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Page 1: Export and Import Clearance Procedures and Documentation

BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

ACKNOWLEDGEMENT

We would like to thank Shailashree mam

for giving us an opportunity which gave us more

knowledge about the lengthy and the complicated

procedures of import and export. With the help of

this project we could understand the role of

clearing and forwarding agents in export and

import procedures.

TABLE OF CONTENTS

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Page 2: Export and Import Clearance Procedures and Documentation

BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

Sr.no

Title Page

no 1) INTRODUCTION.

(i) DEFINITION.4

2) RESPONSIBILITIES OF CLEARING AND FORWARDING AGENTS.

(i) THREE FACETS OF CLEARING AND

FORWARDING AGENTS.

7

3) ESSENTIAL SERVICES PROVIDED BY C&F AGENTS.

(i) OPTIONAL SERVICES PROVIDED BY C&F AGENTS.

13

4) ROLE OF C&F IN EXPORT & IMPORT PROCEDURE.

(i) EXPORT PROCEDURE.(ii) IMPORT PROCEDURE.

17

5) MODE OF PAYMENT. 25

6) DOCUMENTATION.(i) PERFORMA INVOICE.(ii) PACKING LIST.(iii) BILL OF LADING.(iv) CERTIFICATE OF

ORIGIN.(v) SHIPPING BILL.

26

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INTRODUCTION

Before the clearing and forwarding agents

came into the picture the export-import rules

and procedures were very complex, time-

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consuming in short difficult to understand so

as to make it easy the commission rate of

customs have issued clearing and forwarding

license to the people who have proved

themselves convergent with customs rules

and regulations. The clearing and

forwarding agents are also known by

different names such as custom house agent

or freight forwarders or shipping agents.

The clearing & forwarding agents are the

Companies, which have been authorised and

issued License by Customs and Airport

authority of India to get the goods inspected

at the customs warehouse.

Where entry of common man or even the

exporter is prohibited (exporter can always

go to get his goods inspected, but cannot

communicate directly with a custom

inspector)

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

These shipping and clearing agents only

prepare the export documents for the

client’s shipments.

As this area is highly sensitive in nature,

due to all the stuff meant for export is

stocked here and because of risk of goods

being stolen, only authorised people like

employees of these licensed agencies are

allowed to interact with custom officials to

get the goods inspected, after which they

handover the goods to air/shipping lines for

them to airlift the cargo and send it to its

destination.

(i) DEFINITION

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

Clearing and forwarding agents are

authorised by the Government of India to not

only help the importers and the exporters

but also to bring it to the notice of the

custom officials any irregularities in the

customs rules and regulations optated by the

customs, importer and exporter. The

clearing agent should be converse with

customs act rules and regulations.

RESPONSIBILITIES OF CLEARING AND

FORWARDING AGENTS

(i) Furnish, whenever required by the

Licensing Authority, an authorization

from each of the firms or persons by

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whom he is employed to act as their

Customs Agent;

(ii) Not represent a client before an

Officer of Customs in any matter

which the licensee dealt as an officer

or employee of the Department or of

the facts of which he gained

knowledge while in Government

service;

(iii) Not appear, plead or act in any

proceedings under Sections 179,

193, 194 or 196 of the Customs

Act’1969, for and on behalf of any

person other than the person for

whom he acted as licensee in

relation to matters out of which the

proceedings have arisen;

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

(iv) Where he knows that a client has not

complied with the law or has made

any error in or omission from any

documents which the law requires

such client to execute, advise his

client promptly of the fact of such

non-compliance, error or omission

and immediately bring the matter to

the notice of the appropriate officer

of Customs in writing.

(v) exercise due diligence to ascertain

the correctness of any information

which he imparts to a client with

reference to any Customs business;

(vi) Not withhold information relating to

any Customs business from a client

who is entitled to such information;

(vii) promptly pay over to Government

when due, all sums received for

payment of any duty, tax or other

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debt or obligation owing to the

Government and promptly account to

his clients any money received for

them from Government, or received

from them in excess of

Governmental, or the other charges

properly payable in respect of the

clients Customs business;

(viii) not attempt to influence the conduct

of any officer of Customs in any

matter pending before the Custom

House, Station, Port or Airport by

the use of threat, false accusation,

duress or the offer of any special

inducement or promise of advantage,

or of any gift or favor or other thing

of value;

(ix) not procure or attempt to procure,

directly or indirectly, information

from Customs records or other

Government sources of any kind to

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

which access is not granted by

proper authority;

(x) not employ in any capacity, with

power of attorney, by delegation of

otherwise, for the promotion of or in

connection with the work relating

the license :-

i. any person whose application for

license or Customs permit has

been refused; or

ii. any person whose license or

permit has been revoked or

whose conduct as a partner,

manager, director, officer or

servant has been the cause of the

revocation of the license or

permit;

(xi) not lend money to any officer or

employee in the service of the

Custom House or Customs-station or

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become surety for the repayment of

money borrowed by any such officer

or employee ; and

(xii) Intimate to the Licensing Authority

any change of address immediately

after such change is effected.

(i) Three facets of customs clearance

A customs house agent clears and forwards the goods arrived at the following places:-

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1. Goods which come by a foreign post.

2. Goods which come through Sea-ports.

3. Goods which come through Airports

ESSENTIAL SERVICES

PROVIDED BY C&F AGENTS

The following are some of the services provided by all kinds of C&F agents:

Providing warehousing facility to the

exporters for warehousing the goods

before their transportation to the

docks/port.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

Transportation of goods to the docks

and arrangements of warehousing at

the port.

Arrangement of containers required

for shipment of the goods.

Booking of shipping space or air

freighting.

Advising the exporter as regards the

relative cost of sending the goods by

different airlines/shipping lines as

well as selection of the route of the

flight/ sea route.

Making arrangements for shipment

of goods to be on board the

ship/plane.

Arranging for marine/cargo

insurance of the shipment.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

Preparation and processing of

shipping documents required for

custom clearance.

Arranging for various

endorsements/issue of certificates

from various agencies.

Providing assistance in the packing

of the shipment.

Making arrangements for local

transportation of goods to the

port/docks.

Forwarding the documents to the

exporter for their negotiation with

the bank.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

(i) OPTIONAL SERVICES

PROVIDED BY THE C&F

AGENTS:-

The following services are provided by

the leading c&f agents at the specific

request of the exporter:

1. Providing warehousing facilities

abroad at least in some of the major

international markets in case the

importer refuses to take the delivery of

the goods for any reason.

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2. Providing assistance to bring the

goods back to India if the situation so

demands.

3. Providing assistance to locate the

goods in case of shipment is misplaced

or the cargo is stranded at some port.

4. Making arrangements for assessment

of damage to the goods to title claim

with the insurance company.

Role of C&F in Import & Export procedure

For smooth and timely shipment of cargo,

the exporter should appoint a suitable

Clearing and Forwarding Agent.

Nevertheless, he should prepare the

shipping documents himself as there are

many intricacies and technicalities which he

alone would know properly. He should not

depend too much on the Clearing and

Forwarding Agent, who should be entrusted

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with getting the documents processed and

shipment only.

The different stages involved in the

shipment of goods are as follows:

Customs verification of Shipping Bills.

Carting and Receipt of Cargo of/in transit

Sheds.

Cargo examination at Docks.

Loading of Cargo.

Issue of Mate Receipt.

The procedure adopted at different ports relating to different stages is different. Since all these formalities are, by and large, to be completed by the Clearing and Forwarding Agents.

(i) Export procedure:-

Documents required:-

Detail description of goods to be

exported.

Destination address with contact details.

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Invoices that would be raised on

consignee.

The goods that are to be exported would be

factory stuffed or stuffed at the port of

loading. In case the goods are factory

stuffed the exporter needs to make sure that

the container is stuffed in the presence of

the regional customs/excise officials and the

same is sealed by the concerned officer and

the same should be certified by him.

The customs house agent needs to keep the

shipping bill ready with all the particulars

viz.

Exporter name and address with contact

details (consigner), destination name and

address with contact details (consignee),

number of packages, its weight, details

like freight paid mentioned in it, the name

of the vessel/flight

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

The goods are taken in the port area for

either stuffing it into the container or

directly to the vessel/flight. This procedure

is known as carting of cargo.

The customs officials will examine the

goods that have to be stuffed in the

container at the port. In case of factory

stuffed containers the custom official will

only verify marks and number of the

containers the custom official will only

verify marks and the number of the

container and seal number as shown by

the customs/excise officials remarked at

the factory stuffing.

The goods will be loaded into the

designated vessel and only then the

shipping company will issue bill of lading

showing the container is laden on board.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

The bill of lading will have columns

showing the exporter’s name and address,

name and address of the person to whom

the container is consigned to, exporting

carrier’s name, post of loading will also the

number of packages, weight and volume of

the consignment.

Bill of lading is very important

document for consigned partly as he will

be able to clear these goods only on

surrender of Bill of Lading issued by the

port of loading.

Documents enclosed

Copy of shipping bill.

Copy of bill of lading.

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(ii) Import Procedure:-

The custom clearing and forwarding agents

once appointed by the consignee need to

have the following documents:

Bill of Lading.

Invoices.

Packaging list.

Certificate of Origin.

Quarantine Certificate.

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Letter of authority from the Importer.

Importers IC code no. certificate.

On receipt of the above said documents

the custom house agent need to submit

duly filled Bill of Entry to the customs.

The Bill of Entry will be in quadruplicate

original copy for the customs, duplicate

being the importers copy, triplicate being

the exchange control and the fourth copy

to the port Authority.

The cargo would be either first check or

second check. In first check, the cargo is

first checked by customs officials and duty.

In second check, the duty is first paid on

the strength of consigner’s declaration and

customs official would examine the cargo

after the duty is paid.

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The custom house agent should make sure

that all sums received for payment of any

duty, taxes or other obligation owing to the

government is promptly paid on receipt of

the same from the client.

Documents enclosed:

Copy of Bill of Lading.

Packing List.

Invoices.

Certificate of Origin.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

MODE OF PAYMENT:-

The c&f agent offers various services to

its clients. While planning for distribution

logistics, the exporter should in the first

instance, appoint C&F agents to provide him

the required services. There are no

standardized rates of charges taken by these

agents. The exporter should negotiate with

these agents the amount of fees payable to

them in relation to the desired services or

even could pay him on commission basis.

DOCUMENTATION

Documents are classified as commercial

documents and regulatory documents:

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(a) Commercial Documents: Commercial

documents are required for effecting

physical transfer of goods and their title

from the exporter to the importer and the

realization of export sale proceeds. Out of

the sixteen commercial documents in the

export documentation frame work as many

as fourteen have been standardized and

aligned to one another. These are Performa

Invoice, Commercial Invoice, Packing List,

Shipping instructions, intimation for

inspection, certificate of inspection of quality

control, insurance declaration, certificate of

insurance, Mate’s Receipt, and 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.

(b) Regulatory Documents: Regulatory

pre-shipment export documents are

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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, export trade control, customs

etc. Out of nine regulatory documents four

have been standardized and aligned. These

are shipping bill or bill of export, exchange

control declaration, export application dock

challans or port trust copy of shipping bill

and receipt for payment of port charges.

FOLLOWING ARE THE

DOCUMENTS ATTACHED WITH

THEIR EXPLANATIONS.

(i)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 Proforma invoice.

It is a quotation given as a reply to an

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enquiry. It normally forms the basis of all

trade transactions.

Contents of Proforma invoice

Name and address of the exporter.

Name and address of the importer.

Mode of transportation, such as sea or

air or multimodal transport.

Name of the port of loading.

Name of the port of discharge and final

destination.

Provisional invoice number and date.

Exporter’s reference number.

Buyer’s reference number and date.

Name of the country of origin of goods.

Name of the country of final destination.

Marks and container number.

Number and packing description.

Description of goods giving details of

quantity, rate and total amount in terms

of internationally accepted price

quotation.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

Signature of the exporter with date.

(ii) 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.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

(iii) BILL OF LADING

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 the document of title to the goods and

as such, is freely transferable by

endorsement and delivery.

A bill of lading serves three main purposes:-

(a) As a document of title to the goods;

(b) As a receipt from the shipping company;

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(c) As a contract for the transportation of

goods.

CONTENTS OF BILL OF LADING

Name and logo of the shipping line.

Name and address of the shipper.

Name and the number of the vessel.

Name of the port of loading.

Name of the port of discharge and place of

delivery.

Marks and container number.

Packing and container description.

Total number of containers and packages.

Description of goods in terms of quantity.

Container status and seal number.

Gross weight in kilogram and volume in

terms of cubic meters.

Amount of freight paid or payable.

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Shipping bill number and date.

Signature and initials of the Chief Officer.

(iv) 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:-

(1) The goods produced in a particular

country are subject to preferential

tariff rates in the foreign market at the

time of importation.

(2) The goods produced in a particular

country are banned for import in the

foreign market.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

CONTENTS OF CERTIFICATE OF ORIGIN

Name and logo of chamber of commerce.

Name and address of the exporter.

Name and address of the consignee.

Name and number of the Vessel of

Flight.

Name of the port of loading.

Name of the port of discharge and place

of delivery.

Marks and container number.

Packing and container description.

Total number of containers and

packages.

Description of goods in terms of

quantity.

Signature and initials of the concerned

officer of the issuing authority.

Seal of the issuing authority.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

(v) 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, that is

certified by the customs. Shipping bill is

normally prepared in five copies:

(a) Customs copy.

(b) Drawback copy.

(c) Export promotion copy.

(d) Port trust copy.

(e) Exporters copy.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

CONTENTS OF SHIPPING BILL

Name and address of the exporter.

Name and address of the importer.

Name of the vessel, master of 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.

F O B price and real value of goods as

define in the Sea Customs Act.

Whether Indian or Foreign Merchandise to

be re-exported.

Total number of packages with total

weight and value.

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(vi) BILL OF ENTRY

Bill of entry is a document, prepared by

the importer or his clearing agent in

prescribed form under bill of entry

regulations, 1971, on the strength of which

clearance of imported goods can be made.

Bill of entry is a document, which states

that the goods of the stated values and

description in the specified quantity have

entered into the country from abroad. The

bill of entry is drawn triplicate. The

customs authorities may ask the importer

to supply other documents like invoice,

broker’s notes and insurance policy, etc in

order to verify the correctness of the

information supplied in the bill of entry

form.

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The bill of entry goods are classified into

three categories:

1)Free Goods.

2)Goods for Home Consumption.

3)Bonded Goods.

The importer has to fill up a separate bill of

entry form for different classes of goods. In

India, separate forms are not used but all

entries are made in one form

CONTENTS OF BILL OF ENTRY

Name and address of the Importer.

Name and address of the Exporter.

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Import license number of the importer.

Name of the port/dock where goods are to

be cleared.

Description of goods.

Value of goods.

Rate and amount of import duty payable.

Other relevant documents.

BIBLIOGRAPHY

Primary Data:

(1) Mr.Gajendra Shetty.

- Clearing and Forwarding Agent.

- Owner of Akanksha Shipping.

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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS

Secondary Data:

(1) www.google.com (2) Export Management

- D C Kapoor

(3) Export Management

- Khurana

(4) Export Import Procedures and

Documentation

- Jain Acharya

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