Aircraft Import: 4 points to note for customs clearance

Import of complete aircraft into India comes with its own set of procedural challenges. Any import in India requires careful planning, detailed cost analysis from product perspective, a thorough look at customs and trade regulations as well as logistics costs. However in this article we will look at the key aspects from customs perspective. Generally we noticed that customs and trade regulations are factored in at the later stages of planning, which disrupts lot of plans. Planning should consider customs and trade regulations as crucial as product decisions and must factor this from starting point of planning.

We will look below at 4 important aspects from Customs Perspective while planning for import of aircraft

  1. Status of the Importer: Status of importer is critical in terms of regulations that are applicable as well as the customs duty that is applicable. Status refers to purpose of the import by the importing company. Is the company importing the aircraft for Scheduled Airline Operations, Non scheduled Airlines operations or for private/personal purpose. For Scheduled Operators (SOP) or Non Scheduled Operators or NSOPs the rates of duties as well as processes are different than a company importing under Private Status. The Status of import is validated by DCGA and generally NOC is provided. This NOC has to be obtained before the import of aircraft and all documentation needs to be available to be submitted at the time of Import.
  2. Applicable Duties: The Indian customs duty structure is complex. At first glance it looks like we have Basic Customs Duty and GST as two components of Import duty. However at closer look, there is Agriculture Infrastructure Development Cess (AIDC), Social Welfare Surcharge (SWS), GST compensation cess which are applicable in varying percentages, again depending upon the status of the importer. If Basic customs duty is 0% then ancillary duties that are a % of the Basic Customs Duty becomes 0% automatically.
  3. Non-Tariff  Procedures: Apart from customs duty, there are certain procedures that are applicable based on the status of importer. For example, in case of any duty benefit obtained by a Training Institute a Bond / Undertaking has to be submitted by the importer in lieu of availing the duty benefit. The bond has to fulfil all criteria set to avail the duty benefit. Hence documenting and draft of the bond is also critical. In case of Private Status, an import license may also be necessary before import of the aircraft.
  4. Valuation in cases of purchase from non-OEM: Valuation of the aircraft is a very important aspect during assessment of the import of aircraft. Documentary evidences are a must in case the purchase is made from a non-OEM or Aircraft Manufacturer. This is because of the rigourous rules on the importer to prove that the cost mentioned on the invoice is the total cost of acquisition of the aircraft. How this value is arrived at - needs to be clearly documented and shown to the authorities. Since the entire duty structure is % based, hence valuation of the goods is of prime importance.

Kindly note that the onus of proving that duty benefit is applicable to the importer is the duty of the importer to prove not the government. To put this into simple words any trade benefit won't be given to the importer just because the importer qualifies for it, but the importer has to prove eligibility with documentary and procedural evidences.

Our services include customs clearance, freight forwarding, and domestic transportation to help our clients in various needs depending up on their business approach. We have cleared and forwarded Complete Aircraft, Engines, Aviation Parts at Mumbai ports.

Feel free to contact Abhi from Abhishek J Date Logistics or call 9819220630 if you have any queries in import of aircraft into India or any capital goods into India.