Export Import I)ocument~tion

und Pnlirics 4.11 ANSWERS TO CHECK YOUR PROGRESS UNIT 5 PROCESSING OF AN E m B W

B 5 i) True ii) False iii) True iv) False v) True

C 5 i) True ii) False iii) True iv) False v) True

INAL OUESTIONS Qbjactives

I~~troductien
I. How ED1 is different from Electronic Commerce? Nature and Ferl-nat ef Expeir Order
2. Why ED1 has become a necessity for International Trade? Exnminntion and Confirmation of Export Order
'
Manufacturing or Procuring Goods
3. What is EDIFACT? What are the other ED1 standards? Central Excise Clearance
4. What is the role of VAN? Pre- Shipment Inspection
Appointment of Clearing and Fprwarding Agents
5. What are the steps necessary to implement EDI? Transportation of Goods to Port of Shipment
6, What are security and legal issues which organisation must consider while Port Formalities and Customs Clearance
implementing EDI? Despatch of Documents by Forwarding Agent to the Exporter
Certificate of Origin and Shipment Advice
7, What kind of strategic advantages an Export house may get through EDI? Presentation of Documents to Bank
Claiming Export Incentives
5.1 3.1 Excise Rebate
5.13.2 Duty Drawback
Let Us Sum Up
1Cey Words
A~iswersto Check Your Progress
Terminal Questions

5.0 OBJECTIVES
Allcr studyi~igthis unit, you should be able to: .

0 clescribe different stages, preparation and processing of documents for pre-shipment and
posl-shipment for~nalities
a explnin spccitic points to be examined while confirming the receipt of the export ordcr

a explnin documentary requirements for obtaining excise and customs clearance of expart
,cargo
@ clcsc~~ibe
Formalities for claiming major export incentives
@ cnume~.atedocunients to be submitted to the Bank.

5.1 INTRODUCTION
You Iiavc loivnt the regulatory fralnework of foreign trade, the export sales contract the range
ol'documcntation for~nalitiesin export- import trade and Electronic Data Interchange System
in IJnils l,2,3 and 4. An export exercise is concluded successfully after the exporter has been
able to deliver the consigliment in accordance with the export contract and receive payment
fill-rhc goods. In this unit, you will learn various steps involved in the processing of an
espo1.l order at per- shipment, shipment and post- shipment stages. You will also leam
various fomialitics of claiming export incentive.

5.2 NATURE AND FORMAT OF EXPORT ORDER

Processing of an export order stalTs with the receipt of an export order. An export order may
,be either in the form of export sales contract, which is concluded and incorporated in the form
 kxport lmport Documenhtion of a document or in the form of evidence or an instrument evidencing the conclusion of a stnge. it ma!/ he diflicull lo persuade the importer to change this condition. Contquent[v, &e Procenrltig of ar
amd Policies contract. exporter may suffer a loss. Export Order

Simply stated, it means that there should be an agreement, which is mostly reduced in a If there i ~ l any
t discrepancies in the export order, the importer must be immediately informed
documentary form, between the exporter and the importer before the exporter can start for its amendment. It is only after the amended order has been received and confirmed by the
making arrangements for production or procurement of goods and their shipment. exporter that he becomes liable to fulfil his contractual obligations. It is commercially grudent
to confirm the order by sending a documentary confirmation. In certain contracts it may also
\
Generally an export order may take the fallowing forms: be the legal requirement.

0 Proforma Invoice accepted and signed by the importer

There is no specific format of this confirmatory lettefand an ordinary letter would serve the
Purchase Order accepted and signed by the exporter purpose. Although some exporters have printed the letter with suitable blank spaces.
ii Letter of Credit opened by the importer in favour of the exporter.

A proforma Invoice is prepared and sent by the exporter to the importer. After accepting the 5.4 MANUFACTURING OR PROCURING GOODS
terms and conditions given in it as given in a documented contract, if any, the importer
returns a copy of this invoice to the exporter. Such a process helps in accepting the offer of Every export firm has devised internal procedures to suit specific requirements for ensuring
the exporter by the importer and, thus the conclusion of an export contract. In the case of production or procurement of goods, packing, marking and labelling, and despatching to the
long- term contract, the exporter mny be required to send proforma invoice for any intended port for shipment. A systematic approach to these activities could be to send a delivery note,
shipment. Alternatively, the export contract may require a purchase order to be sent by the in duplicate to the production department. In the case of a merchant- exporter, the marketing
importer to the exporter. If the purchase order is in accordance with the terms and conditions department may send a similar document known as purchase order.
of the contract, the exporter'will duly accept it. Opening of a letter of credit is also a colnmon
method of receiving the export order. Although an instrument of payment, the letter of credit Specific instructions are given on the above-mentioned document to the production/procure:
states major terms and conditions of shipment and enables the exporter to start processing of rnent department for undertaking production and transport activities. Besides mentioning the
the export order. (You have already learnt the export sales contract in Unit 2.) time period within which these activities are to be completed, delivery note/purchase order
may give such details as: product specification, quantity required, packing, marking and
labelling requirement, excise clearance requirement, intimation to transport department if any.
5.3 EXAMINATION AND CONFIRMATION OF The r n h e t i n g or export department shouldalso inshuct the productiofl procurement
department to retain one copy of Cie delivery note1purchase order end c o n f m the delivery
EXPORT ORDER (i.e., transportation to the port) on the duplicate copy.
As soon as an export order has been received, the exporrer rnust first acknowledge its receipt The purchasing, processing manufacturing and packiig'of goods for exports ate facilitated
by intimating the importer through telephone, telex, fax, etc. Though not legally necessnly. by the packinggredit facility given by the commercial banks in India. Under the export credit
this step is helpful in creating business goodwill for the exporter. The expoller must carefully (interest subsidy) scheme, the Reserve Bank of India enables the commercial banks to extend
examine the contents of,the order to see that there is no discrepancy between the export pre-shipmentand post- shipment credit to exporters manufacturers, as well as merchant
order and export contract (verbal or written). Thus, the accepted proforma invoice, buyers exporters.
purchase order or the letter of credit opened in favour of the exporter must be examined.
Items to be examined particularly are: Pre- shipment credit i s given to an exporter to finance working capital needs for purchase of
i) Product description, including specification, style, colour, packing conditions, etc. raw materials, processing them and converting them into finished goods for the purpose of
exports. This facility is accorded on the basis of either the letter of edit or the confmed
ii) Marking and labelling requirements, if any. export order or any other evidcnca ofthe ordcr. The rate sf interest charged is concessional
iii) Terms of payment, including currency, nature of letter of credit (revocable. one. Banks also grant post- shipment credit to bridge the time- gap between the shoment of
irrevocable, confirmed, unconfirmed, restricted, unrestricted, etc.), credit period, if the goods and the realisation of sale proceeds.
any.
Packing credit advances are nonnally granted on secured basis, which may mean collateral
iv) Terms of shipment including choice of carrier, mode of carriage, place oPdelivery, security through a third party guarantee or mortgage of immovable property. Once the goods
date of shipment1 delivery, port of shipment, Transhipment, ctc. have been acquired they are to be hypothecated. The banks have evolved their own docu-
v) Inspection requirement including type of inspection and inspecting agency. mentation and procedural systems for granting the credit Generally, followin'g disbursement
procedure is followed:
vi) Insurance requirements including risk being covered and insurable value.
vii) Documents for realising payment including the nature and number of invoices.
9 The exporter hands over the export orderlletter of credit to tho bank, which will
accept it and affix a rubber stamp on it reading 'export finance granted'.
certificate of origin, certificate of inspection, certificate of value, bill of exchange,
insurance policy, transport document and document of title, etc. ii) The bank will calculate the drawing power of the exporter on the basis of a number of
factors, including the value of export orderlletter of credit.
viii) Last date of negotiation of document with the bank.
i iiii . Funds will be released by debiting to the packing credit account and credit to
A new exporter who is very keen to get into t l ~ cbusiness may tend to ignore certain aspects exporter's account.
of the export order. It is not uncommori that lie encounters difficulties while complying with
i ~ ) Goods will .generally be required to be sent through the approved transport agencies
the contracted obligations. In the process, he ,]laysuffer a loss. For example, the importer and forkarding agents
may specify inspection to be undertaken by an agency, which does not operate from India. I

Such a problem will be discovered only after the goods have been manufactured. At this V) Goods will be suitably insured while in the warehouse and in transit.
75.

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I
 LRer the inspector has completed isspection, the Export Inspection Agency will issue the
Proccsslng OF an
Export Import D o c ~ ~ m c n t a t l o nOn the basis ofthe laid down procedures, the exporter will approach the bank for the pre- inspection Certificate in triplicate. The original certificate is for the custon~sverification. It is , Export Order
~ n Pd o l l c l c a sl~ipmentfledit. This credit is granted to enable the expolter to manufacture1 procure and submitted to the customs authorities, along with other documents, before permission to ship
pack the goods for shipment overseas. goods is granted. The second copy may be sent to the buyer, if needed. The third copy is for
the exporter': record.

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5.5 -
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I-
CENTRAL EXCISE CLEARANCE Clleck Your Progress A

The Central Exolas and Salt Act af India and tha rsl~tedrules pravlde tho rsfun'd of caxclse 1. What do you Inearl by an export order?
duty pald. Thia ale0 provlda~sxornptian from tho payment of axcl~t?duty both a19La
export production and inguta uaad in tho manufact~~rs of oxport produot~,popularly known ............................................................................................................
as rebate in ox cis^ duty. The documents ufed are Invoice and AR41ARS for~ns.
As soon as goods are ready for despatch to the port for shipment, the production depart-
ment of export firm is to apply to the ce~~tral
excise authority for excise clearance of the
...............................................'..,...,......................................................
goods. ............................................................................................................
The exporters prepare six copies of AR4lAR5 forms. The exporters are now allowed to 2. List various schemes under which the inspectior1 of export goods may be conducted,
remove the goods for export on their own without getting the goods examined or after the
examination by the Central Excise Officers. In case of withoat examination, exporter submits 4
copies of AR4 lAR5 form to the superintendent of Central Excise having Jurisdiction over the
premise ofthe exporter within twenty-four hours of the removal of the consignment. The
Superintendent examines the AR4lAR5 form and having being satisfied, signs the form and
returns it to the concerned persons.

Sometimes the exporter desires sealing ofthe goods by the Central Excise Officers so that the ....I.........o........................................*.....*..........,,.,,.,...*.........,...,..m,.,....

custom officers at the port of shipment may not examine the export goods. In such case, the '
exporter submits AR4lAR5 forms in sixtuplicate to the superintende~~t of Central Excise 3. Slittc \+>llctller
the following statements are True or False.
having jurisdiction over the premises of the exporter. The superintendent may depute an
inspector of Central Excise or may himself go for sealing and examination of export cargo. i) Processing of an export order starts wit11 the receipt of an export order.
After he is satisfied, he allows the clearance of cargo.
ii) 'There should not be nny discrepancy between export order and export contract.

iii) Normally packing credit is granted on unsecured basis.

5.6 PRE-SHIPMENT INSPECTION
iv) For clearance of goods under bond, the exporter has to execute bond in two sets.
Government of India notifies, from time to time, a number of goods whose export is subject to
compulsory quality control or pre- shipment inspection. Consequently, the Indian customs The hasis of export inspection is usually the importer's specification.
V)
authorities will require the submission of an inspection certificate issued by the designated.
agency before permitting the shipment to take place. The basis of inspection is usually the
importer's specification, except in the case of export of goods involving safety or health
hazards, where notified minimum standards are enforced.
5.7 APPOINTMENT OF CLEARING AND -
FORWARDING AGENTS
Inspection of export goods may be conducted under
Clearing and forwarding agents, also known as freight forwarders, perform a number of
0 Consignment-wise Inspection
fitnctiotis on behalf of the exporter. They provide specialised help in the exporter's ware-
ii) In-process Quality Control and house to the importer's warehouse by undertaking the procedural and docbrnentary formali-
lies. I-le helps in pecking, marking and labelling of consignment, arrangement for transport to
iii) Self-certification
rile port, arrangement for shipment overseas, and customs clearance of cargo, procurement of
Let us discuss consignment-wise inspection. Before the excise authorities seal packs, the Iransport and otlier documents. However, the main function'of the agent is to obtain customs
process of pre-shipment inspection must be completed. The production department is to , clearailce of goods, ship them and procure the relevant transport document (Bill of Lading or
apply to the.Export Inspection Agency for nominating an inspector for conducting examina-, Airway Bill). For performing the desired functions, the exporter is required to give detailed
tion ofthe export goods. The application is to be made on a prescribed fonn known as Notice instructions to his agent, wlio in turn will charge fee for these activities. On completion of the
of Inspection and submitted to the Agency with the following documents: process of clearance by the excise authorities as well as obtaining the Inspection Certificate,
the productio~ldepartment despatches the consignment to 'the port of shipment by either
3 A copy of the commercial invoice road or rail. Information to this effect is sent to the export department by signing the Delivery
Crossed cheque of demand draft as inspection fee Note or by preparing a Despatch Advice alongwith the following documents:
ii) I
iii) A copy of export contract i) Railway Receipt or Lorry Way Bill

Importer's technical specifications and /or approved sample. ii) Invoice

iv)
iii) AR4lAR5 form ( Original and Duplicate) ,
 export Import bocumcntaCLo~ iv) Inspection Certificate (Original) tjowever, for sending cargo by rail, laid down procedure is to be followed for obtaining Procerring or an
and Policies allotnient of wagon on a priority basis under a scheme of the Railway Board. According to Export Order

On receip! of these documents, the export department will appoint a clearing and forwarding this scheme, wagons are allotted on the priority basis for carrying export goods to the port
agent by signing and sending a document, generally known as Shipping Instruction Sheet [own for shipment. Following documents are submitted to the booking railway yard/Station.
I

or simply the Shipping Instnctions. This document contains full details of instructions of i) Forwarding Note (A railway docthent)
the exporter as well as details or the consignment to be shipped. Alongwith this document,
following documents will be sent to the agent: ii) Shipping Order (as proof of reservation of shipping space)
'! 1. Commercial Invoice (Generally 8-10 copies with at least one completed) iii) Wagori Registration Fee Receipt

2 Customs Declaration Form in Triplicate (This is a legal requirement whereby the After wagons have been allotted, goods are loaded, for which railways will issue Railway
exporter states that the declarations made to the customs authorities by the agent on Receipt (RR). This receipt, alongwith other documents, is sent to the clearing and forwarding
his behalf are true) agent at tlie port town. At this stage, the production /export department makes an application
3. Packing list, if needed to the insurance company for insurance cover (internal as well as overseas) and obtains .
insurance policyJcertificate in duplicate with appropriate risk coverage.
4. Original Letter of Creditcontract
5, Inspection Certificate (Original)
GR Form- Original and Duplicate (it is a foreign exchange declaration fomi)
5.9 PORT FORMALITIES AND CUSTOMS
6.
CLEARANCE
7. AR4JAR5 form (Original and Duplicate)
8. Invoice On receipt of the documents sent by the export department, the clearing and forwarding
agent takes delivery of the cargo from the railway station or the road transport company and
9. Railway Receiptllorry Way Bill arranges its storage in the warehouse. He also initiates action to obtain customs clearance
and pern~issiorifrom tlie port authorities to bring cargo into the shipment shed.

5.8 TRANSPORTATION OF GOODS TO PORT OF The ob.jectives of customs control are:

SHIPMENT i) to ensure that the goods go out of the country after compliance with different laws
concerning export'trade
You have already learnt the documents relating to transportation of goods to the port of
shipment. Transportation and movement of goods to the port for shipment involve following ii) to ensure authenticity of value of export goods to check over/under invoicing
activities: iii) to correctly assess and collect export duty, if applicabli.
i) Packing, marking and labelling of consignment To compile data on cargo movements.
iv)
ii) Arrangement for movement of goods either by road or by rail.
For complying with these objectives, tlie cuslo~nsgrant permission for export at two stages.
An export-worthy packing helps in minimising freight and delivery costs. It also eliminates Firstly, docu~ner~tary
checks are made at the ofice of the customs (i.e, Customs House).
the possibility of the insurance company's refusal to pay a claim in the evelit of n loss or Secondly, physical exa~ni~iationof goods is made in tho shipment shed to verify that the
damage to goods in transit. If there are specific instructions on packing in the export con- goods being exported are tlie same as have been declared on the documents submitted at the
tract, these must be followed. After the goods are packed, the packages are to be properly Costonis House. 'The document on which customs give clearance for export is the Shipping
marked and labelled. Proper marking helps in quick and safe transportation of goods. Mark- Bill.
ing serves the purpose of identitication of goods, handling, shipping and delivery of goods
upto the importer. Labels are either stencils or affixed on the packs which contain liandling The clearing and forwarding agent is to file following documents with the Customs House:
instructions. These labels are usually in the pictorial form for easy understanding of tlie i) Shipping Bill (4-5 copies)
instructions.
i Contract/ correspondence leading to the contract (Original)
After the production department has completed the excise clearance and pre-shipment iii) Letter of Credit, where applicable (Original)
insp~tionformalities, the export goods are packed, marked and labelled. At the same time.
the export department takes steps to reserve space on tlie ship thro~~ghwhich goods nre to iv) Commercial Invoice (one for each of the shipping Bill)
be sent. Shipping space can be reserved either through the clearing and forwarding agent or v) GR Form (Original and Duplicate)
fnight broker who work on behalf of the shipprng company or directly.from the shipping
company. After the space has been reserved, the shipping company will issue a document vi) Inspection Certificate (Original)
known as Shipping Order. This document serves as a proof of space reservation. vii) AR 4/AR 5 Form (Original and Duplicate)

Information on space reservation is given to !he production department for niaking transport viii) Packing list, if needed
arrangements to the port. Where the consignment is sent through a mad carrier, no spccific . br) Any other document needed by the customs
formality is involved. The production department engages a reliable carrier and books the
cgnsignment to h e port (generally in the name of the clearing andsfonvardingagent). Lomy/ The Customs Appraiser/Examiner examines these documents and appraises the value having
Tnrk receipt is issued which is sent, abngwith other documents, to the clearing and for- regard to the following consideration:
warding agent at the port town for taking delivery of tlie cargo.
1. That the value and the quantity declared in the shipping bill is the same as in the
export order or letter of credit.
ExPo1 I --r*Pol.( Document~tion 2. That the formalities regarding exchange control, pre- shipment quality control
and Policies Processing Order
Export of nn
inspection etc, have been duly completed. After examination of documents and 5.11 CERTIFICATE OF ORIGIN AND SHIPMENT
appraisement of value, the Custo~nsExaminerIAppraiser makes an endorsement on aADVICE
the duplicate copy of the shipping Bill. He also gives directions to the Dock
Appraiser about the extent of physical examination of the cargo to be conducted at On receipt of the above documents, the exporter makes an application to,the chamber of
the Docks, All the Docunients, except GR (original) Forn~,the original Shipping Bill
and a copy of the Commercial Invoice are returned to the Forwarding Agent to be
commerce and Atains'a 'Certificate of Origin' in duplicate, In case of export shipment to .
countries offering GSP concession, the GSP ~ehificateof Origin will have to be procured by
presented to the Dock Appraiser.
the exporter from the concerned authority like Export Inspection Agency.
After taking delivery of documents from the Export Department, Forwarding Agent Presents
The exporter then sends, 'Shipment Advice' to the importer intimating the date of shipment
the Port Trust Document to the Shed superintendent of the port. He obtains carting order for
of the consignment by a named vessel and its expected time of arrival (ETA) at the destina-
bringing the export cargo to the transit shed for physical exatnillation by the Dock Appraiser
tion port. The following docurne~itsare also sent alongwith the shipping advice so that the
and for their shipment, After bringing the cargo into the shed he presents the following
importer may start making arrangements for taking delivery of the consignments.
doculnents to the Dock Appraiser for conducting physical examination of the cargo.
1) Duplicate, triplicate and export promotion copies of the shipping Bill
I: A non- ,feegotiable copy of the Bill of Lading
2. Coln~nercialInvoice
2) Commercial Invoice
3. Packing List
3) Packing List
, 4. Custo~nsInvoice
4) AR 4 /AR 5 form (original and duplicate) and lnvoice
5) Inspection Certificate (Original)
6) GR Form (Duplicate)

The Dock Appraiser after conducting physical examination records examination report and The exporter presents the following documents to the bank for negotiation/collection:
makes "Let Export" endorsement on the duplicate copy ofthe Shipping Bill. He hands it over I. Commercial lnvoice (Requisite number of copies)
to the forwarding Agent alongwith all other documents to be presented to the preventive
officer of the customs department who supervises the loading of cargo on board the vessel. 2. .certificate of Origin (two copies .
3. Custorns.Invoice (Requisite nhmbkr of copies)
The preventive officer makes an endorsement "Let ship" on the duplicate copy of the
Shipping Bill, The duplicate copy of the Shipping Bill is then handed over to the agent of the 4, GR Form (Duplicate)
shipping company, This constitutes an authorisation by the customs to the shipping com- , 5. Packing List (requisite number of copies)
pany to accept the cargo on the vessel.
6; Full set of Clean-on-Board Bill of Lading wegotiable plus Non- negotiable copies as
After the goods are loaded on board the vessel, the captain of the ship issues a receipt required)
known as LMate'sReceipt7to the Shed Superintendent of the port. The forwarding agent , 7, Additional copies of the Commercial Invoice for Certiflcatlon by the Bank
then makes a payment of the port charges and takes delivery of the Mate's Receipt. He
presents the Mate's Receipt first to the preventive officer who records the certificate of 8.' Original Letter of Cred it/Export Contract
shipment on all the copies of the shipping Bill, original and duplicate copies of AR4lAR5 9, Bank Certificate in the prescribed form in duplicate ' .
form. He returns the Export promotion copy, a copy of Drawback shipping Bill and presents
the Mate's Receipt to the shipping company and requests it to issue thk Bill of Lading (2/3 1.0, Marine lllsurance Policy/Certificate
negotiable and a few non-negotiable as required).

5.10 DESPATCH OP DOCUMENTS BY FORWARDING 5.13 CLAIMING EXPORT INCENTIVES

AGENT TO THE EXPORTER
You have learnt the pfocessing of an export order at pre- shipment, shipment'and post-
After obtaining the Bill of Lading from the shipping company, the agent sends the following shipment level. Let us now discuss the process of claiming export incentives.
documents to the exporter.
1, One copy of the Commercial Invoice duly attested by the customs 5.13.1 Excise Rebate
2 ~ x ~ opromotion
rt copy of Shipping Bill After completing the bost-shipment formalities, the clearing and forwarding agent will file the
3. Drawback copy of Shipping Bill following documents with the Maritime Central Excise Collector or Jurisdictional Assistant
Collector of Central Eycise for claiming the refund of excise duty qr for obtaining release from
4. Full set of 'Clean On Board Bill of Lading' together with non- negotirs~lecopies ,bond, as the case may be. . . . t I

5. Original letter of credit/ contract order , i) AR41 AR5 Form (Duplicate copy), .which has been certified by the customs '
6. Copies of Customs Invoice, if any '
preventive officer

7, AR 4/ AR 5 (Duplicate) and Invoice ii) , Non-negotiable copy of the Bill of Lading and lor shipping Bill certified by the
custolns preventive officer.
8. GR Form (Thplicate). 81
Export Import Documentation Additional documents to be submitted for claiming refund excise duty are: (a) Application Processing of an
3nd Policies
for Refund in Form C and (B) Pre-receipt 5.14 LET US SUM UP Export Order

5.13.2 Duty Drawback -,

Processing of an export order starts with the receipt of an export order, generally in the form
of either the proforma Invoice, Purchase Order or Letter of Credit. On its receipt, the exporter
For claiming Duty Drawback, the exporter's agent will file the customs attested copy of the must first acknowledge its receipt and then process to examine it. The examination should be
Drawback Shipping Bill, alongwith the following documents, with the Drawback Department done with reference to terms and conditions of the contract, particularly product specifica-
of the Customs House. tions. terms of ship~nentand payment and submission of doculnents to the bank. If any
discrepancy is found, the importer must be immediately infonned for amendment of the order.
0 Drawback Claim proforma (prescribed application form in five copies) The exportel-should then confirm the order with the importer.
iii Bank or Customs Certified copy of Commercial Invoice
For productionlprocurem~tand transportation of goods to the port for shipment, a number
K) e on-negdtiable copy of Bill of Lading of activities are to be undertaken by the production1 procurement department of the export
Any other specifically prescribed document. firm. The first activity is to apply for pre-shipment credit (packing credit) to the Bank. The
iv)
bank takes into account a number of factors and grants credit to the extent determined by the
After finding the claim to be correct, the Drawback Department will despatch the cheque of value df the confirnied expol? order. The credit amount is used for manufacturing1 procuring
the claim amount to the expofier. Alternatively, if the exporter so desires, this amount wi I I be and packing goods.
sent to the exporter's bank for being credited to his account with intimation to the exporter.
The clearance from the central Excise authorities is needed so that the exporter can get rebate
Check Your Progress B in the centrill excise duty paidlpayable on the exported goods. For this purpose, AR41 AR5
Form slid Invoice areato be completed. Clearance is completed when the certified AR 41 A R 5
1. Write three objectives of customs control. (Original and Duplicate) is given to the production department.

The production depal-tmenl also applies to the lnspection Agency for obtaining inspection
certificate. This certificate is issued when the inspector visits the factory1 warehouse and
examines the goods. l'he original Inspection certificate will be required to be submitted to the
custolns authority for obtaining permission to ship goods.

Export goods are sent to the port town either by road or by rail. The Indian Railways accord
2. List wo important functions of clearing and forwitrding agent. priority in allotment of wagons needed for moving export consignments, for which the
essential requircments is to first reserve space on tlle ship. Space reservation may be done
either through the %.eight broker or the clearing and fowarding agent. The proof of space
reservation is the shipping order.

At the port two formalities are to be completed. 'The first is to obtain permission fro111the port
authority to bring cargo inside the shipment shed. The second formality is to obtain permis-
sion from the customs autl~orityto export the goods. 'The customs permission is granted at
three stages- docu~nentaryclearances, physical examination of goods and permission fro111
3. Fill in the blanks the Customs Preventive Officer. For these purposes, the clearing and forwarding agent of the
exporter files the necessary shipping bill (a customs document) and the supporting docu-
i) Proforma Invoice is accepted and signed by the ............ ments with the Customs House. After appraising the value of the goods, the concerned
customs officer notes down instructions for physical examination of goods in the shipment
ii) Pre-shipment credit is given on the basis of ............export ordcr. shed on shipping Bill (Duplicate copy).

iii) AR 4 Form is filed in ............copies After obtaining permission from the port authority, the exporter's agent brings goods in the
shipment shed. But before shipment process cal; start, the customs officer first physically
iv) Export Inspection Certificate is issued in ............copies exalllines goods and then finally the Customs Preventive Officer gives permission to load.

v) ............is issued after goods have been loaded into the rail wagons. Once the shipment process is over. The master of the carrier issues Mate's Receipt. This
receipt is then exchanged with the Bill of Lading issued by the shipping company. The
4. State whether the following statements are True or False. ,
exporter's agent obtains shipment certificate on different documents, which will enable thr
exporter to claim various incentives.
i) The exporter cannot directly reserve space on ship.
'As soon as shipment is completed, the exporter should send shipment. Advice to the
ii) Certificate of origin can be obtained from a chamber of commerce.
importer mainly in the form of non-negotiable copy of Bill of Lading. Thereupon, documenta-
:ion formdities are undertaken for getting rebate in Excise Duty and Duty Drawback. At the
iii) GR Fonn (duplicate) is not to be submitted to the bank at the ti~ncof negotiation
Jametime the exporter submits shipping documents as per the export order lo the bank for
of documents. lecuring the sale amount.

iv) Rebate on excise duty is to be claimed by submitti~lgdocuments to the Maritime

Central Excise Collector.
 I
Proccssing of a n
Export Import I)ocurnrntntion SOME USEFUL BOOKS Export Ordc.
a n d Pnlirirr 5.15 KEY WORDS 7xport lnlpo;t Poliqv, Ministry of Commerce, Government of India (Recent Edition). New
,.
Delhi.
Export Order: A documentary evidence ofthe export contract, which is generally in the form
of programme Invoice, Purchase Order or Letter of Credit. Janardhan, Electronic Cornmerce,.Indian Institute of Foreign Trade (Recent Edition),
New Delhi.
Confirniation of Order: An action of informing the importer about formal acceptance of terns
Nabhi's Exporters Manual ur~dDocumentation, A Nabhi Publication (Recent Edition),
and conditions of the export order, which also indicates that these tenns and conditions'are
New Delhi.
in conformity with the export contract. .-
s lnlprrw Export Policy, A Nabhi Publication (Recent Edition), New Delhi.
~ a b h i ' New
Packing Credit: Credit facility on confessional terms provided by commercial banks to the
Kgm Paras, E.r,port-Wllat, Where, How (Recent Edition), Anupani Publisher, Delhi.
exporting units for procuring, manufacturing and packing of export goods. This is a pre-
shipment credit facility.

, Central Excise Clearance: Clearance of goods from the factory 1 war.ehouse by the Central
Excise Authority to enable the exporting units to claim rebate in Excise Duty.

Forwarding Note: A Railway document which is tiled alongwith other documents for obtain-
ing priority allotment of wagons for movement of goods to port towns for shipment.

Mate's Receipt: A receipt issued by the Master of the ship after receiving cargo on board.
*
Shipment Advice; Intimation by the exporter to the importer after contracted goods have
been delivered to the carrier according to the export order.

5.16 ANSWERS TO CHECK YOUR PROGRESS

A 3 i) True ' ii) True iii) False iv) False v) True

.B 3 i) Importer ii) Confirmed iii) Five iv) i h n e v) Railway Receipt

4 . i) Wrong 'ii) ~ i ~ hiii)t Wrong iv) Right

5.1 7 TERMINAL QUESTIONS

1) Describe the steps involved in the receipt, examination and confirmation of an export
order.
2) What ari the documents needed for i) Central Excise Clearance and ii) Securing
Inspectiog Certificate?
3) Describe the process of preparing goods for exports and their transit t'o the port 6f
shipmint.
4) What are the supporting documents to be submitted alongwith the shipping Bill for
getting customs permission for exports? . ,
. .
. 5) What are the three stages at which customs permission to export is obtained?
,
6) Make a flow chart of processing of an export order upto the shipment.stage.
7) What documents are required to be submitted to the baik aftei- goods have been
L
delivered to the carrier?
8) Describe ,the fbrmalities for claiming duty Drawback.