Commercial samples are the specimens of goods shown to the buyers. In respect of international trade commercial samples are imported by the traders or manufacturers in India for having purchase the products or machineries, to know the characteristics and usage and the assess the marketability in India. Samples may be consumer goods, consumer durables, prototypes of engineering goods, high value equipment, machineries and their accessories.
In international trade one country may send samples of goods manufactured in that country to another country for being shown or demonstrated for customer appreciation and familiarization and for soliciting orders. These samples may be brought by representatives of foreign manufacturers as a part of their personal baggage or through port or by couriers.
Geneva Convention 1952 facilitates the importation of commercial samples and advertising materials. India is a signatory to this convention. The notification issued in this respect enables duty free import of genuine commercial samples into the country for smooth flow of trade. The sample may not be used as a resort to avoid paying customs duty through repeated imports of samples in smaller lots.
The goods that are prohibited under Foreign Trade (Development and Regulation) Act, 1992 are not allowed to be imported as samples. The following goods are prohibited under this Act:
- Wild animals;
- Wild birds;
- Parts of wild animals and birds;
- Ivory;
- Arms and ammunitions; and
- Narcotic drugs.
The following are the points to be taken care of while importing free samples:
- The samples should be supplied free of charge;
- The value of individual sample for the purpose of clearance purpose should not exceed Rs.5000/-;
- The aggregate value should not exceed Rs.3,00,000/- per year or 50 units of samples in a year;
- The prototypes of engineering can be imported even if the value is more than Rs.5,000/-;
- The prototypes can be imported up to a value of Rs.10,000/- without payment of duty as long as the goods are rendered useless as merchandise by a suitable process;
- If the value of the prototypes exceeds Rs.10,000/- the same should be re-imported within a period of 9 months of such extended period as the Department may allow;
- The high valued samples may be cleared after depositing duty with the Department. Undertaking is to be given for their re-export within nine months;
- The deposited duty may be refunded after their re-export within 9 months;
- If more than on product is imported the value limit is increased proportionately;
- If the samples are consigned to more than one consignee and are sent at the same time through the same port it shall not be charged to duty if the value limit of Rs.5000/- per unit is adhered to;
- In case of a commercial traveler of a foreign country he is eligible to carry bonafide samples if the value of each of the item is not more than Rs.5,000/- per unit;
- He is not required to produce the IEC at the time of clearance of such goods;
- The traveler must declare these goods meant for securing export order or guidance of exporters and the value does not exceed Rs.3,00,000/- per item during the 12 month period and he has not imported more than 50 units within the 12 months;
- He has to undertake that he would not sell these goods;
- If he sells the goods he is to pay the duty leviable on those goods;
- The value of Rs.5,000/- is the value of the goods in the country of dispatch excluding local refundable taxes;
- In case of free samples of Rs.5000/- its value does not include freight or courier charges;
- If value exceeds Rs.5,000/- the freight and insurance charges would be added to calculate the duty payable;
- Machineries in connection with securing export orders can be imported duty free up to value of Rs.10,000/-;
- These goods are normally defaced or made un-saleable by punching, cracking, marking with indelible ink etc.,;
- The machinery can be cleared by furnishing a bank guarantee or deposit of duty and an undertaking that these would be re-exported within 9 months of import;
- In respect of high valued machinery, the importer has to give an undertaking that these machineries are utilized for the purpose of demonstration;
- The Department may seal the machinery during its journey from the port of transportation to the place of demonstration and it will be unsealed at the place of operation or place of demonstration;
- Samples can be imported for commercial exhibition for display or demonstration with the prior permission of Ministry of Commerce and Indian Trade Promotion Organization;
- Samples can be imported for Government of India sponsored events such as trade and industry fairs;
- Under EOU scheme samples of goods manufactured by the units can be imported duty free;
- Bona fide trade samples should be part of export baggage in terms of para 2.31 of the Policy read with para 2.20 of the Policy and 2.27 of Handbook of Procedures.
