Chapter IX of the Customs Act, 1962.
9. A security bond needs to be executed with Customs before goods can be stored in a bonded warehouse.
10. As long as the goods remain in the bonded warehouse and are not cleared, they are exempted from the payment of Customs duties.
11. If the goods are re-exported directly from the bonded warehouse to a third country, there is no need to pay import duties.
12. Form 43 (Trading License for Cosmetics) is typically required by businesses involved in the import and sale of goods within India. This applies to traders who are looking to import products for domestic sale, distribution, or marketing. If you are only importing cosmetics for storage in a bonded warehouse and plan to re-export them, you may not need Form 43 because you are not engaging in domestic trade.
13. Since your business model involves re-exporting the goods, the goods are technically not entering the Indian market for consumption or sale. Therefore, you may not require Form 43.
Q 445: We are a new exporter. We have a problem of mismatch of addresses in our IEC and GST, which we found out recently. We have our first shipment ready to go. What should we do so that our proposed shipment does not get stuck due to an error in IEC/GST.? How to we resolve this problem?
A: 1. It is extremely important that all data of your company should tally totally in all your registrations.
2. Accuracy is 100% essential.
3. Please check the addresses mentioned in IEC and GST of the registration.
4. Ascertain the error.
5. Make the necessary correction/amendment/change in the document where wrong.
6. The process of correction in IEC is by way of modification in the existing IEC.
7. Visit the website, go for modification. Amend the wrong address.
8. Provide the proof of the address.
9. In case the error is in GST, follow the procedure for correction in GST on the portal.
10. Take fresh printout of both the registrations.
11. Make sure that the data and details in both the registrations are the same.
Q 446: How can I know about import duty on goods to be imported from China?
A: 1. Import into India is subject to import duty as per the prevalent Customs tariff.
2. In India, for the purpose of calculation of import duty, CIF value is taken as the base.
3. In case your import is on EXW, FOB or CFR basis, then necessary addition of other elements like expenses, freight, insurance etc. are to be added.
4. The Customs exchange rate is applied to convert foreign currency amount into INR.
5. As per HSN Code of import item, Basic Customs Duty is calculated.
6. BCD differs from product to product.
7. Social Welfare Surcharge (SWS) is 10% of BCD.
8. SWS will be added.
9. Thereafter, make the total of CIF value in INR + INR amount of BCD + INR amount of SWS.
10. On summation of the above, applicable IGST will be calculated.
11. The total of BCD + SWS + IGST will be regarded as effective amount of duties.
12. Most of the duties are ad-valorem (according to the value).
13. Anti-Dumping Duty is applicable to specific products for which the notification is issued.
14. ADD is based on specific product, country of origin and the supplier.
15. Many products from China are subject to ADD.
16. Applicability of Safeguard Duty is also to be examined.
17. Importer should check exemption notification and take the benefit.