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DHL Express (I) Ltd. Ascot Centre, Mumbai A Study of options available for the recovery of cost incurred in Special Clearance processes done by DHL As a part of Summer Training Project for MBA Degree course  By Abhishek Pandey Avinash Singh Aditya Faculty of Management Studies Banaras Hindu University, Varanasi
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DHL Express (I) Ltd. Ascot Centre, Mumbai

A Study of options availablefor the recovery of cost incurred in

Special Clearance processes done byDHL

As a part of Summer Training Project

for MBA Degree course

By

Abhishek Pandey

Avinash Singh Aditya

Faculty of Management Studies

Banaras Hindu University, Varanasi

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TABLE OF CONTENTS

• ACKNOWLEDGEMENT 02

• PREFACE 04

• INTRODUCTION 05

• NEED FOR STUDY 07

• OBJECTIVE 08

• CLEARANCE PROCESS 09

• RESEARCH METHODOLOGY

• DATA COLLECTION 28

• DATA ANALYSIS 33

• RECOMMENDATIONS AND SUGGESTIONS 41

• LIMITATIONS 42

• ANNEXURE 43

• BIBLIOGRAPHY 47

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ACKNOWLEDGEMENT

With deep satisfaction and immense pleasure we present. This report

on “ To Look for an option of recovery of cost for special

clearance done by DHL in the process of Import and do a

market study of competitors providing such services ” . This

study of cost recovery could not have been successful without the

support and motivation provided by the employees at Ascot Centre

Office of DHL Express (I) Ltd, Mumbai. It is our proud privilege to have

got an opportunity to work with an esteemed organization like DHL

Express. The encouraging work environment and culture has enabled

our learning.

They were always ready to provide constant support and give their

intellectual inputs to guide us through this enriching endeavor. We

would like to thank them for the keen interest they have taken in

clarifying all the concepts and the underlying fundamentals.

At the onset we would like to express our deep heartfelt gratitude to

Ms. Aditi Sinha, National Gateway Manager for giving us an

opportunity to work on this project in DHL Express.

We would like to thank Mr. Vasudevan Rajagopalan, BOM

Gateway Manager for granting us permission to work at his office at

Ascot centre and provide us with suggestions and help when required.

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We devote our special and sincere thanks to Mr. Ashutosh Bajpai –

Director South Asia for providing us his guidance and valuable

advice.

We would like to thank our guide Mr. Nikhil Umarane, Manager

NCG (BOM GTW) without whose constant support and feedback this

project would have been a mere idea with out a form or content.

We would like to express our heartfelt gratitude to the DHL staff at

Ascot Centre who helped us to comprehend the various processes

involved in Logistics and Express Industry.

Our special thanks to Ms. Vaishali Kamble, Resourcing Manager

HR for her care and providing us an opportunity to work with DHL.

Finally, I would like to thank my Institute FMS BHU for making this

experience of summer training in an esteemed organization like DHL

Express (I) Ltd, Mumbai possible. The learning from this experience hasbeen immense and would be cherished throughout life.

Last but not least we would like to thank all those who were involved

directly or indirectly in the completion of the project.

Thank You.

Abhishek Pandey

Avinash Singh Aditya

(Summer Trainees)

Faculty of Management Studies

Banaras Hindu University

Varanasi (U.P.)

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PREFACE

It gives us immense pleasure to present the report on our projectentitled “ To look for an option of recovery of cost for special

clearance done by DHL in the process of Import and do a

market study of competitors providing such services ” for DHL

Express (I) Ltd.

This report addresses the various issues and processes which are

involved in the custom clearance of shipments imported and includes a

market study of the Express Industry which includes the competitors

who are providing such services. For the purpose we did a thorough

study of the process and have provided suggestions, which we hope

will prove to be useful in time to come.

This report is submitted as a part of course curriculum of MBA degree

at Faculty of Management Studies , Banaras Hindu University .

This report is written in an easy and comprehend-able language using

systematic methodology.

We have ensured our best to cover all the aspects related to this topic

and make the report purposeful.

Abhishek PandeyAvinash Singh Aditya

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INTRODUCTION

The Special Clearance process is a part of Custom ClearanceProcess in Imports in which the shipment involves some specialtype of clearance, which involves some additional processes,papers, time, etc more than what is involved in normal clearanceprocess.

The special clearance is done for the shipments which involvessome kind of exemption from the customs duty.

The Indian Customs provide for some concession in duty to thegoods which are imported for the use in production of goodswhich will be exported, or the imported goods which will be usedfor educational process. The goods which need a NOC (NoObjection Certificate) from the various departments concernedwith the specific goods. The SEZ companies also get some typeof exemption on the goods imported by them and the goods alsorequire a special type of clearance.

The special clearance process involves use of processes andpaper work separate than the normal clearance process in whichthe goods are cleared after paying the customs duty. Thecompany incurs extra cost in the special clearance process asthe paper work required is more. The processes involved aremore and the dedication of man power and time in the process ismore than the normal clearance process.

The cost incurred by the company till now is not being charged tothe customer. This is why the company had a need to find outthe cost incurred on these processes and the option of therecovery of the cost from the customers. In order to decide howmuch to charge from the customers we also need to study themarket as how much is the other companies in the market arecharging for the same kind of services the provide to thecustomers.

The company might be loosing revenue by not charging the costincurred to the customer and an opportunity to earn more profits, sothe need of this study was felt by the company.

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The study was mainly conducted in the following steps:

• Map the process involved in all the type of specialclearance done by the company.

• Find out the time involved in the process and the personresponsible for each process.

• Determine the cost incurred for the process above thenormal clearance process.

• Collect the data regarding the prices or the charges of thecompetitors or others companies providing same kind of services.

• Arrange the data systematically in excel sheet forfacilitating analysis.

• Analyze the collected and arranged data with the help of

graphs and charts to find out variations and the differences.

• Look for the methods in which the costs can be chargedfrom the customers.

• Decision to be taken on in which way and how muchcharge is to be levied on the customers.

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NEED FOR STUDY

The problem arises when:

The cost incurred by the company for special clearance processis not charged to the customers.

• Competitors are providing these clearances at different prices.

• The company is loosing out the revenue which it could haveearned and in turn is loosing out on the profit which it could haveearned.

• The company might be loosing its customers to the competitorswho are providing these services at different prices.

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OBJECTIVE

Look for an option of recovery of cost for special clearancedone by DHL in the process of Import and do market study of competitors providing such services.

PERIPHERAL OBJECTIVES

• The cost incurred by the company for special clearance processis not charged to the customers.

• Competitors are providing these clearances at different prices.

• Look for options from where these costs can be recovered.

• Determine the ways and the charges which are to be leviedon the customer.

SCOPEIn Scope:

• EOU• ADC/ NOC• SEEPZ• Advance License• Schemes (DEPB, Drawback, EPGC, NFEI)

Out of Scope:

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• Form IV• Form V• Formal Clearance

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CLEARANCE PROCESS IMPORTS

DHL Express does the following Custom Clearance underthe Import process.

A. CARGO OR FREIGHTB. COURIER

(A) CARGO

DOCUMENTS REQUIRED FOR CARGO CLEARANCE

1. IGM (Import General Manifest)2. MWAB (Master Airway Bill )3. HAWB (by DHL)4. Delivery Order5. Invoice and Packing list6. Other Documents Related with the shipment.

PROCESS FOR CARGO CLEARANCE

1. Documents received by the SKYLINE Team from CSA.2. The documents are thoroughly checked whether all the

required documents are available or not.3. The filing of documents done.4. The customs duty which is to be levied on theshipment is calculated.5. BoE of Cargo is made on the computer using softwarecalled Visual Impex and filing of BoE is done online.6. This system is known as EDI (Electronic Data Interchange).

The BoE along with other documents is sent on ICEGATE (IndianCustoms EDI Gateway).7. This process is to be completed four hours before the flighttimings.

(B) COURIER

TYPES

• FORM IV•

FORM V• FORMAL

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DOCUMENTS REQUIRED FOR FORM IV AND FORM VCOURIER CLEARANCE

1. AWB2. Invoice Copy and Packing list

DOCUMENTS REQUIRED FOR COURIER WHICH REQUIREFORMAL CLEARANCE

a. AWBb. Invoice Copy and Packing listc. Detention Memod. IEC Codec (Import Export Certificate).

PROCESS OF FORMAL CLEARANCE OF COURIER

1. The documents are received by the SKYLINE Team fromCSA.2. Documents are checked by the Supervisor, whether all thedocuments required is present.3. Send the document for deciding the custom dutyapplicable on the shipment.

Send the document with the decided duty to print theBoE, GATT and Importer’s declaration and upload thedata into Visual Impex.

4. Manual BoE is made and 6 copies of BoE are printed.• Original copy of BoE- for AO (Appraisal Officer)customs.• Duplicate copy of BoE- for PO (Preventive Officer)customs.• 3 rd and 4 th copy of BoE for importer.• 5 th copy for custodian.• 6 th copy for DHL records.

5. Attach all the documents to BoE.6. Authority signatory checks all the documents and signs.7. Document sent to customs for further processing.8. Documents are received after process of customs.9. Documents are stamped and DDR no. is filled.10. Importers copy and DDR is sent to Billing Departmentwhich does the billing and send the documents to the consignee11. Rests of the documents are sent to OperationsDepartment for clearance of the shipment.

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PROCESS AT CUSTOMS

1. Notification of the documents is done in the register of customs, clerk signs on all the copies of BoE and serialnumber is obtained.2. Examination of paper work is done and signed by thecustom officer.3. Examiner will examine the package physically and sign thedocuments.4. Appraisal officer checks the paper and signs thedocuments.5. Auditor checks the documents and signs it.6. Deputy Commissioner signs the documents at last and thedocuments are finally ready to be sent to SKYLINE Team.

SPECIAL CLEARANCE UNDER COURIER (FORMAL)

1. EOU (Export Oriented Units)

UNDER EOU

1. STPI (Software Technical Park)2. EHTP (Electronic Hardware Technical Park)3. BTP (Bio-Technical Part)

DOCUMENTS REQUIRED FOR EOU CLEARANCE

1. Detention Memo.2. AWB Copy.3. Invoice copy and Packing list.4. IEC Codec.5. Procurement Certificate by Central Excise of EOU division.6. Form 17-B bond.7. Green Card copy.

8. File number of the importer registered in Central Excise.*If Customs Exemption, then DEC (Duty ExemptionCertificate) is also required.DEC is generally for Govt. shipments i.e. Defence, Railwaysetc. or related to Educational Institutes i.e. IIT, IIM etc or the shipments which material is used for producing goodsfor defence or educational purpose.

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PROCESS FOR EOU CLEARANCE

1. When the shipment arrives, PC (Procurement Certificate) isissued by Central Excise in the name of DC, customs. It isprovided to DHL by the customer.2. All the documents with PC are received by the SKYLINE

Team.3. Documents are checked by the Supervisor, whether allthe documents required is present.

3. Send the document for deciding the custom dutyapplicable on the shipment.4. Printing of BoE which is yellow in colour, known as YellowBoE.5. File no. of importer registered in Central Excise of EOUdivision, Green Card no. and Form 17-B Bond no. is to be

mentioned on the BoE.6. Attach all the documents to BoE.7. Authority signatory checks all the documents and signs.8. Document sent to customs for further processing.9. Notification of the documents is done in the register of customs, clerk signs on all the copies of BoE and serial number isobtained.10. Examination of paper work is done and signed by thecustom officer.11. Examiner will examine the package physically and sign thedocuments.12. Appraisal officer checks the paper and signs thedocuments.13. Appraisal officer gives the Note sheet to DC, Customs.14. Intimation letter issued by Customs to Central Excise of EOU division.

• Package if to be delivered in Bombay, isaccompanied by Customs Officer and handed over toCentral Excise.• Package if to be delivered outside Bombay, is givento DHL with the intimation letter.• Duplicate BoE is signed by AO and DHL staff statingthat shipment is given to DHL and shipment is received byDHL respectively.• Shipment given to DHL on the guarantee that if it isstolen or lost, the duty is paid.

16. Shipment is delivered to consignee after taking itfrom CE of EOU division.

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CLEARANCE PROCESS FOR EOU IMPORTS

Documents required1) B-17 Bond2) Detention Memo3) AWB Copy4) Green Card5) IEC code6) Invoice copy and packing list7) Procurement certificate by Central Excise8) File no of the file in which importer is

registered in Central Excise.

Get the documents from CSA

Are the requireddocuments

present and correct

Decide the customs dutyapplicable on the shipment

Send documents backto customer and askfor fully completed

documents

Print BoE, GATT and uploadthe data into Visual Impex

Print six copies of BoE andattach all Documents to BoE

Supervisor checksif all the

documents requiredare present

Supervisor signs on documentand send it to customs for

further processing

Yes

Get all the documentscorrected and demand

required documentsfrom customer

No

Receive the do cuments fro m ascot centre,get them noted in register of customs, clerk

signs and gives r egistration no.

Customs examinedocuments, are d ocuments

correct

Send documents backto ascot centre for

correction

No

Customs officer signs thedocuments and send them to

examiner

Examiner physicallyexamines the package.

If the contents are correct

Detain the package for later clearance

No

Examiner signs the documentsand send the to auditor for

signature

Yes

Yes

Auditor signs the documentsand send them for signature of

DC

DC signs the documents anddocuments are send back to

Ascot center

No

PROCESS AT ASCOT CENTRE PROCESS AT CUSTOMS

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Appraisal Officer gives notesheet to DC

DC signs the note sheet

Intimation letter issued byCustom to Central Excise of

EOU division

Is EOU in same city

Package isaccompanied by

Custom Officer tillEOU

Package given to DHL for takingit to EOU w ith the intimation

letter to Central Excise of EOUdivision

Yes

No

Package is delivered toconsignee by DHL

These processes are doneafter other processes at

Ascot centre and C ustomsare done.

OTHER PROCESS RELATED TO EOU CLEARANCE

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2. SEEPZ SEZ (Santa Cruz Electronics ExportProcessing Zone) (Special Economic Zone )

DOCUMENTS REQUIRED FOR SEEPZ CLEARANCE

1. AWB2. Invoice and Packing list.3. Any other documents related to shipment.

PROCESS FOR SEEPZ CLEARANCE

1. Documents are received from CSA.2. Documents are checked by the supervisor whether all therequired documents are present.3. Manual BoE made on the same day when shipment arrives.

4. Four copies of BoE made and duty calculated on theshipment is mentioned.• Original and Duplicate copy for SEEPZ Customs(delivered within 15 days with a list of Thoka no. andconsignee name.• Triplicate and Quadruplicate for consignee (deliveredafter billing department does billing and attaches bill to it).

5. BoE is sent to SEEPZ at MIDC.6. Filing of R-form is done.7. Thoka no . is put on BoE by the SEEPZ Customs.8. Noting of BoE is done by Customs and no is put on BoE.9. AO passes BoE and DC Customs SEEPZ signs on it.10. IDF (Import Duty Free) no. is put on BoE.11. Documents are then sent to Airport for further processing.12. PO gives permission for escorting the shipment to SEEPZ.13. Gate pass is received at Airport by Escorting PO. Usuallyshipment is accompanied by Escorting PO till the SEEPZ.14. Shipment is Passed-In by SEEPZ PO.15. Examination of shipment is done.16. Shipment is delivered to consignee and sign taken on D-form for DHL records.

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PROCESS FOR CLEARANCE OF SEEPZ IMPORTS

Are the requireddocuments present

and correct

Send documents back tocustomer and ask for

fully completeddocuments

No

Decide the customsduty applicable on the

shipment

Yes

Print four copies of BoE

BoE sent to MIDC at SEEPZ

Filing of R-Form is done for exemption of OCTROI duty

Receive the documents fromAscot Centre, Thoka No. is put

on the documents

Noting done by customs atSEEPZ and no. is put on

documents

Documents are passed by AOand DC Customs at SEEPZ

signs the documents

IDF no. put on the documentsand they are sent to Airport

Documentsreceived along

with the shipment,from Airport

Shipment passed in by theSEEPZ PO and examined by

Examination Officer

Given to DHL for delivery to the

consignee

Gate pass issued by PO toDHL and permission given

on BoE to escort theshipment till SEEPZ.

Shipment usuallyescorted by PO till SEEPZ

Get the documents fromCSA

PROCESS AT ASCOT CENTER

Documents required1) AWB Copy2) Invoice copy and packing list3) Any other documents related withthe shipment4) BOE

PROCESS AT SEEPZ

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3. Advance License

An Advance License is issued to allow duty free importswhich are physically incorporated in the export product(making normal allowance for wastage).

Other products like fuel, oil, energy, catalysts etc. whichare consumed in the course of their use to produce theexport product, may also be allowed under this scheme.Also, mandatory spares (up to 10% of CIF value of thelicense which are to be supplied with the resultant product)are also allowed under the Scheme.

Advance License carries with it the concepts of exportobligation and value addition. Export obligation indicates

the FOB value of exports that have to be made by theholder of the Advance License in lieu of the of the duty-freeimport facility he gets.

Advance License is issued for

• Physical exports - to a manufacturer exporter or to amerchant exporter or to a supporting manufacturer.

• Intermediate suppliers to a manufacturer for the import of inputs required in the manufacture of goods, to be supplied tothe ultimate exporter.

Advance License - Basic Points

Advance License is issued in two parts - In Part I will berecorded all the imports allowed to be made and the actualimports made (CIF Value), and in Part II the products, theirquantities and value required to be exported (FOB values),constituting the export obligation and the actual exports

made (as seen in the shipping bills). Two copies of Advance license are issued, customs copyand excise copy. Customs copy goes to customs signedand verified. This process is called bulleting.

Advanced License is submitted in customs with bond B-17and Bank Guarantee (BG) or bond with LicenseUndertaking (LUT) for registration.

At the time of making BoE for imported goods, license

number is indicated on it.

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Duty levied on the imported goods is debited from thebond filled by the importer.

PROCESS FOR ADVANCE LICENCE CLEARANCE

1. License is available. Check whether the License iscomplete in all respects.

2. Compare the eligibility of goods imported with respect toLicense available.

3. Bond & Bank Guarantee (BG) is provided by the importeras per the schemes. 4. Bond & BG is accepted by the AO & DC.

5. Register Bond & BG at ACC and obtain relevant filenumber from BBG Cell.

6. Preparing & filing of BoE according to the scheme to beclaimed.

7. Bond & BG is debited in the system by AO & DC duringAssessment of goods.

8. BoE is debited by DC against the Bond no. in the system.

9. Hard copy of License & BoE is debited by AO. 10. Clear the consignment by paying the duty asapplicable.

11. Delivery of the shipment to customer after the landingof shipment.

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Licenses

Air Cargo ComplexDHL Facility

License is available.Check whether the

License is complete in allrespects

Compare the eligibility of goods imported wrt

License available

Proceed for preparing &filing of BoE according tothe scheme to be claimed.

Bond & Bank Guarantee(BG) is provided by the

importer as per theschemes

Note:Bond: Declaration given byimporter on Rs.200 Stamppaper binding himself to comply with all the conditions of notification claimed . Bond should be notorised andsigned by 2 witnesses along with their Name & AddressBBG Cell: Bond Bank Guarantee Cell

Bond & BG isaccepted by the

AO & DC

Register Bond & BGat ACC and obtain

relevant filenumber from BBG

Cell

Bond & BG is debitedin the system by AO &DC during Assessment

of goods

Hard copy of License & BoE isdebited by AO

BoE is debitedby DC against

the Bond no. inthe system

Follow the Importers for completion of Export

obligation &documentation required

for cancellation of Bond/BG

Clear theconsignment by

paying the duty asapplicable

ClearanceAgent

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ADC (Asst. Drug Controller)

o Checks done for drugs, medicines, cosmeticso

Checks for these items restricted in Indiao Personal Import of medicine can be done on Form-12Bissued in Mumbai. Form 10 is for storing imported drugs.o Checks medicine details i.e. quantity, type, disease it isused to cure.

Different types of NOC (No Objection Certificate)

• WLRO (Wild Life NOC). This NOC is issued for animal goods like skins, ivory,leather etc. It includes certificate from country of origin,scientific name etc. If any discrepancy is found with thesegoods, they are not returned to origin but destroyed.

• PNQ (Plant Quarantine NOC)Phyto-sanitary form is required along with certificate of origin. The items related to plants like seeds, flowers,leaves and other herbs are checked and if found free fromrisk of disease or infection, NOC is issued else the itemsare quarantined.

• PHO (Public Health Organization NOC)Eating products, drinks, snacks etc. require PHO certificate.

These items should be accompanied by Certificate of origin.• AQ (Animal Quarantine NOC)

This NOC is issued after checking the health of the animalbeing imported. It requires certificates of place of origin,status of vaccination etc.

• TC (Textile Committee Certificate) This certificate is issued after ensuring that the textilebeing imported is free from restricted chemicals. Howeverif the textile imported is for making dresses which are fullyfor export, no NOC is required.

• Police NOCSome items like dead bodies, weapons, sharp objects likeknives etc. require a NOC issued by the Police.

• NOC for Machine parts This NOC is required for machine parts ensuring qualityand safety. For Aircraft parts, Air worthiness certificate isalso required.

• NOC from Archaeological Survey of India This NOC is required for antique pieces, statues etc.

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PROCESS FOR ADC/NOC CLEARANCE

1. Receive documents from CSA.

2. Prepare BoE and report at Customs with the Filed BoE

3. Put up the BoE along with the Invoice to ADC.

4. Is the ADC satisfied with the details of the product?

5. Get the full markings present on the product.

6. ADC asks for literature, chemical contents, and sample

to be tested.

7. Is the ADC satisfied with the above documents &sample?

8. Importer gives a test bond (Letter of Guarantee) andclears the shipments.

9. On receipt of the test report ADC will give the NOC &cancel the test bond.

10. On receipt of ADC NOC pay the required duty and clearthe shipment.

11. Deliver the shipment to customer.

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Drugs & Pharmaceuticals

Air Cargo Complex

Report at Customswi th the Fi l ed BoE

Get the full markingspresent on theproduct ;such as1) Chemical name2) Contents3) Batch/Seri al no4) Manufacturer’ s name5) Mfg &Exp dates

Is the ADCsatisfied with themarkings on the

product?

ADC asks for 1) Literature2) Chemicalcontents3) Sample to betestedYes

No

Is the ADCsatisfied with theabove documents

& sample?

No

On receipt of the testreport ADC w ill give theNOC & cancel the test

bond

I mport er gives a testbond (Letter of

Guarantee) and cl earthe shipments

Note: Importer cannotuse the goods unlessADC NOC is obtained

ADC endorses itsNOC & clears the

shipment

Yes

CSACl earanceAgent

Put up the BoEalong with the

Invoice to ADC

Is the ADCsatisfied with the

details of theproduct?

Yes

No

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SCHEMES:

DEEC (Duty Exemption Entitlement Certificate)Scheme:

Duty Exemption Scheme is an export promotion schemeand it enables import of inputs required for exportproduction free of Customs duty. Advance Licences areissued under Duty Exemption Scheme to allow import of inputs, which are physically incorporated in the exportproduct (after making normal allowance for wastage).

In addition, fuel, oil, energy catalysts, etc., which is

consumed in the course of their use to obtain the exportproduct, can also be allowed under the scheme. Value andquantity of each item permitted duty free import arespecified in the Advance Licence

Advance Licences are issued for Physical exports,Intermediate supplies and Deemed exports. AdvanceLicences are also issued on the basis of annualrequirement for exports/supplies.

All Advance Licences and/or materials, imported thereunder are not transferable even after completion of exportobligation.

In order to ensure proper monitoring and utilisation of inputs imported against Advance Licences (except AdvanceLicence for deemed exports), a Duty EntitlementExemption Certificate (DEEC) Book is issued along with theAdvance Licence by DGFT authorities.

Since Advance Licence Scheme involves technicalities, its

operation has been restricted to limited ports, airports,ICDs, etc. which are notified for the purpose.Commissioners of Customs have, however, beenempowered to permit export/import under the Schemefrom any other place which has not been notified, on caseto case basis by making suitable arrangements at suchother places.

(Reference: Customs notification No.48/99-Customs, dated29.4.99 and 50/2000-Cus., and 51/2000-Customs, bothdated 27.4.20)

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DEPB (Duty Entitlement Pass Book) Scheme:

DEPB Scheme was first announced on 1.4.1997 under EXIMPolicy 1997-2002. It is an export promotion scheme andgrants DEPB Credit Entitlement to an exporter at the timeof export at a fixed rate notified by DGFT. The DGFT haveso far notified DEPB rates for nearly 2000 export products.

The normal validity period of a DEPB Scrip is 12 monthsand DGFT authority (who issues the scrip) is empowered togrant revalidation. These scrips are for a certain amount of

DEPB credit and can be utilised for adjusting CustomsDuties (Basic or CVD) against import of any products intoIndia, without the necessity of any co-relation between theexport product and the import goods, i.e. it is notnecessary to import only the relevant inputs correspondingto the export product.

Since DEPB Scheme also involves technicalities, itsoperation has also been restricted to limited ports, airports,ICDs, etc. which are notified for the purpose.Commissioners of Customs have, however, beenempowered to permit import/export under the schemefrom any other place which has not been notified, on caseto case basis.

The DEPB and/or the items imported against it are freelytransferable. Import against DEPB scrips is allowed at theport specified in the DEPB which is the port from whereexports have been made.

No duty drawback is allowed on exports made under DEPB

Scheme. However, in cases where CVD is paid in cash onimported inputs, or where indigenous duty paid inputs areused in the manufacture of export product, in such casesbrand rate of duty drawback is admissible .

(Reference: Customs notification No.34/97-cus., dated7.4.97)

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EPCG (Export Promotion Capital Goods) Scheme:

Under EPCG Scheme import of capital goods which arerequired for the manufacture of resultant export productspecified in the EPCG Licence is permitted at concessionalrate of Customs duty. This Scheme also enablesupgradation of technology of the indigenous industry.

Capital goods imported under EPCG Scheme are subject toactual user condition and the same cannot be transferred /

sold till the fulfillment of export obligation specified in thelicence.

The normal validity period of EPCG licence is 24 monthsand DGFT authority (who issues the licence) is empoweredto grant further revalidation.

In order to ensure proper accountable of fulfillment of export obligation, the EPCG licence holder is required toindicate the EPCG licence No/date on the body of theShipping Bill.

Exporter of goods manufactured with the help of CapitalGoods imported under the EPCG Scheme is entitled toinput duty incidence neutralisation benefits like Drawback,DFRC, Advance Licence, etc. in accordance with the termsof the individual scheme(s).

(Reference: Customs notification Nos.28/97-cus.,dated1.4.97 (10% duty) and 49/2000-cus. dated 27.4.2000 (5%duty))

NFEI (No Foreign Exchange Involved)

This advance licence is taken by the companies who havetheir branches in the foreign countries, when they importgoods from their branch outside India there is no foreignexchange involved in the process. The company isimporting from its own branch and does not have to makeany payments. In theses cases the company obtain alicence from Commissioner of Customs for exemption of duty.

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Process followed for Schemes Clearance.

1. License is available for the clearance under the requiredscheme. Check whether the License is complete in allrespects.

2. Compare the eligibility of goods imported with respect toLicense available.

3. Bond & Bank Guarantee (BG) is provided by the importeras per the schemes.

4. Bond & BG is accepted by the AO & DC.

5. Register Bond & BG at ACC and obtain relevant filenumber from BBG Cell.

6. Preparing & filing of BoE according to the scheme to beclaimed.

7. Bond & BG is debited in the system by AO & DC duringAssessment of goods.

8. BoE is debited by DC against the Bond no. in the system.

9. Hard copy of License & BoE is debited by AO.

10. Clear the consignment by paying the duty asapplicable.

11. Delivery of the shipment to customer after the landingof shipment.

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SCHEMES CLEARANCE PROCESS

Air Cargo ComplexDHL Facility

License is available.Check whether the

License is complete in allrespects

Compare the eligibility of goods imported wrt

License available

Proceed for preparing &filing of BoE according tothe scheme to be claimed.

Bond & Bank Guarantee(BG) is provided by the

importer as per theschemes

Note:Bond: Declaration given byimporter on Rs.200 Stamppaper binding himself to comply with all the conditions of notification claimed . Bond should be notorised andsigned by 2 witnesses along with their Name & AddressBBG Cell: Bond Bank Guarantee Cell

Bond & BG isaccepted by the

AO & DC

Register Bond & BGat ACC and obtain

relevant filenumber from BBG

Cell

Bond & BG is debitedin the system by AO &DC during Assessment

of goods

Hard copy of License & BoE isdebited by AO

BoE is debitedby DC against

the Bond no. inthe system

Follow the Importers for completion of Export

obligation &documentation required

for cancellation of Bond/BG

Clear theconsignment by

paying the duty asapplicable

ClearanceAgent

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DATA COLLECTION

1. COST DETERMINATION

• The cost incurred by the company in the Special Clearanceprocess which is to be taken in to account is the additional costabove the cost incurred in the normal clearance process.

• The cost incurred in the normal clearance process is accountedfor and is charged to the customer.

• This additional cost is needed to be charged from the customerin the terms of brokerage charge.

• This additional cost for different types of special clearance andthe prices charged by DHL Express are as following:

Comparison between Cost Incurred and Price charged tocustomer

o The charges mentioned above are in rupees.o The cost incurred is the additional brokerage charge

incurred during the special clearance process.o The Price Charged from customer does not include the

freight charges, the customs duty, the other customcharges, etc.

o The price charged in case of ADC/NOC is only in the case of WMX shipments.

o The two costs mentioned in case of ADC/NOC are the cost

incurred in case of ADC and NOC for Plant Quarantine, Textile Committee, etc respectively.

Charged Cost IncurredEOU Nil 410

SEEPZ Nil 410ADC / NOC 1000 410 / 700

Advance License Nil 410Schemes Nil 410

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April 2008

CostIncurred

(In Rs.)

No of shipmentsCleared

Total Cost(In Rs.)

EOU 410 149 61090SEEPZ 410 200 82000

TOTAL 143090

May 2008

CostIncurred

(In Rs.)

No of shipmentsCleared

Total Cost(In Rs.)

EOU 410 177 72570SEEPZ 410 207 84870

TOTAL 157440

• Total cost incurred by company on EOU and SEEPZ clearance intwo months was Rs. 300530.

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Market Study The Competitors are providing different types of Special

Clearance at different prices.

They are also taking different amount of time for same type of

clearance.

In order to find out the prices prevailing in the market data from

different companies was collected with help of survey.

The data was collected with the help of an open ended and

multiple choice type questionnaires.

The time taken by each company and price charged by them for

different types of Special Clearance processes are shown in the

table.

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Time taken by DHL and other companies for the variousclearance processes:

EOU SEEPZ ADC NOC AdvanceLicense

Schemes

TNT 1 NA 1 2 2

UPS 2 1 1 1 1

AFL 2 2 1 2 2

CargoPartner

1 2 1 3 3

SchenkerIndia Pvt.Ltd.

1 2 1 2 2

WelgrowIndia Pvt.Ltd.

1 2 1 3 3

DHL Express 1 1 1 2 2

• Time mentioned is approximate, and is in No. of days for each kindof clearance.

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Charges of DHL and other companies for various SpecialClearance process

EOU SEEPZ ADC NOC AdvanceLicense

Schemes

TNT 3000 NA 3000 3000 3000UPS 1600 1600 1600 2000 2000

AFL 2500 2500 2500 2500 2500

CargoPartner

2000 2000 2000 2000 2000

SchenkerIndia Pvt.Ltd.

1800 1800 1800 1800 1800

Welgrow

India Pvt.Ltd.

2000 2000 2000 2000 2000

DHLExpress

Nil Nil 1000 Nil Nil

• Charges mentioned are approximate and are in INR.• DHL charge of Rs. 1000 for ADC /NOC in only in case of WMX

shipment.

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DATA ANALYSIS

1. GRAPH OF TIME TAKEN BY VARIOUS COMPANIES

• Time taken is in No. of Days.

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• Comparison of charges by different companies for various

special clearance processes.

1. EOU

• The charges mentioned are in INR.

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2. SEEPZ

0

500

1000

1500

2000

2500

TNT AFL Schenker India Pvt.

Ltd.

DHLExpress

SEEP

SEEPZ

• The charges mentioned are in INR.

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3. ADC / NOC

0

500

1000

1500

2000

2500

3000

TNT AFL Schenker India Pvt.

Ltd.

DHLExpress

ADC NOC

ADC NOC

• The charges mentioned are in INR.• The charge by DHL is only in the case of WMX shipment

otherwise it is not charging anything.

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4. Advance License

• The charges mentioned are in INR.

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5. Schemes

• The charges mentioned are in INR.

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Findings

Cost incurred

1. The cost incurred by DHL in EOU clearance is not charged to the

customer.

2. In SEEPZ Clearance Company is not charging any thing from the

customers.

3. In case of ADC/NOC company charges Rs. 1000 only in the case

of Cargo WMX shipments other shipments are not charged.

4. The company is also not charging the customer for Advance

License and Schemes Clearance under Cargo.

5. The total cost incurred by company in two months of April and

May in EOU and SEEPZ clearance was around Rs 300530, which

was not charged to the customer.

Time Involved

6. The time taken by various companies for all the Special

clearances varies from one day to three days.

7. For EOU all the companies do in almost same number of days,

except AFL and UPS who take a day extra than others.

8. SEEPZ clearance is done fastest by DHL and UPS while others

take an extra day and TNT does not do SEEPZ clearance.

9. ADC / NOC clearance is done by all the companies in same time.

10. DHL and all the other companies take two days to do the

Advance License and Schemes clearance except Cargo Partner

and Welgrow India who take three days.

Prices charged

11. In the case of EOU shipment all the companies are charging

price from the customer in the range of Rs. 1500 to Rs. 3000

but DHL is not charging anything.

12. In the case of SEEPZ all the other companies are charging

price from Rs 1500 to Rs 2500 but here also DHL is not

charging from the customer.

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13. In the terms of ADC DHL charges only in the case if the

shipment is WMX else no charges are levied all the other

companies are charging in the above mentioned range.

14. In the case of Advance License and Schemes Clearance allthe other companies are charging price from the customer

except DHL.

15. The prices charged by all the company are different and there

is no fixed charge in the market.

16. The charges depend mostly on market forces.

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SUGGESTIONS AND

RECOMMENDATIONS

1. The company may be losing upon revenues and profits by

not charging to customers, so it should be charged to customer.

2. Company should charge a price which includes a cost plus

sufficient margin for its services.

3. DHL is providing all the clearance in lesser time compared

to other companies or in same time as others, so it should charge

for faster services.

4. All the competitors or companies are charging price to

customers. So DHL should also charge for the same.

5. The price should include cost and sufficient margin but

should be less than that if other companies for the same process.

6. The price can be charged under brokerage charges.

7. The company will not lose business as even after charging

the cost, the prices will remain the lowest in the market.

8. The prices to be charged must be uploaded in the ACA and

the billing software so as just after indicating the type of

shipment the price is automatically added in the bill.

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LIMITATIONS1. The study is based on the data collected with the help of

questionnaire and the response of companies.

2. The authenticity of data provided by the companies cannot be

verified.

3. Usually the companies contacted were not comfortable in

disclosing the data without knowing the exact motive.

4. Some companies either refused to reply while others provided

information which was not very reliable.

5. The time and charges mentioned for the clearance process are

approximate.

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ANNEXURE

Questionnaire

The objective of this questionnaire is to study and analyze theSpecial Clearance process of major Express / Cargo companies.

Any information provided here in will be used purely for academic /research purpose and will be kept confidential.

Que1. What are the services provided to customers by yourorganization?

(a) Courier (b) Cargo (c) Post (d) Others

Que2. What are the types of special clearance done by yourorganization under imports?(Tick which ever applicable)

(a) EOU (Export Oriented Unit)(b) SEEPZ (Santacruz Electronics Export Processing Zone)(c) ADC NOC (No objection Certificate)(d) Advance licence

(e) Schemes (DEEC, DEPB, EPGC, NFEI)DEEC: Duty Exemption Entitlement CertificateDEPB: Duty Exemption PassbookEPGC: Export Promotion Goods CertificateNFEI: No foreign Exchange Involved

(f) Any other (Please mention)____________________________________________________________________

_

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EOU Clearance

Que3. What documents are required for EOU clearance?(Tick which ever applicable)

(a) Detention Memo.(b) AWB (Airway bill) Copy.(c) Invoice copy and Packing list.(d) IEC (Indian Exporters Certificate) Code.(e) Procurement Certificate by Central Excise of EOU division.(f) Form 17-B bond.(g) Green Card copy.(h) File number of the importer registered in Central Excise.(i) Any other (Please mention)

__________________________________________________________________ ___

Que4. How much is the time taken for shipment to get cleared underEOU clearance?

(a) Less than 1day

(b) 1 day (c) 2 days (d) More than 2days

Que5. How much do you charge (in INR) for EOU clearance other thanfreight, duty and customs charges?

________________________________________________________________________

SEEPZ

Que6. What documents are required for SEEPZ clearance? (Tick whichever applicable)

(a) AWB(b) Invoice and Packing list.(c) Any other (Please mention)

__________________________________________________________________ ___

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Que7. How much is the time taken for shipment to get cleared underSEEPZ clearance?

(a) Less than 1day (b) 1 day (c) 2 days (d) More than 2daysQue8. How much do you charge (in INR) for SEEPZ clearance otherthan freight, duty and customs charges?

________________________________________________________________________

Advance Licence

Que9. What documents are required for Advance Licence clearance?(Tick which ever applicable)

(a) AWB (Airway Bill)(b) Invoice and Packing list(c) Advance Licence Copy(d) Any other (Please mention)

____________________________________________________________________ __

Que10. How much is the time taken for shipment to get cleared underAdvance licence clearance?

(a) Less than 1day (b) 1 day (c) 2 days (d) More than 2days

Que11. How much do you charge (in INR) for Advance licenceclearance other than freight, duty and customs charges?

________________________________________________________________________

ADC / NOC (Assistant Drug Controller / No objection certificate)

Que12. What documents are required for ADC NOC clearance? (Tickwhich ever applicable)

(a) AWB (Airway Bill)(b) Invoice and Packing list(c) ADC / NOC Copy(d) Any other (Please mention)

____________________________________________________________________ _

Que13. How much is the time taken for shipment to get cleared under

ADC NOC clearance?

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(a) Less than 1day

(b) 1 day (c) 2 days (d) More than 2days

Que14. How much do you charge (in INR) for ADC / NOC clearanceother than freight, duty and customs charges? ________________________________________________________________________ Schemes (DEEC, DEPB, EPGC, NFEI)

Que15.What documents are required for Schemes clearance? (Tickwhich ever applicable)

(a) AWB (Airway Bill)(b) Invoice and Packing list(c) Advance licence copy of DEEC, DEPB, EPGC, and NFEI licences(d) Any other (Please mention)

____________________________________________________________________ _

Que16. How much is the time taken for shipment to get cleared underSchemes clearance?

(a) Less than 1day

(b) 1 day (c) 2 days (d) More than 2days

Que17. How much do you charge (in INR) for Schemes clearance otherthan freight, duty and customs charges? (Please mention againstrequired)

(a) DEEC (Duty Exemption Entitlement Certificate):(b) DEPB (Duty Exemption Passbook):(c) EPGC (Export Promotion Goods Certificate):(d) NFEI (No foreign Exchange Involved):

Please fill in your details below:

Name_________________________________________________

Designation__________________________________________

Organization_________________________________________

Phone________________________________________________

Email________________________________________________

Website______________________________________________

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Thank You

BIBLIOGRAPHY

1. www.bluedart.com/regulatory.html

2. www.gjepc.org

3. www.mcgm.gov.in

4. www.accmumbai.gov.in

5. www.ias.nic.in

6. www.cbec.gov.in

7. http://dateyvs.com

8. www.dpwn.com9. www.dhl-discoverlogistics.com

10. www.ieport.com

11. www.ices.nic.in

12. www.icegate.gov.in


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