Procedure Of Importing Goods From Foreign Country.

 Describe the procedure of importing goods from foreign country.

Answer: Import Procedure: The procedure of import trade is as follows:

1. Registration: It is imperative as a first step for the importer that he should registered himself as commercial importer or industrial raw material user or the consumer with the chief controller of imports and exports. The intended importer is supposed to submit the following documents with chief controller:

• Receipt of rent of the place where he runs business.

• The name of the banker and his account number.

• Certificate of nationality or his passport.

• Income tax assessment order.

• Income tax certificate.

• Membership certificate from Chamber of Commerce.

• Profit and loss account of atleast one financial year.

2. Obtain the Import License: The next stage is to obtain the license of the goods which importer wants to import. The license is issued by the chief controller of imports and exports. Import license is the permit given by the government to import certain goods.

3. Correspondence with Foreign Exporter: After having the import license, the importer initiates correspondence with the foreign exporter regarding the price, brand, quality, time and mode of payment, delivery, shipping and packing of the goods to be imported.

4. Proforma Invoice / Quotation / Order: Now proforma invoice is prepared in which the name of importer, his address, details of goods to be imported, their prices, standard and the value in either US Dollars or British Pounds.

5. Appointment of Indenters: At this stage, the importer appoints indenter who is acting within the country as the agent of the foreign exporter. It should be noted that it is also necessary for the indenter to get himself registered with the chief controller of imports and exports.

6. Insurance Cover: It is the imperative for the importer to get the goods insured against theft, fire, decrease in number of goods and ship accident from local insurance company. The importer will get Insurance Cover as consequence getting his goods insured.

7. Letter of Credit (L/C): At this step, the importer has to arrange for the opening of letter of credit through his local bankers. The letter of credit is then forward to the exporter through the banker.

8. Preparations of Exporter: The exporter, on the other hand, makes preparations to send the goods according the order of the importer.

9. Preparation of Bill of Exchange: The exporter prepares a bill of exchange in the name of importer and gets it accepted from the importer’s banker after which, receiving the advice of letter of credit, he hands over the shipping documents (includes invoice, certificate of origin, certificate of measurement and weight, bill of lading) to the shipping company. After completing this formality, he receives the amount in the letter of credit.

10. Payment of the Bill: In this stage, the importer will pay the bill. If the importer fails to pay the bill he may ask his banker to pay the bill by granting him loans against the goods imported. In that case, the bank will ask the importer to give the letter of hypothecation on the strength of which the bank will hold the goods.

11. Appointment of a Clearing Agent: After receiving all the relevant papers, he hands them over to his clearing agent. The clearing agent makes arrangement to get the goods cleared and received which according to his applications might have reached the port. The clearing agent is paid certain commission for his services.

12. Payment of Custom Duty and Sale Tax: When the imported goods reach the port, the custom inspectors confirm whether goods are according to the invoice. Afterwards, they calculate custom duty, sales tax, and other taxes on the goods imported. After the payment of this amount, the goods get cleared and are handed over to the clearing agent of the importer.