Like every business there are some dos and don’ts in import business. So before entering in import business one should consider these. By this, one can avoid trouble and expense and save so much time and also done a little quality control in advance.
Open LC or import transactions only for customers and open only if the party has got sanction limit.
Allow import of restricted items as per procedure laid down in the Exim Policy.
Handover import documents only to drawee or his PA holder against property acknowledgement.
Allow payment for import by debit to customer’s account.
Allow payment for the bills beyond six months and also allow payment of overdue interest on sight bills for a period not exceeding six months.
Allow payment to local agents on commission basis. In case of overseas agent, allow commission as per FEMA guidelines.
Verify the imported items under the LC.
Issue amendments to LC only on the basis of written request.
Verify whether the payment method in Letter of Credit is done as per FEMA guidelines or not.
In case of default payment, crystallise the bill on 10th day of the month.
Allow import provided goods are consigned to bank account opener.
Insist for insurance cover at the time of opening the LC.
Allow opening of LC on DA basis provided the Usance does not exceed more than 180 days.
Allow opening of Transferable LCs provided transfer is restricted to specified second beneficiaries whose credit report is satisfactory.
Verify the Letter of Credit application form to ensure whether they are properly filled and stamped.
Report to the RBI (Reserve Bank of India) if the bill of entry is not received.
Sell the imported goods, only after getting permission from ITC authorities.
Keep one copy of shipping documents, invoice and other papers for future inspection by the custom inspector or the Reserve Bank of India.
Issue the Letter of Credit if the customer doesn’t have IEC number.
Open LC without proper transport documents.
Allow advance payment without proper documentation.
Import prohibited or restricted items without import license.
Allow direct remittance of import bills beyond the limit and without EC copy of bill of entry.
Open revolving LC without safety clause.
Amendments to the Letter of Credit for import of those items which is either restricted or prohibited.
Allow import documents received under collection paid without verifying importers line of business and financial standing.
Don't neglect to investigate whether the importing product is subject to any special requirements by government such as:
Product specifications, product testing requirements or product certification requirements;
Those imported products do not fulfill these special requirements, may be refused entry, seized at the border or assessed a monetary penalty.
Don’t give incorrect country of origin determination or a misrepresentation of origin of imported product, this may be refused entry of imported product, seized at the border or assessed a monetary penalty.
Don't ignore the possibility that you may be eligible to benefit from a preferential duty program available in Exim Policy.
Don't misrepresent transaction values on your imported products in order to avoid or to reduce tariffs.
Don't misrepresent the nature of the product you are importing to avoid product quotas, product licensing requirements or product tariffs.
Don't neglect to evaluate the reputation of your foreign seller with regard to performance because the selection of payment method for your import transactions is depends on this.
Don't confuse INCOTERMS with other sales terms formulations.
Don't forget to insure consistency in your import transactions.