Established exporters of synthetic adhesives and water-based polymer emulsions, familiar with the export process, may consider transitioning from using a Customs House Agent (CHA) to handling customs clearance activities themselves, a process known as self-clearance. While this offers potential cost savings, it requires a thorough understanding of customs regulations and procedures. The initial step involves formally informing the relevant port/customs authority of the intention to handle self-clearance and obtaining any necessary approvals. In all shipping documents, including the shipping bill, the phrase “Under Self Clearance” should be clearly indicated where CHA details would typically be entered.
Handling export clearance independently means the exporter assumes all the responsibilities previously handled by the CHA. This includes electronic filing of the shipping bill, providing necessary declarations, and accurately classifying the export product under the correct Harmonized System of Nomenclature (HSN) code. Correct product classification is critical for determining applicable duties and avoiding delays. A strong understanding of Section 14 of the Customs Act, 1962, which deals with valuation, is also essential. If export duty applies to the products, the exporter is responsible for following the correct procedures and making the payment online.
Staying updated with relevant customs notifications related to exports is another crucial aspect of self-clearance. All documentation, both physical and electronic, must be meticulously handled by the exporter. This includes responding to any queries or objections raised by customs officials promptly and appropriately. Familiarity with the Customs Manual, 2023, is highly recommended as it provides valuable guidance on customs procedures. The “e Sanchit” program, related to digital documentation, should also be understood.
Logistics, previously coordinated by the CHA, now fall under the exporter’s purview. This includes coordinating with shipping companies or agents for booking space and obtaining the Bill of Lading (BL), as well as arranging transportation of goods to the port. Section 146 of the Customs Act, 1962, while primarily aimed at regulating CHAs, highlights the specialized nature of customs clearance and the need for expertise. Even when self-clearing, exporters must maintain all required records as stipulated by customs regulations.
While self-clearance can lead to cost reduction by eliminating CHA fees, it also removes the expertise and experience a CHA brings to the process. Exporters opting for self-clearance must be prepared to invest time and resources in acquiring the necessary knowledge and skills to navigate the complexities of customs procedures. While cost savings are possible, the potential for errors and delays due to a lack of expertise can offset those savings. A careful cost-benefit analysis is essential before making the switch.