In the International trade it is considered often necessary that samples of goods manufactured in one country be sent to another country for being shown or demonstrated for Customer appreciation and familiarisation and for soliciting orders for goods from another country. India is also a signatory to a 1952 convention to facilitate the Importation of Commercial samples and Advertising materials. The notifications issued in this regard enable duty free import of genuine Commercial samples into the country for smooth flow of trade. It is however not a means to avoid paying Customs Duty through repeated imports of samples in smaller lots.

What are samples?

2.        The Commercial samples are basically specimens of goods that may be imported by the traders or Representatives of Manufacturers Abroad in India, to know its characteristics and usage and to assess its marketability in India. Samples include consumer goods, consumer durables, prototypes of engineering goods or even high value equipment, machineries (including agricultural machinery) and their accessories. However, goods which are prohibited under Foreign Trade (Development and Regulation) Act, 1992 are not allowed to be imported as samples e.g. wild animals, wild birds and parts of wild animals and birds, ivory, arms & ammunitions, and Narcotic drugs.

Who can import samples?

3.        Samples can be imported by the trade, industry, individuals, Companies, Associations, Research Institutes or Laboratories. These can also be brought by the Representatives of foreign Manufacturer as a part of their personal Baggage or through port or in Courier. They can also be sent by Manufacturers/Traders abroad to above parties in India.

Value limit

4.        The bonafide trade samples can be imported by Trade and Industry provided the said goods have been supplied free of charge. For duty free clearance the value of individual sample should not exceed Rs.5000/- and aggregate value should not exceed Rs.60,000/- per year or 15 units of samples in a year. However, the Prototypes of engineering goods can be imported even if the value is more than Rs.5000/-. Such prototype goods can be imported upto a value of Rs. 10,000/- without payment of duty as long as the goods are rendered useless as merchandise by a suitable process. In case the value exceeds Rs.10,000/-, the said goods have to be re-exported within a period of nine months or such extended period as the Assistant Commissioner of Customs may allow. The high valued samples are cleared after depositing duty with Customs and giving an undertaking for their re-export within nine months. The deposited duty is refunded when the machinery is exported back. However, if more than one product is being imported into the India, the value limit is increased proportionately. Similarly, if the samples are consigned to more than one consignee, by any foreign company, and are sent at the same time through the same Port/Airport, it shall not be charged to duty if the value limit of Rs.5000/- per unit is adhered to. The consignments meant for distribution to different parties in India can also be imported together for convenience of transport, if the packets are clearly marked and addressed to different persons in India.

5.        The value of Rs.5000/- is the value of the goods at a country of dispatch excluding local refundable taxes like VAT in the country of dispatch. In case of free samples of Rs.5000/-, it does not include freight or courier charges. If value is above Rs.5000/-, the freight and insurance charges would be added to calculate the duty payable .

Records

6.        Importers are trusted to declare correctly and adhere to the undertaking of the limit of yearly value and quantity. However, if any person is suspected to contravene the limit or undertaking deliberately he is liable to be investigated, penalized and / or prosecuted.

How will a salesman from a foreign country bring in the samples to India?

7.        A commercial traveller of foreign country is eligible to import bonafide samples if the value of each of the item is not more than Rs.5000/- per unit. He is also not required to produce the IEC code at the time of clearance of these goods.

8.        The importing executive must declare that these goods are meant for securing export order or guidance of exporters, and that the total value does not exceed Rs.60000/- per item during the 12 month period and that he has not imported more than 15 units of the said goods within the last 12 months. He also undertakes that he would not sell these goods and if he sells he will pay the duty leviable on those goods.

Machinery import

9.        Machinery, which are prototypes of engineering goods, imported either for further manufacturing of the said goods or to be used as capital goods for export production or in connection of securing further export orders can also be imported duty free if the value does not exceed Rs.10000/-. The said goods are normally defaced or made un-saleable by punching, cracking, marking with indelible ink etc. In case the machinery is valued more than Rs.10000/- such goods are always chargeable to duty. The goods can be cleared by furnishing a Bank Guarantee(or) deposit of the duty payable and an undertaking from the importer that the said goods would be re-exported within 9 months of import. In case of high valued machinery the importer given an undertaking that the said goods are utilised for the purpose of demonstration at the place (s) which is declared. The Customs authority may also seal the machinery during its journey from the Port of importation to the place of demonstration and it is unsealed only at the place of operation or place of demonstration

Failure to re-export

10.        The samples have to be re-exported within 9 months. However, the Assistant Commissioner, Customs, may under special circumstances extend the period of 9 months for a further reasonable period.

Import of samples under other scheme

11.        In addition to above the following specific provisions/ schemes are available for duty free import of samples;

(a)        Under 100% EOUs, EPZ, EHTP Schemes the samples of all types of goods manufactured by the Units can be imported duty free.

(b)        Sample can also be imported for Government of India sponsored events viz. Trade and Industry fairs. These machineries are imported under a Carnet (Notification No.57/90).

(c)        Samples can also be imported for Private Commercial exhibition for display or demonstration with the prior permission of Ministry of Commerce and Indian Trade Promotion Organization, (Notification No.3/89).

(d)        Samples are allowed duty free import for promotion of tourism equipment and ancillary goods. (Notification No.113/57)