EXPORT PROCEDURES & DOCUMENTATION

Assignment On International Business

Presented To: Mr Yuvraj Garg Dept. Of Fashion Design NIFT GANDHINAGAR

Presented By: PRASHANT KUMAR M.FTECH 2010-12 NIFT GANDHINAGAR

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Content
EXPORT PROCEDURES P R E - S H I P M E N T S TA G E P O S T - S H I P M E N T S TA G E REGISTRATION STAGE S H I P M E N T S TA G E Q UA L I T Y C O N T R O L A N D PRE-SHIPMENT INSPECTION PROCEDURE FOR C E N T R A L E XC I S E CLEARANCE PROCEDURE FOR R E L I S AT I O N O F E X P O R T PROCEEDS MASTER DOCUMENTS AND ALIGNED D O C U M E N TA I O N S Y S T E M SHIPPING BILL A I R WAY B I L L COMMERCIAL DOCUMENTS R E G U L ATO R Y DOCUMENTS PERFORMA INVOICE

S A L E S TA X E X E M P T I O N

COMMERCIAL INVOICE

C U S TO M F O R M A L I T I E S

PA C K I N G L I S T

EXPORT D O C U M E N TAT I O N

M AT E S R E C E I P T

BILL OF LADING BILL OF ENTRY

CONSULAR INVOICE GR FORM

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EXPORT PROCEDURES
Registration stage Pre-shipment stage

Shipment stage

Post Shipment stage

Quality Control and Pre-shipment inspection

Sales Tax exemption

Procedure for excise clearance

Customs formalities

Procedure of realization of export proceeds

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REGISTRATION STAGE
Registration of the organization Opening Bank Account Obtaining Importer-Exporter Code Number (IEC No)

Obtaining Permanent Account Number (PAN)

Obtaining Sales Tax Number Registration with Export Promotion Council Registration wit ECGC Registration with other authorities

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PRE-SHIPMENT STAGE
Approaching Foreign Buyers Inquiry and offer Confirmation of order Opening letter of credit Arrangement of pre-shipment finance Production or procurement of goods Packing and marking Pre-shipment Inspection Central excise clearance Obtaining insurance cover Appointment of C&F agent

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SHIPMENT STAGE
Reservation of shipping space Arrangement of internal transportation up to the port of shipment

Preparation and processing of shipping document

Customs clearance Obtaining Carting Order from the port trust authorities Customs examination and issue of Let Export Order Obtaining Let Ship Order from the Customs Preventive Officer Obtaining Mates Receipt and Bill of Lading

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POST-SHIPMENT STAGE
Submission of Documents by the C&F Agent to the Exporter Shipment Advice to Importer Presentation of Documents to Bank for Negotiation Dispatch of Documents Acceptance of the Bill of Exchange Letter of Indemnity

Realization of Export Proceeds Processing of GR form Realization of Export Incentives

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Q UAL ITY CO NT ROL A N D P R E - S HI P MENT I N S P EC TION

The Government of India has set up Export Inspection Council (EIC) to monitor the quality of goods meant for exports.

Method
Self Certification In-Process Quality Control (IPQC) and Consignment-wise Inspection

Units exempted from the Inspection Procedure are:

Export Houses, Trading Houses, Star Trading Houses and Super Star Trading Houses Approved 100% EOUs and EPZ units Exporters who are registered with the Textile Committee Goods marketed with ISI, AGMARK, BIS-14000, ISO-

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SALES TAX EXEMPTION

The process consists of the following steps:

Obtaining H Form
Processing of H Forms Sales Tax Claim
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PROCEDURE FOR CENTRAL EXCISE CLEARANCE

Application to the Assistant Collector of Central Excise (ACCE)
Information to the Range Superintendent Sealing of goods Processing of ARE-1 form Examination of goods at the Place of Export Submission of the Claim Verification of the Application Refund of Duty Cancellation of Documents

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CUSTOM FORMALITIES
Preparation and Submission of Export Documents Verification of Documents Valuation of goods Obtaining Carting Order from the Port Trust Authority Custom Examination and Issue of Let Export Order Obtaining Let Ship Order from the Customs Preventive Officer Obtaining Mates Receipt and Bill of Lading

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P RO CEDUR E FO R R EL I SAT ION O F EX P O RT P RO CEED S Presentation of Documents to the Bank for Negotiation Dispatch of Documents Acceptance of Bill of Exchange

Letter of Indemnity
Realization of Export Proceeds Processing of GR Form

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EXPORT DOCUMENTATION
Master Documents and aligned Documentation Systems Performa invoice

Commercial Invoice
Packing list Mates receipt Bill of lading Certificate of origin Shipping bill Consular invoice Bill of entry Airway bill GR Form

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M A S T E R D O C U M E N T S A N D A L I G N E D D O C U M E N TA I O N S Y S T E M
Aligned Documentation System (ADS) is based on the UN Layout key.

Under this system, different forms used in the international trade transaction are printed on paper of the same size and in such a way that the common items of information are given the same relative slots in each of the documents.
1) Commercial Documents and

For the purpose of Aligned Documentation System documents have been classified as

2) Regulatory Documents.

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COMMERCIAL DOCUMENTS
Commercial documents are required for effecting physical transfer of goods and their title from the exporter to the importer and the realization of export sale proceeds.

Out of the 16 commercial documents in the export documentation framework as many as 14 have been standardized and aligned to one another.

These are proforma invoice, commercial invoice, packing list, shipping instructions, intimation declaration, certificate of inspection of quality control, insurance declaration, certificate of insurance, mates receipt, bill of lading or combined transport document, application for certificate of 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.

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REGULATORY DOCUMENTS
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, export trade control, customs, etc.

Out of 9 regulatory documents four have been standardized and aligned.

These are shipping bill or bill of export, exchange control declaration (GR form), export application dock challan or port trust copy of shipping bill and receipt for payment of port charges.

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PERFORMA 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.

Importance of the Proforma Invoice

It forms the basis of all trade transactions It may be useful for the importer in obtaining import license or foreign exchange

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Contents

of
Performa 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 Exporters reference number Buyers 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

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COMMERCIAL INVOICE
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 sellers 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.

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Name and address of the exporter 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 Exporters reference number Buyers 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 account in terms of internationally accepted price quotation Signature of the exporter with date

Contents of Commercial Invoice

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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 preshipment inspection, excise and customs procedures, etc. 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

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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 content of an individual pack, while the packing list is a consolidated statement of the contents of a number of cases or packs.

Normally, ten copies of the packing note/list should be prepared.

The first is to be sent with the shipping documents, two copies in advance to the buyer, one to the shipping agent and the remaining retained by the exporter.

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MATES RECEIPT
Mates receipt is a receipt issued by the Commanding Officer of the ship when the cargo is loaded on the ship.

The mates receipt is a prima facie evidence that goods are loaded in the vessel.

The mates receipt is first handed over to the Port Trust Authorities.

After making payment of all port dues, the exporter or his agent collects the mates receipt from the Port Trust Authorities. The mates 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 mates receipt.

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TYPES OF MATES RECEIPT
Clean Mates Receipt
The Commanding Officer of the ship issues a clean mates 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 Mates Receipt The Commanding Officer of the ship issues a qualified mates receipt, when the goods are not packed properly and the shipping company does not take any responsibility of damage to the goods during transit.

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Content

of
Mates Receipt

Name of the 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

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BILL OF LADING
The bill of lading is a document issued by the shipping company or its agent acknowledging the receipt of goods on board.

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.

A Bill of lading serves three main purposes:

As a document of title to the goods As a receipt from the shipping company As a contract for the transportation of goods Back to Content 27 Of 40

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Contents of Bill of Lading

Name and logo of the shipping line Name and address of the shipper Name and 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 Shipping bill number and date Signature and initials of the Chief Officer

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Significance of Bill of Lading for Importers
It acts as a document of title to goods, which is transferable by endorsement and delivery

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.

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

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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 that the goods exported are originally manufactured in the country whose name is mentioned in the certificate.

Certificate of origin is required under the following circumstances.

The goods produced in a particular country are subject to preferential tariff rates in the foreign market at the time of importation. The goods produced in a particular country are banned for import in the foreign market.

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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

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Certificate of Origin is required for availing of concessions under Generalized System of Preferences (GSP) as well as under Commonwealth Preferences (CWP). It is to be submitted to the customs for the assessment of duty and 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 ensure that goods bought from some other country have not been reshipped by a seller, a certificate of origin is required.

Significance of the Certificate of Origin

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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 Exporters Copy

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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 reexported Total number of packages with total weight and value

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Significance of 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

Duly endorsed shipping bill is also necessary for the collection of export incentives offered by the government

It is useful to the Customs Appraiser while determining the actual value of goods exported

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CONSULAR INVOICE
Consular Invoice is a document required by the Latin American countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Myanmar, Iraq, Australisa, Fiji, Cyprus, Nigeria, Chana, 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 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 importers 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.

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BILL OF ENTRY
The Bill of Entry is a document prepared by the importer or his clearing agent in the prescribed form under Bill of Entry Regulation, 1971, on the strength of which clearance of imported goods can be made.

When goods are imported in a particular country, the importer has to pay the necessary import duty.

For this purpose, necessary information about the goods imported must be given to the customs authorities in a prescribed form called bill of entry form.

Bill of entry is a document, which states that the goods of the stated values and description in the specified quantity have entered into the country from abroad. The bill of entry is drawn in triplicate. The customs authorities may ask the importer to supply other documents like invoice, brokers note and insurance policy, etc. in order to verify the correctness of the information supplied in the bill of entry form.

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Contents of Bill of Entry

Name and address of the importer Name and address of the exporter Import license number of the importer Name of the port/dock where goods are to be cleared Description of goods Value of goods Rate and amount of import duty payable Other relevant documen

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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 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.

Content of Airway Bill

Name of the airport of departure and destination 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

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GR FORM
GR Form is an exchange control document required by the Reserve Bank of India (RBI). As per the exchange control regulations,

an exporter has to realize the proceeds of the goods he has exported within 180 days of their shipment from India. In order to ensure this, the RBI has introduced the GR procedure.

GR form is to be submitted in duplicate to the Customs at the port of shipment along with the shipping bill.

Customs will give their running serial number on both the copies after admitting the customs shipping bill.

Customs authorities will certify the value declared by the exporter on both the copies of the GR form at the space remarked and will also record the assessed value. They will then return the duplicate copy of the form to the exporter and retain the original for transmission to the RBI. Within 21 days from the shipment of goods, exporter must lodge the duplicate copy of GR together with relative shipping documents with the authorized dealer named in the GR form for negotiation of export bills.

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Thank You!!!

References: Vasant Kothari PDF. Discussion with Er. Shakhar suman, Site Engineer, Virgo marine,Mumbai

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