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Customs house agent: Benefits and role in international trade

A customs broker is a licensed professional who specializes in providing assistance in customs clearance procedures. Learn more about how this can help you in your export business.

International trade plays a pivotal role in shaping the growth and development of an economy. However, navigating the complex landscape of customs regulations and procedures can be challenging for many first-time exporters. This is where the expertise of a customs house agent comes into picture.

Who is customs house agent or customs broker?

A customs house agent (CHA) or customs broker is a licensed professional or entity that specializes in providing assistance and expertise in customs clearance procedures and compliance. They act as intermediaries between importers, exporters, and customs authorities, facilitating a smooth flow of goods across international borders¹.

Need for a customs broker

Below are a few ways in which customs broker helps the process of international trade:

1. Expertise in customs regulations

Customs brokers have in-depth knowledge and understanding of customs regulations, including tariff classifications, duty rates, valuation methods, and documentation requirements. Their expertise ensures that importers and exporters are aware of the changing customs laws and comply with them.

2. Streamlined customs clearance processes

Customs clearance agents are well-versed in these processes and have established relationships with customs officials. They navigate paperwork efficiently, ensuring that all necessary documents are accurate, complete, and submitted on time.

3. Minimized risks

Customs brokers ensure that all import and export activities are as per applicable laws and regulations, reducing errors that may lead to penalties.

4. Cost optimization and time efficiency

Customs brokers have a deep understanding of customs procedures, allowing them to optimize duty and tax calculations. By leveraging their knowledge of trade agreements, exemptions, and preferential rates, they can help importers and exporters save on customs duties and taxes.

5. Industry knowledge and networks

Customs brokers leverage their networks and connections to provide valuable insights and guidance to businesses engaged in international trade, helping them make informed decisions.

Destination delivery:

When containers reach the destination terminal, they are unloaded and transferred to the designated location. The cargo is then delivered to the recipient or stored in a warehouse, ready for distribution or further transportation.

Visit Exports Compliance Dashboard to meet your documentation requirements

What does a customs broker or CHA agent do?

A customs broker has many responsibilities, defined by the Customs Act 1962, IATA regulations, and the Customs Broker Licensing Regulations of 2018. Here are a few primary activities²:

Clearance of conveyances

Customs brokers are authorized to undertake the necessary customs clearance procedures for these conveyances, ensuring compliance with customs regulations and facilitating a smooth movement of goods.

Import and export operations

Customs brokers assist businesses in fulfilling necessary customs requirements to import goods to a country or export goods to international markets. This involves handling documentation, customs declarations, tariff classifications, valuation of goods, and ensuring compliance with relevant trade regulations.

Customs station audits

The customs audit process involves reviewing and verifying the accuracy and completeness of customs declarations, supporting documents, and adherence to customs regulations. By conducting audits, customs brokers help ensure compliance with customs laws and regulations.

How to choose a customs broker and a CHA agent?

Here are some key factors to consider when selecting a customs broker:

License and accreditation

Ensure that the customs broker you choose is licensed and accredited by relevant customs authorities. Verify their credentials, certifications, and memberships in professional associations related to customs and international trade.

Expertise and experience

Assess the customs broker’s expertise and experience in handling customs clearance for your specific industry or type of goods. Inquire about their knowledge of relevant customs regulations, trade agreements, and documentation requirements.

Reputation and track record

Research the reputation and track record of the customs broker. Seek recommendations from trusted sources, read reviews or testimonials, and assess their client portfolio.

Range of services

Evaluate whether they can handle all aspects of customs clearance, including documentation, tariff classifications, valuation, compliance, and communication with customs authorities.

Cost structure

Obtain detailed information about the Customs Broker's pricing model, including transaction-based fees, percentage fees, or flat fees.

Technology and systems

A customs broker today should have access to efficient software and electronic platforms that expedite customs clearance processes and enable real-time tracking of shipments.

Customs house agent vs freight forwarder

CHAs and freight forwarders are key stakeholders in international trade and logistics. Customs House Agents specialize in customs clearance, ensuring compliance with customs regulations, and facilitating smooth entry and exit of goods across borders with in-depth knowledge of customs laws, documentation requirements, and duty calculations.

On the other hand, freight forwarders focus on the overall logistics of transporting goods. They handle various aspects, such as booking cargo space, negotiating rates with carriers, and organizing multi-modal shipments. Freight forwarders coordinate movement of goods from the point of origin to the final destination, offering comprehensive logistical support.

Eligibility criteria of a customs house agent in India

As per the regulations outlined in sub-section (2) of Section 146 of the Customs Act, 1962, below is the eligibility criteria to become CHA in India³:

• Educational qualifications: The applicant should possess a master’s degree in law or an MBA/ CA.
• Form ‘G’ pass: The applicant must have successfully passed the Form G examination, which is conducted by the customs department.
• Experience: The applicant should have a minimum of 3 years of relevant experience in the field of customs.
• Financial requirements: The applicant should possess bank-certified assets worth at least INR 5 lakhs.

Amazon Global Selling: Hassle-free logistics and e-commerce exports from India

To enable fast and hassle-free shipping and fulfillment that benefits both the exporter and customer, Amazon provides Fulfillment by Amazon (FBA), a program that allows businesses to outsource order fulfillment to Amazon. With FBA, exporters can send products to Amazon fulfillment centers; whenever a customer makes a purchase, Amazon picks, packs, and ships the order. It empowers Indian exporters to scale their businesses globally by helping them offer a superior customer experience. FBA leverages the Amazon customer service network stretching around the globe, managing customer inquiries and enabling refunds and returns for orders.

Exporters can also use Amazon Global Selling SEND to easily track shipments, ensure convenient pickup and delivery, and pay logistics charges after delivery. It also enables exporters who use Fulfillment by Amazon (FBA) to ship small parcels abroad. All processes are centralized within Seller Central.
Amazon Global Selling enables Indian exporters to sell internationally, while simplifying the export process with support at every stage. Leveraging Amazon’s tools and products, you can establish and manage your e-commerce exports business from India and sell on 18+ Amazon global marketplaces, and get expert support for fulfillment, compliance, and webinar.

Explore Amazon Global Selling SEND

Frequently Asked Questions

Is it mandatory to hire a customs house agent?

Hiring a Customs House Agent (CHA) is not mandatory but recommended for a smooth and hassle-free customs clearance process.

Does a customs broker work for the government?

No, a customs broker does not work for the government. They are private entities or individuals who act as intermediaries between businesses and customs authorities.

What are the other names used to call customs house agents?

CHAs are known by various names in different countries or regions. In addition to CHA, they may also be referred to as customs brokers, customs agents, customs clearing agents, or customs representatives.

Can I do the customs clearance of my own cargo?

Yes, you can choose to handle the customs clearance of your cargo, provided you have the necessary knowledge, resources, and time to effectively navigate the customs procedures.

What are the latest intermodal shipping trends?

The latest trends in intermodal shipping include increased digitization, sustainable practices, and use of specialized equipment for efficient handling.

Published on July 29, 2023.

Sources:
1. https://www.dripcapital.com/en-in/resources/blog/customs-house-agent-broker
2. http://delhicustoms.gov.in/knowledge.html
3. https://cblms.gov.in/knowledgecenter_detail?parent=1&type=1
4. https://dailylogistic.com/customs-house-agent-cha-customs-broker/
5. https://www.toclogistics.com/5-biggest-advantages-of-working-with-a-licensed-customs-broker/

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