Before you get started with the import process, it’s essential to know what importance import documents hold. These documents are a gateway for efficiently running through the process of importing.
When you maintain a proper portfolio of documents that have all the records of importing goods and services, such as transactions, bills, and invoices, it gets easier to get along with the whole process and expedite it as well.
Imports are a great way of fulfilling domestic needs and levelling up poor economic growth. However, considering imports an easy-go process can be the biggest lie of all time. It comes with its problems and complexities.
These problems are sometimes easy to solve, but many times, an importer may have to approach an expert or professional to seek help and find the best solution to those problems.
Let’s delve deeper into the details of documentation and invoicing requirements, which are essential for imports.
Mandatory import documents
These are some of the documents that have great importance in the importing process. Without these documents, it’s nearly impossible to get your process started. These are:
- Bill of lading: A bill of lading gives brief information on a contract between a shipper and a carrier. It includes details of all the transportation of goods and services, details of shipper and consignee. Besides this, it has data related to goods. Information on the goods includes their quantity, type, size, weight, and numbers. It also has details of the vessel through which the goods are supposed to be transported. Apart from these topics, the port at which the goods will be dispatched has the details of that port as well. It also declared the charges for the freight. However, don’t forget to read the terms and conditions of the carriage as well. A bill of lading is a hub of details that opens up its gate to multiple other branches of the details of the goods.
- Packing list: It has all the data that is related to the goods that are being imported. The packing list contains information such as the identification and contact information of the exporter. It has all the required details about the invoice number, consignee, and the date when it was issued. It also has information related to the port as to where the goods are supposed to be unloaded, the carrier, the total number of packages, the category of packages, its average weight and volume, and the country of origin.
- Certificate of Origin: This document helps when it comes to identifying trade agreements and duty rates. It also includes details related to the country of origin and the authorization via the seal and signature of the authority. This document mainly showcases the origin of the goods in international trade.
- Import license: This license is needed when the import is of goods that are either restricted or not allowed in certain countries. With the help of this license, you can get that good imported into your desired location.
- Additional documentation: The health certificate is needed for the products that are needed for animals. The inspection certificate is needed for the safety of goods and for ensuring the quality of products as well. When additional documents are discussed, include the import license and permits, the quota license, and insurance documents including marine insurance and cargo insurance. These additional documents are equally important, as all other documents are necessary for the import process.
Commercial invoice requirements for imports
There are a lot of factors upon which the requirements of commercial invoices rely. It depends on the country of origin and destination.
However, there are some general requirements, which include details of the importer and exporter, the seller and the buyer, and if there is any foreign supplier.
A commercial invoice also specifies the value of the product that is being sold. Apart from these, here are some other requirements as well.
These are:
- Signature and stamp
- Digital invoices
- Language
Also Read: Import Of Goods And Services And Applicability Of Integrated Goods And Services Tax (IGST)
Bill of entry and other shipping documents for imports
It’s fair to say that the bill of entry is very important and is considered a passport for the goods that you would import.
The bill of entry has all the details, such as information related to the exporters and importers, the description and each detail of the good that is being imported, the country of origin, which tells the origin of the goods when they begin their importing journey, and all the duties and taxes that will be implemented on the imported goods.
A bill of entry has great importance among all the documents that are needed at the time of import. Apart from BE, other relevant documents that are essential in the import process are:
- Commercial invoice
- Packing list
- Certificates
Place of supply on import invoices
The place of supply has to be important when it comes to trading. No matter, if you are trading locally or internationally, a place of supply is considered essential so that you can identify payments and taxes.
As per the regulations for place of supply, it should dictate sufficient information regarding:
- Types of goods: It declares the tangible and intangible goods. As per the nature of goods, the place of supply is suggested, as are the payment method and transportation.
- Mode of transportation: Whichever mode is accepted, such as air, land, or sea. It has details related to it.
- Incoterm used: While you begin with importing goods, the trading and payment methods are decided earlier. It is decided before who is going to pay and bear the cost.
Also Read: Place Of Supply For Goods Imports: Port Of Entry And Customs Clearance
Maintaining proper import records
The maintenance of documents is the hidden success of most businesses and companies. Not only does it help with the audits, but it can be the best thing you can do as an importer for the sake of your business reputation and positive image.
It’s difficult to manage every document on your own; therefore, it’s suggested to get your team or company a manager with his personnel who are responsible for collecting and managing all the relevant documents related to the importing of the goods.
Inculcate a robust system that helps expedite the process of managing your goods and keeping them up to date. Try to bring software systems for reporting and managing documents that are needed at the time of the import process.
Commercial invoices, bills of lading, bills of entry, transportation documents, customs documents, and other additional documents are very important to be collected in one place and secured.
One or two of the teammates should know where they are and what documents are there so that, at the time of the audit, the company owner doesn’t have to run here and there to get it collected in one place.
The maintenance of documents is one of the most important steps towards the success of any business. It’s not only about importing or exporting, but it’s important for every business as it helps with keeping records, finding any missing data or information, and auditing as well.
Conclusion
It’s important to inculcate the suggestions and requirements needed at the time of import. To save yourself from the hassle of delays and penalties, the best way is to follow the guidelines and instructions, implement them, and get your business secured for the future.
Once you get hold of these suggestions and requirements and proceed accordingly, it boosts your confidence to trade worldwide. Handling imports will be easier, and the process will go smoothly.
What an importer should religiously follow is to document each step in the import process. All the billing, invoicing, transportation, and every step need to be saved in the form of documents so that, at the time of the audit, these documents will work as proof when there is any uncertainty.
Also Read: Place of supply for service imports: location of service recipient in India
FAQs
Q1. What is import documentation?
With the help of these documents, all the related parties are provided with the relevant information regarding the products or services being imported.
Documentation of various bills and invoices is very important in the trading process, as it helps with an easy and smooth process to proceed ahead.
Q2. Why are documents important in international trade?
They are important because they have a record of various payments and bills, which can be needed at any stage of trading. These documents are held accountable for keeping records of various transactions, keeping various receipts, and providing information on the goods.
At the time of the audit, these documents play a vital role in tracking information on the goods and services that are imported.
Q3. What is the customs documentation process?
This process is needed at the customs department when the goods are imported. They go through a process of checking and verifying the products.
The clearance and allowance of the goods after being checked by the customs department can be in electronic form or in the form of a document.
Q4. What is the most important document in international trade?
Almost all the documents are necessary for the trading process; what tops the list is the commercial invoice. It has information related to the buyer and seller, the importer, and the exporter.
Q5. Why is import needed?
Imports in any country are needed when companies and industries can’t produce goods efficiently and cheaply similar to those exported.
It’s important to import goods for the sake of businesses and to have a positive impact on the global map. It can improve the economic ties between different countries. Consumers can access a great variety of products that are not domestically accessible.
Q6. What is the law of supply?
As per the economic concept, the law of supply believes in increasing the prices of goods and services, which will eventually help in increasing the supply of those goods and services.
The goods can get their prices increased, in turn allowing the suppliers to sell those goods in multiple quantities to maximize profits.
The concept works along with the law of demand, which explains how economies allocate resources and identify the prices of services and goods.
Q7. What are the factors that affect supply?
There are a lot of factors that affect the supply, such as the goods price, related goods price, production cost that includes wages, utilities, and materials, the capacity of the production that speaks of the output, technology that can greatly impact the quality and efficiency of the goods produced, and the number of suppliers whose behavior also comes into play that alters the price and the market share.
Considering all of these factors, the supply of goods and services can be greatly affected. Hence, the best approach is to keep in mind these factors and move ahead with the trading.
Q8. Why is export better than import?
Export is better than import because the more export a country does, the better it changes the economic conditions of its country.
Exporting goods can be the best solution for making a positive impact globally. This way, you get to interact with various countries and get to know their needs and standards. You get to maintain a healthy relationship all around the world.
However, importing goods means that your country cannot produce the goods that you are planning to import. A country should work hard to create a surplus situation where exports are greater than imports.
Q9. What are the essential items for import?
Many factors are essential for imports. The most important ones include pharmaceuticals, surgical instruments, medical devices, food and beverages, medication, and raw materials.
These goods are considered the most important subject of imports because, in any country that is not manufacturing these goods abundantly and cheaply, it’s best to import those goods.
Q10. What is an invoicing system?
This system is generated with the help of software, which is responsible for creating bills for the goods and services imported and exported.
With the help of an invoicing system, you can streamline multiple things related to finance, such as liquidity, flexibility, and financial forecasting.
Any ST-registered business must generate an invoice for any business-to-business transactions made. There is an e-invoicing method that will allow the business to generate invoices electronically and the invoicing system can as well authenticate other documents electronically with the aid of GSTIN. Further, this comes to a use for the GST portal.
