What is Customs Clearance?
Customs clearance is submitting required documentation to a government agency to obtain permission to bring goods from one country into another. It is a crucial part of the logistics and e-commerce process, as it ensures that goods are correctly accounted for and taxed in the country of import.
Significance of Customs Clearance in E-commerce and Logistics
By ensuring goods are cleared adequately for entry, customs clearance facilitates the smooth flow of goods across borders. To understand the benefits of customs clearance, you can refer to the following pointers —
1. It ensures that goods and services are imported, exported, and transported legally per the laws and regulations of each country.
2. It facilitates the movement of goods and services across borders by ensuring that the necessary taxes and duties are paid.
4. It protects businesses from the risks of dealing with counterfeit products.
5. Custom clearance speeds up delivery and provides customers with better service.
6. It helps to provide better visibility into the supply chain and helps businesses monitor their shipments more closely.
Prerequisites of Customs Clearance and How it Works
These prerequisites must be followed to ensure total legality while exporting goods:
1. The importer must provide the customs authorities with the origin and value of the goods and the applicable duties and taxes.
2. The customs authorities may inspect the goods and documents and determine whether the goods are allowed to enter the country.
3. The importer may need to pay the taxes and provide additional information or documents if requested by the customs authorities.
Use Cases of Customs Clearance
For instance, consider you’re an overseas seller. When a customer orders an item from you in a different country, you must offer the customs authorities documents and information such as a commercial invoice, product description, and value of the goods. The customs authorities will then review the records and determine the applicable duties, taxes, and charges you must pay before the goods can be released and delivered to the customer.