Finalising Import Contract

This is an important subject and should be handled with extreme care and caution. It is advisable that before finalising the terms of Import Order, you should call for the samples or catalogue and other relevant literatures and the specification of the items to be imported. Import of samples of goods is exempt from import duties under 'Geneva' Convention of 7th November, 1952. Samples are subject to re-export and other conditions as specified in the Geneva Convention. Besides, vide Customs Notification No. 154/94 dated 13.07.1994, commercial samples brought into India as personal baggage by bona fide commercial travellers and businessmen or imported into Into India by post or by air are exempt from the customs duty. Similarly, vide Notification No. 154/94 dated 13.07.1994, prototype of engineering goods when imported into India as samples for executing or for use in connection with-export orders are exempt from customs duty. Likewise, the Central Government has exempted bona fide commercial samples and prototype of engineering goods when imported into India by post or by air or by courier service by manufacturers of export goods.

Once you are satisfied with the samples and the creditworthiness of the overseas supplier, you can proceed to finalise the term of the contract to be entered into. For this purpose, the Import Contract should be carefully and comprehensively drafted incorporating therein precise terms, all relevant conditions of the trade deal. There should not be any ambiguity regarding the exact specifications of the goods and terms of the purchase including import price, mode of payment, type of packaging, port of shipment, delivery schedule, etc.

The different aspects of an import contract are enumerated as under some of which may be relevant and other may not be:
  • Product, Standards and specifications.
  • Import Quantity
  • Import Inspection
  • Total Contract Value
  • Terms of Delivery
  • Import Taxe, Import Duty and Charges payable at Exporting Country and payable in India on importation.
  • Period of Delivery/Shipment.
  • Import Packing, Import Labelling and Import Marking.
  • Terms of Payment-Amount, Import Mode & Currency.
  • Import Discount and Import Commission
  • Import License and Import Permit
  • Import Insurance.
  • Documentary Requirements.
  • Import Guarantee.
  • Force Majeure or Excuse for Non-performance of Contract.
  • Remedies
  • Arbitration