The Bill of Entry (BOE) is a legal document used by importers to procure customs clearance for the imported shipment.
Creating and verifying a BOE is time-consuming and demands precise documentation and information sharing. Thus, importers and exporters must be well-versed with a BOE to manage a successful business.
What is a Bill of Entry?
When goods arrive in an importing country, they undergo legal formalities. The BOE is the legal paperwork that importers or customs clearing agents file for obtaining the imported goods.
The BOE is a critical aspect of the customs clearance process because it allows the government to maintain a record of the flow of goods and services to and from the country.
Why is the Bill of Entry Important?
Trade impacts individual businesses and a country's overall economic well-being. Keeping this in mind, government entities use the BOE to track the movement of goods across its nation's border and draft better macro-economic policies. This makes the document important and hence is mandatory for an international trader to file a BOE for any product that he/she imports into the country.
A BOE has legal relevance in the export-import process. In this sense, it ensures complete transparency between private businesses and the government, acting as a critical document based on which customs permit cargo clearance. Moreover, importers can claim duty credits if applicable, after the clearance of goods by using this document. The BOE also serves as a necessary record for auditing or inspection purposes.
Types of Bill of Entry
The Central Board of Indirect Taxes and Customs has classified the BOE into three categories based on the nature and purpose of imported goods. Three different forms-- Form I, Form II, and Form III are each designated for various types of bills.
1. BOE for house consumption
The color white indicates the BOE for house consumption under section 46 of The Customs Act, 1962. This BOE is issued for goods imported by an individual for personal or business consumption.
2. BOE for warehousing
Sections 46 and 60 of The Customs Act, 1962, allots the color buff (light brownish yellow) to this type of BOE. Also known as a bond BOE, this document must be filed if the importer doesn't intend to furnish import duty at the exact time of import. Instead, the importer can hold off their products in storage until he/she clears the dues.
3. BOE for Ex-Bond Goods
The Customs Act, 1962, indicates the BOE for ex-bond goods with the color green. This document is used when the importer wants the clearance of warehoused goods for home consumption.
Who needs to issue a Bill of Entry?
A BOE can be issued for bond clearing or personal use. The importer can claim Input Tax Credit (ITC) on the items only post the issuance of the BOE from the following entities:-
- Companies that import items from other countries.
- Enterprises that sell goods purchased from Special Economic Zones within India.
Once the BOE is submitted, a customs officer inspects the items, and the importer pays taxes, including GST, IGST, and customs duty. The importer can then seek ITC compensation cess for GST and IGST. However, they cannot claim compensation for customs duty.
What does the BOE include?
The BOE format is simple. Here are some important details that it includes:-
- Port code and license number
- Importer's name and address
- Customs house agent code
- Import-Export Code (IEC)
- Country of origin and its code
- Country of consignment and its code
- Port of shipment
- Vessel name
- All the critical information about the goods being imported (e.g., monetary value and description of goods)
The importer's IGST, GST, and customs duty details are also included in the BOE. Besides, the bill will have two parts for the signatures of both the importer and the customs agent. Only when both parties sign it is the bill valid.
Who will prepare the BOE?
As mentioned earlier, the BOE is a formal and legal document that an importer or customs broker files with the customs department to clear the goods out of customs.
How to file a BOE?
Although there is a manual offline method to file a BOE, online forms are quickly replacing paper-based documentation, thus avoiding other hassles with officials. With customs offices launching online portals and shipping service providers’ gateways, filing a BOE has become a simple task.
There are mainly two ways to ensure a brief filing procedure:-
- Via the Indian Customs EDI System
- Via a customs house agent’s server
EDI portal
An Electronic Data Interchange (EDI) portal is an online platform that both importers and customs house agents (CHAs) can use after filing the BOE. One can visit the EDI website, register as a certified importer, and submit the BOE alongside all the other required documents electronically.
This portal is especially convenient for importers who are new to the business of international trade and are yet to establish a relationship with reputable logistics service providers.
Customs house agent’s server
India has set up an online software called Indian Customs Electronic Gateway ICE GATE, allowing CHAs to carry out their duties via the portal.
By uploading the required information like their license number, a CHA can gain registered access to the application. Since they are well-trained in filing these bills online, seasoned importers may also benefit from their expertise in successfully executing the procedures associated with filing a BOE.
Documents required for filing a BOE
Importers need an array of documents to file a BOE with customs. They must provide duplicate copies and photocopies of all relevant papers and a draft of the BOE. The BOE should contain the Goods and Services Tax Identification Number (GSTIN) for further processing.
Here’s a list of all the mandatory details that a BOE must include:-
- The port code and license number
- Importer's name and address
- Customs house agent code
- Import-Export Code (IEC)
- Importer's name and address (if the importer is a registered taxpayer, their address automatically appears)
- Vessel name
- Port of shipment
- Country of origin and its code
- Country of consignment and code only if it is different from the country of origin
- The date of issuance on the bill of lading
- Specifics about the commodities and their monetary worth
Packages and quantity
- Serial number, product description, and product unit code
- The number of packages, their weight or volume
- Customs tariff heading, with notification of exemption and year
- Product specifications (details to be provided separately for each class)
Customs duty
- Nature of the duty code
- The commodities' assessable value, additional expenses, such as landing and handling fees if applicable
- The basic rate and amount of customs duty charged
- Special Additional Duty
- The value, rate, and total additional duty
- Additional duty Central Excise Tariff (CET) based on exemption notification and year
IGST
- GST code, IGST rate, and IGST amount
- The total amount of duty (assessable value, customs duty, and other charges) in words and the total number of containers in words
- Amount of compensation cess
- Exemption notice for seeking IGST exemption
- Notification of exemption for obtaining relief from GST compensation cess
Additional documents
Besides the documents mentioned above, customs may also request the following papers depending on the nature and kind of import:-
- A signed copy of the shipping invoice
- Packing list
- Bill of lading
- Letter of credit or bank draught
- Insurance paperwork
- Industrial license
- Importer's or the authorized CHA's declaration
These are the most commonly requested documents. However, the customs department can ask for additional documents depending on any discrepancy they encounter while scrutinizing the documents. The importer and the CHA must guarantee the accuracy and authenticity of all documents submitted to the customs.
Sample BOE
Here is an example of an ex-bond clearance BOE:-
What is the difference between a BOE and a Shipping bill?
The BOE and a shipping bill are vital documents that traders file when moving goods across the border. However, there is one primary difference between the two. An importer files a BOE when importing goods into a country, while an exporter files a shipping bill when exporting goods outside a country. Moreover, unlike a BOE, a shipping bill doesn't require any IGST details since it is concerned with exporting goods.
