What all you have to do to start import business from China to India?

Indian e-commerce market is experiencing a boom over demand for consumer electronics and gadgets. Most of these gadgets are imported from the leading electronic hubs of the World – China, Japan, and Korea. Targeting youth of the country, both new and existing e-commerce vendors are seeking to import more and more electronic items and fascinating technologies to India.  But, most of them don’t have a clear thought over the import process. Import of goods from a market like China requires compliance over a number of searches and clearance procedures before reaching the Indian market, there is a great opportunity for entrepreneurs to start a new importing agency business in India.  

An importing agency serves buyers of overseas markets, all the facilities they require to import goods from abroad. The agency plays the role of a compliance mediator providing – advisory over finding reputed dealers, guarantees to parties transacting, holding custom clearances obligations, checking payment and terms of the transaction and finally committing the import to India. If you too find scope in the industry for yourself, then go through this post to know well about “Forming an Importing Agency in India “and starting your own business of import from China to India.

  • Register your Business 

The time you’ll be dealing with custom authorities, shipping agencies, seller of goods, banks or financial institutions on behalf of your clients or while importing goods in your name , you require legal representation of your entity. That could be received only when you get your business legally registered or incorporated.

In India, there are no specific criteria to start an import and export business.  For new entrepreneurs, Simple registration of business will all be required. Business registration in India can be done by applying in any of the following ways:

Registration can be obtained by either hiring a tax service providing agency or by hiring any legal professional. With registration of business, registration under several other laws and regulations applicable will also become simpler like GST Registration , Registration for Import Export Code, Registration of Trademark / Copyright / Patents and for other tax purposes.

Registration of business will also be required to obtain PAN Card and Bank account in name of business for transacting foreign remittances.

  • Obtain Import Export Code (IEC)

Obtaining an Import Export Code (IEC) is mandatory for bonafide individuals and companies who opt to start their own Importing business from China to India. IEC is a 10 digit alphanumeric code issued by the Director General of Foreign Trade for export and import transactions. After implementation of GST in India, PAN can also be used in the place of IEC. 

Why IEC is important?

Import Export Code (IEC) is a route of tracking imports and exports by DGFT. It is to be quoted on prescribed documents whenever goods or any articles are under shipment or a transaction of import or export is happening. It is required:

  • For tax purposes by both entities and custom authorities 
  • For accessing trade promotion schemes like MEIS and SEIS by export and import entities.
  • For tracking of misleading business activities and establishing standards for global reach of entities.

To apply for IEC Code you can either go through a legal professional or can apply directly on through this link – http://dava.gov.in:8080/dgftiec/panSearch.jsp

  1. Registration cum Membership Certificate (RCMC) 

After receiving Import Export Code (IEC) for your business, to import from China to India as a mediating agency, an application for Registration Cum Membership Certificate is to be filed with the Export Promotional Council or Commodity board of India. 

In India, there are about 26 Export Promotion Councils which grant for RCMC Certificate. To obtains an RCMC certificate, file an application using Form ANF 2C with any export promotion council.

Need of RCMC Certificate for Importers 

  • RCMC permits an importing agency to take benefit of government schemes and tariff policies.
  • RCMC enables importers to import any restricted item which otherwise could not be imported without prior approval.
  1. Take Charge of Shipping or Hire a Logistic Company 

Not limited to India, an Importing agency also caters its services to customers, those residing in other countries. To help importers of India in receiving goods from China, an importing agency can in-house prepare for all shipping services, look out for transportation charges and custom procedures. A separate entity for customs and logistic handling can also be formed. Form a subsidiary and apply for its registration as logistic company.  

While for clients living abroad, hiring a logistic company competent & holding expertise of custom regulations and legal norms of transportation of their residing country would be recommended.  Ask more about legal aspect of importing in India.

  1. Hire a Custom Clearing Agent 

CBIC (Central Board of Indirect Taxes and Customs) in India regulates entities under custom regulations. A custom clearing agent can better assist in the process of getting multiple imports cleared with following all compliances of custom authorities and filing custom charges.

 Before goods arrive in India, the customs authorities expect the importing agency/importer to be prepared with all documents required by customs. So, hiring a custom clearing agent holding specialization in the proceedings would save more time and money.

Final Tip 

Registering as an Importing Agency in India provides a lot of avenues for new entrepreneurs to explore in field of Import business. Before committing any Import transaction in India, it is often recommended to hire a legal service providing agency that would guide on all legal issues and tax-related matters.

Taxreturnwala.com is an online tax service provider that keeps your business in acceleration. Hire us for Business / Company Registration, Tax filling, Legal Advisory, Trademark / Patent / Copyright Registration and related Corporate Services. We have in-house experts to help you counter all your legal issues.

Talk to our business expert at info@taxreturnwala.com