Customs Procedures for Imports
Customs releases the goods; the bill of entry closes the bank's IDPMS entry. Here's the sequence and the rules behind it.
For an importer, customs clearance decides when the goods can leave the port and how much duty is paid. For the importer's bank, the bill of entry decides something else: whether the money it remitted abroad is matched by goods that actually entered India. The two meet in IDPMS, RBI's import monitoring system.
Picture a Pune engineering firm importing CNC machine parts from Germany under a 90-day usance LC. The bank pays at maturity, but until the bill of entry for those parts is linked to the outward remittance, the IDPMS entry stays open on the bank's books.
You save ₹300
- Full 120-question mocks
- ICC rules coverage
- Topic-wise practice
One payment, no subscription · Valid for 2 months
The Import Clearance Sequence
- 1
1. Import manifest before arrival
Section 30 requires the person in charge of a vessel or aircraft to file the arrival or import manifest (IGM) electronically before arrival. Goods not shown in it cannot normally be unloaded (section 32).
- 2
2. Bill of entry
Under section 46 the importer files a bill of entry electronically, either for home consumption (duty paid now, goods released) or for warehousing (goods stored in a customs warehouse, duty paid on removal).
- 3
3. Filing window
The bill of entry must be filed before the end of the day (including holidays) preceding the day the vessel, aircraft or vehicle arrives, and can be filed up to 30 days before expected arrival. Late filing without sufficient cause attracts charges for late presentation.
- 4
4. Self-assessment and RMS
The importer self-assesses duty under section 17. CBIC's Risk Management System then decides whether the bill goes for appraisement, examination or both, or is cleared after duty payment straight to Out of Charge.
- 5
5. Duty payment and clearance
On a self-assessed bill, duty is payable on the date of presentation (section 47(2)); late payment carries interest at a notified rate. The section 47 order then permits clearance for home consumption.
Rules That Decide the Duty
What value is duty charged on?
Answer
Transaction value, which for imports adds costs such as commissions, royalties, freight to the place of importation, insurance and handling, as the valuation rules specify
Section
s.14
Which rate of duty applies?
Answer
The rate in force on the date the bill of entry is presented; if presented before the vessel's entry inwards, it is deemed presented on that later date
Section
s.15
What if goods are not cleared?
Answer
Goods not cleared, warehoused or transhipped within 30 days of unloading can be sold by the custodian after notice
Section
s.48
What does warehousing cost in security?
Answer
A bond for three times the duty assessed, plus prescribed security
Section
s.59
| Question | Answer | Section |
|---|---|---|
| What value is duty charged on? | Transaction value, which for imports adds costs such as commissions, royalties, freight to the place of importation, insurance and handling, as the valuation rules specify | s.14 |
| Which rate of duty applies? | The rate in force on the date the bill of entry is presented; if presented before the vessel's entry inwards, it is deemed presented on that later date | s.15 |
| What if goods are not cleared? | Goods not cleared, warehoused or transhipped within 30 days of unloading can be sold by the custodian after notice | s.48 |
| What does warehousing cost in security? | A bond for three times the duty assessed, plus prescribed security | s.59 |
Where the Bank Comes In
FTP 2023 para 2.06(b) lists three mandatory import documents: the transport document, the commercial invoice cum packing list, and the bill of entry. The first two come to the bank with the LC or collection documents. The third is created by customs, and it is the evidence of import.
Under the superseded Master Direction (still the courseware's frame), banks downloaded electronic bills of entry from the BoE Master in IDPMS using the AD code the importer declared, and matched them to the outward remittance messages. From 1 October 2026, Regulation 18 of RBI's Export and Import Regulations 2026 requires the bank to mark off the IDPMS entry once payment for the import is made, and Regulation 4(2) allows entries up to ₹10 lakh per bill of entry to be closed on the importer's declaration. Regulation 9 ties the time for paying an import to the period in the underlying contract, which the bank monitors and may extend on request.
Quick practice on banking operations. No signup.
Case: The Wrong AD Code
The Pune importer's customs broker files the bill of entry quoting the AD code of the importer's other bank. Customs clears the goods without any problem. But the BoE lands against the wrong bank in IDPMS, so the LC-issuing bank sees a remittance with no matching evidence of import. Customs clearance was never the issue; the data trail was. The fix is to correct the data trail so the bill of entry reaches the right bank; nothing about the goods or the payment needs to change.
How the IIBF Exam Tests This
Questions tend to probe the two kinds of bill of entry, the filing window, which date fixes the rate of duty, and which document is evidence of import. The trap is mixing up the documents: the bill of lading proves shipment to India, the bill of entry proves the goods were entered with Indian customs. Only the second closes IDPMS.
FAQs
What is the difference between a bill of entry for home consumption and for warehousing?expand_more
Home consumption means duty is paid and the goods are released for use in India. Warehousing means the goods go into a customs warehouse under a bond of three times the duty, and duty is paid when they are cleared out later.
When must a bill of entry be filed?expand_more
Before the end of the day preceding the arrival of the vessel, aircraft or vehicle at the customs station, and as early as 30 days before expected arrival. Filing late without sufficient cause attracts charges.
Which date decides the rate of customs duty?expand_more
For home consumption, the date the bill of entry is presented. If it is presented before the vessel's entry inwards, it is treated as presented on the entry inwards date.
Why does the bank need the bill of entry?expand_more
It is the evidence that goods were actually imported against the foreign exchange the bank remitted. The bank uses it to close the importer's IDPMS entry.
Next steps
- Export Customsarrow_forward
- High Sea Salesarrow_forward
- Import Payments Under FEMAarrow_forward
- EDPMS and IDPMSarrow_forward
120 questions, 2 hours, scored instantly.