In the last two decades, India has grown exponentially as an economic powerhouse, recognised globally. A significant growth indicator of this success is its import-export activity which is at an all-time high currently and still rising. India’s assertive position in the global trade market is evident from the outstanding growth that both its service and merchandise exports have seen. Various factors have contributed to this growth including positive changes in the strategic policy measures, expansion in export portfolio, increased market competitiveness, enhanced global participation, investment in key sectors, and better access to global markets, among others.
As the movement of goods across international borders is heavily regulated, all entities or businesses dealing in imports and exports are expected to comply with international trade standards, procedures governing customs, trade sanctions, and other regulations applicable in both the importing and exporting countries. It is critical to have a thorough understanding of these regulations and industry practices while also continuously keeping track of new sanctions, control regulations, restrictions, etc. for facilitating smooth business and trade operations. As trade relations with different countries keep evolving, the industry practices have to evolve simultaneously and business need the flexibility to change rapidly to cope with the new requirements and compliances, making the process of navigating the regulatory framework concerned with the import-export industry, very challenging.
Understanding Import-Export Regulations
Some of the key regulations governing import-export in India are The Customs Act, 1962, The Foreign Trade (Development & Regulation) Act, 1992, the Goods and Services Tax (GST) law, among others. While the import-export business entities are governed by a web of regulations and laws, the following discussion provides an overview of the crucial aspects of regulations.
- Overview of Customs Regulations in India: The Customs Act, 1962 along with The Customs Tariff Act, 1975 govern customs regulations governing legislation in India. Customs regulating import-export transactions in India are governed by The Foreign Trade (Development & Regulation) Act, 1992. The above Acts are administered by the Central Board of Indirect Taxes and Customs (CBIC). The above regulations provide for collection of customs duty, proper classification of goods in compliance with international classification standards, compliance with guidelines of international bodies like the World Trade Organisation (WTO) etc.
- Key International Trade Laws Impacting Indian Businesses: International trade is heavily governed by set of rules laid down by international bodies such as the WTO. Some key agreements that member nations of WTO abide by including India are Agreement on Technical Barriers to Trade (TBT), General Agreement on Tariffs and Trade (GATT), Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Along with these export control regulations, anti-dumping duties and other international trade norms and regulations impact businesses in the import-export industry in India.
- Understanding GST Implications on Import-Export Activities: Import-export transactions are subject to the levy of GST. However there are multiple facets of this tax that a business in the import-export industry must account for to claim benefit of exemptions such as the zero rated supplies exemption, along with ensuring all compliances with GST regulations.
Role of a General Counsel Retainer
A General Counsel Retainer typically refers to an agreement between a business/client and a law firm/legal professional for securing the services of the professional on an ongoing basis by way of payment of a retainer. A General Counsel Retainer ensures that the business has continued access to a legal professional for legal inputs and advice not only at the stage of dispute resolution but also at the time of taking important business decisions as strategic assistance. It is the most cost effective way to hire a legal professional who can help the client in navigating through the regulatory and legal landscape governing the industry in which the client’s business operates in.
Having dealt with the multitude of regulations and laws governing the import-export industry, it is safe to say that the guidance and assistance of an expert can help a business in this industry ensure smooth business operations and execution of business contracts without regulatory hurdles. A General Counsel Retainer can connect a business with experts with different specialisations and expertise who can prove to be an asset to such clients and their businesses. By leveraging the expertise of a General Counsel Retainer Professional, a business can benefit in innumerable ways including:
- Customs compliance: A GC Retainer Professional can help in proper classification, valuation and documentation of the goods which can help in smooth dealings with the custom authorities. They can also ensure that the latest compliance requirements are adhered to and all compliance risks are mitigated.
- Other compliances: A GC Retainer Professional can also help a business navigate through export controls, trade sanctions, compliance with international standards in terms of quality, labelling, testing, product safety regulations, etc.
- Advisory role: A GC Retainer Professional with knowledge of policy patterns and evolving international relations can help the business strategize effectively to prepare for any challenging circumstances that may arise in the future thereby mitigating the loss to the business.
- Assistance in disputes and handling litigation: A GC Retainer Professional can also represent the interests of the client before adjudicatory bodies such as Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and courts at various stages of disputes.
- Engagement with authorities: The GC retainer Professional can also assist the business in effectively engaging with authorities. From assisting in obtaining necessary licenses to pushing for beneficial policies for the industry.
- Providing proactive support: A GC Retainer Professional provides proactive legal support to a business which may be extremely beneficial to it. Such assistance may come in many forms, including contract review, contract negotiations etc.
- Maintain reputation and goodwill in the market: By ensuring that the business complies with all laws, regulations and standards, assisting in effective strategizing to mitigate loss and enhance profitability, ensuring smooth execution of agreements with business partners, and catering to all disputes effectively, a GC Retainer Professional helps a business develop goodwill in the market.