Export procedure-and-documentation

EXPORT PROCEDURE AND DOCUMENTATION

STRUCTURE OF AN EXPORT ORGANISATION

marketing manager for generating sales

Commercial manager for looking activities of the execution of the orders.

staff personnel for carrying out the day-to-day activities namely

o Preparation of pre - shipment documents.

o Co-ordinating with clearing agents on the progress of the shipment to be

made.

o Co-ordinating with the ware house\C. excise department regarding

packing and clearance of the goods for export.

o Preparation of post shipment documents foe banks.

o Follow-up with the bank on dispatch of documents, receipt of payment,

availment of bank loans etc.

To look into the requirement of licenses, claiming of export benefits fiiling of

documents with the Government Authorities in Discharge of Export Obligations,

if any, filing of returns to the various Government Agencies which are mandatory,

prepare and keep an information bank of various transaction of the company, their

domestic as well as international competitors.

An office boy for doing leg work.

A clearing and forwarding agent to handle the documents and the goods in the

customs premises\ in the ports of lading.

Depending upon the size of the business the numbers of personnel under

each category may increase. For example if a company is transacting substantial volume

of business in more than one product. Then it is necessary to have marketing manager for

each product so that the person can concentrate on a particular trade to enhance the

business.

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REGISTRATION WITH REGIONAL LICENCING AUTHORITIES OBTAINING

IMPORTER EXPORTER CODE (IEC) NUMBER.

The Customs Authorities will now allow the exporter to export or import goods into or

from India unless he holds a valid IEC number. Before applying for IEC number it is

necessary to open a bank account in the name of the company with any commercial bank

authorized to deal in foreign exchange. The duly signed application form should be

supported by the following documents.

Bank receipt ( in duplicate ) / Demand Draft for payment of the fees of Rs. 1000/-

Certificate from the banker of the applicant firm as per Annexure 1 to the form

given.

One copy of PAN number issued by Income Tax Authorities duty attested by the

applicant.

One copy of Passport Size photographs of the applicant duly attested by the

banker to the applicant.

Declaration by the applicant that the proprietor/partners/directors as the case may

be of the applicant company, are not associated as proprietor/partners/directors in

any other firm, which has been caution, listed by the RBI. Where the applicant

declares that they are associated as proprietor/partners/directors in any other firm,

which has been caution, listed by the RBI, they will be allotted IEC No. but with

an additional condition that they can export only with RBI’s prior approval and

they should approach RBI for the purpose.

Each importer/exporter shall be required to file importer/exporter profile once

with the licensing authority shall enter the information furnished in Appendix 2 in

their database so as to dispense with changes in the information given in

Appendix-2, importer/exporter shall intimate the same to the licensing authority.

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IEC EXEMPT CATEGORIES.

The following importer exporter is exempted from the requirement of IEC code number.

Ministries \ Department of Central or State Government.

Person importing or exporting goods for their personal use not connected with

trade or manufacture or agriculture.

Persons importing\exporting goods from\to Nepal & Myanmar provided the CIF

value of single consignment does exceed Indian Rs. 25000\-.

APPLICATION FOR OBTAINING AN IEC NUMBER

For obtaining IEC number apply in the prescribe form along with the documents listed

above to Regional Licensing Authority (Office of the Regional DGFT). The registered

office or the head office may apply for allotment of IEC No.

Whenever, there is a change in the name, address or constitution of the holder of IEC

No., such change should be intimated within 30 days to the concern authorities.

IEC certificate will be issued in the form (copy enclosed). A copy of IEC No. is also

endorsed to the concerned banker.

VALIDITY :

The IEC No allotted to a firm/company will be valid for all its branches/divisions

units/factories as indicated in the IEC No. Import/Export of any commodity by that

firm/company. There being no date of expiry, the IEC once allotted is valid till it is

revoked. But, if no import or export is effected in the previous financial year, the same

will be made inoperative. However, this can be made operative by a formal request to the

DGFT.

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IDENTITY CARD (For conducting transactions with the office of DGFT):

As it is not always possible for the top man or directors, promoters of the company to

visit DGFT frequently. There is a provision of issuance of identity cards to the

proprietors/partners/directors and their authorized representatives. An application of

Issuance of an identity card may be made in the form (Appendix-5) The document/

License/Certificate/Permissions may be delivered to the identity card holder and officials

of the Licensing Authority(DGFT)shall not be responsible for any loss etc. In case of loss

of an identity card a duplicate card may be issued on the basis of an FIR & affidavit. In

addition to obtaining the IEC No. the exporter is also required to obtain Business

Identification No(BIN). For this exporter is required to contact DGFT online on web site.

The licensing authority issues BIN in coordination with customs authorities. This BIN is

required to be mentioned on the shipping bills at the time of customs clearance of the

export cargo.

RCMC (Registration-Cum-Membership Certificate) – REGISTRATION WITH

EXPORT PROMOTION COUNCILS –

In order to enable the exporter to obtain benefits/concessions under the Foreign Trade

Policy, the exporter is required to register himself with an appropriate export promotion

agency by obtaining registration-cum-membership certificate. (RCMC). If the export

product is that it is not covered by any EPC, RCMC in respect thereof may be issued by

FIEO. An application for registration should be accompanied by a self certified copy of

the Importer-Exporter Code number issued by the regional licensing authority concerned

and bank certificate in support of the applicants financial soundness. The RCMC shall be

valid for 5 years ending 31st March of the licensing year.

REGISTRATION WITH SALES TAX AUTHORITIES:

Goods that are to be shipped out of the country for export are eligible for exemptions

from both Sales Tax and Central Sales Tax. For this purpose, exporter should get himself

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registered with the Sale Tax Authority of is state after following the procedures

prescribed under the Sales Tax Act applicable to his state.

HOW ONE BEGINS TO DO EXPORT

Before entering into the venture of exports, one must look for the product to be exported

and the market where he intends to export.

In case of a manufacturer, obviously he would like to export the product he manufactures

as is or with possible modification as may be required by the market. However, in case of

a merchant exporter or a trader, one has to identity the product to export. If the exporter is

already in the trade in the domestic market and is familiar with the product it would be an

advantage to export the said product of which he has reasonable knowledge.

Before selecting a product, one must simultaneously made a study and find out the

prospective market. For finding out the market for the selected product, the following

methods will help.

Get statistical information as to imports of the product by various countries

and their growth prospects in the respective countries

Approach the chamber of commerce for their guidance to find out the market.

Approach the Export Promotion Council dealing in the product of selection to

get more information.

The Preliminary

Once you are ready with the product you wish to export and have found the market for

the same, you are ready to proceed further. Following sequences can be followed:

Any one, who wishes to export, must first of all get an Importer Exporter

Code Number (IE Code).This can be obtained by making a formal

application to the office of the Regional Directorate General of Foreign

Trade (DGFT).

Get yourself registered with the related Export Promotion Council and

become a member. Also arrange to obtain Registration-Cum-Membership

Certificate (RCMC) from the council. This has twin objectives:

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o Under the Foreign Trade Policy, it is mandatory that an exporter gets him

registered with the Export Promotion Council to avail of various export

facilities.

o Being a member, you will have access to all the information relating to the

product that could be made available by the council

o Many foreign buyers send their enquiries for the imports to the Export

Promotion Council. Hence you will have few customers interested in your

product.

If you are a manufacturer, find out the provisions under the EXIM Policy of

getting the raw materials duty free.

Get familiar with the excise formalities as goods meant for export can be cleared

without payment of C. Excise duty on the finished product subject to compliance

of certain formalities.

Understand the local government regulations in relations to the export of the

product.

Get information of the government’s regulations of the importing country as to

restrictions on the quantity, product specification, packing regulations, customs

regulations, requirement of specific documents/information etc.

Availability of Vessels/Airlines, the transport charges, frequency of operation

etc.,

To look for a Custom House Agent (CHA) (also know as freight forwarders or

clearing agents) for handling the documents/cargo in the customs.

If the product is covered under any quota regulation, find out the agency/council

who are handling the quota distribution for the product and the availability of

quota for exports.

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EXPORT DOCUMENTS

Any export shipment involved various documents required by various authorities such as

customs, excise, RBI, Inspection and according depending upon the requirements, there

are categorized into 2 categories, namely commercial documents and regulatory

documents.

A. Commercial Documents. : - Commercial documents are required for effecting

physical transfer of goods and their title from the exporter to the importer and the

realisation of export sale proceeds. Out of the 16 commercial documents in the

export documentation framework as many as 14 have been standardised and

aligned to one another. These are proforma invoice, commercial invoice, packing

list, shipping instructions, intimation for inspection, certificate, of inspection of

quality control, insurance declaration, certificate' of insurance, mate's receipt, bill

of lading or combined transport document, application for certificate origin,

certificate of origin, shipment advice and letter to the bank for collection or

negotiation of documents. However, shipping order and bill of exchange could

not be brought within the fold of the Aligned Documentation System,

1. Commercial Invoice: Commercial invoice is an important and basic export

document. It is also known as a 'Document of Contents' as it contains all the

information required for the preparation of other documents. It is actually a seller's

bill of merchandise. It is prepared by the exporter after the execution of export

order giving details about the goods shipped. It is essential that the invoice is

prepared in the name of the buyer or the consignee mentioned in the letter of credit.

It is a prima facie evidence of the contract of sale or purchase and therefore, must

be prepared strictly in accordance with the contract of sale.

Contents of Commercial Invoice

Name and address of the exporter.

Name and address of the consignee.

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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 and total amount in terms of

internationally accepted price quotation.

Signature of the exporter with date.

Significance of Commercial Invoice

It is the basic document useful in preparation of various other shipping

documents.

It is used in various export formalities such as quality and 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.

2 Inspection Certificate: The certificate is issued by the inspection authority such as

the export inspection agency. This certificate states that the goods have been

inspected before shipment, and that they confirm to accepted quality standards.

3 Marine insurance policy: Goods in transit are subject to risk of loss of goods

arising due to fire on ship, perils of sea, theft etc. marine insurance protects losses

incidental to voyages and in land transportation. Marine insurance policy is one of

the most important document used as collateral security because it protects the

interest of all those who have insurable interest at the time of loss. The exporter is

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bound to insure the goods in case of CIF quotation, but he can also insure the goods

in case of FOB contract, at the request of the importer, but the premium payment

will be made by the exporter. There are different types of policies such as

SPECIFIC POLICY: This policy is taken to cover different risks for a

single shipment. For a regular exporter, this policy is not advisable as he

will have to take a separate policy every time a shipment is made, so this

policy is taken when exports are in frequent.

Floating Policy: This is taken to cover all shipments for some months.

There is no time limit, but there is a limit on the value of goods and once

this value is crossed by several shipments, then it has to be renewed.

Open Policy: This policy remains in force until cancelled by either party

i.e. insurance company or the exporter.

Open Cover Policy: This policy is generally issued for 12 months period,

for all shipments to one or more destinations. The open cover may specify

the maximum value of consignment that may be sent per ship and if the

value exceeded, the insurance company must be informed by the exporter.

Insurance Premium: Differs upon product to product and a number of

such other factors, such as, distance of voyage, type and condition of

packing, etc. Premium for air consignments are lowered as compared to

consignments by sea.

4. Consular Invoice: Consular invoice is a document required mainly by the

Latin American countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand,

Myanmar, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Guinea, Zanzibar, etc. This

invoice is the most important document, which needs to be submitted for

certification to the Embassy of the importing country concerned. The main purpose

of the consular invoice is to enable the authorities of the importing country to

collect accurate information about the volume, value, quality, grade, source, etc., of

the goods imported for the purpose of assessing import duties and also for statistical

purposes. In order to obtain consular invoice, the exporter is required to submit

three copies of invoice to the Consulate of the importing country concerned. The

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Consulate of the importing country certifies them in return for fees. One copy of the

invoice is given to the exporter while the other two are dispatched to the customs

office of the importer's country for the calculation of the import duty. The exporter

negotiates a copy of the consular invoice to the importer along with other shipping

documents.

Significance of Consular Invoice for the Exporter

It facilitates quick clearance of goods from the customs in exporter's as well

as importer's country.

Certification' of goods by the Consulate of the importing country indicarer

that the importer has fulfilled all procedural and licensing formalities for

import of goods.

It also assures the exporter of the payment from the importing country.

Significance of Consular Invoice for the Importer

It facilitates quick clearance of goods from the customs at the port

destination and therefore, the importer gets quick delivery of goods.

The importer is assured that the goods imported are not banned for imported

in his country.

Significance of Consular Invoice for the Customs Office

It makes the task of the customs authorities easy.

It facilitates quick calculation of duties as the value of goods as determine

by the Consulate is considered for the purpose.

5. Certificate of Origin: The importers in several countries require a certificate of

origin without which clearance to import is refused. The certificate of origin states

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

mentioned in the certificate. Certificate of origin is required when:-

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The goods produced in a particular country are subject to’ preferential tariff rates

in the foreign market at the time importation.

The goods produced in a particular country are banned for import in the foreign

market.

Types of the Certificate of Origin

(a) Non-preferential Certificate, of Origin: - Non-preferential certificate of origin is

required in general by all countries for clearance of goods by the importer, on which

no preferential tariff is given. It is issued by: ¬

The authorised Chamber of Commerce of the exporting country.

Trade Association. Of the exporting country.

(b) Certificate of Origin for availing Concessions under GSP :- Certificate of origin

required for availing of concessions under Generalised System of Preferences

(GSP) extended by certain, countries such as France, Germany, Italy, BENELUX

countries, UK, Australia; Japan, USA, etc. This certificate can be obtained from

specialised agencies, namely;

Export Inspection Agencies.

Jt. Director General of Foreign Trade..

Commodity Boards and their regional offices.

Development Commissioner, Handicrafts.

Textile Committees for textile products.

Marine Products Export Development Authority for marine products.

Development Commissioners of EPZs

(c) Certificate for availing Concessions under Commonwealth Preferences (CWP):

Certificate of origin for the purpose of Commonwealth Preference is also known as

'Combined Certificate of Origin and Value'. It is required by two member countries,

i.e. Canada and New Zealand of the Commonwealth. For concession under

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Commonwealth preferences, the certificates or origin have to be submitted in

special forms obtainable, from the High Commission of the country concerned.

(d) Certificate for availing Concessions under other Systems of Preference:-

Certificate of origin is also required for tariff concessions. under the Global System

of Trade Preferences (GSTP), Bangkok Agreement(BA) and SAARC Preferential

Trading Arrangement (SAPTA) under which India grants and receives tariff

concessions On imports and exports. Export Inspection Council (EIC) is the sole

authority to print blank Certificates of Origin under BA, SAARC and SAPTA

which can be issued by such agencies as EPCs, DCs of EPZs, EIC, APEDA,

MPEDA, FIEO, etc...

Contents of Certificate of Origin

Name and logo of chamber of commerce.


Name and address of the consignee.

Name and the number of Vessel of Flight


Name of the port of discharge and place of delivery.


Packing and container description.

Total number of containers and packages.

Description of goods in terms of quantity.

Signature and initials of the concerned officer of the issuing authority.

Seal of the issuing authority.

Significance of the Certificate of Origin

Certificate of origin is required for availing of concessions under Generalised

System of Preferences (GSP) as well as under Commonwealth Preferences

(CWP).

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It is to be submitted to the customs for the assessment of duty clearance of goods

with concessional duty.

It is required when the goods produced in a particular country are banned for

import in the foreign market.

It helps the buyer in adhering to the import regulations of the country.

Sometimes, in order to ensures that goods bought from some other country have

not been reshipped by a seller, a certificate of origin IS required.

6. Bill of Lading: The bill of lading is a document issued by the shipping

company or its agent acknowledging the receipt of goods on board the vessel, and

undertaking to deliver the goods in the like order and condition as received, to the

consignee or his order, provided the freight and other charges as specified in the bill

have been duly paid. It is also a document of title to the goods and as such, is freely

transferable by endorsement and delivery.

Bill of Lading serves three main purposes:

As a document of title to the goods;

As a receipt from the shipping company; and

As a contract for the transportation of goods.

Types of Bill of Lading

Clean Bill of Lading: - A bill of lading acknowledging receipt of the goods

apparently in good order and condition and without any qualification is termed as

a clean bill of lading.

Claused Bill of Lading: - A bill of lading qualified with certain adversere marks

such as, "goods insufficiently packed in accordance with the Carriage of Goods

by Sea Act," is termed as a claused bill of lading.

Transhipment or Through Bill of Lading: - When the carrier uses other

transport facilities, such as rail, road, or another steamship company in addition to

his own, the carrier issues a through or transhipment bill of lading.

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Stale Bill of Lading: - A bill of lading that has been held too long before it is

passed on to a bank for negotiation or to the consignee is called a stale bill of

lading.

Freight Paid Bill of Lading: - When freight is paid at the time of shipment or in

advance, the bill of landing is marked, freight paid. Such bill of lading is known

as freight bill of lading.

Freight Collect Bill of lading :- When the freight is not paid and is to be

collected from the consignee on the arrival of the goods, the bill of lading is

marked, freight collect and is known as freight collect bill of lading

Contents of Bill of Lading

Name and logo of the shipping line.

Name and address of the shipper.

Name and the number of vessel.





Total number of containers and packages,


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. .

Significance of Bill of Lading for Exporters

It is a contract between the shipper and the shipping company for carriage of the

goods to the port of destination.

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It is an acknowledgement indicating that the goods mentioned in the document

have been received on board for the Purpose of shipment.

A clean bill of lading certifies that the goods received on board the ship are in

order and good condition.

It is useful for claiming incentives offered by the government to exporters

The exporter can claim damages from the shipping company if the goods are lost

or damaged after the issue of a clean bill of lading.

Significance of Bill of Lading for Importers

It acts as a document of title to goods, which is transferable endorsement and

delivery.

The exporter sends the bill of lading to the bank of the importer so as to enable

him to take the delivery of goods.

The exporter can give an advance intimation to the foreign buyer about the

shipment of goods by sending him a non-negotiable copy of bill of lading

Significance of Bill of Lading for Shipping Company

It is useful to the shipping company for collection of transport charges from the

importer, if not collected from the exporter.

7. Airway Bill: An airway bill, also called an air consignment note, is a receipt

issued by an airline for the carriage of goods. As each shipping company has its own bill

of lading, so each airline has its own airway bill. Airway Bill or Air Consignment Note is

not treated as a document of title and is not issued in negotiable form.

Contents of Airway Bill

Name of the airport of departure and destination.

The names and addresses of the consignor, consignee and the first carrier.



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Amount of freight paid or payable.

Signature and initials of the issuing carrier or his agent.

Importance of Airway Bill: It is a contract between the airlines or his agent to

carry goods to the destination. It is the document of instructions for the airline

handling staff. It acts as a customs declaration form. Since, it contains details about

freight it also represents freight bill.

7. Shipment Advice to Importer:- After the shipment of goods, the exporter

intimates the importer about the shipment of goods giving him details about the date

of shipment, the name of the vessel, the destination, etc. He should also send one

copy of non-negotiable bill of lading to the importer.

8. Packing List: The exporter prepares the packing list to facilitate the buyer to check

the shipment. It contains the detailed description of the goods packed in each case,

their gross and net weight, etc. The difference between a packing note and a

packing list is that the packing note contains the particulars of the contents of an

individual pack, while the packing list is a consolidated statement of the contents of

a number of cases or packs.

9. Bill of Exchange: The instrument is used in receiving payment from the importer.

The importer may prefer Bill of Exchange to LC as it does not involve blocking of

funds. A bill of exchange is drawn by the exporter on the importer, to make

payment on demand at sight or after a certain period of time.

B/E is a means to collect payment.

B/E is a means to demand payment.

B/E is a means to extent the credit.

B/E is a means to promise the payment.

B/E is an official acknowledgement of receipt of payment.

Financial documents perform the function of obtaining the finance

collection of payment etc.

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2 sets. Each one bearing the exclusion clause making the other part of the

draft invalid.

Sight B/E.

Usance B/E.

It is known as draft.

Immediate payment – Sight draft.

There are two copies of draft. Each one bears reference to the other part

A&B. when any one of the draft is paid, the second draft becomes null and

void.

Parties to bill of exchange.

1. The drawer: The exporter / person who draws the bill.

2. The drawee: The importer / person on whom the bill is drawn for payment.

3. The payee: The person to whom payment is made, generally, the exporter /

supplier of the goods.

B Auxiliary Documents: These documents generally form the basic documents based

on which the commercial and or regulatory documents are prepared. These documents

also do not have any fixed formats and the number of such documents will wary

according to individual requirements.

1. Proforma Invoice: The starting point of the export contract is in the form of offer

made by the exporter to the foreign customer. The offer made by the exporter is in

the form of a proforma invoice. It is a quotation given as a reply to an inquiry. It

normally forms the basis of all trade transactions.

Contents of Proforma Invoice


Name and address of the importer.

Mode of transportation, such as Sea or Air or Multimodal transport.


Name of the port of discharge and final destination.

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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 and total amount in

terms of internationally accepted price quotation.

Signature of the exporter with date.

Importance of Proforma Invoice

It forms the basis of all trade transactions.

It may be useful for the importer in obtaining import licence or foreign

exchange.

2. Intimation for Inspection: Whenever the consignment requires the pre-

shipment inspection, necessary application is to be made to the concerned

inspection agency for conducting the inspection and issue of certificate thereof.

3. Declaration of Insurance: Where the contract terms require that the insurance

to be covered by the exporter, the shipper has to give details of the shipment to

the insurance company for necessary insurance cover. The detailed declaration

will cover:

Name of the shipper \ exporter.

Name & address of buyer.

Details of goods such as packages, quantity, value in foreign

currency as well as in Indian Rs. Etc.

Name of the Vessel \ Aircraft.

Value for which insurance to be covered.

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4. Application of the Certificate Origin: In case the exporter has to obtain

Certificate of Origin from the concerned authorities, an application has to be

made to the concerned authority with required documents. While the simple

invoice copy will do for getting C\O from the chamber of commerce, in respect of

obtained the same from the office of the Textile Committee or Export Promotion

Council, the documents requirement are different.

5. Mate's Receipt: 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.

Types of Mate's Receipts

Clean Mate's Receipt: - The Commanding Officer of the ship issues a clean

mate's receipt, if he is satisfied that the goods are packed properly and there is

no defect in the packing of the cargo or package.

Qualified Mate's Receipt: - The Commanding Officer of the ship issues

qualified mate's receipt, when the goods are not packed properly and the

shipping company does not take any responsibility of damage. to the goods

during transit.

Contents of Mate's Receipt

Name and logo of the shipping line.

Name and address of the shipper.

Name and the number of vessel.



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Gross weight in kg. and volume in terms of cubic meters.

Shipping bill number and date.

Signature and initials of the Chief Officer.

Significance of Mate's Receipt

It is an acknowledgement of goods received for export on board the ship.

It is a transferable document. It must be handed over to the shipping company

in order to get the bill of lading.

Bill of lading, which is the title of goods, is prepared on the basis of the mate's

receipt.

It enables the exporter to clear port trust dues to the Port Trust Authorities.

Obtaining Mate's Receipt

The goods are then loaded on board the ship for which the Mate or the

Captain of the ship issues Mate's Receipt to the Port Superintendent.

6. Shipping order: it is issued by the Shipping/Conference Line intimating the

exporter about the reservation of space for shipment of cargo which the exporter

intends to ship. Details of the vessel, poet of the shipment, and the date on which

the goods are to be shipped are mentioned. This order enables the exporter to

make necessary arrangements for customs clearance and loading of the goods.

7. Shipping Instructions: at the pre-shipment stage, when the documents are to sent

to the CHA for customs clearance, necessary instructions are to be give with

relevance to

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The export promotion scheme under which goods are to be

exported.

Name of the specific vessel on which the goods are to be loaded.

If goods are to be FCL or LCL.

If freight amount are to be paid / collected.

If shipment are covered under A.R.E.-1 procedure.

Instructions for obtaining Bill of Lading etc.

8. Bank letter for negotiation of documents: at the post shipment stage, the exporter

has to submit the documents to a bank for negotiation or discounting or collection

for forwarding the same to the customer and also for realization of export

proceeds. The bank letter is the set of instruction for the bank as to how to handle

the documents by them and by the bank at the buyer’s country which may include

Name and address of the buyer.

Details of various documents being sent and the number of the

copies thereof.

Name and address of the buyer’s bank if available.

If the documents are sent L/C or on open terms.

If the proceeds are to adjusted against any pre-shipment packing

credit loan.

If the bill amount is to be adjusted against any forward

exchange cover.

In case of credit bill who has to bear the interest, either exporter

or if the same is to be collected from the buyer.

Instructions in case non-acceptance/non-payment by the buyer.

C. Regulatory Document: Regulatory pre-shipment export documents are prescribed by

the different government departments and bodies in order to comply with various

rules and regulations under the relevant laws governing export trade such as export

inspection, foreign exchange regulation, ex port trade control, customs, etc. Out of 9

regulatory documents four have been standardised and aligned. These are shipping

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bill or bill of export, exchange control declaration (GR from), export application dock

challan or port trust copy of shipping bill and receipt for payment of port charges.

1. Shipping Bill: Shipping bill is the main customs document, required by the

customs authorities for granting permission for the shipment of goods. The

cargo is moved inside the dock area only after the shipping bill is duly

stamped, i.e. certified by the customs. Shipping bill is normally prepared in

five copies :-

Customs copy.

Drawback copy.

Export promotion copy.

Port trust copy.

Exporter's copy.

Types of Shipping Bill

Based on the incentives offered by the government, customs authorities have introduced

three types of shipping bills:-

Drawback Shipping Bill: - Drawback shipping bill is useful for claiming the

customs drawback against goods exported.

Dutiable Shipping Bill: - Dutiable shipping bill is required for goods which are

subject to export duty.

Duty-free Shipping Bill: - Duty-free shipping bill is useful for exporting goods

on which there is no export duty.

In order to facilitate easy recognition and quick processing, following colours have been

provided to different kinds of shipping bills :

Types of goods By Sea By Air

Drawback shipping bill Green Green

Dutiable shipping bill Yellow Pink

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Duty-Free shipping bill White Pink

Contents of Shipping Bill


Name and address of the importer.

Name of the vessel, master or agents and flag.

Name of the port at which goods are to be discharged.

Country of final destination.

Details about packages, description of goods, marks and numbers, quantity and

details of each case.

FOB price and real value of goods as defined in the Sea Customs Act.

Whether Indian or foreign merchandise to be re-exported

Total number of packages with total weight and value.

Significance of Shipping Bill

a) Shipping bill is the main customs document, required by the customs

authorities for granting permission for the shipment of goods.

b) The cargo is moved inside the dock area only after the shipping bill is duly

stamped, i.e. certified by the customs.

c) Duly endorsed shipping bill is also necessary for the collection of export

incentives offered by the government.

d) It is useful to the Customs Appraiser while determining the actual value of

goods exported.

2. A.R.E. 1 form (Central excise): this form ARE-1 is prescribed under Central

Excise rules for export of goods. In case goods meant for export are cleared

directly from the premises of a manufacturer, the exporter can avail the

facility of exemption from payment of terminal excise duty. The goods may

be cleared for export either under claim for rebate of duty paid or under bond

without payment of duty. In both the events the goods are to be cleared under

form A.R.E-1 which will show the details of the goods being exported, the

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relevant duty involved and if the duty is paid or goods being cleared under

bond, details of goods being sealed either by the exporter or Central Excise

officials etc.

3. Exchange Control declaration Form (GR/PP/SOFTEX): under the exchange

control regulations all exporters must declare the details of shipment for

monitoring by the Reserve Bank of India. For this purpose, RBI has

prescribed different forms for different types of shipments like GRI, PP forms

etc. These declaration forms must be presented to the customs officials at the

time of passing of export documentation. Under the EDI processing of

shipping bill in the customs, these forms have been dispensed with and a new

form SDF has to be submitted to the customs in the place of above forms.

4. Export Application: this is the application to be made to the customs officials

before shipment of goods. The prescribed form of the application is the

Shipping Bill/Bill of Export. Different types are required for shipment like ex-

bond, duty free goods, and dutiable goods and for export under different

export promotion schemes such as claims for duty drawback etc.

5. Vehicle Ticket/Cart Ticket/Gate Pass etc.: before the goods are being taken

inside the port for loading, necessary permission has to be obtained for

moving the vehicle into the customs area. This permission is granted by the

Port Trust Authority. This document will contain the detail of the export

cargo, name and address of the shippers, lorry number, marks and number of

the packages, driver’s licence details etc.

6. Bank Certificate of Realisation: this is the form prescribed under the Foreign

Trade Policy, wherein the negotiating bank declares the fob value of exports

and for the date of realisation of the export proceeds. This certificate is

required fore obtaining the benefit under various schemes and this value of

fob is reckoned as fob value of exports.

D. Other Document: Black List Certificate: it certifies that the ship/aircraft carrying the

cargo has not touched the particular country on its journey or that the

goods are not from the particular country. This is required by certain

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nations who have strained political and economical relations with the

so called “Black Listed Countries”.

Language Certificate: Importers in the European Community require a

language certificate along with the GSP certificate in respect of

handloom cotton fabrics classifiable under NAMEX code 55.09.

Generally four copies of language certificate are prepared by the

concerned authority who issues GSP certificate. Three copies are

handed over to the exporter. A copy is sent along with the other

documents for realisation of export proceeds.

Freight Payment Certificate: in most of the cases, the B/L or AWB

will mention the transportation and other related charges. However if

the exporter does not want these details to be disclosed to the buyer, the

shipping company may issue a separate certificate for payment of the

freight charges instead of declaring on the main transport documents.

This document showing the freight payment is called the freight

certificate.

Insurance Premium Certificate: this is the certificate issued by the

Insurance Company as acknowledgement of the amount of premium

paid for the insurance cover. This certificate is required by the bank for

arriving at the fob value of the goods to be declared in the bank

certificate of realisation.

Combined Certificate of Origin and Value: this certificate is required

by the Commonwealth Countries. This certificate is printed in a special

way by the Commonwealth Countries. This certificate should contain

special details as to the origin and value of goods, which are useful for

determining import duty. All other details are generally the same as

that of Commercial Invoice, such as name of the exporter and the

importer, quality and quantity of the goods etc.

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Customs Invoice: this is required by the countries like Canada, USA

for imposing preferential tariff rates.

Legalized Invoice: this is required by the certain Latin American

Countries like Mexico. It is just like consular invoice, which requires

certification from Consulate or authorised mission, stationed in the

exporter’s country.

Special Provision under Uniform Customs and practice for Documentary Credit

UCP-500, for Commercial Invoice.

Article-37: Commercial Invoice

o Must appear on their face to be issued by the beneficiary named

in the credit.

o Must be made out in the name of the applicant.

o Need not be signed

Banks may refuse Commercial Invoice issued for amounts in excess of

the amount permitted by the credit except otherwise stated.

The description of the goods in the commercial invoice must

correspond with the description of the credit. In all other documents the

goods may be described in the General in general terms not

inconsistent with description in the credit. In all documents goods may

be described in general terms not inconsistent with the Description of

the goods in the credit.

Pre-Shipment Documents:

Shipping bill.

Export order/Sales contract/Purchase order.

Letter of Credit

Commercial invoice.

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Packing list.

Certificate of origin.

Guaranteed Remittance (G.R/SDF/PP/SOFTEX),or SDF.

Certificate of Inspection.

Various declarations required as per custom procedure.

Exchange Control Declaration Form: all exports to which the requirement of

declaration apply must be declared on appropriate forms as indicated below unless the

consignment is of samples and of ‘No Commercial Value’

GR FORM: to be completed in duplicate for exports otherwise than by

post including export of software in physical form i.e. magnetic

tape/discs and paper media.

SDF FORM: to be completed in duplicate and appended to the

Shipping Bill for export declare to the customs offices notified by the

Central Government which have introduced EDI system for processing

Shipping Bill.

PP FORM: to be completed in duplicate for export by post.

SOFTX: to be completed in triplicate for export of software otherwise

than in the physical form i.e. magnetic tapes/discs and paper media.

These forms are available for sale in Reserve Bank of India

Export declaration forms have utmost importance and are binding on the exporters. It is,

therefore, necessary that enough care is taken while declaring exports on these forms,

with special reference on the following points.

Name and address of the authorised dealer through whom proceeds of

exports have been or will be realized should be specified in the relevant

column of the form.

Details of commission and discount due to foreign agent or buyer

should be correctly declared otherwise difficulties may arise at the time

of remittance of such commission.

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It should be clearly indicated in the form whether the export is on

‘outright sale basis’ or ‘on consignment basis’ and irrelevant clauses

must be stuck out

Under the term ‘analysis of full export value’ a break up of full export

value of goods under F.O.B value, freight and insurance should be

furnished in all cases, irrespective of the terms of contract.

All documents relating to the export of goods from India must pass

through the medium of an authorised dealer in foreign exchange in

India within 21 days of shipment.

The amount representing the full export value of goods must be

realized within six months from date of shipment.

Disposal of Copies of Export Documentation Form

GR forms covering export of goods other than jewellery should be

completed by the exporter in duplicate and both the copies should be

submitted to customs at the port of Shipment. Customs will give their

running serial number on both the copies of the GR forms after

verifying the particulars and admitting the corresponding shipping bill.

The value declared by the exporter will also be verified by the customs

and they will also record the assessed value. Duplicate copy will be

returned to the exporter and the original will be remained by the

customs for onward submission to the Reserve Bank. Duplicate form of

the GR form will again be presented to the customs at the time of

actual shipment. After examination of goods and certifying the quantity

passed for shipment the duplicate copy will again be returned to

exporter for submission to an authorised dealer. However, an exception

to submission of GR forms to the Customs authorities have been made

in case of deep sea fishing.

(a) PP forms are to be first presented to an authorised dealer for

countersignature. The form will be countersigned by the authorised

dealer only if the post parcel is addressed to his branch or

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correspondent bank in the country or import. The concerned overseas

branch or correspondent is to be instructed to deliver the post parcel

against payment or acceptance of relevant bill, as the case may be.

(b) For post parcel addressed directly to the consignee, the

authorised dealer will countersign the form, provided —

(i) an irrevocable letter of credit for the full value of export has

been opened in favour of exporter and has been advised

through authorised dealer concerned; or

(ii) the full value of shipment has been received in advance by the

exporter through an authorised dealer; or

(iii) On receipt of full value of shipment declared on

this form the authorised dealer will forward to RBI the

duplicate copy along with the certified copy of shipper’s

invoice.

(iv) The authorised is satisfied on the basis of standing and track

record of the exporter and arrangements made for realisation of

the export proceed that he cold do so. If the authorised dealer is

not satisfied about standing etc. of the exporter, the application

is rejected. No reference is entertained by the Reserve Bank in

such cases.

(c) The original PP form countersignature will be returned to the

exporter by the authorised dealer and the duplicate will be retained

by him. Original PP form should then be submitted to the post

office along with the parcel. The post office through the goods

have been dispatched will forward the original to RBI.

The export of computer software may be undertaken in physical form i.e. software

prepared on magnetic tape and paper media as well as in non-physical form by direct data

transmission through dedicated earth stations/satellite links. The export of computer

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software in physical form is subject to normal declaration on GR/PP form and regulations

applicable there to will also be applicable to such exports. However, export of non-

physical form should be declared on SOFTEX Form. Besides computer software, export

of video / T.V. Software and all other types of software products / packages should also

be declared on the SOFTEX forms. Since export of software is fraught with many risks

and special guidelines have been framed for handling such exports.

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Date post:	20-Jan-2015
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