Indirect Tax Laws · Importation and Exportation of Goods

Import Procedure: Bill of Entry and Clearance (CA Final IDT)

Updated 5 October 2026 · Fact-checked

Import procedure is the sequence of steps that takes goods from arrival in India to release by Customs. The carrier files the import manifest, you file a bill of entry, duty is self-assessed and paid, goods may be examined, and the officer gives an out of charge order for home consumption, warehousing or transit.

Understand Import Procedure: Bill of Entry and Clearance

Imported goods are not free to move the moment a ship lands or a flight arrives. Customs must first know what has come in, then decide what duty is due, and only then let the goods go. The import procedure is this chain of control. Think of it as three questions: what arrived, what is owed, and where are the goods going.

Entry inward answers the first question. The person in charge of the conveyance (ship, aircraft or vehicle) delivers an import manifest or import report to Customs. This is a carrier's document. It lists the cargo on board. Only after the conveyance is permitted to enter inward can goods be unloaded under Customs control.

Bill of entry answers the second and third questions. The importer (or the customs broker) files it electronically. It declares the description, classification, value, quantity and the intended purpose of the goods. Under the self-assessment scheme, you declare the classification, value, exemption claimed and duty yourself. The proper officer does not assess every bill. A risk management system picks bills for verification, examination or testing. If the self-assessment is found wrong, the officer reassesses the bill and the duty changes.

There are three main types of bill of entry by purpose: for home consumption (goods enter the Indian market on payment of duty), for warehousing (goods are stored in a bonded warehouse and duty is deferred), and ex-bond (goods are taken out of the warehouse for home consumption, with duty paid then). Goods can also be moved onward under transit or transhipment to another customs station or abroad, without being cleared for domestic use at the first port.

Clearance ends with the out of charge order. The officer gives it when he is satisfied that the goods are not prohibited, the duty and any interest, fine or penalty are paid, and the declaration is in order. Only then can goods leave the customs area. Exams love to test the order of steps, the type of bill for each purpose, and the date that fixes the rate of duty.

Key rules to remember

Order of the import chain: Entry inward → Bill of entry → Assessment → Payment of duty and examination (if ordered; either may come first) → Out of charge → Removal; Write this chain first in any descriptive answer. Examination happens only for bills selected on risk or by the officer. Where it is ordered, it may take place before or after payment of duty. The out of charge order follows both.
Who files what: Import manifest/report = person in charge of conveyance; Bill of entry = importer or customs broker; A common one-line question. The carrier never files the bill of entry.
Types of bill of entry: Home consumption (white) | Ex-bond (yellow) | Warehousing (green); The colours come from the traditional forms. Today filing is electronic, so lead with the purpose and mention colours as a memory aid. The ex-bond bill of entry is the bill of entry for home consumption that is filed to clear goods already held in a warehouse. It is not a third independent category in the Act, but it is useful to name it separately in answers.
Rate of duty: home consumption: Rate in force on the date the bill of entry is presented. Proviso: if the bill of entry is presented before the delivery of the import manifest, the rate in force on the date of delivery of the manifest applies; If you present the bill before the manifest is delivered, the rate on the date of delivery of the manifest applies, whether that rate is higher or lower than the rate on the date the bill is presented. The date that matters is the date of delivery of the manifest, not simply the vessel's arrival.
Rate of duty: goods from a warehouse: Rate in force on the date of actual removal of the goods from the warehouse; The rate on the date of warehousing does not apply. Nor does the date the ex-bond bill of entry (the home consumption bill filed to clear warehoused goods) is presented. Duty is deferred, not fixed.
Self-assessment: Importer self-assesses duty; proper officer may verify, examine or test; if self-assessment is incorrect, he reassesses; Mention the importer's duty to declare correct classification, value and exemption.
Clearance condition: Out of charge = duty and other dues paid + officer satisfied + goods not prohibited; Without the out of charge order, goods cannot be removed for home consumption.

How to solve Import Procedure: Bill of Entry and Clearance questions

Use this method for any question on import procedure, whether it is a theory answer or a case scenario with dates and values.

1Identify the stage the question tests: entry inward, bill of entry, assessment, payment, examination or clearance.
2Identify the purpose of import: home consumption, warehousing, or transit/transhipment. This decides the type of bill of entry.
3Fix who must act: the carrier (manifest), the importer or customs broker (bill of entry), or the proper officer (assessment, examination, out of charge).
4If dates are given, mark the key dates: date of delivery of the import manifest, date of presenting the bill of entry, and, for warehoused goods, the date of actual removal from the warehouse. Pick the rate date using the rule.
5If values are given, compute duty on the assessable value at the rate on the chosen date. Add other levies only if the question gives them.
6Check conditions for clearance: duty paid, any examination or testing done, goods not prohibited.
7Conclude in provision-facts-conclusion form: state the rule, apply it to the facts, and give a one-line answer.

Quickest way: Purpose-then-date shortcut

When to use it: Use this for case-scenario MCQs where you must name the bill of entry type or pick the applicable rate of duty in a minute or less.

Read the purpose of import in the scenario. Home consumption means one bill. Warehousing means a warehousing bill first and an ex-bond bill later.
Underline all dates in the scenario and label them: manifest delivery, bill of entry presented, removal from warehouse.
For home consumption, the rate date is the date the bill of entry is presented. Only if the bill was presented before the import manifest was delivered, take the date of delivery of the manifest instead.
For warehoused goods, take the date the goods are actually removed from the warehouse.
Eliminate options that use the date of warehousing, the date of order, or the date of payment. These are traps. For warehoused goods, the date the ex-bond bill is presented is also a trap.
Multiply value by the rate once, and stop. Do not add levies the question does not mention.

Common mistakes in Import Procedure: Bill of Entry and Clearance

Saying the importer files the import manifest.
Both documents sound like import declarations, so students mix up the filer.
Fix: Remember: manifest is the carrier's document about the cargo on board. Bill of entry is the importer's document about the goods being cleared.
Using the date of arrival or manifest delivery as the rate date even when the bill of entry is filed after it.
Students recall only the early-filing proviso and apply it to every case.
Fix: The rate date is the date the bill of entry is presented. Only if it is presented before the delivery of the import manifest does the date of delivery of the manifest apply.
Applying the rate on the date of warehousing, or the date the ex-bond bill is presented, to goods cleared from a warehouse.
Students assume the rate gets locked when goods are first imported, or when the paperwork is filed.
Fix: For goods cleared from a warehouse, use the rate in force on the date the goods are actually removed from the warehouse.
Treating a bill of entry for warehousing as final clearance for the Indian market.
The word 'clearance' is used loosely, and students forget that duty is only deferred.
Fix: A warehousing bill lets goods be stored under bond. Duty is paid when an ex-bond bill for home consumption is filed and the goods are cleared.
Thinking every bill of entry is assessed and examined by an officer.
Older study notes describe manual assessment of each bill.
Fix: Under self-assessment, the importer assesses. Officers verify and examine bills selected by risk or on specific grounds, and reassess if the declaration is wrong.
Letting goods leave the port once duty is paid, without mentioning the out of charge order.
Students stop the answer at payment of duty.
Fix: Always end with the out of charge order. It is the officer's permission that completes clearance.

Worked examples

Example 1

Ravi Traders imports machine parts by sea for its own factory use. The assessable value is ₹10,00,000. The bill of entry for home consumption is presented on 10 May. The import manifest is delivered on 14 May. The basic customs duty rate is 10% till 11 May and 15% from 12 May. Ignore all other levies. Which rate applies, and what is the basic customs duty?

Show the solution

Provision: for goods cleared for home consumption, the rate is that in force on the date the bill of entry is presented. If the bill is presented before the delivery of the import manifest, the rate on the date of delivery of the manifest applies.
Facts: the bill is presented on 10 May, which is before the import manifest is delivered on 14 May. So the date of delivery of the manifest, 14 May, fixes the rate.
The rate on 14 May is 15%, because the increase took effect from 12 May.
Duty = ₹10,00,000 × 15% = ₹1,50,000.

Answer: The rate on 14 May, 15%, applies. Basic customs duty is ₹1,50,000. Filing early on 10 May gives no benefit from the 10% rate.

Example 2

Meera Pharma imports raw material worth ₹5,00,000 (assessable value) and files a bill of entry for warehousing on 1 June. It presents an ex-bond bill of entry for home consumption on 18 September and the goods are actually removed from the bonded warehouse on 20 September. The basic customs duty rate was 10% on 1 June, 11% on 18 September and 12% on 20 September. Ignore other levies. State the type of bills of entry and compute basic customs duty.

Show the solution

Provision: goods may be warehoused without payment of duty on a bill of entry for warehousing. When they are cleared for home consumption, an ex-bond bill of entry is filed and duty is paid then. The rate is that in force on the date of actual removal of the goods from the warehouse.
Facts: the first bill on 1 June is for warehousing. The second bill, presented on 18 September, is the ex-bond bill for home consumption. The goods are removed on 20 September.
The rate date is the date of actual removal, 20 September. That rate is 12%.
Duty = ₹5,00,000 × 12% = ₹60,000.
The 10% rate on 1 June and the 11% rate on the date of the ex-bond bill are irrelevant. Duty was deferred, not fixed, at the time of warehousing.

Answer: Meera Pharma files a bill of entry for warehousing and then an ex-bond bill of entry for home consumption. Basic customs duty is ₹60,000 at 12%, the rate on the date of removal from the warehouse. Goods can leave only after the officer gives the out of charge order.

Exam tips

For a theory question, draw the chain from entry inward to out of charge in the first two lines, then explain each stage briefly. This secures the structure marks.
In case-scenario MCQs, list the dates first and decide the rate date before reading the options. The options are built to trap the wrong date. For warehoused goods, the date of actual removal is the one that counts.
Always name the bill of entry type by purpose: home consumption, warehousing, or ex-bond. Mention colours only as a bonus.
Do not quote section numbers unless you are certain. A correct rule in plain words earns marks, and a wrong section number can cost them.
End every answer with the out of charge order. It shows you know that payment alone does not clear goods.

Practice questions from Importation and Exportation of Goods

Import Procedure: Bill of Entry and Clearance: frequently asked questions

What is a bill of entry under the Customs Act, 1962?

It is the declaration an importer or customs broker files to get imported goods cleared. It states the description, classification, value, quantity and purpose of the goods. It is the basis for self-assessment of duty.

What are the types of bill of entry?

The three main types are the bill of entry for home consumption, the bill of entry for warehousing, and the ex-bond bill of entry. The first is for goods entering the market on payment of duty. The second is for storing goods in a bonded warehouse. The third is for taking goods out of the warehouse for home consumption.

Can I file a bill of entry before the goods arrive?

Yes, the law allows presentation of the bill of entry before the arrival of the goods, within the time allowed by regulations. This speeds up clearance. But for home consumption, if you file before the import manifest is delivered, the rate of duty is that on the date of delivery of the manifest.

What is an out of charge order?

It is the proper officer's order allowing clearance of the goods. He gives it when duty and other dues are paid and he is satisfied about the declaration and that the goods are not prohibited. Goods cannot be removed for home consumption without it.

Does every bill of entry get examined by Customs?

No. Under self-assessment, the importer assesses the duty. A risk management system selects bills for verification, examination or testing, and others are cleared with little or no intervention.