Dr. Anuj SharmaBIMTECH

Greater Noida

EXPORT DOCUMENTATION

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EXPORT DOCUMENTATION

There are a number of documents, which have to be prepared by the exporter in order to arrange export of his consignments.

These documents can be mainly classified into two i.e.

(a) Commercial Documents and

(b) Regulatory Documents

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EXPORT DOCUMENTATION

Export Documents

Commercial Documents Regulatory Documents

Principal Auxiliary

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Principal Documents

Out of the 15 commercial documents, eight are principal and the rest are auxiliary. The eight principal documents are

1. The Commercial Invoice,

2. Packing List

3. Bill of Lading/Air Waybill

4. Certificate of Inspection/Quality control

5. Certificate of origin

6. Bill of Exchange and

7. Shipment Advice

8. Insurance Certificate

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Auxiliary Documents

The seven auxiliary documents are

1. Proforma Invoice

2. Intimation for inspection

3. Shipping instructions

4. Insurance Declaration

5. Application for certificate of origin.

6. Mate's Receipt

7. Letter to bank of collection/negotiation of documents

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Regulatory Documents

There are seven regulatory documents associated with the pre-shipment stage of the export transaction. They are:

1. ARE Form

2. Shipping Bill/Bill of Export

3. Port Trust Copy of Shipping Bill/ Export Application/Dock Challan

4. Vehicle ticket

5. Exchange Control Declaration/GR/PP forms

6. Freight Payment Certificate

7. Insurance Premium Payment Certificate

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Principal Documents

Proforma/ Commercial Invoice• It indicates all the details of the goods.• It has all the information required for preparation of the

other documents• Description of merchandise must correspond exactly to

the details in the L/C

Customs Invoice

Exporter has to submit invoice in the format provided by the importing country (US, Canada, Australia)

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Consular invoice

Certified by Embassy/Consulate of the importing countries, usually required if there are any quotas and also to help in processing of the export order.

Legalized Invoice

Required for Mexico, Turkey, Taiwan etc. Exporter submits 4 copies of the commercial invoice for legalization along with a fee. Mission returns three copies

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Packing List

This document gives the complete details of the packing of the merchandise, i.e., it shows item by item the contents of the containers like

a. which material is in which box

b. Weight of the material per unit and total weight of the box

c. Any other details

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Airway Bill

• It is receipt issued by airline company.• The goods are delivered to the consignee.• It consist of 3 original and 6-11 copies.

- Green : retained by carrier- Pink : Accompanies the consignment- Blue : Given to shipper

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B/L – Bill of Lading

• The bill of lading is a document issued by the shipping company or its agent acknowledging the receipt of goods mentioned in the bill for shipment/ mate’s receipt

• B/L is made in triplicate. Extra copies can be issued which are marked ‘Non negotiable copy’

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Types of B/L

• Claused B/L : indicates defective condition of the goods. Also known as dirty B/L

• Clean B/L: with all conditions correct and no clauses

• Stale B/L : B/L presented late to the bank that the documents may not reach consignee in time

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Inspection certificate

• It indicates that the goods have been inspected before sealing for export.

• Specialized inspection agencies are there in India

• Self inspection certificates can also be given by export houses with good record of exports

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Certificate of Origin

• In certain countries it is pre-requisite for obtaining custom clearance.

• In India it is issued by (GSP Certificate of Origin) by - Export Inspection Agency- Textile Committee- Central Silk Board- Development Commissioner (Handicraft)- Coir Board

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Bill of Exchange

A bank instrument began (issuing or opening bank), at the request of the buyer, evidencing the bank's undertaking to the seller to pay a certain sum of money provided that specific requirements set out in the contract are satisfied.

• It is issued by Issuing Bank upon an application made by the Importer

Shipment Advice

This document is used to inform the exporter the details of the shipment in advance. The required set of documents are sent separately to the buyer through the bank.

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Insurance certificate

• Specific marine insurance policies are there

• Most exporters use the ‘open policy’- over a period of time.

• insurance contracts remain in force till the individual consignments are delivered at the warehouse of the importer

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AR Form

• It is used for claiming excise rebate / duty drawback from the GoI.

• The different copies of AR4 forms should be of different colors indicated below:

- Original---- White (Returned to Exporter)- Duplicate--- Buff (Do)- Triplicate--- Pink (Rebate sanctioning authority )- Quadruplicate---Green (Chief Accounts Officer)

Quintuplicate---- Blue (Central Excise Officer)- Sixtuplicate--- Yellow ( To be given to the exporter.

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Shipping Bill

• Most important document required by custom authorities for allowing exports. It contains all details of goods shipped.

• These are of 4 types- White : Export of duty free goods (3 Copies)- Green : Export under claim for duty drawback (4 copies)- Yellow : Export for dutiable goods (3 copies)- Pink : Export of duty free goods ex-bond (3 copies)- Blue: Export under DEPB scheme (7 copies)

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Port Trust Copy of Shipping Bill/Export Application/Dock Challan

An exporter has to pay the port and dock charges when the shipment is sent by sea. The amount is assessed on the basis of nature of goods, volume, weight etc.

Vehicle TicketIt is an entry pass issued by the port trust authority to the

shipper to allow the latter to bring export cargo to the port for their dispatch to the importer.

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Declaration Documents

GR Forms

• Prescribed by the RBI under FEMA to ensure that the Forex receipts in respect of exports are repatriated to India.

• Prepared in duplicate. Both copies submitted to customs at port of shipment along with shipping bill.

• Customs gives ten no. running serial no. on both copies

• Customs returns duplicate copy and retains original

• Exporter submits GR form and other documents to his bank/authorized dealer for collection of export bills within 21 days

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SDF Forms

• Where shipping bills are processed electronically, SDF is used.

• Submitted in duplicate

• Customs gives back one copy along with a copy of the shipping bill marked as ‘Exchange Control Copy’

• Should be given to authorized dealer within 21 days

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PP Forms

• Completed in duplicate

• Exports to all countries are to be declared on PP Form when goods are sent by post parcel.

• Postal articles intended for any permissible foreign destinations may be booked at any of the post office in India .

• PP form or No objection certificate from the Reserve Bank of India is required to be enclosed to the parcel depending upon the value of the goods being exported.

• All such parcels are routed through the ‘foreign post offices’ located in major cities.

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SOFTEX Forms

• Used in export of software otherwise than in physical form, i.e magnetic tapes, discs, etc.

• Valuation of Software Exports

• Disposal of SOFTEX form (triplicate)

• Should be submitted not later than 30 days along with invoice to the valuation authorities

• Terms of Payment – Invoicing

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Freight Payment Certificate

• It is like receipt for payment of freight

• Insurance Premium Payment Certificate.

• It is like receipt for payment of insurance premium.

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Procedure for Export at ICD / CFS• Presentation of Shipping Bill

5 copies of SB in case of Non Drawback shipment i.e. original, duplicate, triplicate (Export promotion copy) and two transference copies (six copies of Shipping Bill in case covered under drawback).

• NotingAll copies of the SB will be presented in the Noting Section of Export Branch of ICD. In addition , the Exporter should be requiring to mention the port of Exit.

• Processing After scrutiny, the Noting clerk will stamp the date of presentation and assign the serial number to the SB which is then processed.

• AssessmentThe inspector will pass on the SB to Appraiser/Supdt. Thereafter, after detachment of first copy of the SB and G. R. form, the remaining copies off the SB and G. R. form, will be returned to the Exporter/CHA who will acknowledge the receipt thereof.

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• G.R. Formalities - The assessing officer will verify full export value as in G.R. form. The

original G.R. form shall be retained by the Customs. - Shipment certificate on the duplicate copy of G.R. form shall be furnished

after the Customs examination of the export cargo and sealing of the containers by the officer of the Export shed at ICD. The exporter shall be handed over duplicate G.R. form.

• Arrival of Export Goods at ICD - One copy of the processed SB will be presented by Exporter to the Shed

Incharge (Exports). The CONCOR will thereafter give carting permission on SB.

- The Exporter after arrival of goods presents SB to the Goods Arrival Clerk. On receipt of the acknowledgement from the Shed Incharge (Export) that the goods have been received, SB will be presented to the Appraiser who will give examination order on the duplicate copy of the SB.

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• Examination - IOn receipt of the SB the examining officer in the shed will examine the goods in presence of the CHA. The examination report will be counter-signed by the Appraiser. who will also verify the export value on the G.R. form

• Examination - IIStuffing of containers will be done only after obtaining permission from the Supdt. (Exports) by the Manager, ICD. The stuffing of containers will be done strictly under Customs supervision and CONCOR/CHA representative of shipping-line. The stuffing sheets will then be prepared and signed by the exporter/representative of the shipping-line and jointly signed by shipping-line and Shed Incharge.

• A complete record of no. of shut out packages and the quantities of goods loaded will be recorded on the SB after the stuffing of container is done. Thereafter the container will be duly sealed with Customs OTL (One Time Lock) seal.

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• After the Customs copy of the stuffing sheet is presented to the Supdt. (exports) he will give the "Let Export" order. The duplicate copy of the SB will be retained in the ICD and triplicate handed-over to the exporter.

• The two transference copies of the SB will be placed in a sealed envelope and handed-over to CONCOR who will be responsible for producing it along with the container to Customs Office at port of exit.

• A register in Proforma "C" should be maintained by the custodian for the cargo despatched from ICD, to the Gate-way (Exit) Port and a copy of thereof submitted to Customs Officer.

• The factory stuffing of the export containers will be allowed after seeking permission from the Asstt Commissioner of Customs, ICD. In such cases the containers will be stuffed by the exporters under Central Excise supervision and the containers will be sealed with punch seals (Lead seals) by Central Excise and forwarded to ICD for onward transshipment to the gateway ports.

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Procedure at the Gateway Port• At the gateway port the container will be allowed to the exported under

preventive supervision on checking the seals without any further examination. The preventive officer will suitably endorse two transference copies of the SB regarding the fact of shipment

• At the port of shipment the steamer agent will also file the export manifest in duplicate. After the shipment of the goods, the concerned officer must send the transference copies of the SB within 24 hours of loading of the goods to the container unit of the Export Department.

• Within 24 hrs of receipt of SB container unit will send a telex regarding fact of shipment mentioned to the ICD. The Container Unit shall then despatch one copy of the transference shipping Bill and one copy of the export manifest under registered acknowledgment due to the Assistant Commissioner of Customs, ICD within 48 hours of their receipt.

• The Asstt. Commissioner of the Container Unit of the Gate-way Port will ensure that all the SB and manifests have been duly dispatched to the ICD. The second of the transference SB will be retained by the Customs House at the Gate-way Port.

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Procedure for Export At Sea Port• SB along with other documents is presented by CHA to preventive officer of

the Customs dept. who supervises the loading of cargo on board the vessel. He makes endorsement “Let Ship” on the duplicate copy of SB which is handed over to CHA (This is authorization by customs to Shipping Co. to accept cargo)

• Goods loaded on board and captain issues Mate’s receipt to Shed Suptd which is delivered to CHA on payment of dock charges.

• Mate’s receipt is presented first to Preventive Officer who records certificate of shipment on all copies of SB, I & II copy of AR -4 form.

• Mate’s receipt is then presented to Shipping Co. and receives 2-3 negotiable copy of B/L.

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Procedure for Import• Arrival at customs port - Section 29 provides that person-in-charge of a

vessel entering India shall call or land at customs port only.

• Import Manifest - Person-in-charge of vessel has to submit Import Manifest . [IGM - Import General Manifest]. The import manifest in case of vessel is required to be submitted prior to arrival of a vessel.  If the manifest could not be submitted within prescribed time, person-in-charge is liable to penalty upto Rs 50,000.

• IGM can be submitted electronically where EDI facility is available.

• Grant of Entry Inwards by Customs Officer - Unloading of cargo can start only after Customs Officer grant ‘Entry Inwards’. Such entry inwards can be granted only when berthing accommodation is granted to a vessel. If there is heavy congestion shipping berth may not be available and in such case, ‘Entry Inwards’ cannot be granted.

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• Carrier responsible for shortages during unloading - If the goods are short landed, the carrier is liable to pay penalty upto twice the amount of duty payable. It has been held that tally sheet prepared by Port Trust authorities on unloading of goods is a statutory document and should be accepted.

Procedure by Importer –

Bill of Entry - This is a very vital and important document which every importer has to Submit.

• Bill of Entry should be submitted in quadruplicate – original and duplicate for customs, triplicate for the importer and fourth copy is meant for bank for making remittances.

• Under EDI system, Bill of Entry is actually printed on computer in triplicate only after ‘out of charge’ order is given. Duplicate copy is given to importer.

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• Types of Bill of Entry – These are 3 types. Two are for clearance from customs while third is for clearance from warehouse.

• B/E for Home Consumption - often called ‘white bill of entry’.

• B/E for Warehousing - This will enable him to defer payment of customs duty till goods are actually required by him. This Bill of Entry is also called ‘Yellow Bill of Entry’ or ‘Into Bond Bill of Entry’

• B/E For Ex-bond Clearance - The third type is for Ex-Bond clearance. This is used for clearance from the warehouse on payment of duty and is printed on green paper. The goods are classified and value is assessed at the time of clearance from customs port. Thus, value and classification is not required to be determined in this bill of entry.

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• Rate of Duty for Clearance from Warehouse - It may be noted that rate of duty applicable is as prevalent on date of removal from warehouse. Thus, if rate has changed after goods are cleared from customs port, customs duty as assessed on yellow bill of entry and as paid on green bill of entry will not be same.

• Filing of Bill of Entry – Submitted by CHA the Bill of Entry has to be filed electronically, i.e. through Customs EDI system or manually.

• The documents that are essentially required are : (i) Invoice (ii) Packing List (iii) Bill of Lading (iv) Import Licence (v) L/C (vi) insurance policy (vii) Certificate of country of origin (viii) Advance License / DEPB in original.

• Noting of Bill of Entry – B/E submitted by importer is cross-checked with ‘Import Manifest’ submitted by person in charge of vessel. It is noted if the description tallies. This date is relevant for determining rate of customs duty. Thoka number (serial number) is given in the import section. Otherwise, it is returned for clarifications. In case of EDI system, noting is done by the system itself

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• Prior Entry of Bill of Entry - After the goods are unloaded, these have to be cleared within stipulated time - usually 3 working days. If these are not so removed, demurrage is charged by port trust authorities.

• Assessment of Customs duty –• Appraising The Goods - Appraiser has to (a) correctly classify the goods

(b) decide Value for purpose of Customs duty (c) find out rate of duty applicable as per any exemption notification and (d) verify that goods are not imported in violation of any law. If he is of the opinion that goods have to be examined for appraisal, he will issue an examination order. If such order is issued, the Bill of Entry is presented to appraising staff at docks, where the goods are examined.

• Valuation of Goods - the importer has to file declaration about full 'value' of goods. If the assessing officer has doubts about the truth and accuracy of 'value' as declared, he can ask importer to submit further information, details and documents.

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• Payment of Customs Duty - After assessment, necessary duty is paid. Regular importers and Custom House Agents keep C/A with Customs department. The duty can be debited to such C/A, or it can be paid in cash/DD.

• After payment of duty, if goods were already examined, delivery of goods can be taken from custodians (port trust) after paying their dues. If goods were not examined before assessment, these have to be submitted for examination in import shed to the examining staff. After shed appraiser gives ‘out of charge’ order, delivery of goods can be taken from custodian

• Examination of Goods - Examiners carry out physical examination and quantitative checking like weighing, measuring etc. Selected packages are opened and examined on sample basis.

• Out of Customs Charge Order - After goods are examined, it is verified that import is not prohibited and after customs duty is paid, Customs Officer will issue ‘Out of Customs Charge’ order under. Goods can be cleared from customs area only on receipt of such order.

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•Thanks

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MISTAKES IN DOCUMENTATION

Particulars often incorrectly declared

• 1. Quantity vis a vis Units of Qty • 2. Gross weight & Net weight • 3. Invoice No/Date & ARE 1 No in the SB • 4. Port of Destination/ Discharge • 5. Description of goods • 6. Currency Viz USD/GBP/Aus D/Euro etc • 7. CIF Value/FOB Value • 8. Export promotion Scheme opted.

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Quantity vis a vis unit of qty

• Qty is required to be furnished in Cubic Meters with declaration of length x Breadth x width (thick ness) for verifying the eligibility of DEPB rate, but the qty is declared in Square Meters.

• The description of packing materials used for packing the export product is relevant for granting DEPB in certain cases. Failure to give the Pkg particulars result in denial of benefit.

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Gross & Net Weight:

• Care has to be taken to correctly declare the Gross weight and Net weight in the Excise documents such as ARE1, Invoice and Pkg List and the said List weight should tally with the Gross and Net Weight declared in the Shipping Bill.

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PORT OF DESTINATION

• The Exporters / CHA are failing to distinguish are the difference between Country of Destination and Port of Destination.

• Such declaration should not be based on assumptions such as basing on what is declared in previous export document or basing on the Country Destination.

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Description

• The Description of the Chemicals/Medicines is given in general terms as brand name etc where as for claiming the DEPB / DBK benefits the actual chemical name has to be given in the export documents.

• Same is the case with the Machinery/ Electrical Machinery/ Electrical Goods/ Electronic Goods.

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Currency & Value:

• Incorrect declaration of unit of Currency Incorrect Currency Viz USD, Euro is another important field.

• Incorrect declaration of the CIF Value and FOB Value. If the Value as per the Purchase Order is FOB and if exporter declares it as CIF value/ Invoice Value and exhibits Insurance and Freight in the SB then automatically the FOB value arrived at in the SB will be less than the actual FOB Value since the freight & Insurance is deducted twice in the system.

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Export Promotion Scheme :

• The exporter has to decide before hand whether the exports are under FREE SB (no export incentive scheme) or under any Export Scheme DEPB/DFIA/DBK/EPCG etc., and file the bill accordingly.

• The Conversion of SB from Free Bill to any Scheme Bill is not permitted. The conversion of SB from one Export Scheme to another Export Scheme is not allowed as matter of routine but examined case by case by Commissioner.

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Other Documents

• Black list certificate• Weight Note• Languages certificate• Certificate of Chemical Analysis• Phytosanitary certificates• Conditioning certificate• Antiquity Certificates• Certificate of measurement• Transshipment bill• Shipping Order

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• Black List Certificate - It is required for countries which have strained political relation. It certifies that the ship or the aircraft carrying the goods has not touched those country(s).

• Weight Note - Required to confirm the packets or bales or other form are of a stipulated weight.

• Shipping Order - Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date.

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• Manufacturer's Certificate - It is required in addition to the Certificate of Origin for few countries to show that the goods shipped have actually been manufactured and are available.

• Certificate of Chemical Analysis - It is required to ensure the quality and grade of certain items such as metallic ores, pigments, etc.

• Certificate of Shipment - It signifies that a certain lot of goods have been shipped.

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• Health/ Veterinary/ Sanitary Certification - Required for export of foodstuffs, marine products, hides, livestock etc.

• Certificate of Conditioning - It is issued by the competent office to certify compliance of humidity factor, dry weight, etc.

• Antiquity Measurement - Issued by Archaeological Survey of India in case of antiques.

• Transhipment Bill - It is used for goods imported into a customs port/ airport intended for transhipment.

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• Cart/ Lorry Ticket - It is prepared for admittance of the cargo through the port gate and includes the shipper's name, cart/ lorry No., marks on packages, quantity, etc.

• Shut Out Advice - It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter.

• Shipping Advice - It is prepared in aligned document

to be used to inform the overseas customer about the shipment of goods.

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THANKS