Académique Documents
Professionnel Documents
Culture Documents
On
Customs house agent in
Chandra shipping and trading services
Submitted to
Lovely professional university
Mentor
Mr. AMRISH DOGRA
Mentor (14804)
Submitted by
Name
: t.sirisha
Reg no
: 11203157
Section : Q1205
Stream : mba (ib)
Contents
ACKNOWLEDGEMENT ....................................................................................................................... 4
Project topic : customs house agent ....................................................................................................... 5
Objective of the study .............................................................................................................................. 5
Introduction to study................................................................................................................................ 5
Company profile...................................................................................................................................... 7
Logistics .............................................................................................................................................. 7
Vision .................................................................................................................................................. 8
Mission ............................................................................................................................................... 8
Company allocated mentor .................................................................................................................. 8
Some competitors of Chandra shipping and trading services ................................................................ 8
References in company ...................................................................................................................... 10
Chandra shipping & trading services branches ................................................................................... 10
INTRODUCTION TO CUSTOM HOUSE AGENTS: ........................................................................... 13
CHA DEMAND IN INDIA ................................................................................................................... 13
INDIA IS WORLDS MAJOR IMPORT & EXPORT DESTINATION: ............................................. 13
Duties and Obligations of a CHA: ...................................................................................................... 15
Objectives Of Indian Custom EDI System: ........................................................................................ 19
OPERATIONS OF CUSTOM HOUSE AGENTS .................................................................................. 21
CLEARANCE PROCEDURE FOR IMPORTS ................................................................................. 21
CLEARANCE PROCEDURE FOR EXPORTS ................................................................................. 30
INTERNATIONAL FREIGHT TERMS .......................................................................................................... 36
Conclusion: ........................................................................................................................................... 49
DECLARATION
I, T.Sirisha, student of Lovely Professional University have completed the Project on Custom
House Agents and Its Operations
To study the Whole Export procedure &what are the duties and responsibilities of a Custom
House Agents.
The information given in this project is true to the best of my knowledge.
(T.Sirisha)
ACKNOWLEDGEMENT
I cannot forget acknowledging them in few words as without the guidance & co-ordination of
them in my project report would not have been possible.
Many individuals contributed to this project. I am thankful to all of them for their help and
encouragement. My writing in this project report has also been influenced by a number of
website and standard textbooks.
First of all I owe my heartfelt gratitude to my faculty guide Mr. Amrish dogra for his noble
guidance throughout the completion of the Project.
I would like to extend my heartfelt thanks to my trainer Mr.shiva Kumar of Chandra shipping
and trading services, Kakinada, A.P for giving me an opportunity to work on this project. For
his guidance, inspiration, and constructive suggestions, which helped me in the Project.
I must also thank the management of Chandra shipping and trading services to provide
excellent opportunity and environment to be able to pull my project through. Cooperation of the
staff is also gratefully acknowledged.
Last but not least, also give my sincere thanks to all the people to directly indirectly have help
and encourage me in finding the way to us collecting the requisite information and completing
the project effectively and timely.
Introduction to study
This project is all about to know about export import procedure/ documentation of shipment.
This project puts more focus on to know custom clearness, to make export - import invoice, to
get shipping bill number from custom department etc. This project will also find out how
Chandra shipping and trading services could sustain in the competitive world by providing vast
range of cargo handling through all instruments which flexible prompt and innovative in meeting
the requirement of the customer. The purpose of the study was to know about export procedure
and custom house responsibilities of Chandra shipping and trading services.
CHA is a person who is licensed to act as an agent for transaction of any business relating to the
entry or departure of conveyances or the import or export of goods at any Customs station. The
agent to do everything that an importer or an exporter can do .Filing a bill of entry, shipping bill,
submitting supporting documents therewith, helping in examination of goods, payment of duty
on behalf of the principal, warehousing of goods, removal from warehouse and the like.
Important Abbreviations
Company profile
Beginning the journey with 4 people under 1 roof, Chandra Group has grown into
workforce of 600 plus spread across 25 offices including the major ports. More than a
decade long, we have gained rich experience & good exposure of varied upstream segment
by serving clients ranging from PSU & private operators to drilling contractors, seismic
surveyors, construction companies, dredging companies, OSV companies, etc.
Why CHANDRA
Logistics
Management of international and domestic ocean/air Freight, project cargo handling and
transportation.
Arranging Various Statutory Clearances, Licenses, Permits, Customs Clearances and Security
Clearances for Men & Material.
Yard/shore base facilities for storage (open and covered)/ warehouse management.
Handling equipment like cranes, forklifts, trailers and multi-axle trailers for ODC, trucking, etc.
Crew Management.
Charter Helicopters, meet and greet facilities/co-ordination with local supply boats.
Vision
To have extensive and substantial presence in the support services related to Oil and Gas industry
with care for the environment by developing relevant systems and procedures and competent
employees to address the needs of the clients in timely, satisfactory and compliant manner.
Mission
Achieving excellence in supply chain management by providing superior customer service.
References in company
Mr. Sri ram
Managing director
Email : sriramb@chandra_logistics.com
Phone : 09393794666
MUMBAI
602-603, SAGAR TECH PLAZA B ANDHERI KURLA ROAD,SAKI NAKA,
VISAKHAPATNAM
D.NO 9-28-1, MARUTHI NIKETAN, CBM COMPOUND,
VISAKHAPATNAM 530 003
PHONE : 0891 2707845, FAX : 0832 2712555
GOA
OLD MPT BOARD ROOM, 1ST FLOOR MPT ORT USERS COMPLEX,
CUSTOMES HOUSE, MUMAGAO HARBOUR
INDRAPURAM, GOA 403 803
PHONE : 0832-2521784/85 FAX : 0832-2521814
NEW DELHI
NO.7,LOWER GROUND FLOOR,AMARPALI COMMERCIAL COMPLEX, 1/3 VAIBHAV KHAND,
INDRAPURAM, GHAZIABAD 201010
PHONE : 0120- 4138375/6, FAX : 0120- 4138377
HYDERABADA
PLOT NO : 17A, FLAT NO : 202, H .NO:7-1-644/17A,
SUNDER NAGAR COLONY,
HYDERABAD 500 038PHONE : 040-65585485, FAX : 040-23814041
Commissioners have been empowered to prescribe fees to prevent excess billing by the
CHAs.
Temporary Licence:
After scrutinizing and accepting the application a temporary licence for a period of one year is
granted under Regulation 8 in Form B.
Before receiving the temporary or regular licence, the applicant has to go through another
important step. He is required to execute a bond and give a surety or bank guarantee in Forms D
and E. For major ports, the surety amount is Rs.25000/- For other ports, it is Rs.10000/- Surety
may also be given in the form of National Savings Certificates or postal security. In the last two
forms of surety, these should be pledged in the name of the Commissioner. It is important to note
that since a regular licence holder is allowed to work in more than one Customs station, separate
bond and surety have to be given in respect of each Customs station.
Regular Licence:
An application for regular licence can be made by a person who has passed the examinations.
Application for regular licence is made in Form C. Form A and Form C are almost identical
except that while the first form is issued under Regulation 5, the latter form is issued under
Regulation 10. Licence fee is Rs.5000/-. Regular licence is granted in Form D. The applicant for
regular licence has to satisfy following conditions:
The applicant must satisfy the norms regarding quantity or value of cargo cleared form
the Custom House. This is determined by the Commissioner.
The conduct of the applicant during the period of holding temporary licence must be
business like. There should be no delay in clearance of goods or in payment of duty on
account of conduct of the applicant. There should be no complaint of misconduct of the
applicant. There also should not be any complaint of non-compliance of provision of
Regulation 14, which casts some important obligations on the CHAs.
Clearances only against authorization A CHA is required to clear goods for import or
export only against specific authorization from the principal and must produce it
whenever required by the Deputy/Assistant Commissioner.
Method of transacting business The CHA has to either personally clear the goods or
clear it through an employee who is approved by the Deputy/Assistant Commissioner
who is designated for this purpose by the Commissioner. All the documents prepared by
him should prominently bear the CHAs name at the top of the document. The CHA
should not attempt to influence the conduct of Customs officers in matters pending before
him or his subordinates. There should be no threats, false accusations or duress against
such officers. No promise of advantage or benefit or gift should be made or bestowed on
such officers. Duty of CHA should be discharged with utmost speed and avoid delays. He
cannot charge for his services in excess of rates approved by the Commissioner.
Personal interests of CHA If the CHA is a former officer of the department, he cannot
represent any matter before a Customs officer, which he had personally considered as
such officer. He cannot also use facts which came to his knowledge when he was an
officer.
Duty to tender correct advise The CHA is duty-bound to advise the client to comply
with the provisions of the Act and the regulations. If there is non-compliance of
provisions by any client, he is required to bring it to the knowledge of the
Deputy/Assistant Commissioner. This regulation requires the CHAs to act as source of
information to the department.
The CHA has to exercise diligence and ensure that he passes on correct information to the client,
ensure that all information relevant for clearance or cargo or baggage is passed on to the client if
it is relevant for clearance of cargo or baggage.
Accounting for money received The CHA has a duty to promptly pay to Government all
money received from client for payment of duties and taxes. Similarly, any money
received by him from the client or from the Government should be promptly and fully
accounted to the client.
Note:
If there is failure in complying with obligations under Regulation 14, the Commissioner
may prohibit a person from acting as a CHA within his jurisdiction.
If there is any change in the constitution of the firm or company, an application for grant
of temporary and regular licence should be made within 30 days of such change. If there
is nothing adverse against the firm or company, the Commissioner will grant licence of
the category held by the firm or company earlier. In the meantime, the concern may be
allowed to continue its business as a CHA if an application to that effect is made to the
Commissioner.
If the concern is not a firm or company, in case of any change in the constitution of the
concern, permission will be granted to continue the business as CHA by the
Commissioner, If the change occurs due to death of person who was licenced to act as a
CHA, his legal heir who was assisting him in his work as CHA under Regulation 20 may
be granted licence if there is nothing adverse against that person and he also passes the
examination.
If there is any change of qualified person acting on behalf of the firm or company, such
information should be immediately given to the Deputy/Assistant Commissioner.
Minimize the data entry operations and to reduce human errors, to being almost non-existent,
which occur during the entry of the information in the Customs Annexure.
Increases efficiency.
Customized MIS Reports for Top and Middle Management.
Keep track of SB and BE filed with ICEGATE.
Integrated Customer Relationship Management.
Multi User, Multi Branch working.
Vishruta Software Solutions ([1]) has its product CHA Eternity, An online ERP software for
CHA and it is also on SAAS technology. It has an in-built JOB COSTING ACCOUNTS
system. Perhaps the only product with accounts module in-built in the market
Royal Tech Systems ([2]) also provide CHA Software
FOCUS is the most used product and it also of low cost. But it assists only in online filing
alone
Visual Impex
CUSTOM HOUSE:
A custom house or customs house was a building housing the offices for the government
officials who processed the paperwork for the import and export of goods into and out of
a country. Customs officials also collected customs duty on imported goods.
The customs house was typically located in a seaport or in a city on a major river with
access to the ocean. These cities acted as a port of entry into a country. The government
had officials at such locations to collect taxes and regulate commerce.
The main objectives set for Indian Customs EDI System by the Customs were:
Provide management information system for policy making and its effective revenue
and
The guiding principles for the officials of Customs and National Informatics Centre while
designing the ICES system were:
Facilitation: While
ensuring
proper
enforcement
of
Customs
laws
and
IMPORT CLEARANCE
AND
EXPORT CLEARANCE
The Legal Services Cell [LSC] is a part of Business and Sector Development Division of
SMEDA and plays a key role in providing an overall facilitation and support to SMEs.
The LSC provides guidance based on field realities pertaining to SMEs in India and other
parts of the world.
LSC believes that information dissemination among the SMEs on the existing regulatory
environment is of paramount importance and it can play a pivotal role in their sustainable
development.
In order to facilitate SMEs at the Micro Level LSC has developed user-friendly systems,
which provide them detail description of the Laws, and Regulations including the process
and steps required for compliance.
The purpose of this document is to disseminate information amongst the SMEs about the
Customs Clearance Procedure for Imports. For convenience of the readers a process flow
chart explaining the procedural details and sample of various forms are also annexed with
the document. The information given herein is provided on as is basis with no liability of
SMEDA of whatsoever as to any act or omission consequent there to.
General Manifest (IGM) to each shipment. It is a number indicating the serial of the shipment
arrived during the year. Upon receipt of the IGM the consignment is further indexed to allow for
a systematic reference of all goods received. After issuing this number, the shipment is off loaded
and sent back to port warehouse. In the case of land customs station i.e. dry port etc. the IGM is
issued not at the time the goods reach the land customs station but at the time the goods are off
loaded at the sea or air port.
Upon arrival of the off loaded goods, the clearance process starts. Normally at this point a
clearing agency is engaged by the importer to facilitate the process of customs clearance and to
reduce interface with the customs officials. Following documents are required and provided to
the clearing agent for processing.
a) Invoice of shipment
b) Packing list
c) Bill of lading
d) Copy of the Letter of Credit or Contract
If the importer is importing for the first time, following additional documents are to be
submitted:
a) Copy of the Sales Tax Registration Certificate as an importer
b) Copy of Registration Certificate issued by the Export Promotion Bureau in
case of import of Gems and Jewellery
c) Copy of the National Tax Number
d) Copy of the most recent sales tax return
It may be noted that now there is no need to obtain import and export licence from the Export
Promotion Bureau.
Filing / Examination of Bills of Entry:
Provided all the above mentioned documents are complete, the clearing agency preparesthe Bill
of Entry. It may be noted that at present the bills of entry are being filed electronically with the
customs department. For such purposes the customs official have issued Pin Code to every
clearing agent along with a CD which contains the standard formats of bills of entry in blank
form. The clearing agent after giving all the particulars in the bills of entry hand over the CD
along with all the requisite documents to the customs officials for their review and clearance of
goods. There are three types of colour coded Bills of Entries, which are explained as here under
White Bill of Entry: The bill is prepared when the consignment is to be cleared against
the cash payment of the duty levied without transferring it to a warehouse.
Yellow Bill of Entry: This bill is filed when the shipment is transferred to the bonded
warehouses.
Green Bill of Entry: This bill of entry is used for the release of shipments which have
been placed in bonded warehouse against the yellow colour bill of entry.
The clearing Agent first receives the delivery order from the shipping agency and subsequently
files the Bill of Entry contained in the computer CD along with the previously mentioned
documents with the customs department, where a manifest for the consignment is filed. After the
filing of the manifest machine number and group number is allotted. Group number is a
predefined number based on the category set by Customs department. The bill of entry should be
completed in all respects and the amount of payable customs duty, sales tax, income tax etc.
should also be typed on the bill of entry, calculated on the basis of invoice under the correct
Pakistan Customs Tariff (PCT) Heading.
The test reports (where applicable) should be typed in case of chemicals. Similarly, in case of
Clearance Procedure for Imports Legal Services Cell imports of tea, the values certified by
Pakistan Tea Association shall be declared on the bill of entry for the purposes of assessment.
Next step is the Appraisement of the consignment. The designated customs officials examine the
goods to ensure whether the particulars given in the bill of entry i.e. amount of duties and taxes,
PCT Heading etc. correspond with the goods imported. Provided there is no contradiction with
the particulars given in the bill of entry and the goods actually imported, the case is marked to
the principal appraiser of the assessment hall, for assessment of duties and taxes on the imported
goods. On assessment of the duties and taxes, the amount so assessed is deposited in the treasury
and the goods are released.
Clearance Procedure for Yellow Bill of Entry:
The procedure for the yellow Bill of Entry is almost identical to the white bill of entry however;
the only difference is that instead of clearing the shipment against cash, it is placed in a bonded
warehouse. The customs appraisal procedure remains the same, however, in case of filing of
yellow bill of entry, a No Objection Certificate is required from the bonded warehouse authority.
In addition to NOC a surcharge amount equivalent to 2% of the customs assessed value of the
shipment or such other rate, as is for the time being fixed by the CBR, is paid to the Government.
Bonded warehouse can be very helpful to business, which do not require the whole shipment
immediately released. It can be best utilized in case of shortage of cash amount with an importer
for the release of a consignment. It is a storage facility, where the consignment is stored under
secured conditions for a certain period of time that has been predefined. The shipment remains in
the bonded warehouse against nominal charges for a specified period until the importer requires
part of whole of the shipment, which can be cleared and released against the filing of green bill
of entry.
Clearance Procedure against Green Bill of Entry:
The procedure for clearance against green bill of entry is same as that of white bill of entry
except that it is filed to ex-bond the goods in whole or in part of the goods bonded against yellow
bill of entry.
IMPORTANT ISSUE:
Once the white bill of entry is filed for clearance of goods, it is not possible to transfer the
consignment into bonded warehouse.
Where the owner does not have full Information about the consignment:
In case an owner of a shipment is unable to make complete entry of the goods imported in a bill
of entry, he may make a declaration to that effect before the appropriate officer with the request
to examine the goods. The appropriate officer may, subject to the conditions prescribed by the
Collector, permit such officer to examine the goods in the presence of an officer of customs or to
deposit of such goods in a public warehouse without warehousing the same, pending the
production of such information.
During first appraisal the case is forwarded to the appraisement hall where the specific
percentage of goods imported is determined for examination. The principal appraiser marks the
case to the Inspector and Deputy Superintendent for examination. The inspector after examining
the goods marks the case to the Deputy Superintendent for further approval. Provided the case is
approved by both of them, the case is referred to the Principal Appraiser for assessment of
customs duty and other taxes thereon.
Declared Value: This is the value of the consignment as given on the invoice and shown
in the bills of entry.
Karachi Data Base Value: The value of the consignment is calculated on the recent
price of the commodity released from the report by the Karachi Collector ate from their
data base; and
Evidence Value: This value is based on the history of previous duty paid by the importer
of the same commodity.
Release of Goods:
After assessment of valuation the case is then forwarded to the Inspector - Out of Charge for
final release and issuance of a gate pass. Following documents are submitted to the Inspector
for Processing:
a) Copy of Invoice
b) Copy of Packing List
c) Bill of Entry (Original Copy, Quadruplicate Copy and Statistical Copy)
With the issuance of gate pass, the importer is directed to deposit the amount of duty assessed,
warehouse charges, fines and penalties, if any, placed by the port authorities. Once the payment
is made, the shipment is released and can be loaded and transported to its destination.
Provisional Assessment of duty:
Where it is not immediately possible to assess the customs duty on any imported goods for the
following reasons:
That the goods require chemical or other test or
Further inquiry for the purposes of assessment or
That all the documents or complete documents or full information pertaining tothose
goods have not been furnished.
An officer not below the rank of Assistant Collector or Deputy Collector of Customs may order
that the duty payable on such goods be assessed provisionally subject to the payment of any
additional amount or furnishing of bank guarantee for the purposes of securing payment of duty,
if any, payable on final assessment, by the importer, as such officer deems sufficient.
The importer, and if clearance is desired through agent, both must have a PACCS user ID.
This user ID may be obtained from Model Customs Collector ate, Customs House
Karachi between 1000hours to 1400hours on all working days.
Copy of the packing list and invoice of the cargo must be available inside the imported
containers. These documents are retained by the customs and are not returned to the
importer.
Free Tax Number FTN in case of exemption from income tax liability.
4. Regulatory Authorities like Government departments, Banks etc. would require static IPs to
interact with PACCS
There is no need to file any document to the customs. All the declarations (Bills of Entry,
shipping Bills etc.) are electronically available online.
PACCS has a highly sophisticated automated Risk Management System and designed to
detect any illicit practices. Therefore, in order to avoid delays and confusion later it is
advisable to file your declaration carefully and to ensure that correct information is
declared to customs.
The Customs if not satisfied with the declaration may also require additional information,
verify certain documents, question value, HS code etc.
cargo by furnishing the security, he may challenge the decision before the relevant appellate
authorities.
Automated Customs Clearance Procedure (ACP):
In addition to the above, on some other main ports including Lahore, Peshawar etc. other than
KICT, Customs Clearance procedure under ACP is also operative. The same is however,
available to following eligible importers:
I. All the Federal / Provincial Governments, Public sector organization, State owned corporations
and defence imports.
II. All the importers, having import value more than Rs. 30 million during last twelve months
will be eligible for ACP as per parameters laid down in implementation strategy.
III. The import of risk prone commodities shall not fall in the preview of ACP.
IV. The clearing agents (up to five) who have been clearing goods of such importers in the past
one year would be taken as nominated clearing agents, unless otherwise desired by such
importers through application to the Deputy Collector, Import Section or any proceedings have
already been initiated against clearing agent under customs law.
V. The importers who do not meet the ACP criteria may also apply to the Collector for special
enrolment.
VI. The facility of ACP shall be withdrawn at any stage if it is found that a case of misdeclaration
or fiscal fraud exists or has been detected against the importer, (or a director in case of company /
firm).
VII. The facility of ACP will be availed only for goods imported against valid LC (letter of
Credit) or registered bank contract.
Exception to the ACP:
The ACP will not be available in following cases:
a) Where the Goods Declaration is filed prior to the arrival of the vessel under section 79 (1).
b) Import of scrap of all kinds, second hand machinery, job lot / stock lot goods.
c) Chemicals on the controlled list or useable in the manufacturing of narcotics, psychotropic
substance or chemical weapons.
d) Items meant for re-export.
e) Banned / restricted items as per current Import Trade & Procedures Order.
f) Items in section II (Procedural Requirements) of current Import Trade & Procedures Order,
except CKD kits of motor cars and other motor vehicles, and trucks and buses, or unless allowed
by Collector of Customs.
g) Items ordered to be excluded from ACP due to high risk, by the Appraisement Intelligence
Branch, after approval of additional Collector in charge and notice issued by Additional
Collector (Imports).
1) Shipping Bill: Shipping bill is the main document required by customs authority for
allowing shipment. The exporter has to submit some documents for shipping bill which are
as follows:
SDF (GR Form) in duplicate for shipment.
Four copies of packing list giving contents, quantity gross and net weight of
each package
Four copies of invoice indicating all relevant particulars such as number of packages,
quantity, unit rate, total FOB/CIF value, correct and full description of goods etc
Retained by customs
ii) Duplicate
Exporters certificate
iii) Triplicate
iv) Quadruplicate
to excise department
v) Quintuplicate
iv) Bond (Pink in colour): Used where the exported goods are manufactured in bond
(EOU goods). Such type of shipping bill is not used, because the company has no
dealing with EOUs.
2) GR/SDF Form: GR/SDF form is filled and submitted by the exporter. The exporter give this
form to his shipping agent to get it stamped from the customs office after clearance of goods
from custom. GR/SDF form is prepared in duplicate. The original copy remains with
authorities and they submit it to the Reserve Bank of India. Duplicate copy is submitted to
Negotiating Bank, after mentioning the date of receipt of payment on GR/SDF form they also
send it to RBI.
Contents of GR Form:
i) Name of advising bank (if exports is under L/C arrangement)
ii) Name of bank through which payment is to be realized.
iii) Customs assessable value.
iv) Quantity of goods.
3) Bill of Lading:
agent acknowledging the receipts of the goods mentioned in the bill for shipment on board and
undertaking to deliver the goods in who like order and condition as received to the consignee or
his order provided the freight and other charges specified in the bill of lading require will depend
upon the terms of better of credit.
CONTAINERISATION
Modern ship building technology has brought forth dry cargo bulk carriers and tankers to
reduce per unit cost of transportation in tramp shipping. Likewise the container technology
has brought in the cellular ships to carry general cargo in containers to reduce cargo-handling
cost and promote faster movements.
The container system of transportation involves bulking of the break-bulk cargoes by putting
them in containers of standard sizes shown below: -
From port to port (Pier to Pier)- the carriage of containers is confined to the Scaliger
of journey.
From Inland Container Depot (ICD) in one country to ICD in another country- the
movement of containers is extended to the interior parts of the country and
Door to Door-the movement of containers is further extended right to the factory gates
of the manufacturer/exporter to the door of the importers warehouse in a foreign
country.
When shipping lightweight and bulky packages, use the following formula to help you
determine their volumetric weight:
Multiply the width by the length by depth of your shipment and divide the total by 6000.
For example
In India, ships transport more than 90 per cent of the cargo. It therefore interesting to study the
export processed by ship documentation related to it.
Processing of an export order:
i. Exporter operation starts with the receipt of enquiry by the exporter from importer. Bar on
the enquiry exporter submits his offer giving complete details of products technical
specific price delivery payment terms etc.
ii. After the process negotiations importer sends a purchase order follow by letter of credit (if
applicable).
iii. The exporter manufactures the goods according to the specification given in purchase order.
PACKING LIST
ARE1 FROM EXSICE DEPARTMENT
MARINE INSURANCE POLICY
COPY OF PURCHASE ORDER / L/C
vii. Based on these documents CHA agent completes the octopi formalities, obtain port permit
and prepare shipping bill which is a customs documents.
viii. Custom department check the export cargo on the basis of information provided on the
shipping bill. If satisfy then cargo allow to loaded on the board of ship.
ix. The shipping line gives mate receipts to CHA agents after the payment of ocean freights and
port due obtains the bill of lading (B/L) from shipping line .B/L is a proof of dispatch of
cargo and also a negotiable document.
x. After that, CHA agent send various documents back to exporter which is
Customs attested invoice
Copy of shipping bill
Full set of non board bill of lading.
Copy of purchase order or L/C
Copies of ARE1 Form
SDF form
xi. After that the exporter submitted above these documents for negotiation to the bank which
include :--- Commercial invoice
Packing list
SDF form
Original copy of purchases order
Certificate of origin
Bill of exchange
Shipment advice
After that, bank scrutinizes these documents and if found correct make payment to exporter
against documentations.
ABI - Automated Brokerage Interface: Is a system available to Indian Customs Brokers with
the computer capabilities and customs certification to transmit and exchange customs entries and
other information, facilitating prompt release of imported cargo.
Acceptance: A time draft (or bill of exchange) which the drawer has accepted and is
unconditionally obligated to pay at maturity. Drawers act in receiving a draft and thus entering
into the obligation to pay its value at maturity. An agreement to purchase goods under specified
terms.
Add Hoc Charter: A one-off charter operated at the necessity of an airline or charterer.
Ad Valorem ("according to the value"): A fixed percentage of the value of goods that is used
to calculate customs duties and taxes.
Admiralty Court: Is a court having jurisdiction over maritime questions pertaining to ocean
transport, including contracts, charters, collisions, and cargo damages.
Advance Against Documents: Load made on the security of the documents covering the
shipment.
Advising Bank: A bank that receives a letter of credit from an issuing bank, verifies its
authenticity, and forwards the original letter of credit to the exporter without obligation to pay.
Advisory Capacity: A term indicating that a shipper's agent or representative is not empowered
to make definite decisions or adjustment without the approval of the group or individual
represented.
Affiliate: Is a company that controls, or is controlled by another company, or is one of two or
more commonly controlled companies.
Airfreightment: An agreement by a steamship line to provide cargo space on a vessel at a
specified time and for a specified price to accommodate an exporter or importer, who then
becomes liable for payment even though he is later unable to make the shipment.
Agency Agreement: The steamship line appoints the steamship agent and defines the specific
duties and areas of responsibility of that agent.
Air Cargo Agent: Is a type of freight forwarder who specializes in air cargo and acts for airlines
that pay him a fee (usually 5%). He is registered with the International Air Transport Association,
IATA (See also Air Freight Forwarder; Forwarder, Freight Forwarder, Foreign Freight
Forwarder).
Air Freight Forwarder: Is a type of freight forwarder who specializes in air cargo. He usually
consolidates the air shipments of various exporters, charging them for actual weight and deriving
his profit by paying the airline the lower consolidated rate. He issues his own air waybills to the
exporters, is licensed by the CAB (Civil Aeronautics Board) and has the status of an indirect air
carrier (See also Air Cargo Agent, Forwarder, Freight Forwarder, Foreign Freight Forwarder.)
Air Waybill: A bill of landing that covers both international and domestic flights transporting
goods to a specified destination. This is a non-negotiable documents of air transport that serves
as a receipt for the shipper, indicating that the carrier has accepted the goods listed and obligates
itself to carry the consignment to the airport of destination according to specified conditions.
AITA: International Air Transport Association, IATA, (French, German).
All-Risk Clause: Is an insurance provision that all loss or damage to goods is insured except that
of inherent vice (self caused). (See All Risk Insurance).
All Risk Insurance: Is a clause included in marine insurance policies to cover loss and damage
from external causes, such as fire, collision, pilferage, etc. but not against innate flaws in the
goods, such as decay, germination, nor against faulty packaging, improper packing/ loading or
loss of market, nor against war, strikes, riots and civil commotions (See Marine Insurance)
Alongside: A phrase referring to the side of a ship. Goods to be delivered "alongside" are to be
placed on the dock or barge within reach of the transport ship's tackle so that they can be loaded
abroad the ship.
Arbitration Clause: Is a standard clause to be included in the contracts of exporters and
importers, as suggested by the American Arbitration Association. It states that any controversy or
claim will be settled by arbitration in accordance with the rules of the American Arbitration
Association.
Assignment: The transfer of the rights, duties, responsibilities and/or benefits of an agreement,
contract, or financial instrument to third party.
Assignment of Proceeds: A stipulation within a letter of credit in which some or all of the
proceeds are assigned from the original beneficiary to one or more additional beneficiaries.
A.T.: American Terms (Marine Insurance) A term used to differentiate between the conditions of
American Policies from those of other nations, principally England.
Automated Brokerage Interface (ABI): An electronic system allowing customhouse brokers
and importers to interface via computer with the US Customs Service for transmitting entry and
entry summary data on imported merchandise.
Automated Commercial System (ACS): The electronic system of the US Customs Service,
encompassing a variety of industry sectors that permits online access to information in selected
areas.
Automated Manifest System (AMS): The electronic system allowing a manifest inventory to be
transmitted to the US Customs Service data centre by carrier, port authority or service centre
computers.
BAA: British Airports Authority
BACA: Baltic Air Charter Association
Balance of Trade: The difference between a country's total imports and exports; if exports
exceed imports, favorable balance of trade exists, if not, a trade deficit is said to exist.
Barter: Trade in which merchandise is exchanged directly for other merchandise without use of
money. Barter is an important means of trade with countries using currency that is not readily
convertible.
B/B: (See Break-Bulk Cargo)
Belly Cargo: Freight accommodation below the main deck.
Beneficiary: A firm or person on whom a letter of credit has been drawn. The beneficiary is
usually the seller or exporter.
Bermuda Agreement: An agreement concluded in 1946 between the U.K. and the U.S.,
designed to regulate future international air traffic. Most governments accept its principles and
follow it inter alia by limiting traffic rights on international routes to one or two carriers.
Berth: Is the place beside a pier, quay or wharf where a vessel can be loaded or discharged.
Berth Liner Service: Is a regular scheduled steamship line with regular
Published schedules (port of call) from and to defined trade areas.
Berth or Liner Terms: Is an expression covering assessment of ocean freight rates generally
implying that loading and discharging expenses will be for ship owner's account, and usually
apply from the end of ship's tackle in port of loading to the end of ship's tackle in port of
discharge.
Bill of Lading: A document that establishes the terms of a contract between a shipper and a
transportation company under which freight is to be moved between specified points for a
specified charge. Usually prepared by the shipper on forms issued by the carrier, it serves as a
document of title, contract of carriage, and a receipt for goods. Also see Air Waybill and Ocean
Bill of Lading.
Bonded Warehouse: A warehouse storage area or manufacturing facility inwhich imported
goods may be stored or processed without payment of customs duties.
Brussels Tariff Nomenclature Number (BTN): The customs tariff number used by most
European nations. The United States does not use the BTN, but a similar system known as the
Harmonize Tariff Schedule.
CAA: Is the Civil Aviation Authority. Government body responsible for regulating to U.K.
airlines.
Cabot age: Is where cargo is carried on what is essentially a domestic flight and therefore not
subject to international agreements that fix set rates. Cabot age rates are negotiable between
shipper and airline and apply on flights within a country and to its overseas territories.
CAD Can have two meanings in the industry:
CAD: The acronym meaning "cash against documents," a method of payment for goods
in which documents transferring title are given to the buyer upon payment of cash to an
intermediary acting for the seller.
Cage: The transporting of goods by truck to or from a vessel, aircraft, or bonded warehouse, all
under customs custody.
Cargo: Is merchandise/commodities/freight carried by means of transportation.
Cargo Receipt: Is a receipt of cargo for shipment by a consolidator (used inocean freight).
Carnet: A customs document permitting the holder to carry or send merchandise temporarily
into certain foreign countries (for display, demonstration, or similar purpose) without paying
duties or posting bonds.
Carriers(s) Containers or Shipper(s) Containers: The term Carrier(s)Container(s) or
Shipper(s) Container(s) means containers over which the carrier or the shipper has control either
by ownership or by the acquisition thereof under lease or rental from container companies or
container suppliers or from similar sources. Carriers are prohibited from purchasing, leasing or
renting shipper owned containers.
Carrier, Common: A public or privately owned firm or corporation that transports the goods of
others over land, sea, or through the air, for a stated freight rate. By government regulation, a
common carrier is required to carry all goods offered if accommodations are available and the
established rate is paid.
Cartel: Is an association of several independent national or international
business organizations that regulates competition by controlling the prices, the production, or the
marketing of a product or an industry.
Cash in Advance (C.I.A.): Payment for goods in which the price is paid in full before shipment
is made. This method is usually used only for small purchases or when the goods are built to
order.
Cash Against Documents (CAD): Payment for goods in which a commission house, or other
intermediary, transfers title documents to the buyer upon payment in cash.
C.C.E.F. ---- Customs Centralized Examination Facility.
Certificate of Analysis: Is a certificate required by some countries as proof of the quality and
composition of food products or pharmaceuticals. The required analysis may be made by a
private or government health agency. The certificate must be legalized by a foreign consul of the
country concerned, as is the case with such similar certificates as the phytosanitary certificate.
Certificate of Inspection: A document certifying that the goods were in apparent good condition
immediately prior to shipment.
Certificate of Manufacture: A statement in which a producer specifies where his goods were
manufactured, certifies that manufacturing has been completed, and confirms that the goods are
at the buyer's disposal.
Certificate of Origin: A statement signed by the exporter, or his agent, andAttested to by a local
Chamber of Commerce, indicating that the goods being shipped, or a major percentage of them,
originated and were produced in the exporter's country.
C.E.S.----Customs Examination Station
C&F: Is a quoted price includes cost of goods and freight.
C & I: Is a quoted price includes cost of goods and insurance.
CFS (Container Freight Station): The term CFS at loading port means theLocation designated
by carriers for the receiving of cargo to be packed intoContainers by the carrier. At discharge
ports, the term CFS means the bonded location designated by carriers in the port area for
unpacking and delivery of cargo.
CFS/CFS (Pier to Pier): The term CFS/CFS means cargo delivered by break bulk to Carrier's
CFS to be packed by Carrier into containers and to be unpacked by Carrier from the container at
Carrier's destination port CFS.
CFS/CY (Pier to House): The term CFS/CY means cargo delivered break-bulk to Carrier's CFS
to be packed by Carrier into containers and accepted by consignee at Carrier's CY and unpacked
by the consignee off Carrier's premises, all at consignee's risk and expense.
CFS CHARGE (Container Freight Charge): The term CFS Charge means the charge assessed
for services performed at the loading or discharging port in packing or unpacking of cargo
into/from containers at CFS.
CFS Receiving Service: The term "CFS Receiving Services" means the service performed at
loading port in receiving and packing cargo into containers from CFS to CY or shipside. "CFS
Receiving Services" referred herein are restricted to the following
1. Moving empty containers from CY to CFS
2. Drayage of loaded containers from CFS to CY and/or ship's tackle
3. Tallying
4. Issuing dock receipt/shipping order
5. Physical movement of cargo into, out of and within CFS
6. Stuffing, sealing and marking containers
7. Storage
8. Ordinary sorting and stacking
9. Preparing carrier's internal container load plan
CIF (cost, insurance and freight): Seller is responsible for inland freight,Ocean/air freight and
marine/air insurance to the port of final entry in the buyer's country. The buyer is responsible for
inland transportation to his or her location.
Chargeable Kilo: Rate for goods where volume exceeds six cubic meters to the tone.
Charter: Originally meant a flight where a shipper contracted hire of an aircraft from an airline.
Has usually come to mean any non-scheduled commercial service.
Charter Party: The contract between the owner of a ship and the individual or company
chartering it. Among other specifications, the contract usually stipulates the exact obligations of
the ship-owner (loading the goods, carrying the goods to a certain point, returning to the
charterer with other goods, etc.); or it provides for an outright leasing of the vessel to the
charterer, who then is responsible for his own loading and delivery. In either case, the charter
party sets forth the exact conditions and requirements agreed upon by both sides.
Charter party Bill of Lading: A bill of lading issued under a charter party. It is not acceptable
by banks under letters of credit unless so authorized in the credit.
Chassis: A wheel assembles including bogies constructed to accept mounting of containers.
CIA: The acronym meaning "cash in advance," a method of payment for goods whereby buyer
pays seller in advance of shipment of goods.
C.I.F.: Is a quoted price includes cost of goods, insurance and freight.
C.I.T.E.S.: Committee on International Trade of Endangered Species.
Class Rates: A class of goods or commodities is a large grouping of variousitems under one
general heading. All items in the group make up a class. The freight rates that apply to all items
in the class are called class rates.
Classification: Is a customs term.The placement of an item under the correct number in the
customs tariff for duty purposes. At times this procedure becomes highly complicated; it is not
uncommon for importers to resort to litigation over the correct duty to be assessed by the
customs on a given item.
Claused Bill of Lading: Is a bill of lading which has exemptions to the receipt of merchandise
in "apparent good order" noted.
Clean Bill of Lading: Is a bill of lading which covers goods received in "apparent good order
and condition" and without qualification.
Clean Draft: Is a draft to which no documents have been attached.
CNS: Cargo Network Services, an IATA company. See IATA.
Collective Paper: All documents (commercial invoices, bills of lading, etc.)submitted to a buyer
for the purpose of receiving payment for a shipment.
Commercial Risk: Risk carried by the exporter (unless insurance is secured) that the foreign
buyer may not be able to pay for goods delivered on an open account basis.
Confirmed Letter of Credit: A letter of credit, issued by a foreign bank, with validity
confirmed by a U.S. bank. An exporter who requires a confirmed letter of credit from the buyer
is assured of payment by the U.S. bank even if the foreign buyer or the foreign bank defaults.
Conference: A group of vessel operators joined together for the purpose of establishing freight
rates.
RoRo/Container Vessel: Ship designed to accommodate containers and roll-on roll-off cargo.
It can be self sustaining.
RoRo/Container/Break-bulk Vessel: Designated to accommodate three types of cargo, usually
self sustaining.
Commercial Code: A published code designed to reduce the total number of words required in a
cablegram.
Commodity Specialist: An official authorized by the U.S. Treasury to determine proper tariff
and value of imported goods.
Consignee: Person or firm to whom goods are shipped under a bill of landing.
Consular Declaration: A formal statement, made to the consul of a foreign country, describing
goods to be shipped.
Consular Invoice: A document, required by some foreign countries, describing a shipment of
goods and showing information such as the consignor, consignee, and value of the shipment.
Certified by consular official of the foreign, it is used by the country's customs official to verify
the value, quantity, and nature of the shipment.
Combi: Is an aircraft with pallet or container capacity on its main deck as well as in its belly
holds.
Combination Vessels: Container/Break-bulk vessel - this type of ship Accommodates both
container and break-bulk cargo. It can be either self Sustaining or non-self sustaining.
Commercial Invoice: An itemized list of goods shipped, usually included among an exporter's
collection papers.
Common Carrier: A firm or individual that transports persons or goods for Compensation.
Confirmed Letter of Credit: A letter of credit, issued by a foreign bank with validity confirmed
by a U.S. bank.
Confiscation: The taking and holding of private property by a government or agency acting for a
government. Compensation may or may not be given to the owner of the property.
Consignee: The individual or company to whom a seller or sipper sendsMerchandise and who,
upon presentation of necessary documents, is recognized as merchandise owner for the purpose
of declaring and paying customs duties.
Consignee Marks: A symbol laced on packages for identification purposes;Generally consisting
of a triangle, square, circle, diamond, cross, with lettersAnd/or numbers as well as port of
discharge.
Consignment: Is the physical transfer of goods from a seller (consignor) with whom the title
remains, to another legal entity (consignee) who acts as a selling agent, selling the goods and
remitting the new proceeds to the consignor.
Consignor: A term used to describe any person who consigns goods to himself or to another
party in a bill of lading or equivalent document. A consignor might be the owner of the goods, or
a freight forwarder who consigns goods on behalf of his principal.
Consolidated Shipment: An arrangement whereby various shippers pool their boxed goods on
the same shipment, sharing the total weight charge for the shipment.
Consolidator: An agent which brings together a number of shipments for one destination to
qualify for preferential airline rates.
Consortium: The name for an agreement under which several nations orNationals (usually
corporations) of more than one nation, join together for a common purpose. It could be for
management or exploitation of a natural resource, as in the case of some international petroleum
consortiums.
Consul: A government official residing in a foreign country, charged withRepresenting the
interests of his or her country and its nationals.
Consular Documents: Special forms signed by the consul of a country to which cargo is
destined.
Consular Invoice: A document, required by some foreign countries, describing a shipment of
goods and showing information such as the consignor, consignee, and value of the shipment.
Certified by a consular official of the foreign country, it is used by the country's customs officials
to verify the value, quantity and nature of the shipment.
Container: The term container means a single rigid, non-disposable dry cargo, insulated,
temperature controlled flat rack, vehicle rack portable liquid tank, or open top container without
wheels or bogies attached, having not less than 350 cubic feet capacity, having a closure or
permanently hinged door that allows ready access to the cargo (closure or permanently hinged
door not applicable to flat rack vehicle rack or portable liquid tank). All types of containers will
have constructions, fittings and fastenings able to withstand without permanent distortion.
Container Ship: Ocean going ship designed to carry containers both internally and on deck.
Some are self sustaining.
Containerization: Is a concept for the ultimate unitizing of cargo used by both steamship lines
and air cargo lines. Containers allow a greater amount of cargo protection from weather, damage,
and theft.
Containers (Air Cargo): Many types of air cargo containers are offered: The containers are
designed in various sizes and irregular shapes to conform to the inside dimensions of a specific
aircraft.
Containers (Ocean): Are designed to be moved inland on its own chassis and can be loaded at
the shippers plant for shipment overseas. Basic types of containers are; dry van, open top, half
high, hi cube, flat rock, tank container, refrigerated container, insulated container, tilting
container. Average outside dimensions is generally 20, 35, and 40 feet in length, 8 feet wide and
8 feet high standard.
Continuous Bond: Is an annual customs bond insuring compliance with all regulations and
requirements.
Contract Rate: Is a charge levied by carriers selling capacity forward over agiven route to a
shipper of forwarder; the client is therefore assured of capacity, which must be paid for
regardless of load carried.
Deferred Payment Credit: Type of letter of credit providing for payment some time after
presentation of shipping documents by exporter.
Deferred Rebate: The return of a portion of the freight charges by a carrier or a conference
shipper in exchange for the shipper giving all or most of his shipments to the carrier or
conference over a specified period of time (usually 6 months). Payment of the rate is deferred for
a further similar period, during which the shipper must continue to give all or most of his
shipments to the rebating carrier or conference. The shipper thus earns a further rebate which
will not, however, be paid without an additional period of exclusive or almost exclusive
patronage with the carrier of conference. In this way, the shipper becomes tied to the rebating
carrier or conference. Although, the deferred rebate system is illegal in U.S. foreign commerce, it
generally is accepted in the ocean trade between foreign countries.
Demurrage: A penalty for exceeding free time allowed for loading or unloading at a pier or
freight terminal. Also a charge for undue detention of transportation equipment or carriers in port
while loading or unloading.
Density: Density means pounds per cubic foot. The cubage of loose articles or pieces, or
packaged articles of a rectangular, elliptical or square shape on one plane shall be determined by
multiplying the greatest straight line dimensions of length, width and depth in inches, including
all projections, and dividing the total by 1728 (to obtain cubic feet). The density is the weight of
the article divided by the cubic feet thus obtained.
DEQ: Delivered ex quay/duty paid.
Destination Control Statement: Any of various statements that the U.S.Government requires to
be displayed on export shipments and that specify the destination for which export of the
shipment has been authorized.
D.F.: Dead Freight
DGR: Dangerous Goods Requirement.
Dim Weight: (Dimensional zed Weight) Determined by calculating length x width x height and
dividing by 166. Charged when actual weight is less than the dim weight.
Dock Receipt: When cargo is delivered to a steamship company at the pier, the receiving clerk
issues a dock receipt.
Documents against Acceptance (D/A): Instructions given by a shipper to aBank indicating that
documents transferring title goods should be delivered to the buyer (or drawee) only upon the
buyer's acceptance of the attached draft.
DOT: Department of Transportation
Draft (or Bill of exchange): An unconditional order in writing from one person (the drawer) to
another (the drawer), directing the Drawer to pay a specified amount to a named Drawer at a
fixed or determinable future date.
Drawback: A U.S. customs law that permits an American exporter to recover duties paid on
imported foreign raw materials or components included in products that are subsequently
exported out of the United States.
Drawee: The individual or firm on whom a draft is drawn and who owes the stated amount to
the drawer.
Dry Lease: The rental of a "clean" aircraft without crew, ground staff or supporting equipment.
DST: The acronym meaning "double stack train" service, which is the transport rail between two
points of a trainload of containers with two containers, one on top of the other, per chassis.
1. Primarily, it is used by the U.S. Bureau of Census for the compilation of export statistics on
United States foreign trade (for this reason an export declaration is required for practically all
shipments from the United States to foreign countries and the United States possessions, except
for mail shipments of small value, or for those of a non commercial character);
2. The declaration also serves as an export control document because it must be presented,
together with the export license, to the United States Customs at the port of export. If the goods
may be exported under general export license, this fact must be stated on the export declaration.
Conclusion:
It is clear from the above study that the complexity of international import-export business can
be overcome easily by a systematic export procedure & fair documentation. This is only the
documentation which safeguards the interests of Exporter, Importer, Banks, Governments,
Transport Agencies, Insurance Agencies and Inspection Agencies. Thus the whole study
concludes in brief:
To survive & grow in todays international market for any export house, the systematic
export procedure is compulsory.
To overcome any kind of error, bottleneck, fraud and mistake; the awareness and
implementation of standardized rule-regulations & documentation is necessary.
The final indicator of success any business is its financial viability and in exports the
inflow of funds is from across the borders. Thus mode of payment must be decided on
the basis of best business suitability according to the Govt. & RBI policies.
Also the Government of India has instituted many support programmers with a view to
give thrust to our sectors. These programmers have been made to facilitate the exporters
in their exports efforts at various stages of export process.