What is Customs Clearance? Stages that Often Make Imported Goods Stuck at the Port

Illustration. (Photo: Dok. Antara)

JAKARTA - More and more small business actors are bringing goods directly from abroad. The capital is calculated neatly: the price of goods, shipping costs, margins. But once the goods arrive at the port, many are just aware that there is one stage that has not been counted - and this stage is most often the one that makes shipments delayed for weeks.

It's called customs clearance.

What is Customs Clearance?

Customs clearance is a customs process that must be passed through every imported goods before they can circulate in the country. Simply put, there are three steps: reporting goods, being inspected by officers, then paying the obligations that arise.

The report is called the Import Goods Notification or PIB, submitted through an electronic system. From here, a shipment is determined to enter the inspection lane.

Green, Yellow, or Red Line

Each shipment is placed on one of three lanes:

• Green lane - goods directly exit without physical inspection

• Yellow line — documents are checked first

• Red line - both documents and physical goods are checked

What determines it is not luck. The history of the importer, the type of goods, and the suitability of the documents all have an effect. The most common cause of a shipment entering the red channel is that the description of the goods on the invoice is not the same as that written on the PIB.

Costs that are Often Not Calculated Beginners

Many think that the import capital is just the price of goods plus shipping costs. In fact, there are several more layers:

• Customs value (CIF) — the price of goods, insurance, and freight to the destination port. All other calculations depart from this figure.

• Import Duty — a levy on imported goods, the amount of which follows the HS Code of goods.

• Import VAT - value added tax on goods entering the customs area.

• Import Income Tax - collected in advance, and its treatment differs depending on the status of the importer's import permit used.

That's not including the cost of handling at the port, and the cost of accumulation if the goods are held.

Because tariffs are attached to HS Codes and can change according to policy, the calculation needs to be done per shipment. Guidance on how to import goods from China generally puts this calculation at the earliest stage - before negotiating prices with suppliers, not after the goods are shipped.

Documents to be Prepared

The completeness of the file determines the smooth or delayed shipment:

• Commercial Invoice and Packing List

• Bill of Lading for sea shipments, or Air Waybill for air shipments

• Certificate of Origin — determines whether the goods are entitled to preferential tariffs

• Business Registration Number and importer identification number

• Technical permits, for regulated goods such as food, cosmetics, medical devices, and telecommunications devices

Not Have Import Permit? This is What is Called Undername

Not all small businesses have their own import permits. Taking care of it takes time and costs that are not necessarily proportional if the volume of shipments is still small.

The common way is undername: goods are imported using the identity of another company that already has a permit.

But there is something that needs to be understood from the beginning. Legally, those who are listed as importers are the permit holders - not the owners of the goods. Customs responsibilities are attached to the undername provider company. So choosing a provider should not just look at the price; clarity of the contract and its track record are much more decisive.

Freight Forwarder and Door to Door Service

Freight forwarders are service providers who arrange inter-country shipments. They do not transport themselves, but rather coordinate: ordering ship or plane space, handling documents, and connecting the chain from the sender's warehouse to the destination.

Later, door to door services developed, where one provider handles the entire chain - picking up goods at the supplier's warehouse, transporting, handling customs clearance, and delivering to the recipient's address. For business actors who do not have their own export-import team, this model transfers the technical affairs of customs to the party who handles them on a daily basis.

A number of import door to door service providers in Indonesia offer packages like this along with document management and undername, so that business actors only have to deal with one party from the supplier's warehouse until the goods are received.

Three Mistakes that Most Often Occur

First, assume the supplier's price is equal to capital. Without calculating the value of customs duties and customs duties, the margin that looks healthy on paper can be exhausted at the port.

Second, hand over the determination of the HS Code entirely to suppliers. Suppliers abroad have no interest in the tariffs in force in Indonesia, and if the classification is wrong, the importer bears the burden.

Third, skip the technical permit. For regulated goods, shipments can still be held even though all customs obligations have been paid.

Understand the Flow Before the Goods are Sent

Imports are not just about finding the cheapest suppliers. The price difference obtained in the country of origin is easily lost due to a wrong document or a week of accumulation at the port.

For those who are just starting out, understanding the flow of customs clearance from before the goods are shipped is much cheaper than clearing it up after the container is held.