What Is the Role of Custom House Agent in Export Business?

There are many moving parts to an export business—internal and external. You can find many of the internal aspects you need to manage in our article about how to become an exporter in India. Among the numerous external factors your business should focus on are customs clearance, inward remittance, trade finance, and the various export agencies in India.

One external factor that can help with customs clearance is the custom house agent (CHA). This article will explain what a CHA is, its role in export, and how to become one.

What is a CHA?

If someone asks you, ' What is a CHA? ' The straightforward answer is that a Custom House Agent (CHA) is a licensed professional who can help your business with matters related to export and import, where customs are integral to the process. The CHA will coordinate with the customs authorities and the business and help with the required documentation to enable the process.

What comes under the scope of work of a CHA?

Now that we understand the role CHAs can play in the export business let’s examine the scope of their work.

Preparing and submitting documents

CHAs will help the export business prepare, verify, and submit key documents involved in export. Preparing and verifying documents according to the required norms ensures an efficient process and helps the company avoid penalties.

The documents include:

Certificate of origin
Commercial invoice
The shipping bill
Packing list
Any other documents required by customs authorities

Clearance with customs

The CHAs play a pivotal role in filing the shipping bill electronically via the Indian Customs Electronic Data Interchange System (ICES) to help with customs clearance. They also help resolve customs officials' queries about the shipment and assist the business in complying with export-related laws like the Foreign Trade Policy, Customs Act, and other related regulations.

Managing duties and taxes

In the export business, taxes, cesses, or duties apply to the goods for export, and CHAs help calculate these. This is the first step towards applying for duty exemptions like GST refunds, RoDTEP, etc., so the exporter can benefit from them.

Examination and clearance of cargo

CHAs liaise with customs officials to examine the goods physically where needed to ensure that they are checked against the list, verified, and approved for export. This ensures that there are no delays.

Coordinating with related agencies

During export, the exporter’s team must work with various authorities, and the CHA will coordinate with these agencies. These include freight forwarders for logistics, the port authorities for clearance, shipping or airlines for transportation, and other regulatory bodies like the Plant Quarantine, DGFT, and FSSAI for approvals.

Managing cargo and containers

The CHAs help exporters book containers, coordinate with transporters, and supervise to ensure the goods are packed, labeled, and loaded correctly. They also work on complying with the norms and standards of the country you are exporting to.

Assistance to attain export incentives

Our government has put together many schemes and benefits for exporters to help them reduce costs and become more competitive. This includes the Remission of Duties and Taxes on Exported Products (RoDTEP), Goods and Services Tax (GST) refunds, and the Merchandise Exports from India Scheme (MEIS) scheme. All these refunds and schemes require paperwork, which the CHA helps put together in the correct order.

Logistics and freight support

In some cases, CHAs also provide logistical support and act as freight forwarders. This means they will help you pick the correct mode of transport as applicable to your export order and help you negotiate the best possible rates.

Consultancy and advisory

CHAs possess deep knowledge about the nuances of export and will guide your team on the applicable rules and regulations from the government, navigate customs processes, and advise you on how to comply with the importing country’s laws.

Risk management

CHAs help you identify potential risks in the export process and guide you in mitigating them. For instance, documentation errors often cause shipping delays, and CHAs can help you avoid these errors and ensure on-time delivery.

In conclusion, CHAs are essential in facilitating exports by minimizing potential delays with documentation, customs, and regulations.

How to become a Custom House Agent?

Becoming a Custom House Agent in our country requires you to meet the specified eligibility criteria, pass an exam, and get a Customs Broker License. The Customs Brokers Licensing Regulations (CBLR) 2018 issues the license.

As you can see, connecting and working with a qualified and experienced Custom House Agent will help your export business-related operations become efficient. At LeRemitt, we help budding exporters by providing them with an innovative platform that will help them manage inward remittances and trade finance. Want to know how we can help? Click here!