Saturday, 20 September 2014

Importing Goods for Personal Use, Please Check for Customs Duty



Here is an interesting piece of information I discovered last week in conversation with a friend who routinely does online shopping. Inherently all of us are looking for a good deal and we don't really care where the goods come from. If you are shopping from a foreign site, usually for fragrances and cosmetics, you are most likely to get a good deal. You pay by your card and the goods are shipped either by post or courier.  So far so good.

If your shipment tracker informs you that your shipment has arrived in India and is handed over for customs clearance, you may be in for a bit of trouble. Apparently there is a rule that you cannot import anything into the country by post or air for personal use worth more than Rs. 2000/- (including freight and insurance) unless it is a gift or a sample (both of which you have not paid for) in which case the limit is Rs. 10,000/-. If you do so your goods will be liable to confiscation or you will be liable to pay duty and penalty which can be Rs. 5000/-. Furthermore if you do not claim it within 15 days, the goods will be disposed by auction. Basically it means that you need to have necessary permits to import goods over a certain value or to do it through someone who has them.

Not many would be aware of this rule. None of your shipments may have even been intercepted. But if they do come under checking, you will receive a letter from the customs authorities to present yourself for appraisal and examination of your shipment. You will be asked to bring along a whole lot of documents of which you may have only the copy of the invoice and shipment advice. Once at the customs office the shipment will be opened in your presence, examined and it will be determined as to whether duty is to be levied as well as penalty. If you are living in Mumbai or any of the cities where the appraisal and examination is conducted at the inbound airport, you are lucky. If you are living at a distance which will consume at least half a day of travel or more, you may have to decide whether to pursue your shipment based on its value or let it be put up for auction.

But apparently there is a way out of this. The rule is applicable on per shipment basis and not on the total value you import in a year. So as long as each of your shipment is less than Rs. 2000/- (CIF), you are doing good. So if you are buying multiple items from a single foreign website and the value is exceeding Rs. 2000/- make sure you split it into multiple shipments. You may lose out on the free shipping and may also have to bear extra shipping, but it will save you a lot of money and trouble once the goods are in the country.

Another interesting observation is that goods shipped by express delivery are far more likely to be examined than those by ordinary shipping. Many will tell you that that they have received their shipments through ordinary post with a demand for customs duty attached to it and the postman collects it from you at your doorstep. Guess it's a matter of luck.
So the next time you shop online at a foreign website make sure to check the import rules and the limits beforehand.

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