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Customs clearance in Georgia: procedures, duties, documents

Irakli

RegHub Georgia Specialist

Whatever their size, importers face the same formalities at the border: a trading group, a small business and a private individual alike. A company importing into the Republic of Georgia benefits from settling several parameters in advance, since customs clearance in Georgia proceeds from them. Those parameters are the cargo's commodity code and its valuation, the procedure chosen for it, the charges it attracts on entry and the permits it needs. Administering those formalities is the Revenue Service, which forms part of the Ministry of Finance.

Below we explain how the procedure operates, which stages it passes through and which errors arise most often along the way.

What customs clearance in Georgia involves

The phrase covers a chain of formalities, not a single act at the border. Georgian law prescribes that chain for bringing cargo in, and for its subsequent treatment: free circulation, or some other customs procedure. Along it customs supervises goods in movement, tests them against requirements in force, works out sums owed and rules on release.

How far the customs clearance procedure in Georgia extends is a matter of how cargo travels and on what terms. It brings together several elements: a declaration lodged and registered, a value and a code determined, charges calculated and paid. Papers confirming that movement to be free of prohibitions, restrictions and other requirements are lodged alongside. Release by customs closes it.

A departure from the prescribed order, or a missing document, halts clearance and delays release. Where the law so provides, the authorities then assess further charges, impose measures of liability and leave the foreign-trade operator with additional financial consequences.

Clearance regimes and their declarations

Cargo crossing the border, inbound or outbound, has more than one procedure open to it. The choice of procedure bears directly on the fiscal burden, on the permitted period of stay, and on duties falling on the declarant later.

Import

Commercial goods are usually entered for free circulation. For an importer, import customs clearance in Georgia normally runs through several steps:

• fixing the commodity code;

• putting a value on the consignment;

• checking restrictions, prohibitions and any need for permits;

• choosing the customs procedure;

• assembling the file;

• lodging the customs declaration;

• customs control;

• working out and paying every tax and duty due;

• release onto the market.

Kind of cargo and its worth govern the order in practice. Their country of origin bears on it, so does the mode of transport, and so does the procedure selected together with any special requirements. Once necessary formalities are behind it, a shipment enters free circulation inside the republic's customs territory. At that point import duty becomes due, together with VAT, and excise as well whenever the goods themselves are excisable. How much each amounts to will depend on the particular product, on its code, on its customs value and on the exemptions the legislation allows.

Export

Exports repeat much of that sequence, with the emphasis moved to preparing the goods for despatch, evidencing their characteristics and answering the requirements applied at destination. The exporter lodges an export declaration; from registration the shipment stays under supervision until it physically leaves. Statutory forms of control lie open to a competent authority, which may also fix its route and its departure window if it sees the need.

An export completes once the goods have physically quit Georgian customs territory as required. The load must leave in whatever condition was logged when its exporter registered that declaration, apart from changes attributable to natural wear, to carriage or to loss inherent in normal storage. A statutory deadline binds that departure, and a declarant who misses it must approach the supervising authority, either to have the declaration invalidated or to have the term extended in the prescribed way.

Transit

Transit lets a carrier take a load across the customs territory on a defined procedure, with no entry into free circulation in the country. A supervising authority discharges it in the established manner once the declarant has met its conditions. Particulars declared at departure are matched, under Georgian customs law, against those logged at the destination. For international logistics that matters commercially, since a load may pass through Georgia without being handled as an ordinary import.

Customs warehouse

A customs warehouse may take goods whose customs procedure is already settled. Storage under the warehousing procedure is limited to two years for goods other than exports, while exported goods have their own period. Companies use the arrangement to postpone final clearance, or to arrange logistics before settling that cargo's next move.

How the commodity code is determined

Classification governs much of what follows in the customs procedures in Georgia. For that purpose the Customs Code names one instrument, the Foreign Economic Activity National Commodity Nomenclature. It follows the Harmonized System, with eleven digits of detail. Entering the code falls to the declarant; checking it for correctness, to the customs authority.

The code determines:

• rate of import duty;

• liability to excise;

• entitlement to a tax exemption;

• need for licences, permits or certificates;

• scope of any special restrictions;

• documents which clearance will require.

The Revenue Service publishes an official HS Codes search module. Rates appear there for VAT, for excise and for import duty. The module also lists the exemptions, the papers a procedure calls for and the preferences that free trade agreements open up.

How the procedure runs: the main stages

Practice varies with cargo type, with movement, with documents produced and with control regime.

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Time needed for clearance

Cargo and documentary completeness set its length, as do carriage and any further checks required. Papers correctly prepared, and nothing calling for further procedures, put customs clearance in Georgia somewhere between a few hours and a few working days. A discrepancy, a request for more documents or a physical examination lengthens it considerably.

Importers use advance declaration to reduce that time: in the appropriate cases the file is settled ahead of arrival. Declarations themselves run through the electronic e-Customs system.

Which duties and taxes arise on import

Import gives rise to three charges: VAT, import duty and, in the appropriate cases, excise.

Documents for customs clearance in Georgia

What goes into a file is settled by the goods themselves and by the procedure chosen. For a standard import consignment, though, the Revenue Service names the core documents:

• an invoice, or another document that evidences the purchase;

• papers of carriage;

• licences, permits, certificates and anything else demanded of that cargo by non-tariff measures or by extra customs control.

The transport document varies by mode of carriage. Road carriage means a CMR consignment note, a TIR carnet where that regime applies. Rail takes a consignment note, air an air waybill, sea a bill of lading. Another document answering the same purpose will serve. Whichever it is, it states the load, its quantity and its weight. Commodity code and container appear there too. So do carrier, consignor and consignee, together with the loading and destination places.

Among the documents for customs clearance in Georgia, an invoice must state the essential details of seller and buyer. It must also state what the goods are, how many and at what price. The invoice must further show its date and its number, proof that the transaction took place, and the agreed terms of delivery. Where the goods fall into a category subject to special requirements, a standard invoice is not sufficient.

What the procedure costs

Duty and tax are not the only costs. Customs clearance of goods in Georgia also attracts service charges payable to the Revenue Service, on published tariffs keyed both to customs value and to filing method. Its standard scale reads:

• up to GEL 3,000: GEL 100 per declaration;

• from GEL 3,000 to GEL 15,000: GEL 300;

• above GEL 15,000: GEL 400.

Registration through e-Customs before the border is crossed reduces those figures to GEL 100, GEL 200 and GEL 300 respectively. When calculating the cost, however, regard must be had to the date from which a given tariff operates. Special rules for particular kinds of clearance count as well.

Liability for breaches: fines and other risks

The customs clearance procedure in Georgia rests on four declarant duties. Declaring comes first and classification second. Valuation of the cargo follows, and payment of whatever legislation renders due is the last of them. A declaration that carries an error, or one inaccurate particular, produces two consequences at once. Corresponding amounts become payable, and a financial sanction attaches.

Consequences vary with what the breach is.

• Declaring inaccurately, or understating what is payable. Where incorrect classification, or inaccurate particulars of quantity, value or other characteristics, reduce what is owed in customs or tax, the declarant may face the penalties the law lays down. In particular cases the fine reaches 100% of the tax that went unpaid, and a repeat breach raises it.

• Failure to observe the declaration deadlines. Formalities left undone inside the period allowed draw penalties. Their amount depends on how long the delay ran and on the ground for it.

• Storage costs. Alongside the state sanctions a delay in clearance carries its own commercial cost. While a load or a container remains at a customs terminal, the operator charges for storage and other services. The longer the procedure runs, the higher that standstill's final cost.

Our specialists provide full support for that procedure and check the necessary particulars before lodging. That step reduces the risks attached to technical error, to misclassification and to a file missing a document.

Typical errors and where they arise

Difficulty with customs procedures in Georgia tends to surface well before anything is lodged at all. Classification errors, document defects or a wrongly chosen procedure lead to requests for further particulars. They also force revision of declared figures and, where circumstances warrant, bring additional financial obligations.

Procedures, duties and declarations: what a business should weigh

Formalities in both directions are connected. The outcome is largely settled before despatch, by how accurately a business fixed its shipment's main parameters. Those are valuation and commodity code, the procedure it will use, the sum payable and the paperwork the file needs.

Georgian law prescribes methods for arriving at customs value, and their ranking order. The transaction value method comes first; where it cannot be used, the remaining methods are taken in the prescribed order, ending with the fall-back method. Whatever a declarant states remains subject to customs control.

Preparation ahead of the consignment's arrival matters particularly for import and export of goods in Georgia. Classification, documents, permit requirements and expected charges checked in advance surface the likely questions early and cut the chance of delay. Where the case allows, an importer may declare the consignment in advance, and may check the rates and requirements in force through the electronic services of that authority.

Our team guides clients through the procedure in Georgia: preliminary document review, determination of applicable requirements, preparation for declaring and dealings with customs.