What Is a Customs Duty and a Customs clearance

Exporting and Importing can often be an extremely complicated and mundane process as there are so many rules, regulations as well as countless  number of procedures to adhere to. This, many a times, may require to prepare and submit documents for import and export. Usually, freight forwarders would prepare it  for us, but it is also good to know for ourselves as to how to complete the relevant documents by understanding what the terms mean. As such, in our new article series titled “Export Terms”, we would  introduce you to all the various terms used in the international trade, be it through air, land or sea freight. We would roll out one related article on a regular basis, which would help you to get a comprehensive understanding as to the document preparation for the purpose of doing trade internationally.

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What is a Customs Duty?

A customs duty is essentially a form of  import tax. This tax is imposed by the customs authority of the country that you are bringing your goods into.Usually, a customs duty is imposed to increase the revenue of the country or to protect the interests of local industries from competitors abroad.  A customs duty  is charged based on either the weight, value or dimensions of the imported goods. Sometimes, it may be based on certain criteria.

How about a Customs Clearance?

This term sounds similar to a ‘customs duty’, however it is actually different. A customs clearance refers to the document that gives imported as well as exported goods to either enter or leave a country. Typically, the shipping agent helps the individual or  the business to get approval for the shipment to be made. The customs clearance process however, differs from one country to another. This is because  each country has its own unique set of rules and regulations, crafted to suit the needs of the country that you would be either importing or exporting from.

The customs clearance is a very delicate process. First of all, the set of regulations and laws to obey differ  for each country. Secondly, it is also important to know and make sure that all the relevant documentation related to import or export is prepared accurately. This is so that the process could be completed at the earliest. Not being able to clear the customs clearance stage would mean that goods would not be allowed to move out from the country.

All in all, these are what the terms “Customs Duty” as well as “Customs Clearance” stand for.Comment your thoughts below and share this among your friends! If you would like to speak with us, click here or drop us an email to cs@ kargo.co.id

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