India, Samples, and Export Paperwork

Most people in the export industry are aware of the complications regarding shipping goods to India.  While many businesses operate globally and have facilities in the United States and India, concerns still arise with customs, duties, and requirements for additional paperwork.  Indeed, shipping no-cost items to India has become more arduous within the last 30 days.

There are rules regarding no-cost samples sent to India, and some of the rules are easily located on Customs India.  However, there are recent changes that can only be learned by experience, which we will impart to you in this article to prevent confusion and avoid unnecessary delays.

It is Not a Commercial Invoice

Most of the time, nations are not picky about whether the invoice provided is a commercial invoice, customs invoice, or some other type of proforma invoice.  However, when sending no-cost samples to India, it is now required that the form provided is not written as a commercial invoice, but rather a customs or sample invoice.

Knowing the Value Limits

Per the Customs India website (2017), there are very specific limitations as to what can be sent no-cost while avoiding additional duty fees.  This is either a one-time item that is less than 5.000 rupees ($77.57 USD), an aggregate annual limit of 60.000 rupees ($930.84 USD), or a limit of 15 samples per calendar year.  Engineering parts may be permitted no-cost at a rate of less than 10.000 rupees ($155.14 USD) if the equipment is deemed “useless as merchandise”.  These extremely low values create some concern.

In the past, many organizations have been aware of these rules and have gotten around them by indicating any samples as low value, often citing just $1.00 USD as the cost.  With the new changes, however, this practice no longer works.

Changes to Reporting Value

As stated, simply lowering the value on the sample invoice or the customs invoice will no longer suffice.  At this point, India customs has decreed that any no-cost items or intercompany transfers not intended for sale require additional paperwork written on company letterhead that not only indicates the value of the items in question, but also the justification for value determination.  In addition, the country reserves the right to request proof of these values.  Through experience, those that have worked within this new system will likely tell you that the phrase “reserve the right” is a pleasant way of saying that this item will be demanded.

Pre-Clearance is Typically Required

Again, these new changes are resulting in times when you must email all the documents to the consignee in India prior to the goods leaving the United States.  This allows the consignee to review the paperwork and send it to their own customs broker to offer pre-clearance duties to prevent goods from being tied up in customs by being deemed “questionable”.  We suggest pre-clearing your shipments to avoid delays.

Summary

The changes presented to those exporting or importing to India, specifically related to samples and no-cost goods, require additional care and due diligence.  While there have been methods of avoiding these concerns in the past, these new changes prevent utilizing these methods.   Understanding each nation’s needs and requests is critical to ensuring smooth logistical operations and timely delivery of products and services.

Working with the rules and laws that govern other nations is the only way to ensure that items clear Customs and make their point of destination. Complying with these rules may require additional steps, but these can save time, storage fees, and potential fines.

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About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance.  Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, FL U.S.A, Shanghai, P.R. China and Prague, Czech Republic. For more information, log on to www.allynintl.com.