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EXPORT PROCEDURES & DOCUMENTATION
Presented By:PRASHANT KUMARM.FTECH 2010-12
NIFT GANDHINAGAR
Presented To:Mr Yuvraj Garg
Dept. Of Fashion DesignNIFT GANDHINAGAR
Assignment On International Business
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Content
EXPORT PROCEDURES REGISTRATION STAGE C O M M E R C I A L
D O C U M E N T S
P R E - S H I P M E N T S TA G E S H I P M E N T S TA G E REGULATORY
D O C U M E N T S
P O S T - S H I P M E N T S TA G E Q U A L I T Y C O N T R O L A N D
P R E - S H I P M E N T
I N S P E C T I O N
P E R F O R M A I N V O I C E
S A L E S T A X E X E M P T I O N P R O C E D U R E F O R
C E N T R A L E X C I S EC L E A R A N C E
C O M M E R C I A L I N V O I C E
C U S T O M F O R M A L I T I E S P R O C E D U R E F O R
R E L I S AT I O N O F E X P O R T
P R O C E E D S
PACKING L IST
E X P O R TDOCUMENTATION
M A S T E R D O C U M E N T SA 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
MATE’S R E C E I P T
B I L L O F L A D I N G S H I P P I N G B I L L C O N S U L A R I N V O I C E
B I L L O F E N T R Y AIRWAY B I LL G R F O R M
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EXPORT PROCEDURES
Procedure of realization of export proceeds
Customs formalities
Procedure for excise clearance
Sales Tax exemption
Quality Control and Pre-shipment inspection
Post Shipment stage
Shipment stage
Pre-shipment stage
Registration stage
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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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• 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
PRE-SHIPMENT STAGE
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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 Mate’s Receipt and Bill of Lading
SHIPMENT STAGE
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Submission of Documents by the C&FAgent to the Exporter
Shipment Advice to Importer
Presentation of Documents to Bankfor 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
POST-SHIPMENT STAGE
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QUALITY CONTROL AND PRE-SHIPMENT INSPECTION
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 StarTrading 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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The processconsists of the
following steps:
Obtaining
‘H’ Form
Processing
of ‘H’ Forms
Sales Tax
Claim
SALES TAX EXEMPTION
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Application to the Assistant Collector
of Central Excise (ACCE)
Information to the RangeSuperintendent
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
PROCEDURE FOR CENTRAL EXCISE CLEARANCE
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Preparation and Submission of Export Documents
Verification of Documents
Valuation of goods
Obtaining Carting Order from the Port TrustAuthority
Custom Examination and Issue of ‘Let Export Order’
Obtaining ‘Let Ship Order’ from the Customs
Preventive Officer
Obtaining Mate’s Receipt and Bill of Lading
CUSTOM FORMALITIES
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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
PROCEDURE FOR RELISATION OF EXPORT PROCEEDS
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Master Documents and aligned Documentation Systems
Performa invoice
Commercial Invoice
Packing list
Mate’s receipt
Bill of lading
Certificate of origin
Shipping bill
Consular invoice
Bill of entry
Airway bill
GR Form
EXPORT DOCUMENTATION
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Aligned DocumentationSystem (ADS) is basedon the UN Layout key.
Under this system,different forms used inthe international tradetransaction are printedon paper of the samesize and in such a way
that the common itemsof information are
given the same relativeslots in each of the
documents.
For the purpose of Aligned Documentation
System documentshave been classified as
1) CommercialDocuments and
2) RegulatoryDocuments.
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 T A I O N S YS T E M
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Commercial documents are required for effecting physical transfer of goods andtheir title from the exporter to the importer and the realization of export saleproceeds.
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, shippinginstructions, intimation declaration, certificate of inspection of quality control,insurance declaration, certificate of insurance, mate’s 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 thefold of the Aligned Documentation System.
COMMERCIAL DOCUMENTS
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Regulatory pre-shipment export documents are prescribed by thedifferent government departments and bodies in order to complywith various rules and regulations under the relevant laws governingexport trade such as export inspection, foreign exchange regulation,export trade control, customs, etc.
Out of 9 regulatory documents four have been standardized andaligned.
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.
REGULATORY DOCUMENTS
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The starting point of the exportcontract is in the form of offermade by the exporter to the
foreign customer.
The offer made by the exporteris in the form of a proforma
invoice. It is a quotation givenas a reply to an inquiry. It
normally forms the basis of alltrade transactions.
• It forms the basis of all trade transactions
• It may be useful for the importer in obtainingimport license or foreign exchange
Importance of the Proforma
Invoice
PERFORMA INVOICE
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• Name and address of the exporter
• Name and address of the importer
• Mode of transportation, such as Sea or Air or Multimodaltransport
• Name of the port of loading
• Name of the port of discharge and final destination
• Provisional invoice number and date
• Exporter’s reference number
• Buyer’s reference number and date
• Name of the country of origin of goods
• Name of the country of final destination
• Marks and container number
• Number and packing description
• Description of goods giving details of quantity, rate andtotal amount in terms of internationally accepted pricequotation
• Signature of the exporter with date
Contents
of
Performa
Invoice
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It is also known as a ‘Document of Contents’ as it containsall the information required for the preparation of otherdocuments.
It is actually a seller’s bill of merchandise.
It is prepared by the exporter after the execution of exportorder giving details about the goods shipped. It is essentialthat the invoice is prepared in the name of the buyer orthe consignee mentioned in the letter of credit.
It is a prima facie evidence of the contract of sale orpurchase and therefore, must be prepared strictly inaccordance with the contract of sale.
COMMERCIAL INVOICE
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Contents of
Commercial Invoice
• 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
• Exporter’s reference number
• Buyer’s reference number and date
• Name of the country of origin of goods
• Name of the country of final destination
• Terms of delivery and payment
• Marks and container number
• Number and packing description
• Description of goods giving details of quantity, rate andtotal account in terms of internationally accepted pricequotation
• Signature of the exporter with date
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Significance of Commercial Invoice
• It is the basic document useful in preparation of various othershipping documents
• It is used in various export formalities such as quality and pre-shipment 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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The exporter prepares the packing list to facilitate the buyer tocheck the shipment.
It contains the detailed description of the goods packed in eachcase, their gross and net weight, etc.
The difference between a packing note and a packing list is that thepacking note contains the particulars of the content of an individualpack, while the packing list is a consolidated statement of thecontents 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 inadvance to the buyer, one to the shipping agent and the remainingretained by the exporter.
PACKING LIST
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Mate’s receipt is a receipt issued by the Commanding Officer of the ship when the cargo is loaded on the ship.
The mate’s receipt is a prima facie evidence that goods are
loaded in the vessel.
The mate’s receipt is first handed over to the Port Trust
Authorities.
After making payment of all port dues, the exporter or his agent
collects the mate’s receipt from the Port Trust Authorities.
The mate’s receipt is freely transferable. It must be handed over
to the shipping company in order to get the bill of lading. Bill of lading is prepared on the basis of the mate’s receipt.
MATE’S RECEIPT
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T Y
P E S O F M A T E ’ S R E C E I P T
Clean Mate’s Receipt
• The Commanding Officer of the shipissues a clean mate’s receipt, if he is
satisfied that the goods are packedproperly and there is no defect in thepacking of the cargo or package.
Qualified Mate’s Receipt
• The Commanding Officer of the shipissues a qualified mate’s receipt,
when the goods are not packedproperly and the shipping company
does not take any responsibility of damage to the goods during transit.
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• 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
Content
of
Mate’s
Receipt
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The bill of lading is a document issued by the
shipping company or its agent acknowledgingthe receipt of goods on board.
Undertaking to deliver the goods in the likeorder and condition as received to the
consignee or his order provided the freight
and other charges as specified in the bill havebeen duly paid.
It is also a document of title to the goods and,as such, is freely transferable by endorsement
and delivery.
• As a document of title to the goods
• As a receipt from the shipping company
• As a contract for the transportation of goods
A Bill of lading serves three main purposes:
BILL OF LADING
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•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
Contents
of
Bill of
Lading
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Significance of Bill
of Lading forImporters
It acts as a document of title to goods, which is
transferable by
endorsement and delivery
The exporter sends the bill of lading to the bank of the importer
so as to enable him to take thedelivery of goods
The exporter can give an advanceintimation to the foreign buyer about
the shipment of goods by sending him anon-negotiable copy of bill of lading
Significance of Bill
of Lading forShipping Company
It is useful to the shipping companyfor collection of transport chargesfrom the importer, if not collected
from the exporter.
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The importers in several
countries require acertificate of origin
without which clearanceto import is refused.
The certificate of originstates that the goods
exported are originallymanufactured in the
country whose name ismentioned in the
certificate.
Certificate of origin isrequired under thefollowing circumstances.
•The goods produced in aparticular country are subjectto preferential tariff rates inthe foreign market at thetime of importation.
•The goods produced in aparticular country are bannedfor import in the foreign
market.
CERTIFICATE OF ORIGIN
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• 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 theissuing authority
• Seal of the issuing authority
Contents
of
Certificate of
Origin
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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 theassessment 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 importregulations of the country.
• Sometimes, in order to ensure that goods bought
from some other country have not been reshipped bya seller, a certificate of origin is required.
Significance of
the Certificate
of Origin
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Shipping bill is themain customsdocument required bythe customs authoritiesfor granting permissionfor the shipment of goods.
• Customs Copy
• Drawback Copy
• Export Promotion Copy
• Port Trust Copy
• Exporter’s Copy
The cargo is movedinside the dock areaonly after the shippingbill is duly stamped,i.e., certified by thecustoms. Shipping bill
is normally prepared infive copies:
SHIPPING BILL
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• 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 theSea Customs Act
• Whether Indian or foreign merchandise to be re-
exported• Total number of packages with total weight and value
Contents
of Shipping
Bill
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Significance of Shipping Bill
Shipping bill is the main customs documentrequired by the customs authorities for granting
permission for the shipment of goods
The cargo is moved inside the dock area only after theshipping bill is duly stamped i.e., certified by the customs
Duly endorsed shipping bill is also necessary for the collection of exportincentives 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 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 theEmbassy 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 theConsulate of the importing country concerned.
The Consulate of the importing country certifies them in return for fees. One copy of the invoice isgiven to the exporter while the other two are dispatched to the customs office of the importer’s
country for the calculation of the import duty. The exporter negotiates a copy of the consularinvoice to the importer along with other shipping documents.
CONSULAR INVOICE
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The Bill of Entry is a document prepared by the importer or his clearing agent inthe 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 thenecessary import duty.
For this purpose, necessary information about the goods imported must begiven 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 anddescription in the specified quantity have entered into the country fromabroad.
The bill of entry is drawn in triplicate. The customs authorities may ask theimporter to supply other documents like invoice, broker’s note and insurance
policy, etc. in order to verify the correctness of the information supplied in thebill of entry form.
BILL OF ENTRY
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• 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 areto be cleared
• Description of goods
• Value of goods
• Rate and amount of import duty payable
• Other relevant documen
Contentsof Bill of
Entry
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An Airway Bill, also called an air consignment note, is areceipt issued by an airline for the carriage of goods. Aseach shipping company has its own bill of lading, so eachairline 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
AIRWAY BILL
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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 spaceremarked 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 theRBI. Within 21 days from the shipment of goods, exporter must lodge the duplicate copy of GR together with relativeshipping documents with the authorized dealer named in the GR form for negotiation of export bills.
GR FORM
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Thank You!!!
References:Vasant Kothari PDF.Discussion with Er. Shakhar suman,Site Engineer, Virgo marine,Mumbai