MOVEMENT OF

TRAFFIC-IN-TRANSIT
THROUGH INDIA

BACKGROUND
India provides transit to Nepal and Bhutan.
Treaties/ Agreements governing trade/transit:
Nepal

Treaty

of Trade
Treaty of Transit
Agreement of Co-operation to Control Un-authorized
Trade.
Rail Services Agreement

Bhutan

Agreement

on Trade Commerce and Transit

TREATY OF TRANSIT
The

Treaty of Transit has provisions, inter alia, to:

Exempt

Traffic-in-transit from customs duties and from all

transit duties or other charges, except reasonable charges
for transportation and other charges commensurate with
the costs of services rendered in respect of such transit.

Provision

for facilities for temporary storage of the transit

goods at points of entry/exit.

Protocol

to the Treaty - List of agreed entry/exit

points for traffic-in-transit

Memorandum

to the Protocol Detailed procedure

applicable for imports and exports

TRANSIT CARGO HANDLED IN

KOLKATA/HALDIA PORTS
Containers by Rail

Containers by Road

Total

Year

No. of
CIF Value
Containers (in Rs. Cr.)

No. of
CIF
Containers Value
(in Rs.
Cr.)

No. of
Containe
rs

CIF Value
(in Rs.
Cr.)

2011
-12

14655

641

18887

1471

33542

2112

2012
-13

14022

2018

19456

3406

33478

5424

TIME RELEASE SU R
VEY- SU MMAR
Y O FFIN DINGS

Time

Release survey conducted at Kolkata port

Customs

Transit Declarations (CTD) are allowed to be filed and

processing completed prior to arrival/ unloading of the cargo;

Processing

of documents completed on the same day (subject to

correctness) - over 20300 CTDs processed in 2011;

Unloading
Customs

and stacking of cargo takes up to 24-48 hours;

examination and affixation of Seal done on the same

day;

Movement of cargo from the port by rail depends on the

availability of rakes.

DOCUMENTS FILED IN CTD PROCESS

IGM*
CTD/ICCD
Bill

(Transit Declaration)

of Lading*

Invoice
Letter

and Packing List*

of Credit/License/Letter from Consulate

Insurance/Guarantee/Undertaking#

*(These documents required even for processing bilateral cargo. Only the
declaration and guarantee are requirements of Indian Customs. The
Letter of Credit/license etc. are based on Nepalese domestic law).

KOLKATA NEPAL CUSTOMS TRANSIT DOCUMENT (IMPORTS)

- FLOW CHART [TRANSPORT BY ROAD]

In case of sensitive items, insurance policy/Bank Guarantee is

required in place of undertaking.
Normal goods: Undertaking of the amount which is calculated
as market value minus declared CIF plus anti-dumping duty
and safe guard duty if applicable.

CTD
Presentation &
Assessment
formalities are
done in
Customs.
House (CH). Cargo
checked
with
CTD, LC
& invoice
etc.
In case of goods are
not tallying, cargo to
be detained and in
case of shortage,
short shipment is
recorded &
equivalent duty to
be collected.

After assessment
one copy of CTD is
retained in CH

If
seal
s not
intac
t

If cargo found
as per records,
the container is
sealed & seal
no. is put on
CTD

5 copies of CTD are sent

to Dock Customs. After
pass out order Dock
Customs retain 1 copy,
give 1 copy to CHA and
3 copies back to CH.
If seals found
intact crossborder order is
given on triplicate
copy to move to
Nepal & duplicate
copy is sent to CH

**Cargo
received at
Nepal and CTD is
endorsed and
send to exit LCS

On receipt of
cargo the seals
are examined

Exit LCS
sends
endorsed CTD
to Kolkata CH

2 copies in sealed
cover are sent to
exit Customs
Station

Cargo is
transported
under cover of
CTD / challan to
exit LCS

Endorsed CTD is
reconciled with
the CTD with CH
and UT/BG etc. is
cancelled

PROCEDURE FOLLOWED AT LCS

At the LCS, the officers tally the original copy of
CTD with the Duplicate and Triplicate copies of
CTD, produced by the Importer in sealed
envelope.

The officers also ensure that the OTLs affixed on

containers are intact and their numbers tally
with the numbers as mentioned in the CTD.

If the same is found in order, the containers are

allowed for export to Nepal. The whole process
at LCS normally takes about half an hour.

TRANSIT
Protocol to the Agreement on Trade Commerce
and Transit - Transit procedure for Bhutanese
traffic.
Processing done based on a Letter of Guarantee
filed by the Royal Government f Bhutan.
Bhutan Government undertakes to realise the
customs duties and other dues leviable on goods
lost or on goods not crossing the Indian border
due to diversion.
Provision for reconciliation

RISK BASED GUARANTEE SYSTEM

FOR TRANSIT

System of guarantees based on risk management

approach no blanket requirement for all transactions.
Sensitive goods specified by India covered by an
insurance policy or a bank guarantee (option of trader)
for an amount equal to the Indian customs duties on
such goods.
22

commodities in the sensitive list

If these goods belong/consigned to Government of Nepal,
only an undertaking required.

o For other goods, the importer to furnish, a legallybinding undertaking that the amount equal to the
difference between the market value of the goods in
India and their C.I.F value shall be paid, in the event of
the goods not reaching Nepal

RISK BASED GUARANTEE SYSTEM

FOR TRANSIT

Guarantee/Insurance/Undertaking returned on
safe reaching of goods to Nepal.
Thus, guarantee/insurance required only for 22
commodities.
Returned generally after a period of 15 days (time
taken for transit).
Majority of goods allowed transit based only on an
undertaking no cost to the trader.
In case of Bhutan, transit allowed based on
sovereign guarantee.

Bhutan

Government in turn take a guarantee from

their traders
Saves time in doing transit formalities

RECOMMENDED PRACTICES
Transit is allowed free of customs duties and
from all transit duties or other charges, except
reasonable charges for transportation.
Provision made for temporary storage of the
transit goods at points of entry/exit in India.
Clearly listed entry/exit points for transit
Detailed and transparent procedure and
documentation
Use of risk assessment - Majority of goods
allowed transit based only on an undertaking
effectively at no cost to the trader

FURTHER DEVELOPMENTS
Automation

discussion

of entire CTD process under

more

efficiency, standardization and

transparency.

Use of modern technologies (RFID etc.)

Improved rail connectivity across the border

THANK YOU