Every year, goods worth millions of dollars are imported by a country. These goods need to go through a set procedure established by the customs office to ensure the authorities charge the correct taxes and check the consignments against illegal imports. The process ideally includes examination, appraisal, assessment, and evaluation of the import commodities.
To enable the authorities to accurately and correctly inspect imported goods, each consignment comes with a set of documents that detail the consignment contents, the place of origin, import license, insurance certificate, commercial invoice, and so on. Bill of entry is one of the import documents amid the list.
What is a Bill of Entry?
As the name suggests, a Bill of Entry in import is a legal declaration document filled by an importer or a customs house agent under the Bill of Entry Regulations, 1971. It’s an important document required to initiate the import customs clearance process in a country. An importer has to specify all the necessary details in the Bill of Entry, including the type, quantity, and quality of goods that they’ve imported from a foreign country.
Once the customs authorities of both importing and exporting countries approve the goods, they’re then passed on to the importer.
A Bill of Entry is comparatively simpler to fill with a limited number of form fields. Ideally, the document includes the following components:
- Name and business address of the importer
- Name, business address, and the country of the exporter
- Name of the arrival port and its code
- Description and value of the goods/consignment
- The license number of the importer
- Value of the import duty and payable rate
- Import-export code and CHA code
After filing the Bill of Entry, a commissioned customs magistrate will inspect the goods. Post the inspection, the importer is informed about the necessary customs duty, GST, and IGST compensations, if applications, to clear the goods for final dispatch to the importer’s destination. An importer can then assert a claim on input tax credit (ITC) for IGST and other payments. This, however, does not include standard customs duty.
Steps to get a Bill of Entry
As per the officials, a Bill of Entry can be acquired from the customs office or online through the official government site. For instance, an importer in India can fill a Bill of Entry by logging on to ICEGATE or request a clearance agent to do the needful in lieu of a nominal fee.
Format of the Bill of Entry
Every government has its own set of rules describing a Bill of Entry. However, here’s a typical format of a Bill of Entry.
- Code and license number of the port where goods arrive
- Code of the customs house agent (CHA), import-export code (IEC), and name and business address of the importer.
- Name of the vessel, shipment port, country of origin and its code, country of the consignment (if different from the country of origin), and its code
- Date of issue of the bill of lading
- Details of the goods and their value:
- Packaging and quantity:
- Description of the goods, serial number, and unit code of the goods
- Number of packages in the consignment and their weight/volume
- Description of the goods
- Customs tariff heading that includes the exemption notification and year
- Customs duty:
- Nature of the duty code
- Assessable goods value
- Additional charges such as landing and handling charges (if any)
- Basic rate and amount of customs duty levied
- Additional duty:
- Central excise tariff (CET) owing to the notification of exemption and year
- Special additional duty (SAD) for customs
- Value, rate, and total additional duty
- GST code
- IGST rate and amount
- Compensation cess amount
- Exemption notification to claim IGST exemption and GST compensation cess
- Total payable amount of duty (includes assessable value along with customs duty and any other additional charges) and the total number of packages
- Packaging and quantity:
- Declarations and signature of the customs house agent and the importer
Importance & Usages
Every document mandated for imposters and exporters to fill has a legal significance behind it. And, the Bill of Entry is no exception.
A Bill of entry:
- Enables imposters to furnish all the necessary details of the consignment to the customs authority
- Serves as a document of authentication informing the authorities that no illegal items have been imported into the country
- Helps customs authorities to cross-verify all the necessary details from the documents submitted by an exporter at the country of export
- Allows the customs office to charge the correct taxes and duties and avoid malpractices
- Adds to the economic welfare of a country
Based on the nature and purpose of the goods imported in a country, the customs office classifies the Bill of Entry into three categories. These are as follows.
|Types of Bill of Entry||Color||Customs selection|
|Bill of Entry for house consumption||White||Section 46 of the Customs Act, 1962|
|Bill of Entry for warehousing||Buff||Section 46 and 60 of the Customs Act 1962|
|Bill of Entry for ex-bond goods||Green||Section 68 of the Customs Act, 1962|
Bill of Entry for house consumption: It’s meant for importers bringing in goods for self-consumption or business purposes.
Bill of Entry for warehousing: Otherwise known as the Bond Bill of Entry, this document is meant for importers who do not want to pay import duty right away when importing the goods. They can store the goods in the warehouse until they clear the dues.
Bill of Entry for ex-Bond goods: This bill comes into action when an importer wants to get their consignment released from the warehouse and revoke the Bill of Entry for warehousing.
To conclude, this is just an overview of what you need to know about the Bill of Entry. Since it’s one of the most important documents for an import in a country, you must get in-depth knowledge about this bill and its corresponding documents besides understanding the meaning of the Bill of Entry, to ensure a smooth goods importation process.
Frequently Asked Questions
Who will prepare the bill of entry?
The Bill of Entry is prepared by an importer declaring the value, quantity, and necessary details of the goods imported into the country.
What is the Bill of Entry in import?
Bill of Entry in import is an essential document filled by an importer on or before the arrival of imported goods in a country declaring necessary consignment details. The bill enables the customs office to verify the consignment details and release them to an importer’s site.
How do I make a bill for entry payment?
Every country has its own defined method of payment for the Bill of Entry. In the United States particularly, you can make Bill of Entry payment through any of the following ways:
- U.S. currency only
- Issue a personal check with the exact amount, drawn in the name of a U.S. bank, made payable to the U.S. Customs and Border Protection.
- Issue a government check, money order, or a traveler’s check if the amount is not more than $50.
What is the advance bill of entry?
Under the amended provisions of Sec. 46 (3) of the Customs Act, 1962, an importer can submit a Bill of Entry even before the delivery of import Manifest in case the vessel or aircraft carrying the goods has been shipped for importation and is expected to arrive at the receiving port within 30 days from the date of presentation of the bill. Importers choose to submit the advance Bill of Entry to avoid paying a late fee, which may happen due to unforeseen events.
How is the Bill of Entry value calculated?
Usually, the value of the Bill of Entry is calculated through the following formula:
- Step 1: Transaction Value that contains free on board (FOB) and a few adjustments)
- Step 2: Add cost of transport (including demurrage charges) associated with the delivery of imported goods to the importation destination
- Step 3: Add cost of insurance cover to the place of importation (if you’re unable to ascertain the cost of insurance, it will be 1.125% of FOB
- Step 4: Total of Step 1 + Step 2 +Step 3)