How to import metal scrap in India?
Importing metal scrap into India involves steps and adherence to various regulations and procedures. This blog offers a comprehensive overview of the process, from obtaining the necessary licenses to clearing customs and ensuring compliance with environmental regulations.
1. Understand the Import Policy
Metal Scrap Classification
Metal scrap is categorised under the Harmonised System (HS) code 7204, which includes ferrous waste and scrap, and HS code 7404, which provides for copper waste and scrap. Ensure you are importing the correct category.
Import Restrictions
Be aware of any restrictions or bans on importing certain types of metal scrap, as these may change over time. Consult the Directorate General of Foreign Trade (DGFT) for the latest information before importing metal scrap to India.
Adhere to Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016
Metal scrap import in India is guided by the Hazardous & Other Wastes (Management and Transboundary Movement) (HOWM) Rules, 2016, and the amendments made. So, importers must adhere to these rules before bringing metal scrap from any country to India.
2. Business Setup
Register Your Business
To import metal scrap, you need to have a registered business entity. You can establish a partnership, sole proprietorship, a private limited (Pvt. Ltd.) company or a limited liability partnership (LLP).
Goods and Services Tax (GST)
Obtain a GST registration for your business, as it's required for most import activities.
3. Obtain an Importer Exporter Code (IEC)
IEC Application
Apply for an IEC from the Directorate General of Foreign Trade (DGFT) online or through your nearest DGFT office. You must submit the required documents, including PAN, address proof, and bank details.
IEC Fees
Pay the applicable fees for the IEC application.
4. Obtain import licence from DGFT.
The importer of metal scrap must obtain an import license from the (DGFT) Director General of Foreign Trade.
5. Set Up a Bank Account
Authorised Dealer Code (AD Code)
Open a bank account in the name of your business and obtain an AD Code from your bank. The AD Code is necessary for international transactions and customs clearance.
6. Comply with Environmental Regulations
Prior Environmental Clearance
Ensure that your metal scrap import complies with India's environmental regulations. Some types of scrap may require prior environmental clearance from the MoEF&CC (Ministry of Environment), Forest & Climate Change. The importer must send a copy of the application to the concerned State Pollution Control Board (SPCB) for information and acknowledgement.
Customs Clearance
Without proper environmental clearance, customs may not clear your consignment.
7. Obtain Required Licenses, Permits and Consents
Pre-shipment Inspection Certificate
Some categories of metal scrap may require a pre-shipment inspection certificate from the exporting country.
Hazardous Waste Authorisation
One must obtain Hazardous Waste Authorisation under the HOWM Rules for dealing with such waste.
Consent from SPCB
The importer must obtain valid consents under the Water (Prevention & Control of Pollution) Act, 1974 (25 of 1974), the Air (Prevention & Control of Pollution) Act, 1981 (21 of 1981)and the E-waste authorisation for importer whichever applicable;
One-time authorisation
An importer who is a trader importing metal scrap waste on behalf of actual users must obtain one-time authorisation.
8. Shipping and Logistics
Select a Freight Forwarder
Choose a dependable freight forwarder or shipping agent experienced in handling metal scrap shipments.
Shipping Documentation
Prepare all necessary shipping documents, including the bill of lading, commercial invoice, packing list, and certificate of origin.
Customs Valuation
Ensure that the value declared on the commercial invoice aligns with the prevailing market rates for the specific metal scrap.
9. Customs Clearance
Customs Broker
Appoint a customs broker or clearing agent to facilitate customs clearance.
Customs Duties
Pay applicable customs duties, including Integrated Goods and Services Tax (IGST), Basic Customs Duty (BCD) and other relevant taxes.
Bill of Entry
File a Bill of Entry with customs, along with all supporting documents.
Examination
Customs may physically examine the shipment, especially if there are discrepancies or doubts about the declared contents.
10. Inspection and Testing
Quality Testing
Some metal scrap imports may undergo quality testing to meet the required standards.
Sampling
Customs or regulatory authorities may take samples for testing. Cooperate with these procedures.
11. Paying Customs Duties
Ensure you promptly pay all customs duties, taxes, and other fees to avoid delays or penalties.
12. Environmental Compliance
Comply with all environmental regulations and guidelines related to the disposal and recycling of metal scrap.
13. Transportation to Destination
Arrange to transport the metal scrap from the port of entry to your desired destination within India.
14. Documentation and Record Keeping
Maintain proper records of all import-related documents for at least five years, as they may be required for audits and compliance checks.
15. Post-Import Compliance
Ensure you comply with post-import obligations, such as reporting to environmental authorities or submitting periodic reports.
16. Submit the Annual Returns
The importer of the hazardous and other wastes must file an annual return to the State Pollution Control Board (SPCB) on or before the 30th day of June subsequent the financial year to which that return relates.
17. Market and Sell the Scrap
Once the metal scrap is cleared through customs and other regulatory checks, you can market and sell it to your buyers or processing units.
18. Compliance with Scrap Recycling Regulations
If you are engaged in the recycling of metal scrap, be aware of the specific regulations governing recycling facilities and processes. Obtain any necessary licenses or permits.
19. Ongoing Monitoring
Stay updated with changes in import policies, customs procedures, and environmental regulations to ensure continued compliance.
20. Seek Professional Assistance
Importing metal scrap can be complex, and it's advisable to seek professional assistance from customs consultants, legal experts, and environmental consultants to navigate the process smoothly. You can contact EcoserveIndia, who can quickly help you with the necessary procedure.
21. Duty Drawback and Export Opportunities
Explore opportunities for exporting processed metal scrap or other products to utilise duty drawback benefits and increase your business's profitability.
22. Stay Compliant
Compliance is critical in the import business. Review your import processes and documentation to ensure they align with the latest regulations.
In conclusion, importing metal scrap into India involves careful planning, regulatory requirements compliance, and experienced professionals' support. Understanding the import policy, obtaining the necessary licenses, complying with environmental regulations, and ensuring proper customs clearance are critical steps. Stay updated with the ever-changing regulatory landscape to provide India with a successful metal scrap import business.
