Procedures of the Export Imports Logistics and Freight Forwarding.
it Di scribes how CHA Works for customs clearance and deliver the cargo to the importer.
Keppel Ltd. 1Q 2024 Business Update Presentation Slides
OVERVIEW OF CHA FUNCTIONS
1. 1
A PROJECT REPORT.
ON
“OVERVIEW OF CHA FUNCTIONS’’
Experienced From
ASHAPURA FORWARDERS PVT. LTD.
SINESS MANAGEMENT
GUJRAT
UNIVERSITY,
AHMEDABAD
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY
JIGNESH VITTHALBHAI PANCHAL
Enrollment no: 31621
Year 2016 – 2018
B. K. SCHOOL OF BUSINESS MANAGEMENT
2. 2
GUJARAT UNIVERSITY
ACKNOWLEDGEMENT
It was a great pleasure and overwhelming experience working on this
summer internship project. I take this opportunity to express our gratitude towards
all those persons who have directly/indirectly guided and helped us for undertaking
this Grand project.
I hereby take this opportunity to add special note of thanks to Mr. Sunil
Davey (Chief Operating Officer) and for admitting us to do project work in this
esteemed organization. We also express our sincere thanks to M/s Rashmi Gomes
– Manager-HR for her approval to work with the company.
I express our deep and sincere thanks to Ms. Krutika Dave, the Assistant
Manager at Ashapura Forwarders Pvt. Ltd. Initially she helped me in understanding
of how C.H.A.s work and then guided me throughout the project. She also helped
me by contributing her valuable time in completion of this practical project as well
as the project report.
I am also thankful to the entire team of Ashapura Forwarders Pvt. Ltd ,
Ahmedabad, Mr. Akhil Rajan (GM), Mr. Ravi Patil (Manager-Exports), Mr. Renju
(Manager Imports- Pipavav), when I needed support they give me their valuable
time in completion of this practical project.
I am also thankful to Dr. Pratik Kanchan-Director of B.K. School of Business
Management, Gujarat University (Ahmedabad) and also to all professors of
institute.
Jignesh Panchal (31621)
Place : Ahmedabad
Date: 22th Sept, 2018
3. 3
PREFACE
I know that training is for the development and enhancement of the
knowledge in particular fields. It can never be possible to make a mark in today’s
competitive era only with theoretical knowledge when industries are developing at
global level, practical knowledge of administration and management of business is
very important. Hence, practical study is of great importance to MBA student.
With a view to expand the boundaries of thinking, we have undergone for
Ashapura Forwarders Pvt. Ltd. We have made a deliberate efforts to collect the
required information and fulfill training. This project report is one type of test of
our knowledge, skill, and ability to perform in an organization, this practical training
helps us to enrich our theoretical knowledge in the practical world. It helps us to
meet the future challenges more efficiently and effectively.
Based on the data, information and facts obtained from the various reliable
sources have prepared this project report and I believe it is true up to the best of
my knowledge.
4. 4
DECLARATION
I hereby declare that this internship report is a bonafide piece of
research work done by me and this report has not previously formed the
basis for the award of any degree or diploma of any other university or
institution.
Jignesh Panchal
Place: Ahmedabad
Date: 21-09-2018
5. 5
TABLE OF CONTENT
Sr No. Particulars Page No
1 Company profile 7 to 14
2 Organization Structure 15
3 Swot analysis 16
4 Introduction of custom house agent 17 to 19
5 Documentation 20 to 26
6 Import procedure 27 to 69
7 Export procedure 70 TO 82
8 Introduction of problem to study 83 TO 84
9 Findings 85 & 86
10 Conclusion 87
11
References
88
12 Glossary 89 TO 92
13 List of abbreviation 93 & 94
7. 7
COMPANY PROFILE
About company
Ashapura forwarders Pvt. Ltd. Established in 1997 by Mr. SUJITH KURUP
with the intention to create the company which offer multiple services at one
single destination, it start from Ahmedabad and now in 12 different locations in
whole country.
Incited by a culture of openness and long term service, Ashapura
Forwarders Pvt. Ltd. (AFPL) steadfast in providing outstanding service to their
customers, by understanding the consumer genome. We consider expertise
imperative and relationship as, king; hence we provide a platform, where the
employees‟ can uncover opportunities of learning and advancement, and
thereby, contributing to the progress of the society, by being a good corporate
citizen. Established in 1997, Ashapura is an ISO 9000 – 2008 certified company
having strong worldwide network of business associates and an excellent
presence in Indian market.
Working on the principles of partnership, proficiency and quality
management, it provides customer centric solutions for maximum efficiency and
customer satisfaction, which is possible because of the expertise acquired by
Ashapura through its nearing 2 decades of existence in the field of imports,
exports, custom clearance, transportation and warehouse & distribution backed
up by a team of experts who nurture the needs of many multinationals.
In brief, Ashapura is one stop shop for integrated imports, exports, pre &
post custom clearance formalities, transportation, warehouse & distribution
and door-to- door service & service solution provider.
Core values:
The 3 Cs
Commitment to Work
Compliance to Unhold Integrity
Customer Focus
8. 8
Vision:
“We are a dedicated team striving to bring excellence in the field of
international and domestic logistics and assist our clients free from all worries
of their supply chain requirements.”
Mission:
Ashapura committed to build long term relationships based
on integrity, performances, value and client satisfaction.
Group of Companies
Ashapura Forwarders Pvt. Ltd.
Engaged in freight forwarding and handling of Sea and
Air Cargo both in bulk, BREAK BULK, project, liquid as
well as containerized Cargo.
Amanzi International Pvt. Ltd.
The company's mission is to provide integrated logistics
solution for simplifying the supply chain of our
customers and business partners in domestic and
international market.
Ameya CFS Pvt. Ltd.
Develop State of the Art CFS in Pipavav
Providing Support service to Logistics Operation
Empty Yard Operations & Warehousing and
distribution.
Jai Ambe Enterprise
Inland Transport having its own fleet of Equipments for
managing movement of all types of cargo.
9. 9
Transmarine Corporation
Customs Clearance of Air & Sea- Import & Export
consignments from almost all the locations.
Ashapura Warehousing
Warehousing and Distribution
Certifications and Membership
Area of Operations
Logistics
Stevedoring
Freight Forwarding
Container Handling
Customs House Agency
Chartering & Brokerage
Project Cargo Logistics
Supply Chain Logistics
Warehousing & Distribution
CFS Operations
Land/Sea/Air Transport
11. 11
Valued Customers
Services
Core Services
Ocean Freight
When you have sea freight professionals matching frequent sailings
and flexible service options to your specific business objectives, you have
ASHAPURA's brand of Personal Service. Our Freight Management experts
partner with you to learn your business first-hand. Equipped with an intimate
understanding of your requirements, we pull from a range of standard sea
freight products & supplementary options to secure the spare allocation,
timing, frequency and rates that fit your precise objectives. Whether we need
to reserve an oversize container or securely transport your high value cargo,
Ashapura’ s sea freight specialist treat each shipment with the care and
attention it take to earn your trust.
12. 12
Air Freight
When you have an experienced team of Air Freight specialists
delivering on your daily priorities for time, space, frequency and cost, you
have ASHAPURA's brand of Personal Service. We listen, learn and form a
close partnership with you to identifying your needs and understand your
goals. Our standard air freight products and their customizable options bring
added flexibility to your requirement. Whether we're taking extra measures
for your sensitive cargo or giving you added supply chain visibility through
our online tracking tools. Ashapura’s Air Freight experts are looking to build
your trust as they look after your cargo.
Customs Clearance
Single Window Door to Door Service
Good knowledge in Customs rules/Procedures/Duty Exemption
& Export Promotion Schemes/Product classifications etc.
Centralized Documentation and ON-LINE Filling of Bills of Entry
and Shipping Bill.
Centralized Client Co-ordination for all Key account shipments
clearing across all major ports of India.
Well versed in handling projects/ODC both Imports & Exports.
Specialized in handling Automobile & Construction Equipment
clearances.
Exclusive Team for handling all valued added services like SAD
Refunds, SVB finalization / SVB Renewal / Finalisation of
Provisional Bill of entry & pursuing EDD refund claims, Drawbacks
etc.
Mapping of KPI through set SOP's
Automation of CHA Operations of all branches.
Surface Transportation
Ashapura group operate fleets of 80 plus own trucks & trailers
both open and covered all over India. We are specialized in
moving over dimensional & odd sized cargoes.
13. 13
Value Added Services
Insurance
We associated mostly with all nationalized and non-nationalized
insurance companies in India and arrange insurance coverage for
the cargoes as per the request of clients.
Please note that upon choosing your cargo insurance, you hereby
accept and will adhere to the terms and conditions of the
insurance company.
Consultation
Besides, complete documentation & compliances with DGFT,
Central Excise, RBI, Sales Tax Authorities and other
Governmental & Non-Governmental bodies is India.
Warehouse and Distribution
Ashapura offers its customers comprehensive warehousing and
storage facilities. Through our own space as well as leased, we
can provide virtually any form of storage required by the
customers. In addition to that we also provides packing, sorting
and bar coding facilities according to the requirements of the
customers.
Container Yard Management
Local transportation of empty & loaded container, container
stuffing, fumigation, container cleaning & repairing, Loading &
offloading of empty & loaded containers is achieved by using
state of the art equipments, facilities, and a sound system
thereby reducing investment cost. Operational efficiency which
is gained through single point of contact.
14. 14
Freight Forwarding
The services broadly offered by the Company as clearing and
forwarding agent include all procedural requirements of
customs, shipping lines, chamber of commerce, phyto sanitary
certificates, health certificates, fumigation certificates,
surveying, inspection, sampling, export inspection certificates,
insurance claims, license registration and any other job specify
by the shipper.
15. 15
ORGANATION STRUCTURE
Sujith Kurup
(MD)
Sunil Davey
(COO)
Ravi Patil
(Manager
Exports)
Whole Exports
Team
Akhil Rajan
(General
Manager)
Automobile Team
Renju Koshy
(Manager
Pipavav)
Dharmesh &
Team
Dilip ( Manager
Hazira)
Jitu Jagwani &
Team
Meet Shah
(Accounts
Manager)
Rashmi Gomes
(Manager HR)
Akash
Vishwakarma
Sanjay Lodaya (
Logistics Head)
Vinod Nair
( Logistics
Manager)
17. 17
INTRODUCTION OF CUSTOM HOUSE AGENT
A Customs House Agent (CHA) is somebody entitled to act upon a
company’s behalf on actions involving the import and export of goods. The
phrase is most commonly used in India. There such agents must be licensed
under section 146 of the Customs Act.
The purpose of a custom house agent is to tackle the problem that
management of many businesses simply do not have the resources to personally
deal with import and export issues. This is a particular concern given that India
is traditionally a trading nation. There is also a high degree of bureaucracy in
Indian business.
The laws governing these agents specifically state that any action they
take is treated legally as if it was made by the company itself. In legal terms, the
agent is treated as if they were the legal owner of the goods they deal with. One
exception to this is that a custom house agent cannot normally be held
personally responsible for any duty that is not paid by the company.
The services rendered by the Custom House Agent:
Clearance of the import and export consignment
Loading/unloading of import or export goods from/at the
premises of the exporter/importer
Packing
Weighment
Measurement of the export goods
Transportation of the export goods to the customs station or the
import goods from the custom station to the importers premises.
Payment of expenses on account of
Octroi
DE stuffing /palletization terminal handling
Fumigation
Drawback/DEEC processing
Survey /amendment fees
Dock fees
18. 18
Repairing and examination charges
Landing and container charges
Statutory labour charges
Testing fees
Drug control formalities
Sorting /Marking/Stamping/Sealing on behalf of the exporter/
importer
Crane/fork lift charges
Types of CHA License:
Temporary License :
After accepting an application, a one-year temporary license is
granted under Regulation 8 in Form B. Before receiving a
temporary (or regular) license, the applicant must execute a
bond on Forms D and E. For major ports, the surety amount is
Rs.25000/; for other ports, Rs.10000/. Surety may also be given
in the form of National Savings Certificates or postal security,
which should be pledged in the name of the Commissioner. Since
a regular license-holder is allowed to work in more than one
Customs station, separate bond and surety must be posted for
each customs station.
Regular License:
An application for regular license may be made on Form C by a
person who has passed the examinations. Forms A and C are
nearly identical, except that while the former is issued under
Regulation 5, the latter form is issued under Regulation 10. A
regular license is requested on Form D. The applicant
must satisfy the following conditions:
Quantity or value norms of cargo cleared from the customs
house (as determined by the Commissioner)
19. 19
Applicant conduct during the temporary-license period; no
complaints of non- compliance with Regulation 14.
A regular license is nontransferable, and its term is ten years.
20. 20
DOCUMENTATION
These documents can be classified into following categories
Mandatory Documents Required for Filling of BOE :
Commercial invoice
Packing list
Insurance certificate
Bill of exchange
Shipment advise
Certificate of origin
Inspection certificate
Transportation documents
Bill of lading
Airway bill
Combined transport document.
Regulatory Documents
Export license, if necessary.
AR4/AR5 Form
Pre-shipment inspection certificate
Export declaration form GR/PP/VPP/COD/SOFTEX/Form
Shipping bill
Documentation as per requirement of importing country.
Customs invoice
GSP certificate of origin
Documents required for claiming export assistance.
Application form
Shipping bill duly authentication by customs
Commercial invoice attested by bank
Bank certificate
Statement of export certified by negotiating bank
Registration cum membership form of concerned export
promotion council.
21. 21
Principal Documents
Commercial invoice
Packing list
Marine insurance policy
Bill of exchange
L/C
Bill of lading
Airway bill
Combined transport document
GR/PPN/COD/SOFTEX Forms
Export inspection certificate
AR4/AR5 Form
Shipping bill
Certificate of origin
Shipment advice
Consular invoice
Additional Documents Required for Import
Original D.E.E.C./ D.E.P.B. together with relevant Declarations.
Concessional duty certificate (issued by DGTD or any sponsoring
Authority )
Adhoc exemption certificate with the end-use bond.
N.Form and Undertaking (in case of clearance at Mumbai.)
In addition where cargo is to be bonded Warehouse outside
Bombay.
Double-Duty bond.
Transit bond.
Space availability Certificate from Warehousing Authority.
N.O.C. from Customs/Central Excise.
22. 22
Insurance policy for duty amount favoring Commissioner of
Customs covering Transit from Bombay Customs to Public
Bonded Warehouse.
It is advisable that you obtain a re-warehousing certificate from
proper authority for submission to Bombay Customs for cancellation of
bond by you. Please advise us in advance whether the consignments to be
cleared are for Home consumption or to be bonded.
Kindly advise us the name of the Transporter through whom the
consignment is to be dispatched on clearance as also the address where the
cargo is to be delivered.
Import Documentation
The paper work that is required for an import sale transaction is
called Import Documentation by which shipping process is facilitated and
recorded. The import documents are listed below.
Import/Export Code No. given by Jt. CCI & E. / D.G.F.T.
Permanent Income Tax A/c. No. allotted to importer.
Signed copy of Invoice.
Signed copy of Packing List.
Bill of Lading/Airway bill.
Insurance memo/policy.
Import License/C.C.P with letter of Transfer/letter of a
authority etc. In case the license is attached to any other B/E,
a Photocopy of the same can be submitted for processing the
documents, Original License will however be required for
release of the consignments. OR O.G.L declaration giving
appendix/List/Sr.No with copy of Industrial.
License/SSI Registration Certificate. (English Translation
required when Certificate is not in English).
23. 23
Set of Importer's Declarations and GATT declarations signed
under your rubber stamp.
Certificate of Origin.
Literature/ Certificate of Analysis/ Catalogue/ Write up.
Order/Order Confirmation.
No Commission Declaration. When cargo is in bags or drums
packing material declaration as per P.N.99/90.
Freight memo with Bank Freight Certificate, where freight is
payable in India.
Bank Draft/Letter of Credit.
Original documents duly endorsed in your favor by your Bankers and
in turn endorsed by you under your rubber stamp in our favor.
Invoice duly attested by Bank should also be sent.
Export Documentation
The paperwork that is required for an export sales transaction is
called Export Documentation by which the shipping process is
facilitated and recorded. Documentation is essential for moving
goods through the channels of distribution, transferring
responsibility or possession, clearing goods through customs, and
facilitating payment according to the agreed upon terms. The export
documents are listed below:
Invoices (9 Copies)
Packing List (9 Copies)
Copy of Letter of Credit/Order/Contract
Correspondence leading to export of consignment
Export Declarations
GR Form in duplicate duly filled and signed under your rubber
stamp
Freight Certificate duly signed under your rubber stamp
Permanent Income Tax Number
24. 24
Importer/Exporter Code No. given by JT.C.C.I.&E/D.G.F.T.
Forwarding Instructions as per attached form
E.I.A. Certificate/Quota Certificate etc.,(wherever applicable)
Additional documents required for export under D.E.E.C or D.E.P.B. :
Proforma Invoice (2 copies).
D.E.E.C/D.E.P.B. Book or its Application together with the
receipt in duplicate whichever is applicable.
Declarations.
ADDITIONAL DOCUMENTS REQUIRED FOR EXPORT UNDER CLAIM FOR
DRAWBACK:
Drawback claim copy of the S/B duly signed on the reverse of
the same on the revenue stamp under your rubber stamp.
Name, Address and A/c. No., of your bankers where drawback
amount is to be credited.
Drawback Serial No.
ADDITIONAL DOCUMENTS REQUIRED FOR EXPORT FROM MUMBAI:
E.D.I Number allotted by Mumbai Customs. In case the same is
not taken from Customs registration will have to be done prior
to export.
N- Form and under taking for the same duly signed under your
rubber Stamp.
In case there are any specific requirements the same may be
intimated to us when sending the documents for shipment like
palletization, fumigation Phytosanitary, SGS, Commission to be
declared on GR etc.
If in case shipment by Merchant Exporter name and address of
Manufacturer's to be included on Invoice and certificate issued
by Central Department to the manufacturer stating that Modvat
have been availed by them for the quantity sold to the exporter.
25. 25
Cost Factor of Export/Import of Goods
Materials, labour and overhead
Custom packaging
Inspection fees
Licensing fees
Royalties
Buying agent's commissions
Trader's mark-ups
Bank charges and commissions
Overseas agent's commissions
Documentation charges
Insurance premiums
Export license fees
Certification fees
Road freight (cartage, drayage) and/or rail freight
Routing costs (canal and inland waterway links)
Theft and pilferages
Handling charges
Brokerage fees
Export levies
Insurance premiums
Overtime charges
Warehousing
Loading fees
Demurrage
Wharf age
Ocean freight
Lighter age
Uninsured damages (e.g. war and acts of God)
Pilferages
Overtime charges
Unloading fees
Import duties and taxes
26. 26
Bank charges and commissions
Import license fees
Brokerage fees
Interest charges
27. 27
IMPORT PROCEDURE
Receive Pre Alert Documents from
Client. Check for free days and details as
per standard checkpoints
Prepare Docket and track the shipment
and communicate
Scrutinize thoroughly on notification
matter and HS Code matter and License
or Under Merit?
If the documents are in order, Prepare
checklist and get the same crosschecked
internally before sending for approval
Obtain Checklist approval, Coordinate
with Client for original/attested
documents required for clearance.
Arrange to collect original/attested
documents from Client and prepare
customs docket for ABD Shipments or
courier to Branch location along with
the DO. And obtain confirmation
Obtain IGM and Inward details... and arrange for submitting
with EDI. Pl. Record debiting details in the excel sheet.
Generate BOE No. and inform clearance team to process
documents. Check on shipment status whether RMS or Apr
and plan accordingly.
Coordinate with Shipping Line/Air Lines/Forwarders for
Import Invoice and prepare FDS Bond
Parallel Process
Parallel Process
Address discrepancy to Client in proper way with
justification and ask for clarification in order to prepare
checklist
Parallel Process Maintain master file of HS code and end use
Parallel Process
Arrange to submit required documents along with the
payment to Shipping and collect Shipping line / Air lines DO
In case of AIR SHIPMENT, Collect original
documents from the Airlines and check
before submitting. In the event of
discrepancy, inform Client to provide
corrected documents
Coordinate and monitor status of the shipment and
update all the concern. Carry out below task basis
the status
Parallel Process
In the event of Customs raising any kind of query or
demand clarification, firstly try to resolve internally
then by consulting with Client and clarify with
customs. Approach Client and demand necessary
documents only if we do not possess it
PROCESS FLOW FOR HANDLING Client OPS
Conditions to be fulfilled
If the shipment in project, collect RA letter from Client.
Prepare application as per the format and send it to the
ICD for obtaining RA and debiting
Obtain RA check and send it to the clearance location
If the shipment is in EPCG license, check
availability of license and arrange to provide to
clearance team for process
28. 28
First Check
Examination
Customs may
give first check
if the value
declared is
found to be on
lower side
RMS
Duty on the
basis first print.
Complete
assessment and
obtain OOC
APR
Conclude the
assessment and
advise duty on
the basis of first
print
...examination
and OOC
Obtain debiting details
confirmation upon completion of
assessment. Also cross check with
the first print.
Follow up for Duty payment...get the same collected and
make the payment. Obtain OUT OF CHARGE
In the event of Container Delivery, check validity of the DO
and get the same validated as per operational requirement.
Obtain Dispatch plan from Client and coordinate with
transport team by giving advance notice.
Parallel Process
In the event of Cargo delivery...De-stuff
the cargo and handover Empty
containers to shipping line upon
examination.
Communicate with Client on dispatch
pattern to be followed
Parallel Process
Check DO Validity and arrange to
extend validity as per operational
requirement
In the event of loose cargo, obtain necessary approvals from
Client if the items not covered in PO
Send Dispatch details and coordinate with AFPL In-Plant team
and Client for offloading.
Collect LR from drivers directly and retain for billing
Arrange to collect Original Bill of Entry along with required
documents and submit to Client
Parallel Process
Arrange to collect all the original
bills/documents for preparation of
AFPL Invoice and submit to Client
29. 29
IMPORT PROCEDURE
Importer Share Pre-Alert ( Invoice, Packing List, B/L)
Documentation Team scrutinize the documents and inform importer if
any document is missing
After receiving all required documents from Importer, Checklist is
prepared and filed with ETA (Estimated Time of Arrival)
AFPL has a system called LOGISYS, for preparing Checklist
In Sea Shipment, pre-alerts of 1 month is received in advance. So,
checklist is prepared accordingly.
IGM (Import General Manifest) which is received about 48 hours
before Inward of vessel is checked according to ETA on Ice Gate.
If IGM is reflected then filing for BOE (Bill of Entry) is done
File is signed using E-Token of CHA
Signed File is uploaded at Ice Gate and IRN/DRN Number is
generated which is to be inserted in Checklist
Checklist is filed at Ice Gate Submission
Positive/Negative Acknowledgement is received with BOE
Number.
First print of BOE is received
In Air Shipment, pre-alerts are received on daily basis and Checklist are
prepared accordingly. Rest of the procedure is same.
BOE is linked to EDI system of Customs
Shipment is arrived at port of Destination
Hard copy of Original documents, Import License, Technical Write-up,
end use, PO copy, Authority letter, B/l, Invoice, BOE, checklist is
submitted to customs.
Now, Custom Clearance process will take place
According to customs system, BOE can go under:
30. 30
First Check
Assessment/Appraisement
RMS (Risk Management System)
RMS B/E :
Duty Reflected in the system
Duty paid by the importer
Examination : Seal verification and report
Shipment OOC Completed
Open Assessment B/E :
Assessment by Suppt. Officer
Counter by AC/DC
Duty Reflection and Duty Payment by Importer
Examination: Open and Verify Cargo
Shipment OOC Completed
First Check
First Check print release in the system
Examination: 100% de-stuff and verification and report.
Assessment by Suppt and
Counter by AC/DC
Payment by Importer
Shipment OOC Completed
Detail Explanation on the customs processes
BOE Filing: BOE Filing will be done on prior and Normal.
Prior Filing: Up on receipt of all supporting documents, Checklist
will prepared upon approval of importer BOE will be filed once IGM
reflected on ICE GATE.
Normal Filing: Up on receipt of all supporting documents, Checklist
will prepared upon approval of importer BOE will be filed once
Inward updated on ICE GATE.
31. 31
Assessment and Counter
Open Assessment: Open Assessment will be done by Assistant
Superintendent with respect to Presenting All supporting Attested
or Original Document on counter.
First Check: Assessment will be done by Supdt. Officer based on the
First Check Examination report on submitting all documents at
Counter.
Duty Payment:
After Assessment Duties will be reflected on ICE GATE, Duty
should be paid by Importer through E-Payment of ICEGATE, In
case of manual BOE through Cheque/Demand Draft on Customs
Counter.
Examination of the cargo
RMS: Seal verification would be done by Cross Checking with Seal
no mentioned in B/L.
Open Assessment: After Duty Payment Cargo will be DE stuffed in
front of Custom Officer and Examination of Cargo will take place.
First Check : 100 % de stuffing would be done in front of
Examination Officer, After verification officer will provide
Examination report based on it, Assessment will be done
Document Requirements for Import of shipments
Fresh New Machinery/Spares Import :-
Commercial Invoice
Packing List
Bill of Lading
Certificate of Origin
32. 32
Insurance Policy
Contract/Letter of Credit/Purchase Order/Payment Proof
Freight Certificate(FOB Shipment)
Catalogue
Technical write up
Used/Second hand Machinery/Spares import :
Commercial Invoice
Detailed Packing List
Bill of Lading
Certificate of Origin
Insurance Policy
Contract/Letter of Credit/Purchase Order/Payment Proof
Freight Certificate(FOB Shipment)
Catalogue
Technical write up
Local Chartered Engineer Certificate
33. 33
Restricted Goods
Sl. No. Categories of Second Hand Goods
Import
Policy
Conditions, if
any
I Second Hand Capital Goods
(a)
i. Personal computers/ laptops
Restricted
Importable
against
authorization
including their refurbished / re-conditioned spares
ii. Photocopier machines/ Digital multifunction Print &
Copying Machines
iii. Air conditioners
Iv. Diesel generating sets
(b) i. Refurbished / re-conditioned spares of Capital Goods Free
Subject to
production of
Chartered
Engineer
certificate to
the effect that
such spares
have at
least 80%
residual life of
original spare.
( C ) Freei. All other second hand capital goods
{other than (a) &( b) above}
II Second Hand Goods other than capital goods Restricted
Importable
against
authorization
34. 34
Documents Required for Clearance
Importer exporter code (IEC) number
No person can obtain import or export goods without obtaining an
importer-exporter code number unless he has been specifically exempted.
It’s obtained from the Regional Licensing Authority.
Example of IEC Code: - 0714022420
Bill of Entry
It’s a document on which clearance of imported goods can be
affected. All goods
Discharged from a vessel, from foreign or coastal ports are cleared on Bill of
Entry in prescribed form.
It has been standardized by the central board of excise and customs.
Generally there are three types of Bill of Entry.
A. Bill of Entry for home consumption(white in colour)
B. Bill of Entry for warehousing(Yellow in colour)
C. Ex-bond Bill of Entry(Green in colour)
Bill of Entry for home consumption: - This bill of entry is in white color,
before introduction of electronic media of filing. Manual bill of entry is
filed, where in no electronic data interchange is available to file bill of
entry electronically. Importer files bill of entry for home consumption
wherein he wants to clear the goods on payment of duty or free duty
goods to remove the cargo to his premises immediately. As per customs
department section 46 of the customs Act 1962 describes in detail about
the procedures and formalities.
Bill of Entry for warehousing: - Warehousing bill of entry is also called
Into Bond Bill of Entry. This is in buff color before introduction of EDI filing,
if filed manually where in no electronic filing available. As per section 46
and section 60 of Indian Customs Act describes in detail about this type of
filing. If an importer does not want to pay duty on his goods immediately
35. 35
up on arrival of goods at port, he keeps his goods in a customs bonded
ware house by following formalities under such provisions and files Into
bond bill of entry. He pays duty and take the quantity of goods as and
when he requires.
Ex-bond Bill of Entry: - The ex-bond bill of entry is filed to take the goods
for home consumption by importer as and when he requires from the
bonded warehouse explained above. The ex-bond bill of entry is in green
color before if filed manually where in no EDI facility is available. The
details of this types of procedures are mentioned in section 68 of Indian
Customs Act.
Four copies of Bill of Entry are submitted
1. Original and duplicate for custom departments
2. Triplicate is owner’s copy
3. Forth copy is for the purpose of foreign exchange to be submitted to
bank.
37. 37
Necessary Documents for Filling Bill of Entry
Bill of lading: -
A bill of lading is a legal document between a shipper and a carrier
that details the type, quantity and destination of the goods being
carried. The bill of lading also serves as a shipment receipt when
the carrier delivers the goods at the predetermined destination.
This document must accompany the shipped goods, no matter the
form of transportation, and an authorized representative from the
carrier, shipper and receiver must sign it.
House Bill of Lading :-
A House Bill of Lading (HBL) is issued by an NVOCC operator, or a
Freight Forwarder to their customers.
When issued for a FCL shipment (non-groupage), a HBL should
always be issued on a back to back basis with a MBL which means
that the HBL should be an EXACT replica of the MBL issued by the
actual Shipping line in respect of all details except
the shipper, consignee and notify party details which will be
different in the HBL and MBL..
In the HBL
The Shipper will usually be the actual shipper/exporter of the cargo
(or as dictated by the L/C)
The Consignee will usually be the actual receiver/importer of the
cargo (or as dictated by the L/C)
The Notify could be the same as Consignee (or any other party as
dictated by the L/C)
38. 38
Master bill of lading :-
A Master Bill of Lading (MBL) is issued by the Shipping Line (Carrier)
to the NVOCC Operator, or Freight Forwarder..
In the MBL
The Shipper will usually be the NVOCC operator, or their agent or
the Freight Forwarder..
The Consignee will usually be the destination agent or counterpart
or office of the NVOCC operator, or the Freight Forwarder.
The Notify could be the same as Consignee or any other party..
39. 39
Another Types of Bill of Lading :-
Ocean Transportation :-
A straight bill of lading: This is a non-negotiable form of the B/L which is
addressed / consigned directly to the buyer, with the buyer’s customs
broker listed as a “Notify Party.” In this case, the carrier will issue a set of
three original Bills of Lading, one of which must be endorsed by the
consignee and presented in order to obtain the cargo at destination.
Typically the straight bill of lading is issued if buyer still owes payment for
all or part of the goods.
An “order” bill of lading: This is a negotiable form which is addressed “to
order” or “to order of [a party]” instead of being consigned to the buyer.
The carrier will hand over the shipment to whoever presents this bill of
lading, as long as it is endorsed on the back. The holder of the order bill
of lading is assumed to be the owner of the goods being shipped. The
order bill of lading is commonly used when the purchase of goods is
covered by a letter of credit or if the goods are expected to be traded on
a mercantile exchange while the shipment is still in transit.
The electronic “telex” release: An electronic “telex” release eliminates
the need for an original bill of lading to be presented at the destination
for the release of the goods. Instead, the shipper endorses an original bill
of lading and submits it to the carrier’s agent at the origin. The origin
agent then notifies the agent at the destination in a simple message that
the goods may be released without the hard copy bill of lading present. In
the past, this notification was done by telex (hence the name), but today
electronic releases are done by email or via integrated system notes in
carrier booking systems. This is often used when a buyer still owes for all
or part of the goods, but then pays before cargo arrives.
An express bill of lading: With this type of bill of lading, the carrier agrees
to only release the goods to the named consignee or notify party. It is a
non-negotiable document, and no original bills of lading are issued at all.
The express bill of lading is frequently used if the importer paid for the
goods before shipping or has credit with the supplier. It expedites the
release of the goods upon arrival and saves on time and mail courier fees
by eliminating the need for a physical bill of lading to be presented.
40. 40
Air Transportation :-
Air waybills, or AWB, are issued when goods are transported by air. They are
non-negotiable, so once cargo arrives at the destination airport it is immediately
handed over to the consignee or their customs broker for customs clearance and
final delivery. Air waybills therefore serve only as:
A contract of carriage
A cargo receipt, i.e. the carrier has received the shipment
Delivery instructions, if special handling is necessary
However, if goods are shipped under a letter of credit or the shipper is using
his bank to collect payment for goods prior to release to the consignee, the air
waybill may be consigned to a bank. In such cases, the consignee must pay the
bank, who in turn provides a bank release to the airline to authorizing the carrier
to release the goods. This process typically takes several days during which the
goods will sit at the airline warehouse and possibly incur storage charges.
Air Waybills (AWB) :- the document serves as a receipt of goods by an
airline (the carrier), as well as a contract of carriage between the shipper
and the carrier. The AWB contains the shipper's name and address,
consignee's name and address, three letter origin airport code, three
letter destination airport code, declared shipment value for customs,
number of pieces, gross weight, a description of the goods and any special
instructions (e.g., "Perishable"). It also contains the conditions of contract
that describe the carrier's terms and conditions, such as its liability limits
and claims procedures, a description of the goods, and applicable
charges.
AWB's are unlike other bills of lading, in that they are non-negotiable
instruments, meaning that it does not specify on which flight the
shipment will be sent, or when it will reach its destination.
41. 41
Master Airway Bill: - MAWB is Master airway bill issued by main carrier
of goods on receipt of goods from a freight forwarder to deliver at
destination as per agreed terms. HAWB means House airway bill issued
by a freight forwarder on receipt of goods from shipper agreeing to
deliver goods at destination.
42. 42
House Airway Bill: - Issued by a freight forwarder (consolidator) to a
shipper as a receipt for the goods which will be shipped with other cargo
as one consignment to avail of better freight rates. The airline's (carrier's)
AWB shows the forwarder as the consignor, and the name of forwarder's
agent at the destination as the consignee.
43. 43
Invoice :-
A commercial invoice is a document used for customs declaration
that identifies the value and quantity of the shipped products.
What must be included in a Commercial Invoice?
Country of origin / manufacture (where the products were
made)
Full name and address of the supplier / manufacturer
Full name and address of the business or person buying the
products (noting if this person or business is different from the
importer)
Full name and address of the person or business to whom the
goods are being shipped
Quantity of units for each product
Unit value for each product (both in US dollars and the supplier's
currency) Note: A declared value for every product imported is
required, so a $0 value is not acceptable for Customs purposes.
We suggest the fair market value of the product be declared,
even if you are receiving the goods free of charge.
A complete description of the product that includes: what the
product is, what the product is used for, and what the product is
made of
45. 45
Packing List :-
A packing list is a document used for customs declaration that
identifies the quantity, weight, dimensions, and carton count of
the shipped products.
The information listed on the Commercial Invoice must match
the corresponding fields on the Packing List (e.g., the quantity of
units for each product should be the same on both the
Commercial Invoice and the Packing List).
46. 46
Certificate of Origin :-
A certificate of origin (often abbreviated to C/O or COO) is
a document used in international trade. In a printed form or as
an electronic document, it is completed by the exporter and
certified by a recognized issuing body, attesting that the goods in
a particular export shipment have been produced, manufactured
or processed in a particular country. A "Certificate of Origin" is
also called a "Form A".
47. 47
Customs Invoice :-
An invoice for commercial export that customs needs. It has the
description, quantity, selling price, freight, insurance, and packing
cost. The delivery terms and payment are also listed. It is how
customs controls imports and exports.
48. 48
Bonds :-
Execution of bond with customs :- Executing a bond with any
individual, group or authorities means the executer of bond legally
commits to fulfill the terms and conditions as per the details mentioned in
bond.
You may be an importer or exporter. The goods you import from other
country or goods you export may be attracted duty, depends up on the
nature of goods importing or exporting. Government provides various
types of duty exemption for various exporters and importers. If you are
eligible in any of the same, you can avail such benefit of exemption in
payment of duty for imports or exports. For example, you need to import
machinery for manufacture at your factory. The finished products
manufactured with the said machine are exported. You are eligible to get
exempted from duty amount, under the import of said machinery because,
the imported machinery is used to manufacture goods for export.
Government exempts import duty on the basis of your commitment of
exports in forthcoming years. How can Government monitor your
fulfillment of export obligation? So you are executing a bond with customs
and committing government that you will fulfill export obligation as per
the details given in the bond. If you do not fulfill the export obligation, you
will be penalized up to extend of your obligation.
There are many types of execution of bond with customs used for
exemption under various types of duty exemptions and other government
benefits. You need to find out under which notification falls those
exemptions to claim duty exemption. Once after obtaining a specimen
copy of the said bond, you need to prepare the said bond after paying
nominal legal stamp duty. You can either execute with the licensing
authority or customs department or both as per the guidelines of customs
law and procedures.
A. Re-Export bond
B. Provisional Assessment Bond
C. End Use Bond
49. 49
Re-Export Bond: - Re-exports are exports of foreign goods in the same
state as previously imported; they are to be included in the country
exports. It is recommended that they be recorded separately for analytical
purposes. This may require the use of supplementary sources of
information in order to determine the origin of re-exports, i.e., to
determine that the goods in question are indeed re-exports rather than
the export of goods that have acquired domestic origin through
processing.
Provisional Assessment Bond: - If the imported goods were warehoused
after provisional assessment, the Customs Officer may require importer
to execute a bond for twice the difference in duty, if duty finally assessed
is higher [section 18(2)(a)]. The bond is called as 'P D Bond' (Provisional
Duty Bond). The bond is with security or surety.
Special Valuation Branch: - The Special Valuation Branch ("SVB") is a unit
of the Indian custom authorities that investigates valuation of goods
during imports between related parties. A special relationship between
an Indian importer and a foreign supplier may impact the transaction
price of the import and thereby affect the customs duty imposed on such
transaction. SVB's function is precisely to examine the impact of such
relationship on the invoice value of the imported goods.
Purpose and constitution of SVB: - Under Section 14 of the Customs Act,
1962, customs duty is imposed on the value of the imported goods. If the
Indian buyer and foreign supplier are related say as holding and subsidiary
the goods may be imported at a discounted price that could be lower than
the normal market price. Accordingly, the customs duty imposed will be
lower leading to a potential loss in revenue accruing to the authorities.
The SVBs have been constituted to monitor the valuation of goods in such
cases in accordance with circulars issued by the Central Board of Excise
and Customs ("CBEC") from time to time. At present, only four (4) SVB
offices are in operation at Chennai, Calcutta, New Delhi and Mumbai
respectively. Each SVB is headed by a Deputy Commissioner of Customs
and assisted by one appraising officer and the necessary ministerial staff.
Before February 9, 2016, the working of SVBs was governed by CBEC
Circular No. 11/2001 dated February 23, 2001 ("2001 Circular"). However,
two weeks ago CBEC has revamped the assessment procedure to be
followed by SVBs through issuance of Circular No.4/2016 ("Circular 4")
50. 50
and Circular No. 5/2016 ("Circular 5") effective February 9, 2016.
Consequently, the 2001 Circular stands repealed from this date.
Inspection Certificate/MTC :-
When shipping high-value products or when you are dealing with
a very conscientious customer, an inspection certificate might be
requested. An inspection certificate provides proof that what
you are shipping is, in fact, what the customer ordered, and is
also of good quality. If a customer requests this document, agree
to it -- but see that they cover the administrative and inspection
fee. Also, ask them to recommend an independent inspection
agency to perform the review at your end. If they don't have one,
refer to your import/export dream team (e.g., banker, logistics
expert, accountant, and lawyer) for a suitable contact.
An inspection certificate can be furnished directly to a buyer, a
buyer’s government or direct to a buyer’s bank. In the case of
presenting to a buyer’s bank, that is precipitated by the request
of a Letter of Credit payment transaction that spells out
specifically an inspection certificate is required in order to fulfill
payment obligations. Generally, a manufacturer furnishes the
certificate or the report.
International Inspection Companies: A number of countries’
governments have ongoing relationships with international inspection
companies to verify the quantity, quality, and price of shipments
imported into their countries. Here are four such companies:
Bureau Veritas Group
Cotecna
Intertek
SGS
52. 52
BASIC CUSTOM CLEARANCE PROCESS FOR IMPORT
The goods imported are brought to the nominated CFS by the
shipping line.
Once the containers arrive in the CFS the Bill of Entry is file by the
CHA with the custom department.
The Bill of Entry is assessing by the custom department as per the
foreign trade policy.
The CHA than submit the seal cutting request to CFS operation &
the CFS operator than cut the seal for goods to be examined by
the custom department.
Once the seal are cut the cargo is allow to de stuff at CFS by the
custom department.
After de stuffing the cargo the CHA request the custom
department to examine the imported goods.
The goods are examined as per Bill of Lading, Bill of Entry &
foreign trade policy.
If the goods are found to be ok of import & clear such goods are
allow to taken out of the CFS for delivery as per custom norms.
Such goods which are cleared by the custom are called goods out
of custom charge.
Once such permission is received the CHA deputes the vehicles
for delivery of cleared imported goods.
Delivery of Goods :-
The term ‘Delivery Order’ is used in Imports and Exports at two
different areas. Delivery Order in terms of delivery of goods by carrier and
Delivery of empty container for stuffing by sea carriers.
53. 53
Delivery Order :-
Delivery order is the order given by carrier to the party to take delivery
of goods. Once cargo arrived at port of destination, the goods are moved
to customs bonded area where in customs clearance procedures are
carried out. If the cargo is Less Container Load (LCL), it is stored in the
container freight station warehouse. The import cargo will be under the
custody of CFS authorities who acts as ‘custodian of cargo’.
Custodian of cargo can be a private party, semi-government, or fully
owned by government authorities. However, custodian of cargo in a
bonded area can release the goods to the party only with the permission
of Customs authorities and the carrier of cargo. The carrier of cargo
means, the shipping, freight forwarding or transport company who carries
goods to the port of final destination. Once after arrival of cargo at final
customs port of destination, the said carrier of goods issues delivery order
to consignee (or his order) after collecting necessary charges if any. The
importer or his customs broker completes import customs formalities by
filing necessary documents and inspection of cargo procedures completes
if applicable. Once after completion of import customs formalities, the
importer or his authorized agent approaches custodian of cargo along with
the delivery order issued by carrier of goods to release the cargo. The
custodian of cargo verifies the proof of completion of import customs
clearance procedures and delivery order, release the cargo to importer.
Along with delivery order, carrier need to collect original bill of lading
issued by his counterpart at port of loading pertaining to the said shipment
unless otherwise the said document surrendered or released as ‘Sea Way
Bill’.
DO are of 2 types :-
Dock De-stuff (CFS) :- A delivery order (abbreviated D/O[1]) is a
document from a consignee, or an owner or his agent of freight
carrier which orders the release of the transportation of cargo to
another party.[2] Usually the written order permits the direct
delivery of goods to a warehouseman, carrier or other person who
in the course of their ordinary business issues warehouse
receipts or bills of lading.
54. 54
Documents required for issuance of import delivery order of Doc De-
stuffing :-
Original B/L duly endorsed at back side.
If telex release, seaway bill or express B/L then the covering letter
required on consignee’s letter head to hand over the D/O to the
specified CHA.
In case of Endorsement / House B/L Delivery Order below said
procedure should be followed :-
A. Duly endorsed house B/L copy & Master B/L copy
B. NOC letter from forwarder to release the Delivery Order.
Factory De-stuff:- A delivery order (abbreviated D/O) is a
document from a consignee, or an owner or his agent of freight
carrier which orders the release of the transportation of cargo to
another party. ... A delivery order which is used for the import of
cargo should not to be confused with delivery instructions.
Documents required for issuance of import delivery order of Fectory
De-stuffing :-
Original B/L duly endorsed at back side.
If telex release, seaway bill or express B/L then the covering letter
required on consignee’s letter head to hand over the D/O to the
specified CHA.
In case of House B/L below said procedure should be followed :-
A. Duly endorsed house B/L copy.
B. NOC letter of the forwarder to release the Delivery Order.
In all the above three cases, following documents are required:-
A. Factory destuffing bond in 100/200 Rs. Stamp pape.
B. Insurance cover for value of the container in favour of “ The
Shipping Corporation of India”(value of insurance Rs.
55. 55
95,000/20’ GP & Rs. 127,000/40’ GP & HC, Rs .178,000/20’
OT/FR & Rs. 225,000/40’ OT/FR)
C. In case of open policy the covering letter from the insurance
company required for the specific container.
D. One cheque of concerned CHA in favour of “The Shipping
Corporation of India Ltd” should be submitted along with the
bond for security purpose.
E. Demand Draft of 5000/- per container in case of SCRAP
CARGO, FLAT TRACK CONTAINER & OPEN TOP containers as
security deposit in favour of “The Shipping Corporation of
India Ltd”.
Documents required for issuance of delivery order to high sea sale
party :-
Copy of request letter issued by both party
Copy of High Sea sale agreement approved by customs
Copy of customs assessed annexure form
Copy of Bills of Entry assessed in the name of High Sea sale party
Original B/L should be endorsed by both the party.
In case of factory dyestuff delivery Bond should be endorsed by
High Sea sale party.
56. 56
There is Different Different Procedure of All Carrier for collecting
Delivery Order.
MAERSK LINE :-
From here – choose between Export/Import for the kind of
payment desired
69. 69
EXPORTS PROCEDURE
How to export??
This question arises to every exporter who is new to this field….
However this is quite difficult for the first appearance.
At the very first instance export should answer what to export and
why to export, what is the difference between domestic marketing
and foreign marketing, what are the various environments that the
exporter will face in the international market and the trade barriers.
One of the reasons that firm fail to initiate at export endeavour is
because management is only on pay lip service or on paper. That’s
not enough! Get management to commit on paper to firm’s exports
efforts and have they approved the budget for the exporter’s
research.
Export Procedures
While exporting any kind of goods in foreign land it has several
commercial and regulatory formalities. These formalities are very
complex, tedious and time consuming. Thus the exporter should
ensure that all the formalities are fulfilled and filed with the
appropriate authority.
What is to be done? How it should be done? Are the certain
answers that are mentioned below:
Registration of AD Code :-
The exporters have to obtain PAN based Business Identification
Number (BIN) from the Directorate General of Foreign Trade prior
to filing of shipping bill for clearance of export goods.
The exporters are also required to register authorised foreign
exchange dealer code (through which export proceeds are
70. 70
expected to be realised) and open a current account in the
designated bank for credit of any drawback incentive.
The exporters intending to export under the export promotion
scheme need to get their licenses/ DEEC book, etc, registered at the
Customs Station.
Opening a bank account.
Obtaining membership from Chamber of Commerce.
Obtaining PAN.
Obtaining IEC (Import Export Code). IEC code is a code granted by
DGFT.
Company’s address proof such as Telephone bill, Electricity bill, etc.
Partnership deed (Agreement).
Procedures for registering of IEC code:
IEC code is a code issued by DGFT to every person desirous to
export or import cargo in and out of India. In absence of IEC code no exports
or imports can take place. Let’s have a brief look of how IEC code is
registered.
For IEC code registration following documents is submitted before
DGFT along with filed application.
Demand Draft of Rs. 250
Signature & Photograph Attested from Bank
Memorandum & Articles of Association
Board Resolution
Address Proof
71. 71
Identity Proof
PAN card
DGFT may require any further information to be submitted as per
its requirement.
Processing of Shipping Bill no :-
When registration of IEC code is done then shipping bill no. is
released.
Enquiry:
The starting point for any Export Transaction is an enquiry. An
enquiry for product should, inter alia, specify the following details or
provide the following data:
Size details - Std. or oversize or undersize
Sample, if possible
Quantity required
Delivery schedule
Is the price required on FOB or C& F or CIF basis
Mode of Packing
Terms of Payment that would be acceptable to the Buyer - If the
buyer proposes to open any Letter of Credit, any specific
requirement to be complied with by the Exporter.
Is there any requirement of Pre-shipment inspection and if so, by
which agency
Any Certificate of Origin required - If so, from what agency.
Pre- shipment procedures:
Proforma generation: After studying the enquiry in detail, the exporter -
be it Manufacturer Exporter or Merchant Exporter - will provide a
Proforma Invoice to the Buyer.
72. 72
Placement of order: If the offer is acceptable to the Buyer in terms of
price, delivery and payment terms, the Buyer will then place an order on
the Exporter, giving as much data as possible in terms of specifications,
Part No. Quantity etc. (No standard format is required for such a purchase
order)
Order of acceptance: It is advisable that the Exporter immediately
acknowledges receipt of the order, giving a schedule for the delivery
committed.
Shipment Procedures:
Goods readiness and documentation:
Once the goods are ready duly packed in Export worthy
cases/cartons (depending upon the mode of dispatch), the Invoice
is prepared by the Exporter.
If the number of packages is more than one, a packing list is a must.
Even the goods to exported are excisable, no excise duty is to be
charged at the time of export, as the export goods are exempt from
Central Excise.
Sales Tax is also not applicable for the export of goods
Goods removal from factory:
When the goods are stuffed in containers from the factory then,
then there is an obligation cast on the exporter to provide the proof
of export to the Central Excise authorities.
Normally, a custom house agent is appointed for smooth and fast
clearance procedures under exports.
Exporters send them the following documents for exports:
Invoice
Packing list
73. 73
SDF declaration
Drawback declaration and other specific documents sent to
customs house agents for the completion of necessary export
customs formalities.
After receiving documents from the exporter, customs broker files
shipping bill through customs online software system
electronically. This can be done from home, office, or any other
private EDI systems appointed by government as the filing software
that can be downloaded through ICEGATE electronically.
CHA approaches Shipping Lines for the containers. If the lines have
containers he would release Delivery Order. Here, stuffing area is
decided by the exporter it could be either from manufacturing unit
or Inland Container Depot.
Role of Customs:
Customs broker gives the following documents for the assessment to be
done by the superintendent: Invoice, Packing list, Annexure C, ARE, SDF,
and any other required declaration.
If the value of cargo is more than 10 lacs, the assessment of the file moves
to Assistant Commissioner.
Inspector later registers the Shipping Bill no.
Later the system no. issues the code no. of inspector who will assess the
cargo physically.
During inspection of cargo inspector makes sure that exporter are
exporting cargo as per the shipping documents and verifies quantity,
marks and numbers and other required parameters. After the inspection
process if found satisfactory the inspectors prepares report files online.
On the basis of this report LEO (Late Export Order) number is issued by
the superintendent.
Later Shipping Bill is printed.
74. 74
At last the sealing of containers is done.
EGM ( Export General Manifest):
After obtaining the prints of shipping bills, the respective customs
official involved in the said process signs the original shipping bills
and returns to the exporter or their appointed Customs House
Agent. Once after the movement of goods from exporting country,
the shipping carrier files necessary export general manifest (EGM)
with customs and based on the same, customs department issues
proof of export- Export Promotion Copy of shipping bill.
Post shipment procedures:-
Forwarding of documents:-
After completing the shipment formalities, the C&F Agents are
expected to forward to the Exporter the following documents:
Customs signed Export Invoice & Packing List.
Duplicate of Form SDF.
Exchange control copy of the Shipping Bill, processed electronically.
AR4 (original duplicate) duly endorsed by Customs for having
effected the Export.
Bill of Lading.
Bills Negotiation:
With these documents as above mentioned exporter will have
to negotiate the bills through his bank. The payment can be on
the basis of Documents against payment, Documents against
acceptance or Letter of Credit.
Forwarding of documents through bank to bank:
75. 75
The negotiating Bank will scrutinize the shipping documents and
forward those to the Banker of the importer, to enable him clear
the consignment.
It is expected of such authorized dealers of Reserve Bank to
ensure receipt of export proceeds, which factor has to be
intimated to the Reserve Bank by means of periodical Returns.
Duty of exporter:
Exporter should provide the proof of export to the Central Excise
Authorities on the basis of the approval of the customs made on
the reverse of AR4 and also get their obligation discharged.
Payment:
It is mandatory on the part of the Exporters to negotiate the
shipping documents only through authorized banks of Reserve
Bank, as only through such a system Reserve Bank can ensure
receipt of export proceeds for goods shipped out of this country.
Authorized dealers will issue Bank Certificates to the exporter,
once the payment is received and only with the issuance of the
Bank Certificate, the export transaction becomes complete.
82. 82
INTRODUCTION OF PROBLEM TO STUDY
There are certain challenges we have faced for the Handling Operations.
Quantity Mismatch in COO :-
There are one shipment we have handled which is arrived at
Mundra port. Shipments has arrived in month of February the
Documents we have received has the quantity mismatch.
Solving the Challenges :-
We had filled BOE in the Full duty the without COO Benefit and we had
send the COO to Origin and asked for Revised COO. After receiving revise
COO we had applied for the Refund of the Duty.
There are several process of Duty Refund. There are Documents required
for the Duty Refund are as Below :-
a. Revised Certificate of Origin
b. CA Certificate
c. CA Certified Bank Statement
d. Duty Paid Challan
e. Original BOE Copy
f. Undertaking Letter from Consignee
g. CHA undertaking Letter
Excess weight in the Containers:-
There are many shipments we had handled which has arrived with Excess
weight.
CFS weighment weight is shows excess than BL Weight. Customs has
raised query regarding the Excess weight.
For the Excess weight, Importer has to pay extra duty for the Excess
weight.
83. 83
BIS Certification:-
As per customs Notification BIS Certificate is Mandatory for the Stainless
Steel/Alloy Goods.
Query Regarding CE Certificate on Second hand Machinery:-
Customs Had Raised query regarding the CE Certificate from the Australia.
Machinery was imported from the Australia hence the provided us
Australian CE Certificate.
Indian Customs asked for Indian CE Certificate for the Clearance of the
Goods.
We had arranged local CE and provided CE Certificate for the same.
84. 84
FINDINGS
Custom Duty Calculation
1. Convert Invoice value in INR
2. Convert Freight in INR
3. Insurance Value in INR
4. Convert Miscellaneous Value in INR
5. Assessable value = Σ ( Invoice value+ freight + Insurance +Misc )
6. Basic Duty is Calculated on Assessable Value (varies according to HS
Code)
7. SWF (Social Welfare Surcharge) = 10 % (Basic Duty)
8. IGST = 5% / 18% /28% (Assessable Value + Basic Duty + SWF )
9. Custom Duty = Basic Duty + SWF + IGST
Insurance Calculation :-
1. Invoice Value + Misc. Value + other
2. Convert above summation in INR
3. 1.125% of above value
RE-IMPORT:-
Re-import: Import of own exported goods
S/B copy, export invoice, Export B /L, re-import invoice, B/L, Packing
list are documents required for Re-import.
85. 85
In re-import, exporter and importer will be same
Custom Duty is not charged in Re-import if it is mentioned while
doing export. If it is not mentioned during export that racks are
used for re-import or if benefits are claimed then duty is charged.
If Custom duty is charged then CHA has to Recall for shipment
where file is reopened and assessment is carried out followed by
OOC
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CONCLUSION
During our internship period, we have gained a lot of experience,
knowledge and exposure. All disclosures were awakening us in a boost of self-
confidence to face life more challenging now. Practical is a complement to the
science or theory learned. This is clearly the concept of science and charity,
where they have learned without practice will be lost and will not give anything
- what effect. So if we do without the knowledge of course there will be
problems in terms of grip and stance ever - changing.
During our internship training, there are many changes from the point of
learning environments and discussion among colleagues. It can directly increase
the dedication and rational attitude towards us.
However, there are still some weaknesses that can be improved in the
future. Therefore we conclude that the industrial training program has provided
many benefits to students even if there are minor flaws that are somewhat
disfiguring condition , so that this weakness can be rectified in the future.
Through this project, I conclude that CHA plays an important role in
Import/Export (International Business). With Efficient client & internal
coordination it makes the clearance of goods smooth with the minimum period
of time & charges which is utmost requirement of all clients. CHA co-ordinates
with shipping line, forwarders, operation team at port, custom officers, etc. and
take care of each and every single thing in order to avoid any delay or problem
in clearance. Also, AFPL provide an end service to their clients with satisfaction
in forwarding.
88. 88
GLOSSARY
INCOTERMS
EXW – Ex Works (2000 and 2010)
This term represents the seller's minimum obligation, since he only
has to place the goods at the disposal of the buyer. The buyer must carry
out all tasks of export & import clearance. Carriage & insurance is to be
arranged by the buyer.
FCA - Free Carrier (2000 and 2010)
This term means that the seller delivers the goods, cleared for
export, to the carrier nominated by the buyer at the named place. Seller
pays for carriage to the named place.
FAS - Free Alongside Ship (2000 and 2010)
This term means that the seller delivers when the goods are placed
alongside the vessel at the named port of shipment. The seller is required
to clear the goods for export. The buyer has to bear all costs & risks of
loss or damage to the goods from that moment. This term can be used for
ocean transport only.
FOB - Free On Board (2000 and 2010)
This term means that the seller delivers when the goods pass the
ship's rail at the named port of shipment. This means the buyer has to
bear all costs & risks to the goods from that point. The seller must clear
the goods for export. This term can only be used for ocean transport. If
the parties do not intend to deliver the goods across the ship's rail, the
FCA term should be used.
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CFR - Cost and Freight (2000 and 2010)
This term means the seller delivers when the goods pass the ship's
rail in the port of shipment. Seller must pay the costs & freight necessary
to bring the goods to the named port of destination, BUT the risk of loss
or damage, as well as any additional costs due to events occurring after
the time of delivery are transferred from seller to buyer. Seller must clear
goods for export. This term can only be used for ocean transport.
CIF - Cost, Insurance, Freight (2000 and 2010)
The seller delivers when the goods pass the ship's rail in the port of
shipment. Seller must pay the cost & freight necessary to bring goods to
named port of destination. Risk of loss & damage same as CFR. Seller
also has to procure marine insurance against buyer's risk of loss/damage
during the carriage. Seller must clear the goods for export. This term can
only be used for ocean transport.
CIP - Carriage and Insurance Paid (2000 and 2010)
This term is the same as CPT with the exception that the seller also
has to procure insurance against the buyer's risk of loss or damage to the
goods during the carriage. This term may be used for any mode of
transportation.
CPT - Carriage Paid To (2000 and 2010)
This term means that the seller delivers the goods to the carrier
nominated by him but the seller must in addition pay the cost of carriage
necessary to bring the goods to the named destination. The buyer bears
all costs occurring after the goods have been so delivered. The seller must
clear the goods for export. This term may be used irrespective of the mode
of transport (including multimodal).
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DAF - Delivered At Frontier (2000)
This term means that the seller delivers when the goods are placed
at the disposal of the buyer on the arriving means of transport not
unloaded, cleared for export but not cleared for import, at the named point
& place at the frontier - but before the customs border of the adjoining
country. To be used when delivering to a land frontier.
DES - Delivered Ex Ship (2000)
Seller delivers when goods are placed at the disposal of the buyer
on board the ship, not cleared for import at the named port of destination.
The seller bears all costs & risks in bringing the goods to the named port
before discharging. This term can only be used when the goods are to be
delivered by ocean.
DEQ - Delivered Ex Quay (2000)
This terms is the same as DES with the exception that the seller
is responsible to place the goods at the disposal of the buyer, not
cleared for import, on the quay (wharf) at the named port of destination.
Seller bears all costs & risks as in DES plus discharging the goods on
the quay. This term can only be used in ocean transport.
DDU - Delivered Duty Unpaid (2000)
This term means the seller delivers the goods to the buyer, not
cleared for import, and not unloaded from arriving means of
transport at the named place of destination. The seller bears all
costs & risks involved in bringing the goods to the named place other
than "duty" (which includes the responsibility for customs formalities
& payment of those formalities, duties & taxes) for import into the
country of destination. Buyer is responsible for payment of all
customs & duties & taxes.
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DDP - Delivered Duty Paid (2000 and 2010)
This term represents maximum obligation to the seller. This
term should not be used if the seller is unable to directly or indirectly
to obtain the import license. The terms means the same as the DDU
term with the exception that the seller also will bear all costs & risks
of carrying out customs formalities including the payment of duties,
taxes & customs fees.
DAT – Delivered at Terminal (named terminal at port or place of
destination) (2010)
Seller pays for carriage to the terminal, except for costs related
to import clearance, and assumes all risks up to the point that the goods
are unloaded at the terminal.
DAP - delivered at Place (named place of destination) (2010)
Seller pays for carriage to the named place, except for costs
related to import clearance, and assumes all risks prior to the point that
the goods are ready for unloading by the buyer.
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LIST OF ABBREVIATION
B/L = Bill of Lading
L/C = Letter of Credit
B/E = Bill of Entry
CIF = Cost Insurance Freight
C & F = Cost & Freight
FOB = Free on Board
WTO = World Trade Organization
GATT = General Agreement on Tariffs and Trade
UNCTAD = United Nations Conference on Trade and Development
TEU = Twenty Equivalent Unit
GRT = Gross Registered Tonnage
NRT = Net Registered Tonnage
IWT = Initial weight tonnage
FCL/LCL = Fully Container Loaded / Lower Container Loaded
NVOCC = Non-Vessel Operating Common Carrier
NVOCC = Non-Vessel Owner Common Carrier
CHA = Custom House Agent
CFS = Container Freight station
CVC = Countervailing Duty
93. 93
COO = Certificate of origin 2
GSP = Generalized system of preference
DBK = Drawback DEPB
DEPB = Duty Export Pass Book
EPCG = Export Promotion of Capital Goods
MTO = Multimodal Transport Operator