Export procedure-and-documentation

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Export procedure-and-documentation

  1. 1. EXPORT PROCEDURE AND DOCUMENTATION STRUCTURE 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, availment of bank loans etc. • To look into the requirement of licenses, claiming of export benefits fiiling 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 may increase. For example if a company is transacting substantial volume of business in more than one product. Then it is necessary to have marketing manager for each product so that the person can concentrate on a particular trade to enhance the business. 1
  2. 2. EXPORT PROCEDURE AND DOCUMENTATION REGISTRATION WITH REGIONAL LICENCING AUTHORITIES OBTAINING IMPORTER EXPORTER CODE (IEC) NUMBER. The Customs Authorities will now allow the exporter to export or import goods into or from India unless he holds a valid IEC number. Before applying for IEC number it is necessary to open a bank account in the name of the company with any commercial bank authorized to deal in foreign exchange. The duly signed application form should be supported by the following documents. • 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. 2
  3. 3. EXPORT PROCEDURE AND DOCUMENTATION IEC EXEMPT CATEGORIES. The following importer exporter is exempted from the requirement of IEC code number. • Ministries Department of Central or State Government. • Person importing or exporting goods for their personal use not connected with trade or manufacture or agriculture. • Persons importingexporting goods fromto Nepal & Myanmar provided the CIF value of single consignment does exceed Indian Rs. 25000-. APPLICATION FOR OBTAINING AN IEC NUMBER For obtaining IEC number apply in the prescribe form along with the documents listed above to Regional Licensing Authority (Office of the Regional DGFT). The registered office or the head office may apply for allotment of IEC No. Whenever, there is a change in the name, address or constitution of the holder of IEC No., such change should be intimated within 30 days to the concern authorities. IEC certificate will be issued in the form (copy enclosed). A copy of IEC No. is also endorsed to the concerned banker. VALIDITY : The IEC No allotted to a firm/company will be valid for all its branches/divisions units/factories as indicated in the IEC No. Import/Export of any commodity by that firm/company. There being no date of expiry, the IEC once allotted is valid till it is revoked. But, if no import or export is effected in the previous financial year, the same will be made inoperative. However, this can be made operative by a formal request to the DGFT. 3
  4. 4. EXPORT PROCEDURE AND DOCUMENTATION IDENTITY CARD (For conducting transactions with the office of DGFT): As it is not always possible for the top man or directors, promoters of the company to visit DGFT frequently. There is a provision of issuance of identity cards to the proprietors/partners/directors and their authorized representatives. An application of Issuance of an identity card may be made in the form (Appendix-5) The document/ License/Certificate/Permissions may be delivered to the identity card holder and officials of the Licensing Authority(DGFT)shall not be responsible for any loss etc. In case of loss of an identity card a duplicate card may be issued on the basis of an FIR & affidavit. In addition to obtaining the IEC No. the exporter is also required to obtain Business Identification No(BIN). For this exporter is required to contact DGFT online on web site. The licensing authority issues BIN in coordination with customs authorities. This BIN is required to be mentioned on the shipping bills at the time of customs clearance of the export cargo. RCMC (Registration-Cum-Membership Certificate) – REGISTRATION WITH EXPORT PROMOTION COUNCILS – In order to enable the exporter to obtain benefits/concessions under the Foreign Trade Policy, the exporter is required to register himself with an appropriate export promotion agency by obtaining registration-cum-membership certificate. (RCMC). If the export product is that it is not covered by any EPC, RCMC in respect thereof may be issued by FIEO. An application for registration should be accompanied by a self certified copy of the Importer-Exporter Code number issued by the regional licensing authority concerned and bank certificate in support of the applicants financial soundness. The RCMC shall be valid for 5 years ending 31st March of the licensing year. REGISTRATION WITH SALES TAX AUTHORITIES: Goods that are to be shipped out of the country for export are eligible for exemptions from both Sales Tax and Central Sales Tax. For this purpose, exporter should get himself 4
  5. 5. EXPORT PROCEDURE AND DOCUMENTATION registered with the Sale Tax Authority of is state after following the procedures prescribed under the Sales Tax Act applicable to his state. HOW ONE BEGINS TO DO EXPORT Before entering into the venture of exports, one must look for the product to be exported and the market where he intends to export. In case of a manufacturer, obviously he would like to export the product he manufactures as is or with possible modification as may be required by the market. However, in case of a merchant exporter or a trader, one has to identity the product to export. If the exporter is already in the trade in the domestic market and is familiar with the product it would be an advantage to export the said product of which he has reasonable knowledge. Before selecting a product, one must simultaneously made a study and find out the prospective market. 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. The Preliminary 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: 5
  6. 6. EXPORT PROCEDURE AND DOCUMENTATION 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 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 are handling the quota distribution for the product and the availability of quota for exports. 6
  7. 7. EXPORT PROCEDURE AND DOCUMENTATION EXPORT DOCUMENTS Any export shipment involved various documents required by various authorities such as customs, excise, RBI, Inspection and according depending upon the requirements, there are categorized into 2 categories, namely commercial documents and regulatory documents. A. Commercial Documents. : - Commercial documents are required for effecting physical transfer of goods and their title from the exporter to the importer and the realisation of export sale proceeds. Out of the 16 commercial documents in the export documentation framework as many as 14 have been standardised and aligned to one another. These are proforma invoice, commercial invoice, packing list, shipping instructions, intimation for inspection, certificate, of inspection of quality control, insurance declaration, certificate' of insurance, mate's receipt, bill of lading or combined transport document, application for certificate origin, certificate of origin, shipment advice and letter to the bank for collection or negotiation of documents. However, shipping order and bill of exchange could not be brought within the fold of the Aligned Documentation System, Commercial Invoice: 1. Commercial invoice is an important and basic export document. It is also known as a 'Document of Contents' as it contains all the information required for the preparation of other documents. It is actually a seller's bill of merchandise. It is prepared by the exporter after the execution of export order giving details about the goods shipped. It is essential that the invoice is prepared in the name of the buyer or the consignee mentioned in the letter of credit. It is a prima facie evidence of the contract of sale or purchase and therefore, must be prepared strictly in accordance with the contract of sale. Contents of Commercial Invoice • Name and address of the exporter. 7
  8. 8. EXPORT PROCEDURE AND DOCUMENTATION • Name and address of the consignee. • Name and the number of Vessel or Flight. • Name of the port of loading. • Name of the port of discharge and final destination. • Invoice number and date. • Exporter's reference number. • Buyer's reference number and date. • Name of the country of origin of goods. • Name of the country of final destination. • Terms of delivery and payment. • Marks and container number. • Number and packing description. • Description of goods giving details of quantity, rate and total amount in terms of internationally accepted price quotation. • Signature of the exporter with date. Significance of Commercial Invoice • It is the basic document useful in preparation of various other shipping documents. • It is used in various export formalities such as quality and pre-Shipment inspection excise and customs procedures etc. • • 2 It is also useful in negotiation of documents for collection and claim of incentives. It is useful for accounting purposes to both exporters as well as importers. Inspection Certificate: The certificate is issued by the inspection authority such as the export inspection agency. This certificate states that the goods have been inspected before shipment, and that they confirm to accepted quality standards. 3 Marine insurance policy: Goods in transit are subject to risk of loss of goods arising due to fire on ship, perils of sea, theft etc. marine insurance protects losses 8
  9. 9. EXPORT PROCEDURE AND DOCUMENTATION incidental to voyages and in land transportation. Marine insurance policy is one of the most important document used as collateral security because it protects the interest of all those who have insurable interest at the time of loss. The exporter is bound to insure the goods in case of CIF quotation, but he can also insure the goods in case of FOB contract, at the request of the importer, but the premium payment will be made by the exporter. There are different types of policies such as • SPECIFIC POLICY: This policy is taken to cover different risks for a single shipment. For a regular exporter, this policy is not advisable as he will have to take a separate policy every time a shipment is made, so this policy is taken when exports are in frequent. • Floating Policy: This is taken to cover all shipments for some months. There is no time limit, but there is a limit on the value of goods and once this value is crossed by several shipments, then it has to be renewed. • Open Policy: This policy remains in force until cancelled by either party i.e. insurance company or the exporter. • Open Cover Policy: This policy is generally issued for 12 months period, for all shipments to one or more destinations. The open cover may specify the maximum value of consignment that may be sent per ship and if the value exceeded, the insurance company must be informed by the exporter. • Insurance Premium: Differs upon product to product and a number of such other factors, such as, distance of voyage, type and condition of packing, etc. Premium for air consignments are lowered as compared to consignments by sea. 4. Consular Invoice: Consular invoice is a document required mainly by the Latin American countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Myanmar, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Guinea, Zanzibar, etc. This invoice is the most important document, which needs to be submitted for certification to the Embassy of the importing country concerned. The main purpose of the consular invoice is to enable the authorities of the importing country to collect accurate information about the volume, value, quality, grade, source, etc., of 9
  10. 10. EXPORT PROCEDURE AND DOCUMENTATION the goods imported for the purpose of assessing import duties and also for statistical purposes. In order to obtain consular invoice, the exporter is required to submit three copies of invoice to the Consulate of the importing country concerned. The Consulate of the importing country certifies them in return for fees. One copy of the invoice is given to the exporter while the other two are dispatched to the customs office of the importer's country for the calculation of the import duty. The exporter negotiates a copy of the consular invoice to the importer along with other shipping documents. Significance of Consular Invoice for the Exporter • It facilitates quick clearance of goods from the customs in exporter's as well as importer's country. • Certification' of goods by the Consulate of the importing country indicarer that the importer has fulfilled all procedural and licensing formalities for import of goods. • It also assures the exporter of the payment from the importing country. Significance of Consular Invoice for the Importer • It facilitates quick clearance of goods from the customs at the port destination and therefore, the importer gets quick delivery of goods. • The importer is assured that the goods imported are not banned for imported in his country. Significance of Consular Invoice for the Customs Office • It makes the task of the customs authorities easy. • It facilitates quick calculation of duties as the value of goods as determine by the Consulate is considered for the purpose. 5. Certificate of Origin: The importers in several countries require a certificate of origin without which clearance to import is refused. The certificate of origin states 10
  11. 11. EXPORT PROCEDURE AND DOCUMENTATION that the goods exported are originally manufactured in the country whose name is mentioned in the certificate. Certificate of origin is required when:• The goods produced in a particular country are subject to’ preferential tariff rates in the foreign market at the time importation. • The goods produced in a particular country are banned for import in the foreign market. Types of the Certificate of Origin (a) Non-preferential Certificate, of Origin: - Non-preferential certificate of origin is required in general by all countries for clearance of goods by the importer, on which no preferential tariff is given. It is issued by: ¬ • The authorised Chamber of Commerce of the exporting country. • Trade Association. Of the exporting country. (b) Certificate of Origin for availing Concessions under GSP :- Certificate of origin required for availing of concessions under Generalised System of Preferences (GSP) extended by certain, countries such as France, Germany, Italy, BENELUX countries, UK, Australia; Japan, USA, etc. This certificate can be obtained from specialised agencies, namely; • Export Inspection Agencies. • Jt. Director General of Foreign Trade.. • Commodity Boards and their regional offices. • Development Commissioner, Handicrafts. • Textile Committees for textile products. • Marine Products Export Development Authority for marine products. • Development Commissioners of EPZs 11
  12. 12. EXPORT PROCEDURE AND DOCUMENTATION (c) Certificate for availing Concessions under Commonwealth Preferences (CWP): Certificate of origin for the purpose of Commonwealth Preference is also known as 'Combined Certificate of Origin and Value'. It is required by two member countries, i.e. Canada and New Zealand of the Commonwealth. For concession under Commonwealth preferences, the certificates or origin have to be submitted in special forms obtainable, from the High Commission of the country concerned. (d) Certificate for availing Concessions under other Systems of Preference:Certificate of origin is also required for tariff concessions. under the Global System of Trade Preferences (GSTP), Bangkok Agreement(BA) and SAARC Preferential Trading Arrangement (SAPTA) under which India grants and receives tariff concessions On imports and exports. Export Inspection Council (EIC) is the sole authority to print blank Certificates of Origin under BA, SAARC and SAPTA which can be issued by such agencies as EPCs, DCs of EPZs, EIC, APEDA, MPEDA, FIEO, etc... Contents of Certificate of Origin • Name and logo of chamber of commerce. • Name and address of the exporter. • Name and address of the consignee. • Name and the number of Vessel of Flight • Name of the port of loading. • Name of the port of discharge and place of delivery. • Marks and container number. • Packing and container description. • Total number of containers and packages. • Description of goods in terms of quantity. • Signature and initials of the concerned officer of the issuing authority. • Seal of the issuing authority. 12
  13. 13. EXPORT PROCEDURE AND DOCUMENTATION Significance of the Certificate of Origin • Certificate of origin is required for availing of concessions under Generalised System of Preferences (GSP) as well as under Commonwealth Preferences (CWP). • It is to be submitted to the customs for the assessment of duty clearance of goods with concessional duty. • It is required when the goods produced in a particular country are banned for import in the foreign market. • It helps the buyer in adhering to the import regulations of the country. • Sometimes, in order to ensures that goods bought from some other country have not been reshipped by a seller, a certificate of origin IS required. Bill of Lading: 6. The bill of lading is a document issued by the shipping company or its agent acknowledging the receipt of goods on board the vessel, and undertaking to deliver the goods in the like order and condition as received, to the consignee or his order, provided the freight and other charges as specified in the bill have been duly paid. It is also a document of title to the goods and as such, is freely transferable by endorsement and delivery. Bill of Lading serves three main purposes: • As a document of title to the goods; • As a receipt from the shipping company; and • As a contract for the transportation of goods. Types of Bill of Lading • Clean Bill of Lading: - A bill of lading acknowledging receipt of the goods apparently in good order and condition and without any qualification is termed as a clean bill of lading. 13
  14. 14. EXPORT PROCEDURE AND DOCUMENTATION • Claused Bill of Lading: - A bill of lading qualified with certain adversere marks such as, "goods insufficiently packed in accordance with the Carriage of Goods by Sea Act," is termed as a claused bill of lading. • Transhipment or Through Bill of Lading: - When the carrier uses other transport facilities, such as rail, road, or another steamship company in addition to his own, the carrier issues a through or transhipment bill of lading. • Stale Bill of Lading: - A bill of lading that has been held too long before it is passed on to a bank for negotiation or to the consignee is called a stale bill of lading. • Freight Paid Bill of Lading: - When freight is paid at the time of shipment or in advance, the bill of landing is marked, freight paid. Such bill of lading is known as freight bill of lading. • Freight Collect Bill of lading :- When the freight is not paid and is to be collected from the consignee on the arrival of the goods, the bill of lading is marked, freight collect and is known as freight collect bill of lading Contents of Bill of Lading • Name and logo of the shipping line. • Name and address of the shipper. • Name and the number of vessel. • Name of the port of loading. • Name of the port of discharge and place of delivery. • Marks and container number. • Packing and container description. • Total number of containers and packages, • Description of goods in terms of quantity. • Container status and seal number. • Gross weight in kg. and volume in terms of cubic meters. • Amount of freight paid or payable. 14
  15. 15. EXPORT PROCEDURE AND DOCUMENTATION • Shipping bill number and date. • Signature and initials of the Chief Officer. . Significance of Bill of Lading for Exporters • It is a contract between the shipper and the shipping company for carriage of the goods to the port of destination. • It is an acknowledgement indicating that the goods mentioned in the document have been received on board for the Purpose of shipment. • A clean bill of lading certifies that the goods received on board the ship are in order and good condition. • It is useful for claiming incentives offered by the government to exporters • The exporter can claim damages from the shipping company if the goods are lost or damaged after the issue of a clean bill of lading. Significance of Bill of Lading for Importers • It acts as a document of title to goods, which is transferable endorsement and delivery. • The exporter sends the bill of lading to the bank of the importer so as to enable him to take the delivery of goods. • The exporter can give an advance intimation to the foreign buyer about the shipment of goods by sending him a non-negotiable copy of bill of lading Significance of Bill of Lading for Shipping Company • It is useful to the shipping company for collection of transport charges from the importer, if not collected from the exporter. 7. Airway Bill: An airway bill, also called an air consignment note, is a receipt issued by an airline for the carriage of goods. As each shipping company has its own bill 15
  16. 16. EXPORT PROCEDURE AND DOCUMENTATION of lading, so each airline has its own airway bill. Airway Bill or Air Consignment Note is not treated as a document of title and is not issued in negotiable form. Contents of Airway Bill • Name of the airport of departure and destination. • The names and addresses of the consignor, consignee and the first carrier. • Marks and container number. • Packing and container description. • Total number of containers and packages. • Description of goods in terms of quantity. • Container status and seal number. • Amount of freight paid or payable. • Signature and initials of the issuing carrier or his agent. Importance of Airway Bill: It is a contract between the airlines or his agent to carry goods to the destination. It is the document of instructions for the airline handling staff. It acts as a customs declaration form. Since, it contains details about freight it also represents freight bill. 7. Shipment Advice to Importer:- After the shipment of goods, the exporter intimates the importer about the shipment of goods giving him details about the date of shipment, the name of the vessel, the destination, etc. He should also send one copy of non-negotiable bill of lading to the importer. 8. Packing List: The exporter prepares the packing list to facilitate the buyer to check the shipment. It contains the detailed description of the goods packed in each case, their gross and net weight, etc. The difference between a packing note and a packing list is that the packing note contains the particulars of the contents of an individual pack, while the packing list is a consolidated statement of the contents of a number of cases or packs. 16
  17. 17. EXPORT PROCEDURE AND DOCUMENTATION 9. Bill of Exchange: The instrument is used in receiving payment from the importer. The importer may prefer Bill of Exchange to LC as it does not involve blocking of funds. A bill of exchange is drawn by the exporter on the importer, to make payment on demand at sight or after a certain period of time. • B/E is a means to collect payment. • B/E is a means to demand payment. • B/E is a means to extent the credit. • B/E is a means to promise the payment. • B/E is an official acknowledgement of receipt of payment. • Financial documents perform the function of obtaining the finance collection of payment etc. • 2 sets. Each one bearing the exclusion clause making the other part of the draft invalid. • Sight B/E. • Usance B/E. • It is known as draft. • Immediate payment – Sight draft. • There are two copies of draft. Each one bears reference to the other part A&B. when any one of the draft is paid, the second draft becomes null and void. Parties to bill of exchange. 1. The drawer: The exporter / person who draws the bill. 2. The drawee: The importer / person on whom the bill is drawn for payment. 3. The payee: The person to whom payment is made, generally, the exporter / supplier of the goods. B Auxiliary Documents: These documents generally form the basic documents based on which the commercial and or regulatory documents are prepared. These documents 17
  18. 18. EXPORT PROCEDURE AND DOCUMENTATION also do not have any fixed formats and the number of such documents will wary according to individual requirements. 1. Proforma Invoice: The starting point of the export contract is in the form of offer made by the exporter to the foreign customer. The offer made by the exporter is in the form of a proforma invoice. It is a quotation given as a reply to an inquiry. It normally forms the basis of all trade transactions. Contents of Proforma Invoice • Name and address of the exporter. • Name and address of the importer. • Mode of transportation, such as Sea or Air or Multimodal transport. • Name of the port of loading. • Name of the port of discharge and final destination. • Provisional invoice number and date. • Exporter's reference number. • Buyer's reference number and date. • Name of the country of origin of goods. • Name of the country of final destination. • Marks and container number. . • Number and packing description. • Description of goods giving details of quantity, rate and total amount in terms of internationally accepted price quotation. • Signature of the exporter with date. Importance of Proforma Invoice • It forms the basis of all trade transactions. • It may be useful for the importer in obtaining import licence or foreign exchange. 18
  19. 19. EXPORT PROCEDURE AND DOCUMENTATION 2. Intimation for Inspection: Whenever the consignment requires the preshipment inspection, necessary application is to be made to the concerned inspection agency for conducting the inspection and issue of certificate thereof. 3. Declaration of Insurance: Where the contract terms require that the insurance to be covered by the exporter, the shipper has to give details of the shipment to the insurance company for necessary insurance cover. The detailed declaration will cover: • Name of the shipper exporter. • Name & address of buyer. • Details of goods such as packages, quantity, value in foreign currency as well as in Indian Rs. Etc. • Name of the Vessel Aircraft. • Value for which insurance to be covered. 4. Application of the Certificate Origin: In case the exporter has to obtain Certificate of Origin from the concerned authorities, an application has to be made to the concerned authority with required documents. While the simple invoice copy will do for getting CO from the chamber of commerce, in respect of obtained the same from the office of the Textile Committee or Export Promotion Council, the documents requirement are different. 5. Mate's Receipt: Mate's receipt is a receipt issued by the Commanding Officer of the ship when the cargo is loaded on the ship. The mate's receipt is a prima facie evidence that goods are loaded in the vessel. The mate's receipt is first handed over to the Port Trust Authorities. After making payment of all port dues, the exporter or his agent collects the mate's receipt from the Port Trust Authorities. The mate's receipt is freely transferable. It must be handed over to the shipping company in order to get the bill of lading. Bill of lading is prepared on the basis of the mate's receipt. Types of Mate's Receipts 19
  20. 20. EXPORT PROCEDURE AND DOCUMENTATION • Clean Mate's Receipt: - The Commanding Officer of the ship issues a clean mate's receipt, if he is satisfied that the goods are packed properly and there is no defect in the packing of the cargo or package. • Qualified Mate's Receipt: - The Commanding Officer of the ship issues qualified mate's receipt, when the goods are not packed properly and the shipping company does not take any responsibility of damage. to the goods during transit. Contents of Mate's Receipt • Name and logo of the shipping line. • Name and address of the shipper. • Name and the number of vessel. • Name of the port of loading. • Name of the port of discharge and place of delivery. • Marks and container number. • Packing and container description. • Total number of containers and packages. • Description of goods in terms of quantity. • Container status and seal number. • Gross weight in kg. and volume in terms of cubic meters. • Shipping bill number and date. • Signature and initials of the Chief Officer. Significance of Mate's Receipt • It is an acknowledgement of goods received for export on board the ship. • It is a transferable document. It must be handed over to the shipping company in order to get the bill of lading. 20
  21. 21. EXPORT PROCEDURE AND DOCUMENTATION • Bill of lading, which is the title of goods, is prepared on the basis of the mate's receipt. • It enables the exporter to clear port trust dues to the Port Trust Authorities. Obtaining Mate's Receipt The goods are then loaded on board the ship for which the Mate or the Captain of the ship issues Mate's Receipt to the Port Superintendent. 6. Shipping order: it is issued by the Shipping/Conference Line intimating the exporter about the reservation of space for shipment of cargo which the exporter intends to ship. Details of the vessel, poet of the shipment, and the date on which the goods are to be shipped are mentioned. This order enables the exporter to make necessary arrangements for customs clearance and loading of the goods. 7. Shipping Instructions: at the pre-shipment stage, when the documents are to sent to the CHA for customs clearance, necessary instructions are to be give with relevance to • The export promotion scheme under which goods are to be exported. • Name of the specific vessel on which the goods are to be loaded. • If goods are to be FCL or LCL. • If freight amount are to be paid / collected. • If shipment are covered under A.R.E.-1 procedure. • Instructions for obtaining Bill of Lading etc. 8. Bank letter for negotiation of documents: at the post shipment stage, the exporter has to submit the documents to a bank for negotiation or discounting or collection for forwarding the same to the customer and also for realization of export proceeds. The bank letter is the set of instruction for the bank as to how to handle the documents by them and by the bank at the buyer’s country which may include 21
  22. 22. EXPORT PROCEDURE AND DOCUMENTATION • Name and address of the buyer. • Details of various documents being sent and the number of the copies thereof. • Name and address of the buyer’s bank if available. • If the documents are sent L/C or on open terms. • If the proceeds are to adjusted against any pre-shipment packing credit loan. • If the bill amount is to be adjusted against any forward exchange cover. • In case of credit bill who has to bear the interest, either exporter or if the same is to be collected from the buyer. • Instructions in case non-acceptance/non-payment by the buyer. C. Regulatory Document: Regulatory pre-shipment export documents are prescribed by the different government departments and bodies in order to comply with various rules and regulations under the relevant laws governing export trade such as export inspection, foreign exchange regulation, ex port trade control, customs, etc. Out of 9 regulatory documents four have been standardised and aligned. These are shipping bill or bill of export, exchange control declaration (GR from), export application dock challan or port trust copy of shipping bill and receipt for payment of port charges. 1. Shipping Bill: Shipping bill is the main customs document, required by the customs authorities for granting permission for the shipment of goods. The cargo is moved inside the dock area only after the shipping bill is duly stamped, i.e. certified by the customs. Shipping bill is normally prepared in five copies :• Customs copy. • Drawback copy. • Export promotion copy. • Port trust copy. 22
  23. 23. EXPORT PROCEDURE AND DOCUMENTATION • Exporter's copy. Types of Shipping Bill Based on the incentives offered by the government, customs authorities have introduced three types of shipping bills:• Drawback Shipping Bill: - Drawback shipping bill is useful for claiming the customs drawback against goods exported. • Dutiable Shipping Bill: - Dutiable shipping bill is required for goods which are subject to export duty. • Duty-free Shipping Bill: - Duty-free shipping bill is useful for exporting goods on which there is no export duty. In order to facilitate easy recognition and quick processing, following colours have been provided to different kinds of shipping bills : Types of goods Drawback shipping bill Dutiable shipping bill Duty-Free shipping bill By Sea Green Yellow White By Air Green Pink Pink Contents of Shipping Bill • Name and address of the exporter. • Name and address of the importer. • Name of the vessel, master or agents and flag. • Name of the port at which goods are to be discharged. • Country of final destination. • Details about packages, description of goods, marks and numbers, quantity and details of each case. • FOB price and real value of goods as defined in the Sea Customs Act. • Whether Indian or foreign merchandise to be re-exported 23
  24. 24. EXPORT PROCEDURE AND DOCUMENTATION • Total number of packages with total weight and value. Significance of Shipping Bill a) Shipping bill is the main customs document, required by the customs authorities for granting permission for the shipment of goods. b) The cargo is moved inside the dock area only after the shipping bill is duly stamped, i.e. certified by the customs. c) Duly endorsed shipping bill is also necessary for the collection of export incentives offered by the government. d) It is useful to the Customs Appraiser while determining the actual value of goods exported. 2. A.R.E. 1 form (Central excise): this form ARE-1 is prescribed under Central Excise rules for export of goods. In case goods meant for export are cleared directly from the premises of a manufacturer, the exporter can avail the facility of exemption from payment of terminal excise duty. The goods may be cleared for export either under claim for rebate of duty paid or under bond without payment of duty. In both the events the goods are to be cleared under form A.R.E-1 which will show the details of the goods being exported, the relevant duty involved and if the duty is paid or goods being cleared under bond, details of goods being sealed either by the exporter or Central Excise officials etc. 3. Exchange Control declaration Form (GR/PP/SOFTEX): under the exchange control regulations all exporters must declare the details of shipment for monitoring by the Reserve Bank of India. For this purpose, RBI has prescribed different forms for different types of shipments like GRI, PP forms etc. These declaration forms must be presented to the customs officials at the time of passing of export documentation. Under the EDI processing of shipping bill in the customs, these forms have been dispensed with and a new form SDF has to be submitted to the customs in the place of above forms. 24
  25. 25. EXPORT PROCEDURE AND DOCUMENTATION 4. Export Application: this is the application to be made to the customs officials before shipment of goods. The prescribed form of the application is the Shipping Bill/Bill of Export. Different types are required for shipment like exbond, duty free goods, and dutiable goods and for export under different export promotion schemes such as claims for duty drawback etc. 5. Vehicle Ticket/Cart Ticket/Gate Pass etc.: before the goods are being taken inside the port for loading, necessary permission has to be obtained for moving the vehicle into the customs area. This permission is granted by the Port Trust Authority. This document will contain the detail of the export cargo, name and address of the shippers, lorry number, marks and number of the packages, driver’s licence details etc. 6. Bank Certificate of Realisation: this is the form prescribed under the Foreign Trade Policy, wherein the negotiating bank declares the fob value of exports and for the date of realisation of the export proceeds. This certificate is required fore obtaining the benefit under various schemes and this value of fob is reckoned as fob value of exports. D. Other Document: • Black List Certificate: it certifies that the ship/aircraft carrying the cargo has not touched the particular country on its journey or that the goods are not from the particular country. This is required by certain nations who have strained political and economical relations with the so called “Black Listed Countries”. • Language Certificate: Importers in the European Community require a language certificate along with the GSP certificate in respect of handloom cotton fabrics classifiable under NAMEX code 55.09. Generally four copies of language certificate are prepared by the concerned authority who issues GSP certificate. Three copies are handed over to the exporter. A copy is sent along with the other documents for realisation of export proceeds. 25
  26. 26. EXPORT PROCEDURE AND DOCUMENTATION • Freight Payment Certificate: in most of the cases, the B/L or AWB will mention the transportation and other related charges. However if the exporter does not want these details to be disclosed to the buyer, the shipping company may issue a separate certificate for payment of the freight charges instead of declaring on the main transport documents. This document showing the freight payment is called the freight certificate. • Insurance Premium Certificate: this is the certificate issued by the Insurance Company as acknowledgement of the amount of premium paid for the insurance cover. This certificate is required by the bank for arriving at the fob value of the goods to be declared in the bank certificate of realisation. • Combined Certificate of Origin and Value: this certificate is required by the Commonwealth Countries. This certificate is printed in a special way by the Commonwealth Countries. This certificate should contain special details as to the origin and value of goods, which are useful for determining import duty. All other details are generally the same as that of Commercial Invoice, such as name of the exporter and the importer, quality and quantity of the goods etc. • Customs Invoice: this is required by the countries like Canada, USA for imposing preferential tariff rates. • Legalized Invoice: this is required by the certain Latin American Countries like Mexico. It is just like consular invoice, which requires certification from Consulate or authorised mission, stationed in the exporter’s country. Special Provision under Uniform Customs and practice for Documentary Credit UCP-500, for Commercial Invoice. 26
  27. 27. EXPORT PROCEDURE AND DOCUMENTATION • Article-37: Commercial Invoice o Must appear on their face to be issued by the beneficiary named in the credit. o Must be made out in the name of the applicant. o Need not be signed • Banks may refuse Commercial Invoice issued for amounts in excess of the amount permitted by the credit except otherwise stated. • The description of the goods in the commercial invoice must correspond with the description of the credit. In all other documents the goods may be described in the General in general terms not inconsistent with description in the credit. In all documents goods may be described in general terms not inconsistent with the Description of the goods in the credit. Pre-Shipment Documents: • Shipping bill. • Export order/Sales contract/Purchase order. • Letter of Credit • Commercial invoice. • Packing list. • Certificate of origin. • Guaranteed Remittance (G.R/SDF/PP/SOFTEX),or SDF. • Certificate of Inspection. • Various declarations required as per custom procedure. 27
  28. 28. EXPORT PROCEDURE AND DOCUMENTATION Exchange Control Declaration Form: all exports to which the requirement of declaration apply must be declared on appropriate forms as indicated below unless the consignment is of samples and of ‘No Commercial Value’ • GR FORM: to be completed in duplicate for exports otherwise than by post including export of software in physical form i.e. magnetic tape/discs and paper media. • SDF FORM: to be completed in duplicate and appended to the Shipping Bill for export declare to the customs offices notified by the Central Government which have introduced EDI system for processing Shipping Bill. • PP FORM: to be completed in duplicate for export by post. • SOFTX: to be completed in triplicate for export of software otherwise than in the physical form i.e. magnetic tapes/discs and paper media. These forms are available for sale in Reserve Bank of India Export declaration forms have utmost importance and are binding on the exporters. It is, therefore, necessary that enough care is taken while declaring exports on these forms, with special reference on the following points. • Name and address of the authorised dealer through whom proceeds of exports have been or will be realized should be specified in the relevant column of the form. • Details of commission and discount due to foreign agent or buyer should be correctly declared otherwise difficulties may arise at the time of remittance of such commission. • It should be clearly indicated in the form whether the export is on ‘outright sale basis’ or ‘on consignment basis’ and irrelevant clauses must be stuck out 28
  29. 29. EXPORT PROCEDURE AND DOCUMENTATION • Under the term ‘analysis of full export value’ a break up of full export value of goods under F.O.B value, freight and insurance should be furnished in all cases, irrespective of the terms of contract. • All documents relating to the export of goods from India must pass through the medium of an authorised dealer in foreign exchange in India within 21 days of shipment. • The amount representing the full export value of goods must be realized within six months from date of shipment. Disposal of Copies of Export Documentation Form • GR forms covering export of goods other than jewellery should be completed by the exporter in duplicate and both the copies should be submitted to customs at the port of Shipment. Customs will give their running serial number on both the copies of the GR forms after verifying the particulars and admitting the corresponding shipping bill. The value declared by the exporter will also be verified by the customs and they will also record the assessed value. Duplicate copy will be returned to the exporter and the original will be remained by the customs for onward submission to the Reserve Bank. Duplicate form of the GR form will again be presented to the customs at the time of actual shipment. After examination of goods and certifying the quantity passed for shipment the duplicate copy will again be returned to exporter for submission to an authorised dealer. However, an exception to submission of GR forms to the Customs authorities have been made in case of deep sea fishing. • (a) PP forms are to be first presented to an authorised dealer for countersignature. The form will be countersigned by the authorised dealer only if the post parcel is addressed to his branch or correspondent bank in the country or import. The concerned overseas 29
  30. 30. EXPORT PROCEDURE AND DOCUMENTATION branch or correspondent is to be instructed to deliver the post parcel against payment or acceptance of relevant bill, as the case may be. (b) For post parcel addressed directly to the consignee, the authorised dealer will countersign the form, provided — (i) an irrevocable letter of credit for the full value of export has been opened in favour of exporter and has been advised through authorised dealer concerned; or (ii) the full value of shipment has been received in advance by the exporter through an authorised dealer; or (iii) On receipt of full value of shipment declared on this form the authorised dealer will forward to RBI the duplicate copy along with the certified copy of shipper’s invoice. (iv) The authorised is satisfied on the basis of standing and track record of the exporter and arrangements made for realisation of the export proceed that he cold do so. If the authorised dealer is not satisfied about standing etc. of the exporter, the application is rejected. No reference is entertained by the Reserve Bank in such cases. (c) The original PP form countersignature will be returned to the exporter by the authorised dealer and the duplicate will be retained by him. Original PP form should then be submitted to the post office along with the parcel. The post office through the goods have been dispatched will forward the original to RBI. The export of computer software may be undertaken in physical form i.e. software prepared on magnetic tape and paper media as well as in non-physical form by direct data transmission through dedicated earth stations/satellite links. The export of computer software in physical form is subject to normal declaration on GR/PP form and regulations 30
  31. 31. EXPORT PROCEDURE AND DOCUMENTATION applicable there to will also be applicable to such exports. However, export of nonphysical form should be declared on SOFTEX Form. Besides computer software, export of video / T.V. Software and all other types of software products / packages should also be declared on the SOFTEX forms. Since export of software is fraught with many risks and special guidelines have been framed for handling such exports. 31

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