EU IMPORT DECLARATION GUIDE

Single Administrative Document (SAD) and H1 Customs Procedure

This guide explains the EU customs import declaration process for goods arriving from India and other third countries, covering the Single Administrative Document (SAD), the H1 customs procedure for release for free circulation, customs value, duty calculation, and post-clearance obligations.

1. Overview of EU Customs Import Procedures

All goods entering the EU from a third country (including India) must be declared to EU customs. The declaration triggers the assessment and payment of import duties, VAT, and any other applicable charges. The primary customs procedure for goods entering the EU for consumption is:

Procedure H1 — Release for Free Circulation: Goods are released into free circulation within the EU customs territory. Import duties and import VAT are paid. This is the standard import procedure for commercial goods.

Procedure H2 — Special Procedures (Storage): Includes customs warehousing (goods stored in a bonded warehouse without payment of duty), temporary admission, inward processing, and end-use relief.

Procedure H6 — Re-Export: Goods that arrived in the EU but are being exported back to a third country.

This guide focuses on Procedure H1 — Release for Free Circulation — which applies to the vast majority of India-EU commercial shipments.

2. The Import Declaration — Key Concepts

2.1 Who Files the Import Declaration?

The import declaration is filed by the declarant — either the importer themselves or a customs agent (broker/freight forwarder) acting as indirect representative (in their own name and on behalf of the importer) or direct representative (in the name of the importer). In both cases, the declarant must hold a valid EORI number.

Under most Incoterms (EXW, FCA, FOB, CIF, DAP, DPU), the EU buyer is responsible for EU customs clearance and will appoint a local customs agent to file the declaration on their behalf. Under DDP, the Indian seller is responsible — but DDP is operationally very difficult for non-EU entities (see EORI guide, Doc 36).

2.2 When Is the Declaration Filed?

The import declaration is filed after the goods arrive at the first EU port of entry. For goods arriving by sea, the goods must be presented to customs at the port of discharge. The declaration is typically filed by the customs agent within 1–3 days of vessel arrival, once the Bill of Lading has been released and the goods are available for customs inspection.

Pre-lodgement of the import declaration (before arrival) is possible and encouraged by EU customs for faster clearance — it allows the Risk Management System to assess the shipment before arrival and enables immediate release on arrival if low-risk.

2.3 ICS2 — Import Control System 2

Under ICS2, carriers and freight forwarders must file Entry Summary Declarations (ENS) containing advance cargo information before the goods arrive at the EU border. For goods from India arriving by sea, the ENS must be filed no later than 24 hours before loading at the last foreign port before the EU (for deep-sea containerised cargo).

The ENS contains basic cargo information including: EORI of the declarant; consignee EORI or name and address; description of goods; HS code at 6-digit level; number of packages and weight; container number; port of loading; and destination EU port. ICS2 non-compliance can result in the goods being refused entry at the EU port.

3. Customs Value — How Import Duty Is Calculated

3.1 Transaction Value Method

EU customs duty is calculated on the customs value of the goods — which for most commercial imports is the transaction value: the price actually paid or payable for the goods when sold for export to the EU, adjusted for certain additions and deductions.

The customs value is calculated on a CIF basis — Cost, Insurance, Freight to the first port of entry in the EU. For shipments on FOB Incoterms, the customs value = FOB price + freight cost + insurance cost to the EU port of entry.

Adjustments to the transaction value may be required for:

Commissions and brokerage (excluding buying commissions) paid by the buyer — add to customs value.

Royalties and licence fees payable by the buyer as a condition of sale — add to customs value.

Containers and packaging costs (if not already included in the invoice price).

Assists — goods or services supplied free or at reduced cost by the buyer to the seller for use in producing the goods (e.g. tooling, moulds, designs).

Proceeds of resale accruing to the seller — add if seller receives a share of future resale proceeds.

3.2 Alternative Valuation Methods

Where the transaction value method cannot be applied (e.g. related-party transactions at non-arm's-length prices, goods received as gifts, or samples), EU customs applies alternative valuation methods in the following hierarchy: (1) identical goods value; (2) similar goods value; (3) deductive method; (4) computed value; (5) fall-back method.

4. Tariff Classification and Duty Rates

4.1 Combined Nomenclature (CN)

• EU customs duty is determined by the tariff classification of the goods under the EU Combined Nomenclature (CN) — an 8-digit code based on the Harmonised System (HS). The CN code determines:
• The applicable MFN (Most Favoured Nation) duty rate under the EU Common Customs Tariff.
• Any applicable preferential duty rate under an FTA or GSP scheme (requires proof of origin).
• Any applicable anti-dumping, countervailing, or safeguard duties.
• Whether the goods require an import licence or fall within a tariff rate quota.
• CBAM applicability (for covered sectors).
• The EU's online tariff tool — TARIC — is publicly accessible at ec.europa.eu/taxation_customs/dds2/taric. Always verify the CN code and duty rates on TARIC before finalising the commercial invoice.

4.2 Preferential Duty Rates

• To claim a preferential (reduced or zero) duty rate under the India-EU FTA (when in force) or the EU GSP, the import declaration must reference the preferential origin proof:
• REX Statement of Origin: The exporter's REX number is entered on the customs declaration.
• Form A (GSP Certificate of Origin): For GSP claims where REX is not yet in use.
• EUR.1 Movement Certificate: For bilateral FTA preferences (not applicable to India-EU FTA which uses REX/self-certification).
• The EU customs authority may request retrospective verification of the preferential origin claim. The EU importer should retain copies of all origin proofs for a minimum of four years.

5. The Import Declaration — Field-by-Field Reference

6. Customs Examination

EU customs may select any consignment for physical examination based on the Risk Management System (RMS) assessment. The frequency and type of examination varies by product, country of origin, and importer history. When a consignment is selected for examination, the customs agent must: notify the port/warehouse to make the goods available; arrange for opening of containers or packages; provide the original import documents; and ensure the goods match the declaration exactly. Any discrepancy found during examination can result in re-assessment of customs value or tariff classification, penalties, and seizure.

7. Import Duty Payment and VAT

Import duties and import VAT become due on acceptance of the import declaration. Payment is made either:

Immediately — by bank transfer or direct debit from the importer's or customs agent's duty deferment account.

Deferred Payment — most EU member states allow approved importers to defer payment of customs duties until the 16th day of the month following the month of clearance, using a customs duty deferment account and a bank guarantee.

Import VAT — charged at the rate applicable in the member state of import (e.g. 20% in Germany, 21% in Netherlands, 23% in Portugal) on the customs value plus customs duty. For VAT-registered importers, import VAT is generally reclaimable on the VAT return (subject to the specific VAT rules of the member state).

8. Post-Clearance Audit and Record Retention

EU customs authorities may conduct post-clearance audits of import declarations for up to three years (four years in some member states) after the date of acceptance. All import declarations and supporting documents must be retained for this period. Common audit focuses include: customs value accuracy; tariff classification; preferential origin claims; and compliance with anti-dumping duty obligations.

Doc 39 — EU Import Declaration Guide (SAD / H1) — Neutral Template