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    Export procedure Export procedure Document Transcript

    • EXPORT PROCEDURE UNIVERSITY OF MUMBAI T.Y.B.COM SUBJECT EXPORT PROCEDURE & DOCUMENTATION PROJECT BY MR. ACADEMIC YEAR 2010-11MALINI KISHOR SANGHVI COLLEGE OF COMMERCE AND ECONOMICS VILE PARLE (WEST) MUMBAI-400049 1
    • EXPORT PROCEDURE DECLARATIONI, Mr., student of Malini Kishor Sanghvi College of Commerce and Economics,studying in T.Y.B.Com hereby declare that I have completed my project, titled“EXPORT PROCEDURE” in the academic year 2010-2011. The informationsubmitted here is true and original as per my research and observation. _______________________DATE OF SUBMISSION SIGNATURE OF STUDENT 10th December, 2010 (Mr.) 2
    • EXPORT PROCEDURE CERTIFICATIONThis is to certify that Mr. student of Malini Kishor Sanghvi College ofCommerce and Economics of T.Y.B.Com as completed project on“EXPORT PROCEDURE” in the academic year 2010-2011. The informationsubmitted is true and original to the best of my knowledge._________________ _____________________Sign. Of the principal Sign. Of the Project Guide(Dr. (Mrs.) Krushna Gandhi) (Prof. Abhilasha Gupta) 3
    • EXPORT PROCEDURE ACKNOWLEDGEMENTDuring, the perseverance of this project, I was supported by different people,whose name if not mentioned would be inconsiderate on my part. I would like toextend my sincere gratitude and appreciation to Prof. Abhilasha Gupta whoinitiated me into the study of “EXPORT PROCEDURE”.I also owe my sincere gratitude to Dr. (Mrs.) Krushna Gandhi, the principal of ourcollege.I would also like to thank the following people who through their experience haveenlightened me on the practical aspects of this subject without whom the studywould not have been carried out successfully.I would also like to give my sincere gratitude to all my college librarians and staffbecause of whom I am able to complete my project. 4
    • EXPORT PROCEDURE INDEXPARTICULARS Pg. No.INTRODUCTION 6SET UP FOR AN EXPORT ORGANISATION 7STRUCTURE OF AN EXPORT ORGANISATION 9REGISTRATION FOR OBTAINING IMPORTER EXPORTER CODE (IEC) 10NUMBER.HOW ONE BEGINS TO DO EXPORT 12FINDING A CUSTOMS 14NEGOTIATING CONTRACT 15EXPORT SALES, CONTRACT TERMS & CONDITIONS 16ENTERING INTO AN EXPORT CONTRACT 17PROCESSING AN EXPORT ORDER 18FINANCIAL RISKS INVOLVED IN FOREIGN TRADE 19MARINE INSURANCE POLICY 20SHIPPING AND CUSTOMS FORMALITIES 21PROCEDURE OF EXCISE CLEARANCE: 26FACTORY STUFFING OF CARGO 28SALES TAX EXEMPTION PROCEDURE 29BIBLIOGRAPHY 31 5
    • EXPORT PROCEDUREINTRODUCTION India has a mission to capture 2% of the global share of trade by 2010, up from thepresent level of less than 1%. Export is one of the lucrative business activities in India. Thegovernment also provides various promotional schemes to the exporters for earning valuableforeign exchange for the country and for meeting their requirements for importing moderntechnology and essential inputs. Besides, the income from export business is also exempted tothe specified extent under the Income Tax Act, 1961, Refund of Central Excise and Custom Dutyon export is also made under the Duty Drawback Scheme of the Government. There is no SalesTax on products meant for exports. Exports can be of goods which can be moved physically from one country to another orcan be of service rendered.TWO CLASSES OF EXPORTS: 1. Physical Exports If the goods physically go out of the country or services are rendered outside the country then it is called as physical export. 2. Deemed Exports Where the goods do not go out of the country physically they can be termed as deemed exports. Under Deemed Exports, the goods may be supplied to the manufacturer exporter who ultimately export a finished product of which this supply forms a part and ultimately go out of the country. 6
    • EXPORT PROCEDURESET UP FOR AN EXPORT ORGANISATIONThe proper selection of organization depends upon • Ability to raise finance. • Capacity to bear the risk. • Desire to exercise control over the business. • Nature of regulatory framework applicable to anyoneIf the size of the business is small, it would be advantageous to form a sole proprietary businessorganization. It can be set up easily without much expenses and legal formalities. It is subjectedto only few governmental regulations. However, the biggest disadvantage of sole proprietorshipbusiness is limited ability to raise funds which restricts the growth. Besides the owner hasunlimited personal liabilities. In order to avoid this disadvantage, it is advisable to form apartnership firm.The partnership firm can also be set up with ease and economy. Business can take benefit of thevaried experiences and expertise of the partners. The liability of the partners though joint andseveral, is practically distributed amongst the various partners, despite the fact that the personalliability of the partner is unlimited. The major disadvantage of partnership firm of businessorganization is that conflict amongst the partners is a potential threat to the business. It will notbe out of place to mention here that partnership firms are governed by the Indian PartnershipAct, 1932 and, therefore they should be formed within the parameters laid down by the Act.Company is another form of business organization, which has the advantage of distinct legalidentity and limited liability to the share holders.It can be a private limited company or a public limited company. A private limited can be formedby just two persons subscribing to its share capital. However, the number of its shareholderscannot exceed 50, public cannot be invited to subscribe to its capital and the members right totransfer their share is restricted. On the other hand, a public limited company has a minimum ofseven members. There is no limit on the maximum number of its members. It can invite the 7
    • EXPORT PROCEDUREpublic to subscribe to its capital and permit the transfer of share. A public limited companyoffers enormous potential for growth because of access to substantial funds. The liquidity ofinvestment is high because of easiness of transfer of shares. However its formation can berecommended only when the size of the business is large. For small business, a sole proprietaryconcern or a partnership firm will be the most suitable form of business organization. In case it isdecided to incorporate a private limited company, the same is to be registered with the Registrarof Companies. 8
    • EXPORT PROCEDURESTRUCTURE OF AN EXPORT ORGANISATION • Marketing manager for generating sales • Commercial manager for looking activities of the execution of the orders. • Staff personnel for carrying out the day-to-day activities namely o Preparation of pre - shipment documents. o Co-ordinating with clearing agents on the progress of the shipment to be made. o Co-ordinating with the ware houseC. excise department regarding packing and clearance of the goods for export. o Preparation of post shipment documents foe banks. o Follow-up with the bank on dispatch of documents, receipt of payment, an ailment of bank loans etc. • To look into the requirement of licenses, claiming of export benefits filing of documents with the Government Authorities in Discharge of Export Obligations, if any, filing of returns to the various Government Agencies which are mandatory, prepare and keep an information bank of various transaction of the company, their domestic as well as international competitors. • An office boy for doing leg work. • A clearing and forwarding agent to handle the documents and the goods in the customs premises in the ports of lading.Depending upon the size of the business the numbers of personnel under each category mayincrease. For example if a company is transacting substantial volume of business in more thanone product. Then it is necessary to have marketing manager for each product so that the personcan concentrate on a particular trade to enhance the business. 9
    • EXPORT PROCEDUREREGISTRATION FOR OBTAINING IMPORTER EXPORTER CODE(IEC) NUMBER.The Customs Authorities will now allow the exporter to export or import goods into or fromIndia unless he holds a valid IEC number. Before applying for IEC number it is necessary toopen a bank account in the name of the company with any commercial bank authorized to deal inforeign exchange. The duly signed application form should be supported by the followingdocuments. • Bank receipt ( in duplicate ) / Demand Draft for payment of the fees of Rs. 1000/- • Certificate from the banker of the applicant firm as per Annexure 1 to the form given. • One copy of PAN number issued by Income Tax Authorities duty attested by the applicant. • One copy of Passport Size photographs of the applicant duly attested by the banker to the applicant. • Declaration by the applicant that the proprietor/partners/directors as the case may be of the applicant company, are not associated as proprietor/partners/directors in any other firm, which has been caution, listed by the RBI. Where the applicant declares that they are associated as proprietor/partners/directors in any other firm, which has been caution, listed by the RBI, they will be allotted IEC No. but with an additional condition that they can export only with RBI’s prior approval and they should approach RBI for the purpose. • Each importer/exporter shall be required to file importer/exporter profile once with the licensing authority shall enter the information furnished in Appendix 2 in their database so as to dispense with changes in the information given in Appendix-2, importer/exporter shall intimate the same to the licensing authority. 10
    • EXPORT PROCEDUREPROFORMA OF IEC 11
    • EXPORT PROCEDUREHOW ONE BEGINS TO DO EXPORTBefore entering into the venture of exports, one must look for the product to be exported and themarket where he intends to export.In case of a manufacturer, obviously he would like to export the product he manufactures as is orwith possible modification as may be required by the market. However, in case of a merchantexporter or a trader, one has to identity the product to export. If the exporter is already in thetrade in the domestic market and is familiar with the product it would be an advantage to exportthe said product of which he has reasonable knowledge.Before selecting a product, one must simultaneously made a study and find out the prospectivemarket. For finding out the market for the selected product, the following methods will help. • Get statistical information as to imports of the product by various countries and their growth prospects in the respective countries • Approach the chamber of commerce for their guidance to find out the market. • Approach the Export Promotion Council dealing in the product of selection to get more information.Once you are ready with the product you wish to export and have found the market for the same,you are ready to proceed further. Following sequences can be followed: • Any one, who wishes to export, must first of all get an Importer Exporter Code Number (IE Code).This can be obtained by making a formal application to the office of the Regional Directorate General of Foreign Trade (DGFT). • Get yourself registered with the related Export Promotion Council and become a member. Also arrange to obtain Registration-Cum-Membership Certificate (RCMC) from the council. This has twin objectives: o Under the Foreign Trade Policy, it is mandatory that an exporter gets him registered with the Export Promotion Council to avail of various export facilities. o Being a member, you will have access to all the information relating to the product that could be made available by the council 12
    • EXPORT PROCEDURE o Many foreign buyers send their enquiries for the imports to the Export Promotion Council. Hence you will have few customers interested in your product.• If you are a manufacturer, find out the provisions under the EXIM Policy of getting the raw materials duty free.• Get familiar with the excise formalities as goods meant for export can be cleared without payment of C. Excise duty on the finished product subject to compliance of certain formalities.• Understand the local government regulations in relations to the export of the product.• Get information of the government’s regulations of the importing country as to restrictions on the quantity, product specification, packing regulations, customs regulations, requirement of specific documents/information etc.• Availability of Vessels/Airlines, the transport charges, frequency of operation etc.,• To look for a Custom House Agent (CHA) (also know as freight forwarders or clearing agents) for handling the documents/cargo in the customs.• If the product is covered under any quota regulation, find out the agency/council who is handling the quota distribution for the product and the availability of quota for exports. 13
    • EXPORT PROCEDUREFINDING A CUSTOMS Once you have selected the market, the next step is to find a prospective customer. This you can get • From the directory of importers of the country • By writing to the Embassy of India in that country for assistance • By writing to the chamber of commerce of that country • By means of participation in a Fair/Exhibition abroad either directly or through the Export Promotion Council • By participating in international fair if organized locally • Through the personal contacts in that country. By these processes one can only have the list of customers. One has to dialogue or correspond with these customers by sending samples, getting feedback from the customers etc. to ultimately select the customer with whom to deal with. It is necessary to know the financial standing of the company which can be obtained through the bank channel or through the office of ECGC. 14
    • EXPORT PROCEDURENEGOTIATING CONTRACT Once the prospective customer is found, the business deal has to be concluded. The following aspects may be considered before entering into a final contract with the buyer. • Credit Worthiness of the Customer. • Availability of the Steamer/Airlines and the frequency • The freight charges • The full product specification • The quantity, Price • Terms of Payment • Type of packing and markings on the packages • Mode of shipment & Shipment schedule • Tolerance of quantity to be shipped • Documentation requirement for the customer • Documentation requirement of the government of importing country • Compliance of the local governmental rules and regulationsBefore entering into contract one should take note of the above factors. While these areindicative, the requirements will vary from country to country, product to product and buyer tobuyer. 15
    • EXPORT PROCEDUREEXPORT SALES, CONTRACT TERMS & CONDITIONSVery often exporters do not enter into any formal contract and finalize the trade deal through theexchange of letters, cable, telex etc. It is, however, expedient that the parties (exporters &importers) incorporate all important terms & conditions of their trade deal in a separatedocument or contract that will avoid disputes arising out of uncertainty or ambiguity. Exportcontract may be sent in duplicate along with the Proforma Invoice to the overseas buyer.STANDARD CONTRACT FORMSNotwithstanding the efforts made by various national/international organizations like the UnitedNations Commission on the International Trade Law, there is still no perfection or a devicewhich would give the parties an accurate and complete idea of each others understanding ofvarious trade terms, the commercial practices and the rights and the obligations vis-à-vis eachother so that the misunderstandings are practically eliminated.Nevertheless, the Indian Council of Arbitration published in 1966 a booklet on “StandardContract Forms and Model Arbitration Clause for use in Foreign Trade Contracts”. It wasrevised and reprinted in 1969 and 1977. It can be referred to by exporter for various clause to beincorporated in the Export Contract. 16
    • EXPORT PROCEDUREENTERING INTO AN EXPORT CONTRACTIn order to avoid disputes, it is necessary to enter into an export contract with the overseas buyer.For this purpose, export contract should be carefully drafted incorporating comprehensive but inprecise terms, all relevant and important conditions of the trade deal.There should not be any ambiguity regarding the exact specifications of goods and terms of saleincluding export price, mode of payment, storage and distribution methods, type of packaging,port of shipment, delivery schedule etc. The different aspects of an export contract areenumerated as under: • Product, Standards and Specifications • Quantity • Inspection • Total Value of Contract • Terms of Delivery • Taxes, Duties and Charges • Period of Delivery/Shipment • Packing, Labeling and Marking • Terms of Payment-- Amount/Mode & • Discounts and Commissions Currency • Licenses and Permits • Insurance • Documentary Requirements • Guarantee • Force Majeure of Excuse for Non- • Remedies performance of contractIt will not be out of place to mention here the importance of arbitration clause in an exportcontract Court proceedings do not offer a satisfactory method for settlement of commercialdisputes, as they involve inevitable delays, costs and technicalities. On the other hand, arbitrationprovides an economic, expeditious and informal remedy for settlement of commercial disputes.Arbitration proceedings are conducted in privacy and the awards are kept confidential. TheArbitrator is usually an expert in the subject matter of the dispute. The dates for arbitrationmeetings are fixed with the convenience of all concerned. 17
    • EXPORT PROCEDUREPROCESSING AN EXPORT ORDERYou should not be happy merely on receiving an export order. You should first acknowledge theexport order, and then proceed to examine carefully in respect of : • Items • Specification • Pre-shipment inspection • Payment conditions • Special packaging • Labeling and marketing requirements • Shipment and delivery date • Marine insurance • Documentation requirement etc.If you are satisfied on these aspects, a formal confirmation should be sent to the buyer, otherwiseclarification should be sought from the buyer before confirming the order. After confirmation ofthe export order immediate steps should be taken for procurement/manufacture of the exportgoods. In the meanwhile, you should proceed to enter into a formal export contract with theoverseas buyer.Before accepting any order necessary homework should have been done as to availability of theproduction capacity, raw material e.t.c. It would be in the interest of the exporter to look intoentering into forward contract to safeguard against exchange rate fluctuations. Ensure that themode of payment is also agreed upon. In case of shipment against letter of credit, the buyershould be advised to open the credit well in advance before effecting the shipment. 18
    • EXPORT PROCEDUREFINANCIAL RISKS INVOLVED IN FOREIGN TRADEAs an exporter while selling goods abroad, you encounter various types of risks. The major riskswhich you have to undergo are as follows: • Credit Risk • Currency Risk • Carriage Risk • Country RiskYou can protect yourself against the above risks by initiating appropriate steps.CREDIT RISK: You can cover your credit risk against the foreign buyer by insisting uponopening a letter of credit in your favour. Alternatively one can avail of the facility offered byvarious credit risk agencies. A specific insurance cover can also be obtained from ECGC(Exports Credit & Guarantee Corporation) to cover your country risk besides covering creditrisk.CURRENCY RISKS: As regards covering the currency risk, due to the exchange ratefluctuations, you can request your banker to book a forward contract.CARRIAGE RISK: The carriage risk can be covered by taking an appropriate general insurancepolicy.COUNTRY RISK: ECGC provides cover to protect the exporter from country risks. A detailedprocedure how an exporter can get him protected against the above risks are given in separatechapters later. 19
    • EXPORT PROCEDUREMARINE INSURANCE POLICYGoods in transit are subject to risks of loss of goods arising due to fire on the ship, perils of sea,thefts etc. Marine insurance protects losses incidental to voyages and in land transportation.Marine Insurance Policy is one of the most important document used as collateral securitybecause it protects the interest of all those who have insurable interest at the time of loss. Theexporter is bound to insure the goods in case of CIF quotation, but he can also insure the goodsin case of FOB contract, at the request of the importer, but the premium payment will be madeby the exporter.There are different types of policies such asSPECIFIC POLICY: This policy is taken to cover different risks for a single shipment. For aregular exporter, this policy is not advisable as he will have to take a separate policy every timethe shipment is made, so this policy is taken when exports are infrequent.FLOATING POLICY: This policy is taken to cover all shipments for same months. There is notime limit, but there is a limit on the value of goods and once this value is crossed by severalshipments, then it has to be renewed.OPEN POLICY: This policy remains in force until cancelled by either party, i.e. insurancecompany or the exporter.OPEN COVER POLICY: This policy is generally issued for 12 months period, for all shipmentsto one or all destinations. The open cover may specify the maximum value of consignment thatmay be sent pre ship and if the value exceeded, the insurance company must be informed by theexporter.INSURANCE PREMIUM: Differs upon from product to product and a number of other suchfactors, such as, distance of voyage, type and condition of packing etc. Premium for airconsignments are lower as compared to consignments by sea. 20
    • EXPORT PROCEDUREThe Insurance Policy Normally Contains: • The name and address of the insurance company. • The name of the assured & description of the risk covered. • A description of the consignment. • The sum insured & the date of issue. • The place where claims are payable together with details of the agent to whom claims may be directed & Any other details, as applicable.SHIPPING AND CUSTOMS FORMALITIES(As per the Prevailing Law i.e., ICA 62)The shipment of export cargo has to be made with prior permission of, and under the closesupervision of the custom authorities. The goods cannot be loaded on board the ship unless aformal permission is obtained from the custom authorities. The custom authorities grant thispermission only when it is being satisfied that the goods being exported are of the same type andvalue as have been declared by the exporter or his C&F agent, and that the duty has beenproperly determined and paid, if any.The custom procedure can be briefly explained as follows: • Submission of Documents: The exporter or his agent submits the necessary documents along with the shipping bill to the Custom House. The documents include: o ARE-1 (Original and duplicate) o Excise gate pass (Original and duplicate transporters’ copy o Proforma Invoice o Packing List o GRI form (Original and duplicate) o Customs Invoice (where required in the importing country) o Original letter of credit/contract 21
    • EXPORT PROCEDURE o Declaration form in triplicate o Quality Certificate o Purchase memo o Labels o Licence (if any required) including advance licence copy o Railway receipt/lorry way bill o Inspection Certificate by Export Inspection Agency• Verification of Documents: The Customs Appraiser verifies the documents and appraises the value of goods. He then makes an endorsement of “Examination Order” on the duplicate copy of shipping bill regarding the extent of physical examination of the goods at the docks. All documents are returned back to the agent or exporter, except o Original Copy of GR to be forwarded to RBI o Original copy of shipping bill o One copy of commercial invoice• Carting Order: The exporter’s agent has to obtain the carting order from the Port Trust Authorities. Carting Order is the permission to bring the goods inside the docks. The carting order is issued by the superintendent of Port Trust. Carting Order is issued only after verifying the endorsement on the duplicate copy of shipping bill. The Carting Order enables the exporter’s agent to cart goods inside the docks and store them in proper sheds.• Storing the Goods in the Sheds: After securing the carting order, the goods are moved inside the docks. The goods are then stored in the sheds at the docks.• Examination of Goods: The exporter’s agent then approaches the customs examiner to examine the goods. The customs examiner examines the cargo and records his report on the duplicate copy of the shipping bill. The customs examiner then sings the “Let Export Order”. 22
    • EXPORT PROCEDURE• Let Export Order: The Let Export Order is then shown to the Customs Preventive Officer, along with other documents. The CPO is in charge of supervision of loading operations on the vessel. If CPO finds everything in order, he endorses the duplicate copy of shipping bill with the “Let Ship Order” This order helps the exporter/shipper to load the goods on the ship.• Loading Goods: The goods are then loaded on the ship. The CPO supervises the loading operations. After loading is completed, the Chief Mate (Cargo Officer) of the ship issues the “Mate’s Receipt”. The Mate’s Receipt is sent to the Port Trust Office. The C&F agent pays the port trust dues and collects the mate’s receipt. The C&F agent then approaches the CPO and gets the certification of shipment of goods on AR Forms and other documents.• Obtaining Bill of Lading: The Mate’s Receipt is then handed over to the shipping company (on whose vessel the goods are loaded). The shipping company issues bill of lading. The Bill of Lading is issued in: o 3 negotiable copies of Bill of Lading o 10 to 12 Non-negotiable copies of Bill of Lading. 23
    • EXPORT PROCEDUREPROFORMA OF SHIPPING DOCUMENT PROFORMA OF BILL OF LADING 24
    • EXPORT PROCEDURE25
    • EXPORT PROCEDUREPROCEDURE OF EXCISE CLEARANCE:The common procedure of excise clearance under “bond” and under “rebate” is discussed asfollows:• Preparing of Invoice: The export goods have to be cleared from the factory under invoice. The invoice contains details like name of the exporter, value of goods, excise duty chargeable, etc. The invoice is to be prepared in triplicate. In case of export under Bond, the invoice should be marked as “For Export without payment of duty”. In addition to the invoice, a prescribed for ARE 1 has to be filed in by exporter.• Filling up of ARE-1 form (Annexure-20): The ARE-1 form needs to be filled in four copies. A fifth (Optional) may be filled in by the exporter, which can be used at the time of claiming other export incentives. The ARE-1 copies have distinct color for the purpose of verification and processing.• Application to Assistant Commissioner of Central Excise (ACCE): The exporter has to make an application to ACCE regarding the removal of goods from the factory/warehouse for export purpose.• Information to Range Superintendent of Central Excise (RSCE): The ACCE will inform the RSCE under whose jurisdiction the goods are intended to be cleared for export• Deputation of Inspector: The RSCE will then depute an inspector to clear the goods, either at the factory or warehouse, or in certain cases at the port.• Processing of ARE-1 Form: The Excise Officer/Inspector will make endorsement on all copies of ARE-1. The handling of ARE-1 Form is done as follows: o The inspector returns the original and duplicate copies to the exporter o The triplicate copy is sent to officer (ACCE or Maritime Commissioner (MCCE) to whom bond was executed or letter of undertaking (LUT) was given. This copy can also be handed over to the exporter in a tamper proof sealed cover to be submitted to ACCE/MCCE. o The 4th copy will be retained by the excise inspector. 26
    • EXPORT PROCEDURE o The 5th copy is also handed over to the exporter. o At the time of export, original, duplicate and the 5th copy (optional) will be submitted to customs officer. The customs officer will examine these copies and then export will be allowed. o The customs officer will then make endorsement of export on all copies of ARE-1. He will cite shipping bill number and date and other particulars of export on ARE-1. o The original copy and quintuplicate (optional) will be returned to the exporter. The duplicate copy will be sent directly to the ACCEMCCE i.e. excise officer with whom bond was executed will get 2 copies, one from RSCE (or excise inspector) when goods are cleared from factory and other Custom Officer after export. This will enable him to keep track to ensure that all goods cleared from factory or warehouse without payment of duty are actually exported. In case of export after payment of duty, under claim of rebate, the basic procedure is same as above, except that the triplicate copy (by excise inspector) and duplicate copy(by customs officer)will be sent to the officer to whom rebate claim is filed. If claim of rebate is by electronic submission, these copies well be sent to excise rebate audit section at the place of export.• Refund or Release of Bond: The exporter should make an application to the excise officer for refund or release of bond. The application must be supported by original copy of ARE-1 form. The excise officer crosschecks the original copy of ARE-1 form and the duplicate and triplicate copies of ARE-1 form, which he had received earlier. If the copies match, then refund is given or the bond is released. 27
    • EXPORT PROCEDURE FACTORY STUFFING OF CARGO Clearance of goods to docks: If the goods meant for export is of a small quantity which may not be sufficient to make one full container, the cargo is said to be less than container load (LCL) cargo. Such cargo has to be taken to the docks where the goods will be consolidated (combining the cargo of other exporters to make up quantity for a full container) by the agent and loaded into a container. Here the examination of the cargo is done at the docks. If the goods meant for export is of sufficient quantity to make up a full container, the exporter has the option to take the goods to the docks and get them examined and stuffed into a separate container. An exporter gets the benefit on the freight amount for a full container. Alternatively, he can have a container allotted to him and get the same to his Mills Premises. The goods meant for exports can be stuffed into the container under the supervision of the regional Central Excise Authority. Here the exporter has to • Obtain permission from the Customs for getting the container to his mills premises for stuffing (House Stuffing) • Inform the Central Excise Authorities at least 24 hours before bringing the container for loading.The Central Excise Authority will supervise the loading, seal the container and certify theinvoice as directed in the permission given by the custom authorities. A special Lock is used tolock the doors of the container. Samples from the goods will be drawn, if necessary, as requiredunder the customs permission. Such samples will be sealed and forwarded along with thecontainer. The examiner in the docks may arrange to send the sample for testing. Then thecontainer is moved to the dock for loading. 28
    • EXPORT PROCEDURESALES TAX EXEMPTION PROCEDUREExport good are exempted from the payment of sales tax. The exporter can claim exemptionfrom sales tax (on purchases or sales for export purpose), provide the exporter is registered withthe Sales-Tax Department. If the exporter is not registered with the sales tax department, hecannot utilize the facility of sales tax exemption. Therefore, it is necessary for the exporter to gethis organization registered with sales tax department.I Registration Procedure • Application: The exporter must apply to the Sales Tax Officer (STO) under whose jurisdiction the head/ registered office of the exporter is located. • Deputation of Inspector: The STO may depute an inspector to visit the office of the exporter and inspect: o Relevant books showing sales/ purchases. o Partnership Deed or Memorandum and Articles of Association along with Incorporation Certificate. o Other Relevant documents. • Inspection: The inspector visits the office of the exporter and inspects the necessary books and other documents. • Report by Inspector: The Sales Tax Inspector makes a report to the STO for registration or otherwise. The STO verifies the inspector report. The STO, before granting the ST Reg. Number may cal the exporter for necessary clarifications, if required. • Security Bond: The STO normally requires the exporter to provide a security bond from another firm which is registered with the Sales Tax Department. • Granting of Sales Tax Reg. Number: After completing necessary formalities, the STO grants Sales Tax Reg. Number to the exporter.II. Exemption Procedure • Obtaining Form ‘H’: the registered exporters need to apply to the concerned STO for obtaining Form ’H’. the exporter should submit: o A copy of Letter of Credit o A copy of Letter of Credit /Export Order. 29
    • EXPORT PROCEDURE o Copy of the Invoice, where goods are already purchased for export purchase. o A copy of shipping bill duty certified by customs.The exporter has to affix the prescribed court fee stamp on each of the Form ‘H’ issued. TheSTO then affixes the exporter’s company stamp on the Form ’H’. • Filling the details in Form ‘H’: After export of goods, the exporter fills the relevant details in ‘Form H’. The Form ‘H’ needs to be prepared in triplicate. • The exporter retains one copy, and other two copies are sent to the seller from whom the exporter purchased the goods for export purpose. The seller than sends on copy of Form ‘H’ to STO along with the Return of Sales Tax. The other copy is retained by seller. The STO may issue refund order to the exporter. 30
    • EXPORT PROCEDUREBIBLIOGRAPHYwww.google.comwww.indiandata.comwww.eximkey.comwww.careers-india.comText book Michel Vaz export import management 31