Customs Clearance
Customs Clearance
It is the process of meeting legal requirements set by customs authorities to allow goods to enter or exit a country. It involves submitting necessary documents, paying customs duties and taxes, and complying with import/export regulations. Customs will release the goods for further transportation after review.
Customs Clearance Procedure
To avoid cargo delays at ports, ensure your cargo meets the required standards and certifications beforehand. Maintain communication with your importer and customs clearing agent, and have all necessary documents prepared.
Air freight customs clearance
This involves the clearing of cargo at airports.
Ocean freight customs clearance
This involves the clearing of cargo at seaports
Railway freight customs clearance
This involves the clearing of cargo at borders with international rail lines.
Express freight customs clearance
International express companies all handle customs clearance for express shipments.
About Customs Clearance Services
USA, Russia, Germany, France, Italy, Ireland, Greece, Estonia, United Kingdom, Thailand, Vietnam, Singapore, Australia, New Zealand, South Africa, Sudan, Ghana, Japan, South Korea, etc.
We can provide efficient customs clearance services for our customers’ goods at China’s seaports, airports, and international railway lines. Our global logistics network ensures smooth customs clearance in China and various other countries.
What is Customs Clearance?
It is a critical process involving submitting and processing necessary documents to customs authorities to import or export cargo. Importers provide these documents to customs authorities to evaluate and determine the applicable duty payment.
China HS Classification Code
China’s HS classification codes divide goods into different categories, and each category corresponds to different customs tariff rates. Starting from August 1, 2018, Chinese customs introduced a new set of code numbers to expand the regular 8-digit to 10-digit HS codes. As an importer, it is essential to classify your cargo in accordance with the HS standards before it reaches any of China’s ports. This classification helps determine the following crucial factors:
Pre-market requirement
The authority's pre-market requirements and approval for your cargo. While China's HS code aligns with international conventions regarding the description of harmonized commodities, there are still notable differences in the Chinese model. These discrepancies, coupled with a lack of clear understanding of the codes, contribute to delays at Chinese ports of entry.
Tariff type
Tariffs are classified into various categories, namely, import duties, consumption tax, and value-added tax.
Declaration process
Your cargo‘s customs declaration CIQ inspection: You need to determine the CIQ inspection and quarantine supervision if required for your cargo.
Applying for customs clearance in China with an incorrect HS code can lead to potential delays. Additionally, other factors that can cause delays include:
- Seized shipments
- Heavy fines
- A downgrade of company credit
- Importing cargo listed on the Monitoring list
- Smuggling and tax evasion
To avoid any of the above, you need a reliable custom clearing agent to handle the entire process, and NewSmartShip Global Logistics can do that for you.
China Export Tariff Rates
The import and export tariff rates implemented by China change periodically to the dynamic regulations and policies set by the government. This means that the amount you pay as customs duty is not static but fluctuates over time. It is also important to note that the tariff rates for imports are different from the rates for exports. To ensure accuracy and stay informed, please contact your freight forwarder for precise tariff figures for your upcoming shipment.
The Customs Clearance Process
When importing goods into China or exporting goods from China, you have to complete the customs clearance procedure as follows:
- Check the Prohibited List: Review the list of prohibited items in advance to ensure your cargo is not included.
- Determine the HS Code: Consult the Harmonized System (HS) code to accurately classify your cargo.
- Coordinate with customs agent: Provide your agent with corresponding customs clearance documents, which include invoices, packing lists, and others.
- Submit Documents and Pay Tariff Fees: Provide the collected documents to your customs clearing agent, along with the required tariff fees. Your clearing agent will handle the customs clearance process on your behalf
Taxes and Tariffs
VAT
VAT, also known as Value Added Tax, is a levy imposed on domestically produced goods. Importers may be required to pay VAT along with tariffs in certain instances.
Excise Tax
Excise tax is a type of duty imposed on specific goods, including luxury items such as jewelry, as well as commodities like wine and tobacco. Not all items attract excise taxes.
Anti-dumping duties
Anti-dumping duties are tariffs imposed on imported goods sold below fair market value to prevent unfair competition and protect domestic industries.
Who is a Customs Broker?
A customs broker is a licensed individual or entity responsible for managing the administrative tasks of importers and exporters of goods. Brokers use their expertise to assist shippers by submitting necessary customs documentation on all aspects of the shipping process. Brokers act as middlemen, facilitating communication and transactions between shippers and domestic customs agencies.
Who is a Freight Forwarder?
Chinese Freight forwarder specializes in managing logistics and organizing the physical transportation of cargo from the port of origin to its ultimate destination. Some freight forwarders may also serve as customs brokers, not every customs broker is necessarily a freight forwarder. Freight forwarders can operate within the import, export, or both sectors, depending on their specific area of expertise.
How long does customs clearance take in China?
The clearance timeframe for cargo in China varies depending on factors like port congestion. During peak seasons, clearance may take longer, typically ranging from 1-2 days or more, as customs officers process properly documented items with paid duties during regular working hours. Apart from port congestion, several other factors can contribute to potential delays.
- Unavailability of required shipping documents
- Incomplete shipping information
- A lack of description for the cargo
- A lack of Client Data file
Custom Clearance Documents
In this section, we will talk about the customs clearance documents required to process your cargo. To ensure clarity, we have divided the necessary documents into two categories: import customs clearance documents and export customs clearance documents.
Documents Required for Import Custom Clearance
Packing List
A packing list is a document used in international trade. It provides the exporter, international freight forwarder, and ultimate consignee with information about the shipment, including how it's packed, the dimensions and weight of each package.
Bill of Lading
The Bill of Lading is specifically designed for cargo transported via seaports, whereas an airway bill is used for cargo shipped through airports. Issued by the carrier, this document contains comprehensive information about the cargo, including delivery terms.
Commercial invoice
A commercial invoice is a document used by customs officials to determine the value of goods being imported into the country. By analyzing the information provided in the commercial invoice, customs officials can accurately calculate the customs duty that the importer is required to pay.
Import License
Import licenses are mandatory for certain products and are subject to strict government regulations. These licenses grant individuals or entities the legal authorization to import goods that fall within the regulated category. If you intend to import items that are included in the list of regulated products, it is necessary to obtain the appropriate license.
Documents required for export customs clearance
Proforma invoice
The proforma invoice is a document that communicates an exporter’s intent to sell a range of goods to a buyer or importer at a prearranged price.
Packing List
The packing list provided all the item details included in the shipment
CO Certificate
A country of origin certificate is a document issued by the exporter, confirming that the goods to be shipped have been manufactured and packaged in the specified country of origin.
Bill of Lading
The Bill of Lading is a detailed list of a shipment of goods in the form of a receipt given by the carrier to the person consigning the goods.
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What is the Customs Clearance fee?
China Customs clearance fees refer to the total amount paid by shippers to customs agencies for the clearance of goods from seaports or airports. These fees encompass various types of customs charges, as explained below.
Customs Duty
Customs duty is an indirect tax imposed on imported items in a country. Some exported items may also attract customs duty fees, known as export duty.
Basic Customs Duty and Additional Customs Duty
Basic customs duty is the standard duty applied to similar items, while additional duties are levied on goods based on factors such as volume, size, or quality, in addition to the basic duty.
Excise and Customs Duty
Excises are similar to customs duty as both are forms of indirect taxes levied on goods. The distinction lies in the fact that excises are imposed on items brought into the country via land borders.
VAT
Value Added Tax (VAT) is an indirect tax imposed on goods and services at various stages of production. VAT is levied on services or products produced within a country, serving as a revenue generation mechanism for governments, similar to customs and excise duties.
How much does customs clearance cost?
What are the customs charges in India for goods from China?
Who is responsible for paying customs clearance?
The buyer or importer of the cargo is typically responsible for paying customs clearance fees, including taxes, duties, and other applicable charges.
Who handles customs clearance?
Freight forwarders deal with customs clearance on behalf of the importer, and they possess custom clearing licenses and process the necessary documentation with the customs agency according to established rules and procedures.
