Bill of entry is legal documentation offered by the importers or the custom clearance agents at the time of arrival or before the arrival of imported goods. BOE is submitted to the customs department for channelizing the customs clearance process.
It’s the primary statutory document that is very important to initiate import customs clearances. The successful completion of issuing a BOE leads the importers to claim the ITC on the shipping items. There are various types of BOE, and one should apply a particular type depending on the criteria for the bills of entry.
What is the Bill of Entry?
Definition: A bill of entry is defined as a statutory account of goods entered at the customhouse, and registered by importers or custom clearance agents before or during an imported shipment arrives.
BOE refers to the legal documents filed by the customs clearance officials or the merchants before or during the shipment process. It is an integral part of the customs clearance procedure. An importer can assert a claim of ITC on the imported goods for completing the customs clearance process.
This document declares the full description of the imported and exported items and also ensures if the goods are legal or not. The customs officials have a primary contribution in the BOE to check the shipments’ taxes, traffics, and import restrictions.
After reviewing the document and inspecting the shipment, imported goods can be cleared for transfer or sale by customs clearance agents, but if there would be any problem, goods can be confiscated.
The purpose for a Bill of Entry
A BOE stands for a lawful document being registered by the agents or merchants of custom clearance. . It can also be produced for home expenditure and bond clearance.
The BOE, after being generated, is presented to the Department of Customs, as it falls under the procedure of customs clearance. The agents or the merchants then become able to claim ITC on the shipments. After that, the process of clearance of customs is completed.
The purpose of a BOE is beyond the personal growth of the traders and the formulation of a favorable reputation of the customs departments. The BOE is beneficial for the business industries and their good image and influences the economic welfare of each country.
The Bill of the entry contains immense significance for the businessmen. It introduces a transparent relationship between the government and the private industrialists who import and export the manufactured items.
The BOE is the primary key for approving the clearance of the cargo and plays a crucial role for the importers on post-clearance operations.
Classifications of Bill of Entry
The Central Board of Indirect Taxes & Customs has introduced three categories of BOE, based on the types of imported or exported goods. These three classifications are as follows:
1. Bill of entry for Home Consumptions
When an import consignment demands to be custom cleared, and the importer urges to deliver the goods and takes help from the cargo for internal consumption, the BOE for Home Consumption is then issued.
It is white and required to clear the customs before importing or exporting.
2. Bill of entry for Bonding
Sometimes, the importers don’t like to clear the customs of the imported consignments before the shipments then and there and store the imported shipments in the Customs Bonded Warehouse.
The Bill of entry for Bonding permits the customs officials to transfer the imported consignments in the Bonded Warehouse without paying duty and issuing a BOE for Bonding postpones the clearance for a particular time duration.
The yellow color for the BOE represents bonding.
3. Ex-Bond Bill of entry
Ex-Bond BOE is issued when the imported consignment is not customs cleared immediately, and the importers prefer to warehouse it in the customs bonded warehouses.
For the Ex-Bond BOE, the imported consignment doesn’t require customs clearance entirely at a time. Instead, the importers can clear the customs as per the requirement of the delivery of goods.
Ex-Bond Bill of entry is often called “green bill” and green in color.
Who can apply for a Bill of Entry?
If you’re involved in the shipping industry, you should know the limitations of the BOE and who can use this. So, in a word, having clarity on the BOE users is very crucial, and the below-mentioned list is all about the people who can apply for the BOE:
- An exporter
- An importer
- If you have your own company that acquires goods from Special Economic Zone
- If you’re the owner of a firm and interested in international business that is traded among different countries
Who should issue a BOE?
The bills of entry are generally issued for bond clearance or home consumption. It should be issued by:
- Firms that are involved in importing goods from other countries
- Firms that are involved in buying goods from SEZ and selling them within the country
How to issue a BOE?
After the Bill of entry documentation, an authorized Customs officer will inspect the goods to be imported. The inspection is for the clarity of the goods and helps determine the taxes that’d be perfect for the goods.
Once the examination of the goods is done, the importer of the products needs to pay essential customs clearance, GST, and IGST to clear the goods and import them flawlessly.
Additionally, the importers can demand ITC for the IGST and Compensation cess, but this process is certainly not applicable for the essential customs duty.
Elements of prescribed Bill of Entry Format
Issuing a BOE is a legal activity and requires following a set of rules and regulations decided by the Government-
1. Basic Details
- The customs’ house agent code, importer’s name, and residential address, and IEC (Import Export Code) which is generally GSTIN (regular or provisional GSTIN) & if GSTIN is not there then it can be their PAN/UIN
- The port code and license number
- The container’s name, the destination country, and country code
- Details of the shipped items
2. Packages and Quantity
- The types of goods, serial number, and unit code of the products
- Amount of the packages and their weights
- Details on the goods of individual class
3. Custom Duty
- Classification of duty code
- The assessed value of the goods
- The basic amount and the rate of customs duty
4. Additional Duty
- Central Excise Tariff (CET) in relation to the exemption notification and year
- Special Additional Duty (SAD) for the Customs
- Customs Value, rate, and total additional duty
- GST code, IGST amount & IGST rate
- The total amount of duty (assessable value along with customs duty and additional charges) in words, along with the total number of packages in words
- Compensation cess amount
- Exemption notification for claiming exemption from GST compensation cess
- Exemption notification for claiming exemption from IGST
6. Two Declaration and Signature Sections
- One of the importers
- Another one for Customs house agents
Bill of entry plays an integral role in the broad spectrum of the international trade industry.
The customs officials help to issues a BOE, and it serves as the legal document for customs clearance before or during the shipment.
This document is checked by the customs officers and stamped. Moreover, issuing a BOE is a time-consuming process, and one can apply for it both online and offline.
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