In India, goods may be imported or exported via sea, air, or land. The customs procedures discussed here apply only to formal trade through ports or airports, not to goods arriving via post or as baggage. The customs law defines “entry” as the submission of a Bill of Entry, Shipping Bill, or Bill of Export. An entry may also involve forms prescribed under section 84 of the Customs Act, amended on March 31, 2017. Previously, postal labels or declarations were included in the definition of entry, but the amendment removed those references.
Section 46 mandates that every importer must present a Bill of Entry for goods intended for home consumption or warehousing. Exporters must present a Shipping Bill when exporting by vessel or aircraft, or a Bill of Export for land shipments, as specified under section 50. For goods coming in by post, the Customs Board determines the format of the required entry under section 84. Baggage declarations under section 77 are not considered formal entries.
Importers, exporters, or the person in charge must submit documents such as the Bill of Entry, arrival or import manifest, departure or export manifest, among others. If needed, Customs authorities may permit amendments to these documents, under section 149 (amended August 1, 2019), provided there was no fraudulent intent. Genuine, inadvertent errors may be rectified, and amendments relate to the original filing date. However, if the consignee changes, the new date of filing applies for determining the duty rate and exchange rate.
For shipping bills under EPCG or drawback schemes, post-export conversion is allowed within one year, extendable up to two years under specified conditions. Amendments after clearance must be based on evidence that existed at the time of clearance; reassessment is beyond the scope of section 149. Courts have clarified that the amendment authority is strictly for changes in particulars, and not reassessment, though refund claims may follow. Amendments may now be made electronically by traders through the customs portal under certain risk-based selection criteria (effective March 28, 2021).
Section 154 allows Customs to correct clerical or arithmetical mistakes in decisions or orders. Documentary amendments incur a nominal fee—ten rupees for amendments and fifty rupees for certified copies. A higher fee of one thousand rupees applies for rectifying mismatches between shipping bills and GST returns introduced in February 2021. All documents must bear the signature, printed name, and designation of the signatory.
Merchant overtime (MOT) fees historically applied for customs officer supervision outside regular hours or locations. However, with 24×7 operations now active at many ports and container freight stations, official MOT charges are no longer payable during covered times. While informal, unofficial charges persist, regulations no longer allow official MOT in covered hours.
Customs operations at major seaports and airports have largely been computerized. Documents such as IGM and Bills of Entry must now be filed electronically, primarily through the ICEGATE EDI gateway. A single window system enables electronic submission to Customs and related government agencies. Efforts to reduce paperwork include minimizing printed requirements for documents and promoting message-based communication. A dedicated ICEDASH dashboard facilitates ease-of-doing-business monitoring.
Digital signature certificates became mandatory for importers, exporters, customs brokers, shipping lines, airlines, and their agents for filing Bills of Entry, Shipping Bills, IGM, EGM, and other declarations from 2015 onward. The remote EDI system enables secure digital filing. Customs officers must verify and monitor export obligations and duty credit scrips issued under export schemes as part of revenue control measures.
To expedite cargo clearance, a Customs Clearance Facilitation Committee has been established at major ports. The committee includes representatives from various departments such as food safety, plant quarantine, drugs, wildlife, railways, pollution control, and others to monitor clearance processes and resolve grievances.
Tape recording and inspection of operating hours now extend to full 24×7 customs clearance at major ports and many inland container depots. This expansion allows continuous clearance and container handling as determined by the principal commissioners of Customs.
Customer grievance redressal mechanisms are formalized under the Citizens’ Charter. Public Grievance Officers and committees are appointed at each commissionerate to address concerns from cargo and passenger operations. Additional oversight is provided by Airport Facilitation Committees and Trade Facilitation Committees.
Customs and DGFT have integrated systems for online transmission of shipping bills and DGFT authorizations. These arrangements facilitate seamless system-to-system exchange, eliminating the need for hard copy documents. The ICEGATE system is central to this interoperability and is used extensively for e‑filing by trading partners.
SWIFT (Single Window Interface for Facilitating Trade) and its component e‑Sanchit enable electronic submission of supporting documents (licenses, permits, etc.) for import/export processing. Since October 2018, PGAs have started uploading their approvals directly to the platform. The system was later extended to exports. Over time, up to 53 PGAs have been brought online to submit documents digitally, ensuring a fully paperless clearance journey.
The Customs Act provisions include section 154C and section 2(7B) (effective March 28, 2021), empowering CBIC to establish a Common Customs Electronic Portal. ICEGATE has been designated as this portal for registration, form submission, duty payment, and data exchange. In June 2024, the Exchange Rate Automation Module (ERAM) was launched, with automated published rates from SBI, integrated into the ICE system, and publicly available by 6 pm each day.
These developments collectively have transformed Indian customs into an increasingly paperless, automated, transparent, and trader-friendly regime. The integration of IDPMS, single-window systems, faceless processing, digital corrections, and oversight mechanisms all support better governance, risk-based facilitation, and continuous improvement.
IDPMS, Single Window, and Faceless Assessment
1. Import Data Processing and Monitoring System (IDPMS)
The Import Data Processing and Monitoring System (IDPMS) was jointly developed by the Reserve Bank of India (RBI) and authorized banks in 2016 to ensure regulatory compliance of imports and track the remittance of foreign exchange against physical imports. The system helps monitor outstanding import payments and reduces discrepancies between customs data and financial settlements.
Key Features of IDPMS:
- Integration with Customs: Data from ICEGATE (customs portal) is automatically pushed to IDPMS, linking remittances with Bill of Entry numbers.
- Tracking Mechanism: Banks can monitor whether an import transaction has been completed by comparing customs data with remittance records.
- Exception Management: Mismatches or delayed payments trigger exception alerts that require justification from importers.
- Closure of Bills: Once payment and goods receipt are confirmed, the bank updates the IDPMS, and the case is considered closed.
Importer Responsibility:
- Importers must ensure the timely submission of the Bill of Entry to their AD bank.
- If goods are not received or payment is not made, the transaction remains open, leading to potential regulatory scrutiny.
- In certain cases, RBI may require explanation and justification for delay or non-settlement of imports.
Benefits:
- Reduces the risk of money laundering and under-invoicing.
- Enhances coordination between banks and customs.
- Provides a transparent trail of import transactions for regulatory audits.
2. Faceless Assessment in Customs
The Faceless Assessment initiative, launched under the Turant Customs reform agenda in 2020, represents a transformative shift in India’s customs clearance process by eliminating physical interaction between importers and customs officers.
Objectives:
- Enhance Transparency: Minimizing the interface between the importer and customs officials reduces the scope for subjective assessment and corruption.
- Speedy Processing: Enables faster processing through digital workflows and risk-based assessment.
- Uniformity in Classification and Valuation: National assessment centers (NACs) were created to ensure consistent decision-making.
Key Mechanism:
- Remote Assessment: Bills of Entry are randomly assigned to customs officers in different locations, irrespective of the port of import.
- Automated Queuing: The system uses risk management algorithms to decide which shipments require assessment or examination.
- Document Upload: All supporting documents are submitted online via e-Sanchit.
- Query Resolution: Any clarification or query is raised digitally, and traders respond through the portal.
Challenges Faced:
- Initial delays due to inadequate infrastructure and technical understanding.
- Overlapping jurisdiction in assessment created confusion in some sectors.
- Lack of uniformity in query patterns between NACs.
Improvements:
- Detailed SOPs issued by CBIC for each stage of faceless processing.
- Periodic review of officer performance and stakeholder feedback integrated into system upgrades.
3. Single Window Clearance Mechanism (SWIFT)
India’s Single Window Interface for Facilitating Trade (SWIFT) was launched in 2016, aiming to integrate multiple regulatory agencies with Customs for efficient clearance.
How SWIFT Works:
- Importers and exporters submit their Integrated Declaration on ICEGATE.
- This declaration is simultaneously shared with other Participating Government Agencies (PGAs) like FSSAI, Animal Quarantine, Plant Quarantine, Drug Controller, etc.
- Approvals, NOCs, and other clearances are received electronically from PGAs and integrated into the customs workflow.
Integrated Declaration:
- Replaces multiple forms (like CTH, IEC, RCMC) with a single data set.
- Includes commodity-specific parameters, license numbers, port details, and agency-specific codes.
- A Risk Management System (RMS) checks for exceptions and flags them for further review.
e-Sanchit Platform:
- Under SWIFT, the e-Sanchit system allows electronic upload of supporting documents.
- PGAs now directly upload their authorizations and inspection reports into the system.
- This eliminates the need for paper submissions, courier delays, and physical presence.
4. Authorized Economic Operator (AEO) Program
The Authorized Economic Operator (AEO) certification provides benefits to trusted importers and exporters who maintain high compliance and security standards.
Categories of AEO:
- AEO-T1: Basic certification with limited documentation and simplified procedures.
- AEO-T2: Higher level of trust; includes faster clearance and reduced physical inspection.
- AEO-T3: Granted to major players with significant compliance history.
- AEO-LO: For logistics operators, including carriers, freight forwarders, and warehouse owners.
Benefits of AEO:
- Faster customs clearance and lower dwell times.
- Deferred payment of duties.
- Priority treatment in cargo release.
- Mutual Recognition Agreements (MRAs) with foreign customs for seamless global trade.
Eligibility:
- Minimum 3 years of import/export history.
- Proven record of regulatory compliance.
- Sound financial background and internal control systems.
5. Recent Digital Enhancements
Exchange Rate Automation Module (ERAM):
- SBI exchange rates are now auto-fetched and published on ICEGATE by 6 pm daily.
- Reduces manual intervention and ensures the timely application of correct exchange rates for duty calculation.
Turant Suvidha Kendras (TSK):
- Physical facilitation centers at key ports for issues that can’t be resolved online.
- Assist traders with document verification, physical examination coordination, and procedural clarifications.
ICEDASH & Analytics:
- A public dashboard monitoring key clearance parameters at customs houses.
- Helps in measuring efficiency and identifying bottlenecks.
1. Understanding the AEO Certification Framework
The Authorized Economic Operator (AEO) program is India’s response to the global initiative for supply chain security, as recommended under the World Customs Organization’s SAFE Framework. It recognizes businesses that maintain strong internal controls, financial solvency, and consistent compliance with customs laws.
The Central Board of Indirect Taxes and Customs (CBIC) launched the AEO scheme to enable faster and more seamless movement of goods for trusted traders.
Unlike regular importers and exporters, AEO-certified entities receive privileges such as faster clearance, deferred duty payments, fewer inspections, and global trade benefits through Mutual Recognition Agreements (MRAs) with other countries.
2. Types of AEO Certificates and Their Progression
There are several tiers under the AEO program, each with increasing benefits and stricter eligibility norms. The most common types include AEO-T1, AEO-T2, and AEO-T3, while AEO-LO covers logistics operators.
AEO-T1 is the entry-level certification, designed for businesses seeking basic procedural benefits. It requires minimal documentation and is largely based on self-certification. As businesses demonstrate consistent compliance and robust internal systems, they can upgrade to AEO-T2 or T3 levels, unlocking more operational advantages.
AEO-T3 is reserved for those with a long history of flawless compliance and high trade volumes. It offers the broadest set of benefits, such as priority processing, immunity from routine audits, and enhanced facilitation at partner customs administrations abroad.
3. Core Compliance Requirements for AEO Certification
To become AEO-certified, a business must satisfy several core criteria. These are not merely formalities but indicators of the company’s commitment to secure and compliant trade.
The business must demonstrate consistent filing of customs returns and duty payments without major violations in the past three financial years. Its financial statements should reflect stability, and there must be a robust internal system to identify and manage supply chain risks.
Customs authorities may conduct physical verification of premises, evaluate internal SOPs, and review security practices during the application process. These checks ensure that only genuinely compliant businesses enter the program.
Furthermore, businesses need to maintain digital records, staff training programs, and secure documentation practices. Any weak link in these areas may delay or disqualify the certification process.
4. Practical Benefits of AEO Accreditation
The advantages of obtaining AEO status go beyond faster customs clearance. Certified entities enjoy substantial benefits that can significantly improve their logistics and financial performance.
One of the most valued benefits is the deferred duty payment facility, which allows importers to take delivery of goods before paying customs duties, thus improving working capital flow.
Another major perk is reduced inspection frequency, which means goods spend less time at ports and clear faster, avoiding demurrage or detention charges. This benefit is particularly crucial for perishable or seasonal goods where timing is key.
Additionally, AEO entities receive priority treatment during cargo handling, quicker resolution of disputes or document queries, and access to dedicated help desks within customs offices.
Businesses engaging in international trade can also benefit from Mutual Recognition Agreements (MRAs), where Indian AEO status is recognized by other participating countries, reducing inspection and delays abroad.
5. The Import Process – A Step-by-Step Practical Walkthrough
Understanding how an import shipment is processed through Indian customs helps contextualize where AEO and other initiatives make a difference. Here’s a general flow without getting too technical:
A business begins by placing an overseas order. Once goods are shipped, the exporter provides documents such as the commercial invoice, packing list, bill of lading, and certificate of origin.
The importer then files the Bill of Entry electronically on the ICEGATE portal. Based on risk parameters, the customs system either clears the goods automatically or flags them for assessment.
With faceless assessment now in place, officers at remote locations verify the classification, valuation, and duty calculations. If satisfied, they approve the Bill of Entry. If not, they may raise a query or request additional documents through the portal.
Simultaneously, regulatory clearances from other government agencies, such as food safety or drug control authorities, are processed via the SWIFT system, and documents are uploaded through e-Sanchit.
Once all approvals are in place and duties are paid (or deferred for AEO-certified importers), the customs issues an Out of Charge (OOC) order. This allows the importer or their clearing agent to take delivery of goods from the port or container freight station.
The importer must also ensure the import is reported in the IDPMS system by their authorized bank. This links foreign exchange payment with the customs import record, ensuring compliance with RBI guidelines.
6. Key Tips for Staying Compliant During Customs Transactions
Indian customs procedures, while largely digitized, still require vigilance from traders. Missing documents, misclassified goods, or late remittances can result in delays, penalties, or blacklisting.
Here are some practical tips:
- Maintain a checklist for all import/export documentation and ensure it’s reviewed before submission.
- Use licensed customs brokers with updated knowledge of faceless assessment processes.
- Track every shipment digitally and be proactive in responding to customs queries.
- Establish a compliance calendar for customs and foreign exchange regulations.
- For exporters, ensure that shipping bills are closed properly and that remittances are reconciled on EDPMS.
These steps not only reduce clearance time but also improve eligibility for programs like AEO or faster GST refunds.
Overview of Customs Procedures in India
India’s export sector is a key driver of economic growth and foreign exchange reserves. Whether a business exports textiles, pharmaceuticals, IT hardware, or agri-products, it must navigate a well-defined customs process aligned with global trade norms.
The Central Board of Indirect Taxes and Customs (CBIC), in coordination with the Reserve Bank of India (RBI), monitors and facilitates exports through a framework that ensures both compliance and competitiveness. While systems like EDPMS (Export Data Processing and Monitoring System) support foreign exchange tracking, digitized filing platforms and faceless customs assessments streamline documentation and clearance.
Step-by-Step Overview of Export Customs Procedure
The export process in India follows a structured digital pathway, typically beginning when an exporter receives an overseas order.
After finalizing the contract, the exporter prepares documents such as the invoice, packing list, purchase order, shipping instructions, and sometimes inspection certificates. A Shipping Bill—the core customs declaration for exports—is then filed electronically via the ICEGATE platform.
Key procedural highlights include:
- Selection of an appropriate Shipping Bill type (Free, Drawback, Advance License, EPCG, etc.).
- Uploading supporting documents via e-Sanchit.
- Clearance by the Risk Management System (RMS) or manual assessment if flagged.
- Examination by customs officials, if required, depending on the risk profile.
- Generation of Let Export Order (LEO), marking customs approval for shipment.
- Handover of goods to the carrier for shipment abroad.
Once the cargo leaves India, the shipping line issues a Bill of Lading or Air Waybill, depending on the mode of transport.
The EDPMS System and RBI Monitoring
The Export Data Processing and Monitoring System (EDPMS), managed by the RBI, plays a critical role in ensuring that export proceeds are received promptly.
Every Shipping Bill filed in ICEGATE is mirrored in EDPMS. Authorized Dealer (AD) banks are required to track whether the foreign buyer has made payment within the permitted time (usually nine months from the export date). Once the payment is received, the exporter must inform the bank, which then matches the payment against the Shipping Bill.
If payments are delayed or underpaid, it may lead to reporting on caution lists, scrutiny by the Directorate of Enforcement, or denial of future export incentives.
Regular reconciliation between the bank and exporter is crucial to ensure Shipping Bills are closed correctly. Failure to do so may attract penalties under FEMA (Foreign Exchange Management Act).
Important Export Incentives and Schemes
To boost competitiveness, Indian exporters can leverage several customs-linked incentive schemes. Some of the key ones include:
- Duty Drawback Scheme: Refund of customs duties paid on imported inputs used in export production.
- Advance Authorization: Allows duty-free import of inputs for manufacturing export goods.
- Export Promotion Capital Goods (EPCG): Enables duty-free import of capital goods under export obligation.
- RoDTEP (Remission of Duties and Taxes on Exported Products): Provides a refund of embedded taxes not covered under other schemes.
To claim these benefits, exporters must ensure accurate classification of goods, adherence to eligibility norms, and timely filing of claims..
Faceless Assessment and Export Clearance
With the implementation of faceless assessment, exporters no longer interact physically with customs officers for document verification. Instead, assessments are handled remotely by customs officials in different locations across India.
This system promotes uniformity in decision-making and reduces the scope for discretionary delays. Exporters must ensure that their documents are complete, accurate, and digitally accessible.
In case of any discrepancy or doubt, customs may raise a query on the ICEGATE portal. Prompt response with supporting documents is necessary to avoid shipment delays.
Customs Audits: What to Expect
Indian customs may conduct post-clearance audits (PCA) to verify the correctness of declarations, valuation, and compliance with applicable laws. These audits can happen months after the shipment is cleared.
Audits are of two types:
- Transactional audit: Focuses on specific shipments.
- Periodic audit: Covers a broader period and range of transactions.
Businesses should be prepared to produce complete records of:
- Invoices and purchase orders.
- Contracts and proof of foreign remittance.
- Customs declarations and shipping documents.
- Classification and valuation justifications.
- GST reconciliation, if applicable.
Non-compliance or errors may result in penalties, demand notices, or revocation of export privileges. Having a strong internal control system and conducting self-audits periodically is recommended.
Common Pitfalls in Export Customs and How to Avoid Them
Many exporters—especially new ones—face delays, payment holds, or compliance risks due to oversight or misunderstanding. Common issues include:
- Incorrect HSN codes or product descriptions in Shipping Bills.
- Failure to upload all supporting documents on e-Sanchit.
- Delay in the realization and reporting of export proceeds in EDPMS.
- Over-invoicing or under-invoicingcan leadd to valuation disputes.
- Late or incorrect claim filing under incentive schemes.
To mitigate these risks:
- Double-check all customs declarations and export documentation.
- Monitor EDPMS status weekly and follow up with banks proactively.
- Maintain meticulous records for every shipment and remittance.
- Consult customs experts for high-value or complex transactions.
Conclusion
India’s customs landscape is transitioning towards a compliance-based trust model, in which digital systems and data integrity are central to trade facilitation. Exporters that align with these changes enjoy faster clearance, fewer queries, and better access to global markets.
However, this also means that non-compliance is no longer tolerable. Systems like EDPMS and faceless assessment leave a detailed digital trail. Any mismatch between customs filings, bank reports, and actual shipments can be easily flagged by the system.
To remain future-ready, exporters should:
- Automate their export documentation processes.
- Invest in compliance training and internal audits.
- Engage with reliable customs brokers and freight forwarders.
- Monitor scheme notifications and update systems regularly.
When combined with robust financial practices and digital tools, these steps ensure that Indian businesses not only meet regulatory expectations but also scale globally with confidence.