Monday, September 5, 2011

What to declare at the customs while travelling abroad

Returning from a holiday may not be as exciting as going on one, but you do come back brimming with stories, bags laden with goodies and cameras loaded with memories. If, however, you aren't careful about what you are lugging through the airport, there's a chance that you end a beautiful holiday on a sour note. Many passengers, unaware of what they are allowed to carry abroad or bring back, unwittingly breach the law and get caught at the customs.
Claiming ignorance about the rules isn't going to cut ice with the customs officials, who will impose a hefty duty on the items that you are carrying. So, instead of buying things at a bargain abroad, you might end up paying much more than what they are actually worth. The financial loss can mar your holiday, not to mention the hours you spend at the airport and the stress such an experience can cause. So, be prepared about the things you can carry while travelling.
Before you take off :
If you are going overseas on a vacation, you can carry only up to $10,000 (Rs 4.5 lakh) a year, no matter how many trips you make. However, if you are going on a business trip, you can take up to $25,000 (Rs 11.25 lakh) a year. The only two countries where these ceilings do not apply are Nepal and Bhutan, though you cannot carry currency domination of over Rs 500 to either country.
Foreign exchange can be drawn 60 days before going on the trip and you can get it from money changers, and at banks and airports. Rajiv Menon, head of foreign exchange, Cox & Kings, says, "Don't keep this task for the end or you may have to convert your currency at the airport. This can lead to a loss as the rates offered by money changers at the airport are generally 3-4% higher."
You can carry a maximum of $3,000 (Rs 1.35 lakh) as foreign currency in cash. If you need to take more money, you will have to take it as travellers' cheques (TC) or prepaid travel cards. While travel cards are available only at banks, TCs can be taken from authorised money changers and travel operators too. A TC of up to Rs 50,000 can be paid for in cash, but for values above this, you will need to pay through a cheque or demand draft. Prepaid travel cards also offer an insurance benefit. Menon says, "Cards are easy to carry, and if they are lost, they can be blocked so that you don't lose any money."
To get either of these, you will have to produce copies of your passport and tickets. You may also have to fill up forms explaining the purpose of your visit and declare that you are not carrying more than $10,000. For a prepaid travel card, you will also have to furnish a copy of your PAN card.
Don't worry if you splurge more on your vacation and run out of money. You can always depend on your credit card. However, you should avoid this because you will need to pay a currency conversion charge as well as a transaction fee of Rs 90-150 every time you swipe it. Also, you will have to ensure that you can pay your credit card bill before the due date, otherwise you will be charged an interest on the outstanding amount.
If you are carrying jewellery or other expensive items abroad, you will need to declare these at the airport at the time of departure and obtain an export certificate from the Indian Customs. This will ensure that you don't pay duty when you return.
When you land

Once you come back to India, you can go through two channels-green or red. If you don't have an item that is likely to attract duty, you can go through the green channel, otherwise you will have to go via the red channel. At the latter, you will be given two declaration forms, one for the custom goods (you may need to pay customs duty for some items) and the other for foreign currency.

You need to mention if you have foreign currency notes worth more than $5,000 or an equivalent amount. You will also have to declare if you have more than $10,000 as foreign exchange, including currency, TC or prepaid cards.

Don't think that buying items at duty-free shops means you can escape the customs duty. This is only exempt for goods worth Rs 25,000. You will have to pay duty on the goods that cost more than this amount. You cannot combine the exemption limit for two people.

For instance, if you are travelling with your spouse and have bought a camera worth Rs 40,000, it will have to be declared in the name of one person and you will have to pay duty on the remaining Rs 15,000. The customs duty is 35%, along with an education cess of 3%, which brings the total tax to 36.05%.

Some items are considered restricted products (see How to run clear of the customs at the airport) and the additional duty for these is higher. "In the case of restricted goods, such as alcohol and cigarettes, the applicable duty is much higher at 100%, besides the education cess," says Sumita Singh, managing partner at law firm Ascentialls.

However, you will not have to declare anything if you only have personal items, one laptop and foreign currency that is within limits.

Your responsibility is not over once you walk out of the airport. You need to dispose of the unused foreign exchange because you are not allowed to keep more than $2,000 as foreign currency notes.

Any cash in excess of this amount needs to be surrendered to a bank within 90 days. If it is in the form of travellers' cheques, you can return it within 180 days of returning from abroad. However, you can hold any amount of foreign coins.
source : Economic times-wealth

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