Ppt on processing of an export order

1. Processing of an export order
Submitted by: Ritish Garg
Submitted to: Dr. Navdeep kaur

2. EXPORT ORDER
Export order is a document communicating decision of the importer to purchase certain
items from the exporter
Export order represents an offer to sell´ by the exporter and its acceptance´ by the
importer.
Exchange of promises by the parties to the agreement.
Every set of promises forms part of consideration for each other.
The export order could be written in a proper legal format or it could as well be
evidenced by the exchange of letters between the parties

3. STAGES OF EXPORT ORDER
Export procedure involves a number of steps
● Preliminary Stage
● Pre-shipment Stage
● Shipment Stage
● Post-shipment Stage

4. PRELIMINARY STAGE
1. Organizing
The exporter should have an organization to look after exports.
Exporters may set up a complete new organization or add on export section to an existing one.
2. Registering with various Authorities
The exporter should register his organizations with various authorities. These are as follows.
Income Tax Authorities to obtain permanent Account Number (PAN).
DGFT – to obtain Importer’s exporter’s code Number (IEC No.)
EPC – to obtain Registration – cum – membership – certificate (RCMC)
Other authorities, such as FIEO, sales Tax authorities, chambers of commerce etc

5. PRELIMINARY STAGE (CONT.)
1. Appointing Agent / Distributors
Appointment of agents or distributors in the selected overseas markets.
2. Approaching Foreign Buyers
The overseas agents / representatives approach foreign buyers with a quotation.
The foreign buyer, if satisfied with the quotation and after clarifications, if any, will
place an order with the exporter

6. PRE-SHIPMENT STAGE
1. Inquiry and Offer
Request from importer about description of goods their standard or grade , size , weight or quantity
, terms of payment, etc.
On getting enquiry the exporter processes the inquiry in form of Proforma invoice
2. Confirmation of order
Negotiation of terms and conditions between buyer and the seller.
Exporter sends three copies of proforma invoice to the importer for confirmation of order.
Importer signs the copies sends back two, retains one.

7. PRE-SHIPMENT STAGE (CONT.)
3. Obtaining Letter of credit
With the acknowledgement letter confirming the receipt of an export order, the exporter may send a formal
request to the importer to open a letter of credit in his favour.
4. Obtaining pre-shipment Finance
As soon as the exporter receives a confirmed order and the L/C,
approach made to the bank for securing pre-shipment finance to meet working capital requirements.
5. Production and Procurement of goods
After securing the pre-shipment advance from bank, the exporter has to arrange for production and procurement
of goods for shipment.

8. 6. Packing
After procuring the goods meant for export, the exporter has to arrange for proper packing and marking of the goods.
Packaging must ensure proper protection of the goods. The packing material should be selected after considering the distance to
be covered, mode of transportation, types of handling of the goods at ports etc.
7. Pre-shipment Inspection
If the export cargo is subject to qualify compulsory inspection as a part of quality control. Exporter contacts Export Inspection
Agency by sending an Intimation for Inspection for obtaining Inspection Certificate.
8. Central Excise Clearance
Goods meant for export are exempted from the payment of excise duty. Excise clearance is obtained by two methods
1. Export Under Rebate
2. Export Under Bond
1. Export Under Rebate
Under this method, the exporter has to pay excise duty, initially, and can claim refund of excise duty, after exportation of goods to
countries except Nepal and Bhutan. Exporter can request clearance of goods either with examination or without examination by
central excise authorities.

9. 2. Export Under Bond
Under this method, exporter does not make payment of excise duty. He has to obtain bank guarantee or surety to an
amount equivalent to excise duty payable. Once evidence of export is shown, the excise authorities would release the bond.
In case of manufacturer-exporter, he can execute undertaking for the amount of excise duty payable instead of submitting
Bond
9. ECGC (Export Credit Guarantee Corporation of India Ltd) Cover
The exporter must take appropriate policy to protect him from credit risk. ECGC provides a range of credit risk insurance
covers to exporters against loss in export of goods and services
10. Marine Insurance policy
In order to protect the cargo from perils on high sea, the exporter has to obtain marine insurance policy.
Payment of insurance premium depends on the type of price quotation accepted by the importer.
11. Appointment of clearing and Forwarding Agent
It is always advisable to appoint C & F agent to look after forwarding work which includes booking of shipping space,
preparing and submitting various documents to customs

10. SHIPMENT STAGE
1. Reservation of space in the ship
Exporter contacts the shipping company for booking the required space in the vessel for shipment of his consignment
Necessary information like date of shipment, gross and net weight of each package, particulars of the importer etc are
provided. When shipping company accepts the exporter’s request, the company or its agent issues “shipping order”
2. Internal Transportation up to Port of Shipment
Exporter makes necessary arrangements for transportation of goods to the port by road/railways. Railways issue
Railway receipt on loading goods into the railways which serves as title to goods.
3. Preparation and processing of shipping documents
When goods reach the port of shipment, the exporter has to arrange for preparation of a complete set of documents to
be passed on to the forwarding agent. Letter of credit along with the export contract, Commercial Invoice (2 copies),
Packing List, Certificate of Origin, GR Form (Original and Duplicate), ARE-I Form, Certificate of Inspection, Marine
Insurance Policy

11. 4. Customs Clearance
The following documents need to be submitted to customs appraiser at customs house.
Letter of credit along with the export contract, Commercial Invoice (2 copies), Packing List, Certificate of Origin, GR
Form (Original and Duplicate), ARE-I Form, Certificate of Inspection, Marine Insurance Policy, Five copies of
Shipping Bill
5. Customs Clearance Custom Appraiser Verifies all documents Returns
Original GR - Original Shipping Bill - One copy of Commercial Invoice “Examination Order” on the duplicate copy of
shipping bill given by custom appraiser. C & F Agent
6. Obtaining Carting Order from Port Trust Authorities
Carting Order is the permission to bring the goods inside the docks.
The carting order is issued by the superintendent of Port Trust.
Carting Order is issued only after verifying the endorsement on the duplicate copy of shipping bill.
The Carting Order enables the exporter’s agent to cart goods inside the docks and store them in proper sheds.

12. 7. Physical Examination of goods at the port
The Appraiser Dock (export) orders for samples to be drawn and tested, the Customs Officer/Examiner may
proceed to draw two samples from the consignment and enter particulars thereof. There is no separate register for
recording dates of samples drawn.
Three copies of test memo are prepared and signed by the Customs Officer and Appraising Officer on behalf of
Customs and the exporter or his agent. The disposal of three test memo copies is as follows:
Original—to be sent along with the sample to the test agency.
Duplicate—Customs copy to be retained with the second sample.
Triplicate—Exporter’s copy After physically examines the goods and seals the packages in his presence and issues
the “Let Export order”
8. Loading of goods
The duplicate copy of shipping bill which is endorsed by the custom Examiner is handed over to the custom
preventive officer, who endorses it with ‘Let ship order’. The goods are then loaded on board the ship, for which
Mate’s Receipt is issued by the mate of the ship. The Mate’s Receipt is handed over to the shipping company to
obtain Bill of Lading.

13. POST SHIPMENT STAGE
1a. Submission of Documents by C & F agent
C & F agent submits the following documents to the exporter: Copy of Invoice duly attested by the customs,
Drawback copy of the shipping bill, Export promotion copy of the shipping bill, Full set of negotiable and non
negotiable copies of bill of lading, Original L/C, export order or contract, Duplicate copy of ARE-I form.
1b. Dispatch of Documents
Dispatch of documents by C & F Agent to the exporter the details and the mode of dispatch of the shipping
documents are specified in the L/C. Mailing of dispatching a set of documents to ensure that the importer or his
agent receives the same in time so that the delivery of the exported goods can be done.
2. Shipment advice to importer
After the shipment of goods, the exporter has to send suitable intimation to the importer for his information. By
this intimation, the date of shipment, the name of the vessel, date on which the goods will reach the destination
should be informed to the importer. A copy of non-negotiable bill of lading is also sent for information. The
importer gets the remaining documents through his bank

14. 3. Presentation of Documents to the Bank
A complete set of documents is submitted by the exporter to his bank for the purpose of negotiating the same and
obtaining export proceeds in time.
4. Presentation of Documents to the Bank
The bank then sends the same documents to the exporter.
1. Sight or UsanceBill of Exchange
2. Full set clean-on-board Bill of lading(all negotiable copies)/Airway Bill/Combined transport document
3. Original letter of credit along with amendments made up to date
4. Customs Invoice
5. Commercial Invoice duly attested by customs
6. Packing List
7. GR-1/SDF Form, in duplicate
8. Exchange control copy of the shipping bill
9. Inspection Certificate
10.Marine insurance policy/certificate, in duplicate
11. Certificate of Origin
5. Dispatch of Documents
The bank negotiates the documents with the importers bank as detailed in L/C. Exporter’s bank scrutinizes the documents
then sends the bank certificate and attested copies of commercial invoice to the exporter.

15. 6. Letter of Indemnity
Exporter can get immediate payment from the bank on submission of documents by signing a letter of
indemnity. By signing the letter exporter undertakes to indemnify the bank in the event of non-receipt of
payment from the importer long with accrued interest.
7. Processing of GR form
On receiving export proceeds the exporter’s bank intimates the same to RBI by recording the fact on the
duplicate copy of GR. RBI verifies the details in duplicate copy of GR with the original GR received from
customs. If details are in order the export transaction is treated as complete.
8. Follow-up of Export sales
An exporter should always have a follow-up after sales provide necessary after sale service, find out buyer’s
opinion towards the product It further helps in generating more sales in the international market.

16. THANK YOU