86587039 Export Documentation

A STUDY ON

Export procedure & Export documentation of

INDIAN TOBACCO

5 Year Integrated

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF

INTERNATIONAL BUSINESS STUDIES

ACHARYA NAGARJUNA UNIVERSITY

2010

Submitted by

Y9IB200

MBA (IB), IIIrd YEAR

Project Guide

INTRODUCTION

Export means the transferring of any good from one country to another country in a legal way for the purpose of trade. Export goods are provided to the foreign consumers by the domestic producers. An export and import is very much necessary for a country.

Because if a country had no import or export, they wouldn't be able support themselves. Import is when a country brings things in that they can't supply. And export is when a country gets paid to give away extra stuff they have. Without import and export, a country would only have what they could supply on their own

In order to develop country’s economy, it has to import what it doesn’t produce. The payment for all these imports can be done only through exporting the products and earnings through valuable foreign exchange. It is therefore for each and every industrialist in India to produce a quality product and try to market in the foreign countries. Any developed country in the world is the foremost in the exports field.

The economy of India is the eleventh largest economy in the world by nominal GDP and the fourth largest by purchasing power parity (PPP).

India's exports are likely to cross the USD 200 billion mark for the first time this fiscal on the back of demand revival in the country's traditional markets such as the US and Europe.In its economic outlook for 2010-11, the Prime Minister's Economic Advisory Council projected exports to grow by about 19 per cent to USD 216 billion in the current fiscal

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

http://en.wikipedia.org/wiki/Gross_domestic_product

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

Exports : $155 billion f.o.b (2009 est.)

Goods exported :software, petroleum products, textile

goods, gems and jewellery, engineering

goods, chemicals, leather manufactures

Main export partners : US 12.3%, UAE 9.4%, China 9.3%

(2008)

Imports : $232.3 billion f.o.b (2009 est.)

Import goods : crude oil, machinery, gems, fertilizer,

chemicals

FDI stock

Foreign exchange reserve

: $161.3 billion (2009 est.)

:$279.4 billion(2010)

NEED OF IMPORTS IN INDIA

On the imports side, India has been in a disadvantageous position, advanced countries which are capable of producing and selling almost every commodity at low prices. This meant that India could not develop any industry without protecting it from foreign competition.

Imports are essential to protect domestic industries and to promote industrial development.

Since independence, the government of India has broadly restricted foreign competition through a judicious use of import licensing, import quotas, import duties and in extreme cases, even banning import of specific goods.

NEED OF EXPORTS IN INDIA

To pay for its imports and to minimize dependence on foreign countries, expansion of exports was very essential. There are many good reasons for exporting:

The first and the primary reason for exporting is to earn foreign exchange. The foreign exchange not only brings profit for the exporter but also improves the economic condition of the country.

The companies that export their goods are believed to be more reliable than their counterpart domestic companies assuming that exporting company has survive the test in meeting international standards.

Free exchange of ideas and cultural knowledge opens up immense business and trade opportunities for a company.

One starts visiting customers to sell one’s goods, he has an opportunity to start exploring for newer customers, state-of-the-art machines and vendors in foreign lands.

INDIAN EXPORTS

Indian exports have grown at a rate of nearly 22%. Some commodities have enjoyed faster export growth than others. Some of the main Indian’s exports are software, tobacco, cotton, textiles .jute good tea, coffee, cocoa products, rice, wheat, jams, juices, preserved vegetables etc…. India exports its goods to some of the leading countries of the world such as UK, USA, BELGIUM, RUSSIA, CHINA etc….

EXPORT INCENTIVES

The government of India has framed several schemes to promote exports and to obtain foreign exchange. These schemes grants incentive and other benefits. The few important export incentives, from the point of view of indirect taxes are briefed below:

(1) Free Trade Zones (FTZ).(2) Electronic Hardware Technology Park/ software technology parks.(3) Advance License / Duty exception Entitlement scheme(DEFC)(4) Export Promotion Capital Goods Scheme (EPCG).

RESERVES OF FOREX

The foreign exchange market (FOREX) is a worldwide decentralized financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The primary purpose of the foreign exchange market is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import European goods and pay Euros, even though the business’s income is in US dollars. It also supports speculation, and facilities the carry trade in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies and which may lead to loss of competitiveness in some countries.

Objectives:

The main objective of the work is to study the export documentation and export procedure of the tobacco.

To study the tobacco industry, development and the marketing scenario in India.

Need for the study:

To study the facts and figures of industrial constraints in tobacco and to know the several aspects of global production and trading of unmanufactured tobacco leaf in India.

Methodology:

The study of the data is mainly collected from two sources

1. Primary data

2. Secondary data

Primary data:

The primary data is collected by interacting with the managing director of Yarlagadda exports private limited.

Secondary data:

The secondary data is collected from tobacco journal and internet.

TobaccoTobacco is one of the biggest commercial crops grown in India.

India is considered as the second largest exporter of tobacco after Brazil and the third largest producer of tobacco after China and Brazil with a production of about 750 million kgs. India is exporting tobacco to more than 80 nations. Tobacco industry is providing livelihood to more than 25 million people in India.

Out of the total tobacco items exported from India, unmanufactured tobacco holds a share around 80-85 percent of the tobacco while the unmanufactured tobacco products holds around 15-20 percent.

Countries which import tobacco:

USA, Singapore, Germany, France, Iran, Iraq, Belgium, South Korea, Indonesia, Yemen, Netherlands, South Africa, Poland, Latin America, Brazil, Philippines Vietnam, Nepal, Ukraine, Tunisia, Australia Bangladesh, Malaysia.

India exports nearly 60% of the total tobacco and 40% is consumed with in the country. Flue cured Virginia tobacco is the majorly exported variety from our country. 75% of this verity is exported and remaining 25% is consumed in India.

Although the cultivation of tobacco is restricted to 0.3% of the total cultivated area, it provides employment to the people on the other hand. It makes significant contribution by the way of excise revenue and foreign exchange earnings.

Major Producers:

China, Brazil & India are the major countries which produce tobacco.

China:

Around 20 million rural Chinese house holds produce tobacco in 2.1 million hectares of land. While the price is guaranteed and set by Govt. of china. Chinese Government has acted to reduce the tobacco usage. Out of 2,200 kgs produced 2000 million kgs was consumed within the country. So this is why Chinese government is acting to reduce the tobacco usage.

Brazil:

In brazil around 1,35,000 farmers cite tobacco production as their main economic activity. Tobacco has never exceeded 0.7% of the total cultivated area. In the southern regions of brazil Virginia and amarelinho flu cured tobacco as well as burly tobacco are produced.

India:

India’s tobacco board is head quartered in Guntur in the state of Andhra Pradesh. India has nearly 96,865 registered tobacco farmers. India has 7 tobacco research centres located in Andhra

Pradesh( Guntur & Rajahmundry) , Chennai, Punjab, Bihar, Mysore & West Bengal. The government of India has set up a central tobacco promotion council which works to increase the exports of tobacco.

Verities of tobacco:

Virginia flue cured tobacco Virginia air cured tobacco Burley Natu (country tobacco) Beedi Cheroot Hookah Chewing & Snuff.

FCV verities are mainly grown in the ares of Andhra Pradesh, Karnataka, Orissa & Maharashtra.

Burley is grown only in Andhra Pradesh and tamilnadu.

Natu is also grown in Andhra Pradesh and tamilnadu.

Beedi is mainly grown in the areas of Gujarat.

Cheroot is grown in tamilnadu and west Bengal.

Chewing and snuff is grown in Assam, Tamilnadu, West Bengal, Bihar, & Uttar Pradesh.

In Andhra Pradesh flue cured Virginia tobacco is grown in an area of 1,25,000 hectares in east Godavari, west Godavari, khammam, Krishna, Guntur, prakasam, Nellore, karimnagar & Warangal districts with the total production in 170 million kgs of leaf. It is also grown in smaller areas in the states of Maharashtra & Orissa.

FCV tobacco is mainly grown in A.P & Karnataka in particular soils.

Northern light soils. Northern black soils. Sothern black soils. Sothern light soils. Central black soils. Karnataka light soils.

1) Northern Black Soils : The black soils located in the districts of Khammam, Karimnagar, Warangal, East and West Godavari

constitutes the Northern Black soils . The crop is grown under rain fed conditions. The crop is planted in October and harvested in Dec-Feb producing filling tobacco. Per hectare yields (are) around 2200 Kgs.

2) Central Black Soils: The black soils existing in Krishna and Guntur of Andhra Pradesh and Gadchiroli district of Maharashtra state constitute the central black soils. The crop is planted in Oct-Nov and harvested in Dec-Feb producing filling tobacco. The crop is grown under rain fed conditions. The average yields (are) about 2000 Kgs/Ha.

3) Southern Black Soils: The black soils present in Prakasam and Nellore districts. The crop is planted in Oct-Nov and harvested in Dec-Feb

producing filling tobacco. The average yields (are) around 2300 Kgs/ha.

4) Southern Light Soils: The light soils existing in Prakasam and Nellore districts constitute the southern light soils (SLS). The crop is planted in September-October, harvested in Nov-Jan producing semi – flavorful tobacco. The yields (are) around 1150 kgs/ha.

5) Northern Light Soils: The light soils existing in East and west Godavari and parts of Khammam districts constitute the Northern light soils (NLS). The crop is raised with the help of 7-8 irrigations producing semi flavourful tobacco. The crop is planted in Aug - September, harvested in December. The yields (are) ranging between 2400 kgs/ha depending on stage of topping.

6) Eastern Light Soils: The light soils existing in Vijayanagaram of A.P and Rayagada area of Orissa are termed as Eastern light soils.

Presently the crop is grown in 1400 ha and the production is at about 1 M.Kgs.

7) Karnataka Light Soils: The light soils existing in Mysore, Hassan, Shimoga, Davangere, Coorg, Chikkamagalore and Chitradurga districts constitute the light soils of Karnataka. The crop is planted in the last week of Apr-May and harvested in July-Aug. (The per ha yields are around 1250 kgs.) The yield is around 1250 Kgs per/hr

Virginia Air Cured (VAC): -

This is called as Virginia air cured tobacco. This is not a special variety, a part of FCV variety i.e. the bottom leaves that touches the land is partly damaged and broken, the short leaf available at the top part of plant is not economically suited for fuel curing, hence they are air cured in sunlight. This is used in low variety of cigarettes which are exported to few countries asking for low price tobacco.

Burley: -

This type of tobacco grows in Andhra Pradesh only constituting three varieties.

1) Light soil monsoon burley: This crop is planted in the last week of Aug - Sep and harvested in Nov – Dec. This is cultivated mostly in the districts of East Godavari.

2) Vinukonda & Warangal monsoon burley: This crop is planted in the last week of Aug - Sep and harvested in Nov – Dec. This is cultivated mostly in the districts of Guntur & Warangal.

3) HDBRG (Harvel De Beaxo Rio Grande): This is cultivated mostly in the districts of Guntur and Ongole. This crop is planted in Sep – Nov and harvested in Jan – March.

Types of grades available Burley is:

1) WBR - High body2) WBL – Medium body3) WBX – Thinner body

Indian Air Cured (IAC)/ (Natu): -

It is called as Indian air cured or Country tobacco or Natu. This crop grows mainly in the areas of West & East Godavari, Kurnool & Kadapa. The varieties available in this type are

1) Elore Natu.2) Kurnool Natu3) Lanka

All these varieties are planted in Sep – Oct and harvested in Nov – Dec. Lanka grows mainly in the surroundings of Godavari delta and is used in making Cigars.

Types of grades available are

1) CDK – Dark body with dark colour.2) CBR – Body with brown colour.3) CPL – Thin body with mixed colour.

Indian Air Cured (IAC)

The major grades and plant position of FCV.

Advantages & Disadvantages of Indian tobacco

Advantages Disadvantages

1) Low farm production costs&Low processing costs than other countries.

2) Availability of suitable lands, skilled & unskilled labour round the year.

3) Natural filler blends well with any type of tobacco.

4) Very low usage of pesticides and fungicides.

5) Low ocean freights to Europe and Asia.

6) Sorting and grading of uniformity and fine product

7) European Union, Argentina by passed out agri subsidies, because there is scope for Indian exports to East Europe and South East Asian Countries.

8) Opening European markets.9) Increasing Cigarette smoking

in cold countries

1) India produce bulk of FCV tobacco natural filler styles, because filler type of tobacco very low export potential.

2) Expensive Infrastructure & fuel & involvement of Labour resulted in high cost of labour.

3) As FDI’s not allowed by Government , Multinational companies are unable to enter into India

4) Stiff competition from China, Indonesia Allowing bulk subsidies on exports.

5) WHO - Increasing anti-smoking activities and health suits.

6) Control leaf markets by multinational companies

7) Due to increased lease amount of registered barrens resulted in the increase of cost of production

8) Cost of fuel & labour increased.

9) Fluctuations in rupee value against dollar.

Note: As per agreement with World Health Organization (WHO) by 2020 government has decided to reduce the production by 50%.

EXPORT PROCEDURE Choosing the buyer Requirement of license sampling negotiations agreement financial arrangement purchase of tobacco insurance classification of tobacco fimigation inspection shipping instruction Transportation

Export Procedure:

Selecting the markets:

Target markets should be selected after careful consideration factors like political embrace, scope of export’s selected product , demand stability , preferential treatment to products from developing countries , market penetration by competitive countries and products , distance of political market , transport problems , language problems , tariff and non- tariff barriers , distribution infrastructure, size of demand in the markets, expected life span of the markets, & product requirements , sale and distribution channels. For this purpose you should collect adequate market information before selecting one or more target markets. The information can be collected from various sources like export promotion council (EPCs), Commodity Boards , Federation of India Export organisation (FIEO), Indian Institute of foreign Trade(IIFT), Indian trade promotion organisation (ITPO), Indian embassies Abroad, Foreign embassies In India, Import promotion Institution Abroad, Overseas chambers of commerce and Industries, Various directories, journals, markets survey report.

Selecting the Buyers:

After the selection of markets we can collect the addresses of the prospective buyers of the commodity through enquiries and from friends through consulting International yellow pages & from International trade directories, Periodicals, journals, etc.

Sampling:

After selecting the markets and buyers the required variety of tobacco they needed should be enquired. Based on the availability of tobacco in the market and as per the requirement of the customer, a sample pack of tobacco is sent to the buyer. The same quality of sample should be kept with us in the freezer. The quality of the sample should match the sample which was sent to the buyer.

Counter Sample :

Having a sample of the exported product with us and the same sample with the importer kept in the deep fridge to match the quality we send in bulk to the importer.

A sample with us same sample with customer

Negotiations:

If the customer is satisfied with the sample, an indication letter will be sent to us regarding price, quantity, quality, payment terms, shipping terms, grade, etc.

Agreement:

After the approval of payment terms, a contract is made with the customer according to his terms and conditions. In order to avoid disputes, it is necessary to enter into an export contract with the overseas buyer. For this purpose, export contract should be carefully drafted incorporating comprehensive but in precise terms, all relevant and important conditions of the trade deal.

There should not be any ambiguity regarding the exact specifications of goods and terms of sale including export price, mode of payment, storage and

distribution methods, type of packaging, port of shipment, delivery schedule etc.

Product, Standards and Specifications. Quantity, Quality. Inspection. Terms of delivery. Period of delivery. Taxes, Duties & Charges. Total value of contract. Packing, Labelling & Marking. Terms of payment.

Finance Arrangement:

Financial assistance to the exporters is generally provided by Commercial Banks. Banks asks for the margin money requirement of financial assistance and collateral securities around 100-150 for the finance provided. They will consider even 50% of finance if we export many times from the same bank.

Banks provide 85% of the finance leaving a margin amount of 15% with us for exports.

After acceptance from bank we enter in to further process.

Purchases:

After the completion of financial arrangement the purchases of the tobacco will be done. These purchases should be done only through auction Plat forms. All the farmers are insisted to sell the tobacco only through auction platforms. Presently there are 33 auction platforms in which there are 22 in Andhra Pradesh & 11 in Karnataka. Farmers tightly pack the tobacco in bales and they are sent to tobacco plat forms.

After the bales are arranged on the auction platforms the classifier of tobacco board opens the bales and displays the samples of some varieties and will assigns the grades. The samples drawn are also displayed on the table. The grade once assigned will not be changed except by the senior grading officer.

Insurance:

Future is un-certain. Business should be risk free. To ensure this Insurance is paid to goods those are bought from auction platforms. There are different types of insurances namely

1. Transit Insurance.2. Overseas Insurance.3. Pre-shipment Insurance.4. Post-shipment Insurance.

The first two insurances are checked after the exporters & importers. The remaining two insurances are looked after Governments.

1. Transit Insurance: The insurance that is paid for transportation on roads is transit Insurance. This insurance is commonly known as Insurance on wheels.

2. Overseas Insurance: the insurance that is paid for transportation on water.

The Pre & Post shipment insurances are looked after Export Credit Grantee Corporation (ECGC)

The following risks are covered by ECGC

Credit Insurance PoliciesSCR or Standard Policy

Shipments (Comprehensive Risks) Policy, commonly known as the Standard Policy, is the one ideally suited to cover risks in respect of goods exported on short-term credit, i.e. credit not exceeding 180 days. This policy covers both commercial and political risks from the date of shipment. It is issued to exporters whose anticipated export turnover for the next 12 months is more than Rs.50 lacks. (The appropriate policy for exporters with an anticipated turnover of Rs.50 lacks or less is the Small Exporter's Policy, described separately).

What are the risks covered under the Standard Policy?Under the Standard Policy, ECGC covers, from the date of shipment, the following risks:

a. Commercial Risks

Insolvency of the buyer.Failure of the buyer to make the payment due within a specified period, normally four months from the due date.Buyer's failure to accept the goods, subject to certain conditions.

b. Political Risks

Imposition of restriction by the Government of the buyer's country or any Government action, which may block or delay the transfer of payment made by the buyer.War, civil war, revolution or civil disturbances in the buyer's country. New import restrictions or cancellation of a valid import license in the buyer's country.Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which cannot be recovered from the buyer.Any other cause of loss occurring outside India not normally insured by general insurers, and beyond the control of both the exporter and the buyer.

1. Pre-shipment Inspection: The insurance paid before the goods transferred into the ship.

3. Post-shipment Insurance: The insurance paid after the goods loaded into the ship and before reaching the importer.

Pre-shipment Inspection:-

Respective of the customer will visit the consignment i.e., is called Pre-shipment Inspection. If the sample matches with the consignment, then he allows for the exports. Then only he can issue the shipping instructions.

Post-shipment Inspection:-

After reaching the port, the representative of customer checks whether the tobacco is as per the sample or not, percentage of the NTRM in tobacco & the

percentage of pests (beetles) in the tobacco. If the beetles are more than fixed amount then he may ask for legal claim or return the goods.

Classification of tobacco:

After the delivery of bales from the auction platforms the classification of tobacco is done through the following process.

a) Grading: - Grading is done as per the requirement of the customers. After the bales are brought their position are watched and according to their condition they are removed from bales and if they are dried water is sprinkled over the leaf and gunny bags are placed over them to keep them wet, when they are having proper moisture the leaves are graded as per classification. Then they are separated (and they are) packed and taken to threshing plant. To have a brief idea, some of the grades are as follows

GRADING

Grade Description of colour Texture

4Lemon / Yellow or light Orange, medium to good body

leavesGood

LBYLight brownish Yellow / Orange medium to good body

leavesMediumto good

LG Light Green, Medium to good body leaves Mediumto fine

LBY2 Light brownish Lemon / Yellow / Orange good body leaves Mediumto good

Brown Brown colour with good bodyMediumto coarse

LMG Light Medium Green coloured leavesMediumto coarse

MG Medium Green colour leaves Mediumto coarse

BX Thin body brown mixed broken leaves Thin

Processing:

After the purchase of tobacco from auction platforms, the tobacco is classified and separated depending upon the interest of the customer. Then the tobacco is sent to threshing process.

Threshing is a complex process done to get the customer needed variety.

Threshing process:

The tobacco leaf is generally long and contains a stem in-between. The stem in the upper part of the leaf will not be that much hard. Here the upper part of the leaf is called ‘tip’ and the lower part is called as ‘buts’. The leaf is sent to the ‘tipping machine’. In the tipping machine the tip and the buts were separated and sent to further process on two different conveyer belts. There will be no further process done for the tips.

As the tobacco leaf is dry in condition, while cutting the leaf becomes powder and so the leaf is also in a wrinkle position in the leaf the centre part is ‘stem’ and the remaining leaf part is called ‘lamina’. To separate the stem and lamina of the buts the further process is done.

Steam:

The leaf is sent into a cylinder and the steam is produced to the leaf, so that the lamina of the leaf will be opened or expanded. So that the leaf will be a little bit thick and if necessary it will be again sent to another cylinder where in heavy steam is produced and at this stage the leaf will be in such a position that stem and lamina will be separated cleanly. The steaming for the leaf is completed.

Classifiers:

The leaf is sent into classifier where the stem is to be separated in this stage. The leaf is further sent to several stages to remove stem and lamina. And at the each stage there will be a working men who observes the process whether it is going in a perfect manner or not. During this process smallparticle called scrap (tobacco dust) is separated through viberator. The scrap is separated and sent through separate belt. However the stem and lamina are separated and tobacco is separated.

The stems of the tobacco are passed through a machine where it checks that stem has no leaf attached to it. After that stems are passed through drying, cooling and ordering chambers.

Redrying:

As the leaf is exposed to steam there will be moisture in the leaf. If the tobacco is packed without removing the moisture, the leaf gets spoiled. So, to remove the moisture from the leaf, it is sent to redrying. The leaf is dried in 3stages. In the last stage the dried tobacco comes out.

Ordering chamber:

The dried tobacco is sent to the ordering chamber. In the ordering chamber specific moisture is maintained. Depending upon the requirement of the customer, a specific percentage of moisture is maintained in the chamber. This is because if the tobacco is dry, during the packing tobacco gets powdered so to avoid this, it is sent to the ordering chamber.

After this process tobacco is packed in the cartons.

Quality control:

Particle size distribution is done. After the process of redrying, a sample is collected and dropped in the particle size distributor. Here there are different sizes of particles of tip size, ½ inch, ¼ inch and small particles are separated and, amount and percentage of those particles are noted.

Stem test:

The total time estimated is 4min. here the sample is dropped into the thresher where the stem & lamina gets separated. They are passed through CFC where lamina is blown up & stem passed down is collected and weight is noted.

Fiber test:

In the 1st box there must not be many stems, if there are many stems the threshing must be stopped. The stem control mainly depends on quality control. If more stem are appearing than the target weight then the quality in charge instructs to increase cutting the leaf & to check for less stems.

Laboratory:

In the process of threshing samples from drift places are collected & they are grinded into powder by grinding machine. 10gms of each sample is taken into small boxes having holes on top and weight is noted. Then they are kept in BRABENDER. After 30 min they are taken out & the weight is also noted. The reduction in weight is due to decrease in moisture content. The remaining is fiber content & to improve quality that the in charge suggests the redrying operator.

Those boxes are kept in OVEN’s room, results can be found in 24 hrs.

At the end of the threshing process, the leaves that we bought after grading are utilized for different purposes, except NTRM. After all the process is over the floor is neatly sweeped and the scrap collected is also sold to domestic buyers and is also exported, By this we can say that nothing is wasted in this threshing process.

After the redrying process, the strips are pressed into bales, typically sized for C48 cases, occasionally for hogsheads or other sizes.

Scrap & Stem:

The scrap that is obtained after threshing is also packed and sold in the domestic market for the production of Beedis & Pan etc.,

Storage in warehouses:

After packing in cartons they were sent to warehouses. There they are kept under air conditioned

Inspection:

At the time of packing inspection will be done by the representative of the customer.

Export: -

As per the contract estimated time left for the delivery, the exporter talks to a liner who plays a main role in looking after the further activities. There are two main activities

1. FOB (Free on Board)2. CIF (Commission Insurance & Freight)

FOB (Free on Board): - This is an activity where the exporter has the responsibility over the goods upto receiving the bill of lading (B/L).

CIF (Commission Insurance & Freight): - This is an activity where the exporter has the responsibility over the goods till they reach the importer.

According to our order the liner provides the means of transport for the loading of cartons from the ware house into the container and bring them to Inland container Area ( ICA). This area is under the control of the customs department. The custom duty is to check the container whether it

is perfect or not as per the grades, commodity, quantity & then he seals the container & issues the Shipping bill, SDF form & declaration form. Then the container is forwarded to liner who gives the bill of Lading (B/L). Before issuing the B/L, it is the duty of the liner to make the container sure that container has received the following certificates.

1. JD Board of services2. Fumigation Certificate3. Certificate of Origin.

JD Board of services: - Checks the container properly whether Container has no smell, holes, & properly packed, & then issues a certificate according to it.

Fumigation Certificate: - This department produces a certificate that the container is free from beetles, & the moisture content is properly maintained.

Certificate of Origin: - This certifies that the goods in the cartons are from the respective origin country where they are originated.

Finally the containers are placed in the vessel, and then all the certificates are send to exporter. Then the exporter prepares the remaining documents as ordered by the buyer.

Examples: - a) Phyto sanitary

b) GSP form for tobacco exports, if necessary asked by the buyer.

Then by adding those documents exporter prepares required documents as Commercial Invoice, Sight draft etc., then finally after placing all the documents in the order exporter submit those documents to the bank for the money.

Here the bank mainly looks for Commercial invoice, Sight Draft, EX copy of shipping bill produced by the customs department, later they give the money required.

MODE OF PAYMENT:

Financial assistance to the exporters are generally provided by Commercial Banks, before shipment as well as after shipment of the said goods. The assistance provided before shipment of goods is known as per-shipment finance and that provided after the shipment of goods is known as post-shipment finance. Pre-shipment finance is given for working capital for purchase of raw-material, processing, packing, transportation, ware-housing etc. of the goods meant for export. Post-shipment finance is provided for bridging the gap between the shipment of goods and realization of export proceeds. The later is done by the Banks by purchasing or negotiating the export documents or by extending advance against export bills accepted on collection basis. While doing so, the Banks adjust the pre-shipment advance, if any, already granted to the exporter.

1. Letter of Credit (LC)2. Documents Against Payment (DP)

Letter of Credit (LC):- letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking.

This is LC is again of two types- a) 100% LC

b) 70-80% LC

Documents against Payment: - Arrangement under documentary collection in which an exporter instructs the presenting bank to hand over shipping and title documents (see document of title) to the importer only if the importer fully pays the accompanying bill of exchange or draft, also called cash against documents.

The documents required for exports are as fallows:

1.

2.

3.

4.

5.

6.

7.

CONTRACT FOR GOODS BROUGHT OR SOLD SUBJECT TO FOLLOWING TERMS AND CONDITIONS ENORCED HEREON

Contract No: ATC 178/10 Date: 1-8-2010

1. Goods :UNMANUFACTRED INDIAN FCV TOBACCO2. Quantity :L6M-198,000Net Kgs3. Description :990 Cartoon – 198,000 kgs Indian Flue-cured

Virginia Tobacco4. Shipping Grade Mark :L6M5. Shipment Period :IMMEDIATE6. Price(FOB Chennai) :Per kg IN USD:7. Delivery :10 x 40 Container8. Port of (i) Shipment :CHENNAI

(ii) Destination : EAST LONDON, SOUTH AFRICA9. Packing and Marking :CARD BOARD CORTONS AND KRAFT

PAPER.

10. Mode of payment : 100% PAYMENT ON BILLS COLLECTION BASIS

11. Insurance : NOT APPLICABLE.12. Brokerage / Commission : NOT APPLICABLE.13. Special conditions : NOT APPLICABLE.14. Arbitration clause : International chamber of commerce

Paris

(In case of disputes and differences arising the out of this contract or any issue concerning the contract hey shall be settled by the Arbitration Court at the International Trade Chamber in Paris, whichever is specifically agreed upon by both the parties in the initial contract. The decision of either of these bodies shall be final.)

Buyer’s Signature Seller’s Signature For ASSOCIATED TOBACCO COMPANY LTD For TEJA EXPORTS PRIVATE LTD

Managing Director

Crop year 2009 1-99 Grade L6M

Gross kg Tare kg Net kg

INVOICE CUM PACKING LIST

Exporter:Teja Exports Pvt. LtdDoor no:62-12-8, main road, Lakshmipuram ,Guntur. 522002Andhra PradeshSouth India

Invoice No & Date: Exporters Ref:

Buyer’s Order No & Date:

Other Ref:

Consignee :EASTERN TOBACCO LIMITED221 GALGORAM ROADBALLYMENAJAPAN

Buyer(if other than consignee):EASTERN TOBACCO LIMITED221 GALGORAM ROADBALLYMENAJAPANCountry of Origin: Country of final INDIA Destination: Japan

Vessel / freight no: Port of Loading: CHENNAI

Port of discharge: Final destination:JAPAN JAPAN

Terms & Conditions of delivery & Payment : FOB CHENNAITerms of Payments : Documents Against Payment

MARKS & NO & DESCRITON OF QUALITY IN RATE PER KG AMOUNT NOS/ KIND OF GOODS KGS IN USD IN USDCONTAINER NO. PKGS

1-297 19800 kgs 10LBY unmanufactured 19800 2.35 139500

PACKING LIST: 297 CARTONS WEIGHTGROSS KGS:TARE KGS :NETT KGS :EACH CARTON WEIGHT :GROSS KGS :TARE KGS :NETT KGS :

Relevant Packing Material Used :Card Board Cartons

Gross Tare Net Bodied FCV tobacco

SHIPMENT UNDER DEPB SCHEME VIDE

Amount chargeable (in words) Total 139500 USD : ONE THIRTY NINE THOUSAND FIVE HUNDERED

Declaration:We declare that this invoice shows the actual Signature & Date:

price of the goods described and that all particulars are true and correct

COMMERCIAL INVOICE




Other Ref:






Marks & No,s & Rate Amount No.s Kinds of description of goods Quantity in in USD

Packages USD

39400 kgs 39400 kgs Unmanufactured Packed in 297 Bodied FCV Tobacco Cartons

39400 3.00 118200Container No - Seal No - SH. No’s

1) KKFU 2154 224365 - 1-99

2) KKFU 2174 208092 - 99-198 TOTAL118200

3) KKFU 1543 452389 - 198-297

Declaration : we declare that this invoice shows the actual price of goods and that all particulars are corrected.

Signature & Date

WEIGHT LIST -1




Other Ref:






Marks & no.s No,s & Description of goods Quantity Remarks Kinds of

packages1-99 99 19800 kgs 10LBY 19800 kgs Unmanufactured Bodied

Gross Tare Net FCV Tobacco200 15 190 kg kg kg

Carton number : 1-99

Net weight of each carton : 200kg Tare weight of each carton: 15 kg Gross weight of each carton : 215 kg

Net weight of 99 cartons : 19800kg Tare weight of 99 cartons : 21285kg Gross weight of 99 cartons : 1485kg


Signature & Date

WEIGHT LIST -2




Other Ref:









Carton number : 1-99

Net weight of each carton : 200kg Tare weight of each carton: 15 kg Gross weight of each carton : 215 kg

Net weight of 99 cartons : 19800kg Tare weight of 99 cartons : 21285kg Gross weight of 99 cartons : 1485kg


Signature & Date

PACKING LISTExporter:Teja Exports Pvt. LtdDoor no:62-12-8, main road, Lakshmipuram ,Guntur. 522002Andhra PradeshSouth India



Other Ref:






eclaration : we declare that this invoice shows the actual price of goods and that all particulars are corrected.

Signature & Date




CONTAINER NO SEAL NO NO OF CARTONS RUNNING NO’S

1) KKFU1514 - 220087 - 99 - 1-99

2) KKFU1548 - 234765 - 99 - 99-198

3) KKFU1547 - 208765 - 99 - 198-297

Sight Draft

INVOICE NO. & DATE:

DRAWN UNDER ORDER REF NO: CONTACT NO: DATED GALLAHAR LIMITED, 6 RUE ADOLPHE FISCHER, L - 1520 LEXEMBOURG

EXCHANGE FOR US DOLLARS: 186120

Payment after 30 days from Bill of Lading M/s. STATE BANK OF INDIA, MAIN BRANCH. Or order the sum of US DOLLARS: 186120 for value received US DOLLARS: ONE EIGHTY SIX THOUSAND AND TWENTY

FOR YARLAGADDA EXPORTS PVT LTD

To

GALLAHER LIMITED 201GALGORMROAD LISNAFILLAN, BALLYMENA CO.ANTRIM NORTHERN IRELAND BT 42 IHS

ASSURANCE BANK LISNFILLAN, BALLYMENA Northern Ireland

Attn: JOEL

Commodity code: Contract no:

SHIPPING BILL EP COPY

LEO DATE: LEO. NO: Indian Custom EDI System – Exports (ICSE/E) Chennai Customs House (sea Cargo), Chennai Shipping bill for exportSB.NO: BRC Realisation Date:CHA: Print Date:This consignment was not opened for physical examination by customsPort of Ldg – code: State of origin: ANDHRA PRADESH...............................................................................................................................EXPORTER DETAILS CONSIGNEE

Port of loading :Chennai customs House Total Pkgs : 396Port of discharge: Chennai Loose Pckts : 0Gross Wt (kgs) : 85140kgs Net Wt (Kgs) : 79200kgsCountry of Dest : Northern Island No.of Ctrs : 4Rotation No : 11724 Rotation Date :Nature of cargo : CMarks & No’s : FOREX BANK ACC : RBI wavier No :FOB value (INR)

F DBK (INR)

AD. Code : Bank code Bank a/c No :INVOICE DETAILS Invoice:Inv. Val : 8375400 INR 186120 USD FOB . Val : 8375400 INRInv. No : 1/10 Inv. Dt : Nat. of Con :FC urr (inv) : USDExchange Rate: 1.00 (USD) =

Rate Currency AmountInsurance 0.00 USD 0.00Freight 0.00 USD 0.00DiscountCommission 0.00 USD 0.00Other Detections 0.00 USD 0.00Packing charges DA Nature of payment : Period of payment :90

Date post:	21-Oct-2015
Category:	Documents
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