Académique Documents
Professionnel Documents
Culture Documents
Prepared by
Manish Kumar
PGDM-A III semester
Roll no. IB108112
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INDEX
1. CERTIFICATE 2
2. ACKNOWLEDGEMENT 3
3. EXECUTIVE SUMMARY 4
4. OBJECTIVE OF PROJECT 5
5. RESEARCH MEATHODOLOGY 6
6. COMPANY PROFILE 7
Introduction
Serum Institute of India Ltd.
Achievements.
Organizational chart.
7. IMPORT DOCUMENTATION 11
9. EXPORT DOCUMENTATION 17
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SIIL
11. EXPORT CUSTOM CLEARANCE 23
PROCEDURE
12. EXPORT INCENTIVE SCHEMES 25
Export Promotion Capital Goods
Scheme
Duty Exemption Schemes
Duty Remission Schemes
13. INCO TERMS 31
16. EOU 40
20. CONCLUSION 51
21. LIMITATIONS 52
22. BIBLIOGRAPHY 53
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ACKNOWLEDGEMENT
Lastly, I would like to thank all other executive and employees in SIIL for their help
and counseling at various stages.
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EXECUTIVE SUMMARY
The Poonawalla Group of Companies has grown and diversified into a multifaceted
organization with a nationwide network of offices, extensive manufacturing facilities,
full-fledged research and development capabilities. A market leader of mechanical
seals for industrial use, the group also manufactures and exports industrial valves and
pneumatic actuators to various parts of the world including Europe and USA and has
now extended its activities to include automated control systems for process
industries, prime factors in the groups growth and success have been its emphasis on
quality, innovation, productivity and customer support.
During my summer internship program with Serum Institute of India Ltd. i was
trained in various aspects related to export clearance, documentation, and procedures,
right from the pre-shipment documentation stage to post shipment documentation,
formalities involved in realization of export proceeds, procedures relating to L/C
consignment. Daily functions were carefully observed. Different schemes involved in
exports and imports were studied in details.
Another aspect I covered in this report is about the Export Oriented Units and the
Special Economic Zone, and the various aspects related to the both concepts and
procedures carried out in both.
It was a great experience understanding and learning the above mentioned things.
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Data collection is important step in any project and success of any project will
be largely depend upon how much accurate you will be able to collect and how much
time, money and effort will be required to collect that necessary data, this is also
important step.
Data collection plays an important role in research work. Without proper data
available for analysis you cannot do the research work accurately. There are two types
of data collection methods available.
A. PRIMARY SOURCES: - The primary data was collected by interaction with the
senior executives and HOD of the International Marketing.
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COMPANY PROFILE
The Poonawalla Group has been established in 1896.The group has grown and
diversified into a multi-faceted organization with a nationwide network of offices
manufacturing facilities research and development capabilities, total turnover
exceeding Rs.5 billion.
The group which employees over 2000 people is professionally managed and engaged
in a wide array of activities ranging from horse-racing and breeding ,manufacturing
pharmaceuticals ,mechanical seals to exports and financial services. Prime factor in
the groups growth success have been its emphasis on quality, innovation, dedication
and customer support. The group is committed to prepare for the future by operating
its existing divisions to their full potential through market opportunities that may
present themselves in the service of the nations core capabilities. Its current
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Serum Institute of India Ltd has emerged as the largest exporter of vaccines and
Immunobiologicals of the country with its product being exported to 140 countries
across the globe, thus gaining worldwide recognition as a reliable source of quality
vaccines which form part of the global vaccination programmes.This export
performance has earned the company recognition as export and a 4 Star Trading
House.
It has established as the Worlds largest producer of Measles and DTP group of
vaccines. Several life saving biological were manufactured at price affordable to the
common man and in abundance , with the result that the country was made self
sufficient for Tetanus Anti-Toxin and Anti-Venom Serum. It has also proliferated to
bring down the prices of newer vaccines so that not only Indian, but the entire under
privileged children of the world, in more than 15 countries are protected from the
birth onwards.
Vaccines are manufactured in accordance with the guidelines laid down by the world
health organization. The techniques used are at par with the International Standards.
The facilities are regularly upgraded to be in line with the current good manufacturing
practices followed world wide.
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Serum Institute of India has recently set up SERUM BIO-PHARMA PARK, Indias
first biotech Special Economic Zone (SEZ). It has also an Economic Oriented Unit
(EOU).These are adjoining Serum Institutes existing manufacturing unit and is
sector-specific SEZ is meant for Bio-Technology and Pharmaceutical Products. The
SEZ and EOU has allowed Serum Institute of India ltd. To avail various tax benefits
such Income Tax, Import Duty on Capital Goods, etc .This has encouraged a lot of
foreign companies to partner with Serum Institute of India ltd to avail and share
benefits.
The production facilities of Serum Institute have the best in terms of equipment and
human resources; essential to ensure high quality vaccines. The manufacturing
facilities conform to WHO current Good Manufacturing Practice (cGMP)
requirements and are approved by WHO, Geneva. The unique large bioreactors for
DTP group of vaccines have a huge batch size to produce millions of doses.
It goes without saying that Serum Institute's work ethic ensures that every safeguard is
instituted, every norm of cGMP is scrupulously observed, and every procedure
followed. Among the latest acquisitions is the state-of-the-art EDP system, which
provides instant information on every aspect of production, from stocks, inventory,
quantity of vaccines in the pipeline, Q.C. results of each batch, to sales, product
dispatch and destinations.
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ACHIVEMENTS
First award under the Drug and Pharmaceutical Panel form CHEMIXIL,
Mumbai, for sterling performance in Export performance in 1995-96.
Certificate for Export recognition (1ST RANK) under the Export House
category, from the government of Maharashtra in Export achievements 1999-
97.
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ORGANIZATIONAL CHART
P.C.Nambiar (Director)
Mr.Iyer (Secretary)
(Service tax)
Mr. Nair
(EOU)
Mr.Sathe Mrs.Bahirat
Mr.P.Kulkarni
Mr.Salunke
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IMPORT
IMPORT An import is any good or service brought in from one country to another
country in a legitimate fashion, typically for use in trade. It is a good that is brought in
from another country for sale.
IMPORT DOCUMENTATION
The documents used and required in the Import and its procedure are as follows:-
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Certificate Of Origin :- this certificate indicates that the goods which are
being exported are actually manufactured in a specific country mentioned
therein. This certificate is send by the exporter to the importer.
Shipping Bill :- The shipping bill is the requisite for the seeking the
permission of customs to export goods by sea .It contain :-
The details of goods.
Number and kind of packages.
Shipping mark and number.
Value of goods.
The name of the vessel.
The country of destination.
The port of loading.
The exchange rates, etc.
Airway Bill :- The airway bill is a contract between the owner of the goods
and the carrier or its agent. The receipt issued by an airlines company or its
agent for the carriage of goods is called airway bill.
The first three digit of the airway bill number normally represent the
code, which identifies the carrier. For ex:
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The Import Procedure carried out in SIIL is explained below in sequential manner:-
Invitation For Tender: - The tenders are invited and the tender with
INCO TERMS mode of payment, value of materials, freight charges etc are
decided.
goods are assessed to duty, examined and pre-audit is carried out. Custom duty
Out Of Custom Charge Order:- Goods can be cleared outside port after Out
of Customs Charge order is issued by customs officer. After that, port dues,
demurrage and other charges are paid and goods are cleared.
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EXPORT
The seller of such goods and services is referred to as an "Exporter" who is based in
the country of export whereas the overseas based buyer is referred to as an "Importer".
ADVANTAGES OF EXPORTING: -
The basic advantage of exporting visa- a- vis confined to the domestic market that
SIIL enjoyed are:-
EXPORT DOCUMENTATION
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EXPORT DOCUMENTS
Principle Auxiliary
COMMERCIAL DOCUMENTS
PRINCIPLE DOCUMENTS
1. Commercial invoice
2. Packing list.
3. Bill of Lading/ Air Waybill.
4. Certificate of inspection/Quality Control.
5. Certificate of Origin
6. Bill Of Exchange
7. Shipment Advice.
8. Insurance Certificate.
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AUXILIARY DOCUMENTS
1. Performa invoice.
2. Intimation for inspection.
3. Shipping instructions.
4. Insurance Declaration.
5. Application for certificate of origin.
6. Mates Receipt.
7. Letter to bank of collection/negotiation of documents.
REGULATORY DOCUMENTS
There are seven regulatory documents associated with the pre-shipment stage of the
export transaction. They are:
3. Port Trust copy of Shipping Bill/ Export Application/Dock Challan For port.
4. Vehicle ticket for port
5. Exchange Control Declaration/GR/PP forms RBI.
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COMMERCIAL DOCUMENTS
1. Quotation: - An offer to sell goods and should state clearly the prices, details
of quality, quantity, trade terms, delivery terms, payments term. It is prepared
by exporter.
2. Sales Contract: - An agreement between the buyer and the seller stipulating
every details of the transaction. It is a legally binding document. It is therefore
advisable to seek legal advice before signing the contract. It is prepared by
importer and exporter.
5. Packing List: - A list with detailed packing information of the goods shipped.
It is prepared by the exporter.
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including quality, quantity, and/ or price etc. required by certain buyer and
countries. It is prepared by Inspection Company or exporter.
10. Bill Of Lading:- An evidence of contract between the shipper of the goods
and carrier. The customer usually needs the original as proof of ownership to
take possession of the goods. It is prepared by shipping company.
11. Airway Bill:- A kind of waybill used for the carriage of goods by air. This
serves as a receipt of goods for delivery and states the condition of carriage
but is not a title document or transferable/negotiable instrument. It is prepare
by airline.
12. Document Ary Credit:- A bank instrument began ( issuing or opening bank)
at the request of the buyer, evidencing the bank undertaking to the seller to
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pay a certain sum of money provide that specific requirements set out in the
D/C are satisfied. It is prepared by bank to issue to importer.
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Every consignment leaving the Indian shores by air , sea , or land has to undergo a
prescribed procedure of custom clearance. This is in EDI (non manually)in following
manner in SERUM INSTITUTE INDIA LTD. with the help of their own custom
house agent is MR. N. J. BANDRAWALLA in Mumbai.
(MR.N.J.BANDRAWALLA) IT SYSTEM
SHIPPING LINE
EXPORTER/CHA
Physical Examination
PREVENTIVE Let Export Order SHED
OFFICER APPRAISER
Generation of Shipping Bill
(EXPORT)
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The various stages in custom clearance are illustrated in above mentioned figure. The
details are discussed below in stepwise manner.
STEP 1:- The exporter/CHA fills the declaration in prescribed format through the
custom service centre. The exporter verifies the data as per the checklist generated by
the system after which a shipping bill number is generated by the system endorsed on
the printed checklist and this is given back to the exporter/CHA.
In case of dutiable items, exporter pays the duty along with TR-6 chalan generated by
the system
STEP 2:- The goods are allowed to enter the dock on the strength of the checklist
endorsed with the shipping bill number. The exporter then submits this along with
documents as follows to the custom officer who verifies the documents against the
received goods.
Original invoice
Packing list
GR forms
ARE forms, etc.
STEP 3:- The goods are then presented to the shed appraiser (export) for physical
examination which is carried out by the customs examiner.
STEP 4:- After the physical examination is over the LET EXPORT ORDER is given
by the Shed Appraiser.
The shipping bill is generated in three copies. One copy for customs, the second copy
for exporter and third copy is generated after the submission of Export General
Manifest(EGM).it is mandatory to submit the shipping bill wise EGM to the custom
within the seven days of sailing of ship.
STEP 5 :- The Exporter / CHA submits exporters copy of shipping bill duly signed
by the dock appraiser to the preventive officer for allowing the cargo to be loaded on
board the ship.In case of any discrepancy or mis declaration, the export of the
consignment is not allowed and suitable action is taken against the exporter under the
CUSTOM ACT 1962.
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The EPCG scheme allows import of capital goods for pre-production, production and
post production (including CKD(complete knock down)/SKD(semi-knock down)
thereof as well as computer software system) at five percent custom duty subject to an
export obligation equivalent to 8 times of duty saved on capital goods imported under
EPCG scheme to be fulfilled over a period of 8 years reckoned from the date of
issuance of license.
Jigs
Fixtures
Dies
Moulds,etc.
In case CVD is paid in cash on import under EPCG, the incidence of CVD
would not be taken for computation of net duty saved provided the same is
not cenvated.
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Both the merchant exporter and the supporting manufacturer must jointly
execute and bond with bank guarantee that they will fulfill the export
obligation.
The EPCG license with a duty saved of Rs.100 crores or more, the export
obligation shall be required to be fulfilled over a period of 12 years.
A person holding an EPCG license may source the capital goods from a
domestic manufacturer instead of importing them. The domestic manufacturer
supplying capital goods to EPCG license holders shall be eligible for deemed
export benefit
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While computing the value of Advance Authorization, the margin for normal
wastage is built in so that adequate quantity of raw material can be imported.
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DUTY DRAWBACK SCHEME:- the duty drawback scheme enable the exporter to
claim the refund of the duties such as excise duty on inputs and finished products and
customs duty on the inputs which are imported from the government.
Under the Custom Act 74 and 75, the Duty Drawback can be claimed when the inputs
are used in the manufacture of goods that are eventually exported or when imported
goods are re-exported without any value addition.
There is no duty drawback available on other taxes and duties such as sales tax and
octroi.drawback is also available on duty paid on packing material , processing and
job work.
There are set of procedure to claim for duty drawback which are explained below in
step wise manner;-
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STEP 1. The exporter has to ensure that the drawback rate for the products that
he/she is exporting is fixed by the Director of Drawback, under the Department of
Revenue, Ministry of Finance. These rates are called ALL INDUSTRY RATE
(AIR).
The AIR rates are fixed under rule 3 of Drawback Rules where weighted averages of
consumption of various inputs and its value, both imported and indigenous, are
considered. It is fixed as a percentage of the FOB value of export goods in which a
ceiling of the maximum amount of Drawback payable is defined.
STEP 2 . If the drawback rate is not fixed, the exporter has to apply for the fixation
of rate by submitting the details to the Jurisdictional Commissioner of central
exice.the drawback rate thus fixed is called as the BRAND RATE.
Within the 60 days of export the exporter has to submit an application for the fixation
of brand rate. Also if exporter feels that the AIR is fixed at a lower rate than the actual
duty paid, he/she can apply under rule 7 of Drawback Rules for special brand rate.
The conditions for these are:-
STEP 3 . For claiming the drawback, an exporter must show the details for which
he/she is eligible to make a claim. It includes SHIPPING BILL which is a
triplicate copy marked as drawback claim copy and should be endorsed by the
custom officer at the port confirming the dispatch of goods.
The DEPB is devised for that exporter who wishes to avail the facility of importing
various inputs and other approved items under DEPB scheme on POST-EXPORT
basis.
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Under this scheme, the DEPB rates are fixed and announced by the licensing
authorities which are the SION rates fixed as a percentage of the FOB. The exporter is
issued a passbook in which the amount of DEPB entitlement is credited at the time of
exports on the basis of actual amount of FOB value of export as per the bank
certificate
Capital goods are not allowed for the imports under DEPB scheme.
The export realization should be in hard currencies such as the US Dollar,
Pound Sterling etc.
The facility is not allowed for export to Nepal, Bhutan, etc where export from
India are allowed in Indian rupees.
The exporter has to use a blue shipping bill on which a declaration has to be
made in the prescribed form.
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INCO TERMS
1. FOB (Free On Board) :- One of the most commonly used terms. Though
frequently used to describe inland movement of cargo, FOB specifically
refers to ocean or inland waterway transportation of goods. "Delivery" is
accomplished when the shipper/seller releases the goods to the buyer's
forwarder. The buyer's responsibility for insurance and transportation
begins at the same moment.
2. FCA (Free Carrier):- The seller is responsible for arranging
transportation, but he is acting at the risk and the expense of the buyer. In
FCA the seller chooses and works with the freight forwarder or the carrier.
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3. FAS (Free Alongside Ship):- The buyer bears all the transportation costs
and the risk of loss of goods. FAS requires the shipper/seller to clear goods
for export, which is a reversal from past practices. Companies selling on
these terms will ordinarily use their freight forwarder to clear the goods for
export.
2. CIF (Cost, Insurance and Freight):- This is similar to CFR, but instead of
the buyer insuring the goods for the maritime phase of the voyage, the
shipper/seller will insure the merchandise.
3. CPT (Carriage Paid To):- In CPT transactions the shipper/seller has the
same obligations found with CIF, with the addition that the seller has to buy
cargo insurance, naming the buyer as the insured while the goods are in
transit.
4. CIP (Carriage and Insurance Paid To):- This term is primarily used for
multimodal transport.
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2. DES (Delivered Ex Ship):- Here is the seller's responsibility to get the goods
to the port of destination or to engage the forwarder to the move cargo to the
port of destination uncleared.
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1. Air/Sea Consignment
2. Duty Free/Duty Paid Consignment
For air consignment no original documents are required and the required
documents are:
Bank D/O if the documents are in banks name.
If freight, insurance has to be arranged by us, we have to pay.
Can keep consignment in bond and clear it later, after receiving original it is
given.
Sometimes consignments are to be kept in bond
Bank guarantee and space certificate
Have to maintain a bond register, bond no. , bond date, expiry date card should
be maintained, duly signed by customs and by us.
For duty paid consignments, no TRA is required whereas it is required for
duty free consignments.
Our consignments are free.
Documents required:
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Under Advance License: goods imported under advance license are duty free.
Under EPCG, spares license only for spares of capital goods, which are
imported under EPCG scheme at concessional rate of duty as above.
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India was one of the first in Asia to recognize the effectiveness of the Export
Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in
Kandla in 1965. With a view to overcome the shortcomings experienced on account
of the multiplicity of controls and clearances; absence of world-class infrastructure,
and an unstable fiscal regime and with a view to attract larger foreign investments in
India, the Special Economic Zones (SEZs) Policy was announced in April 2000.
In the short span of about three years since SEZs act and rules were notified in
February 2006, formal approval have been granted for setting up of 570 SEZs out of
which 346 have been notified.
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III. Each zone is headed by a development commissioner, who also heads the unit
approval committee.
The incentives and facilities offered to the units in SEZs for attracting investments
into the SEZs, including foreign investment include:-
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100% Income Tax exemption on export income for SEZ units for first 5
years, 50% for next 5 years.
Manufacturing unit in SEZs as in SIIL are allowed 100% FDI under the
automatic route.
SEZs have the freedom to bring in export proceeds without any time limit
SEZ units are exempted from interest rate surcharge on import finance.
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SIIL is also first of its kind ever approved by the government of India.The BOA has
granted its letter of approval to this company to provide common industrial infra
structure to the units functioning within the SEZ.
SIIL, a world leader, in Immune-Biological taking into account the great export
potential , it has decided to establish world class manufacturing facilities within the
SEZ.Accordingly the company has established 5 manufacturing units in the SEZ. It is
a fact that commercialization of any new product would take at least 3 to 4 years from
the development of molecule to completing the phase 2 clinical trial. Recognizing
this, the company decided to put up a unit exclusively for R&D in SEZ.
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(EOU)
The EOU Scheme introduced in early 1981, is complementary to the SEZ scheme. It
adopts the same production regime but offers a wider option in location with
reference to factors like source of raw materials, port of export, hinterland facilities,
availability of technological skills, existence of an industrial base, and the need for a
large area of land for the project.
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Pisciculture
Viticulture
Poultry or
Sericulture
After then, approval from the state government is required for which the
manufacturing and other activities have to be undertaken under custom bonds
for which formal application is to be made to the deputy commissioner of the
custom. The application should include:-
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Undertaking that the cost recovery and the other charges shall be paid.
After verification of the premises and the relevant documents, the requisite
license under section 58 and 65 of the custom act will be issued by the
assistant commissioner/central excise /deputy commissioner customs on
priority basis.
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The above described import procedure of EOU/SEZ carried out in the SERUM
INSTITUTE OF INDIA LIMITED is explained diagrammatically as follows:-
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Registration of Bill of Entry, giving Serial number & assesing the same by
Authorized officer
Said Bill of Entry is treated as permission for transfer of goods to SEZ &
Stamped on 5th copy of Bill of Entry
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The procedure followed at SIILs SEZ/EOU on arrival of the cargo is explained below
in detail along with the flow chart.
On arrival of less than container load cargo, verification of marks and numbers
shall be carried out at random by the authorized officer at the SBPP gate of entry.
The fifth copy of Bill of Entry bearing endorsement of the authorized officer that
the goods have been received in the SBPP to be submitted to the customs officer
in charge of the airport or port or inland container depot or land customs station or
public/Pvt. bonded warehouse as the case may be within 45 days from the date of
clearance from such airport/seaport/warehouse etc as the case may be failing
which the officer in charge of airport/seaport/warehouse etc shall write to the
specified officer of SEZ for raising demand of applicable duty from SBPP
importer
.
Endorsement regarding verification of marks and number in case of less than
container load or inspection of seal in the case of full container load cargo or
sealed truck by the authorized officer and the receipt of goods by SBPP importer
shall be the completion of the custom procedure for receipt of goods.
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Arrival of Cargo
In Special Economic Zone, every out going material is monitored by custom officials,
provided that the exporter shall intimate the specified officer of such export details in
advance. Also entry of each material is to be done by the customs authorities in the
respective customs registers after physical verification of consignment before goods
enter into the SEZ.
1. Export
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2. DTA Sale
3. Other Removals
REMOVAL
OF GOODS
OTHER
EXPORT DTA SALES
REMOVALS
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Shipping Bill is filed with authorized officer along with invoice packing list,
GR/SDF form
Since SIIL is Exporting Pharma products, get NOC certificate on back side of
Shipping Bill from Assistant Drug Controller (ADC)
Authorized officer registers Shipping Bill and gives running serial No and
DO Assessment
Onward entry has to be done in export gate registered and running Serial
No. should be Mentioned on back side of original and duplicate Shipping
Bill
Duplicate and Triplicate copies of the Shipping Bill will be handed over to
Exporters Representative as a proof of receipt of consignment
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1. SEZ units can be set only in EOU can be set anywhere in India
designated SEZs
2. A SEZ unit has to be new unit. Running DTA unit can be converted into EOU
No Conversion is allowed.
3. DTA sales allowed on payment DTA sales up to 50% of FOB Value Of Exports
of full Duties permitted on Concessional Rate of Duty
4. Trading unit are permitted in Trading units not permitted in EOUs
SEZ
5. No routine examination of Examination of Export Import Cargo By
Export Import Cargo by Customs
Customs
6. Export Proceeds to be realized Export Proceeds to be realized Within 6 months
Within 12 months
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CONCLUSION
SERUM INSTITUTE OF INDIA LTD. has been over the years being a
prime exporter of vaccines to various countries. Company has good reserves
and high credibility in foreign market due to which it is not facing problem
related to foreign exchange risk and recoveries from importers abroad.
The company has kept itself in accordance with the latest change in the
technology. It has now upgraded with EDI system of the filling documents to
customs.
Documentation is one of the most important aspects of overseas trade.
The present procedure and documentation process, though simplified over a
period of time is still lengthy and complicated.
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The time span for the project was very short which was of 2 months, which
itself acts as a major constraint. Moreover, studying the guidelines and applied
it practically within such short time span was a task of great pressure.
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BIBLIOGRAPHY
BOOKS REFERRED :-
1. M.I.Mahajan : Export Policy,Procedures and
Documentations.
2. Justin Paul & Rajiv Aserkar : Export Import Management
3. Hand book of procedures
WEBSITES :-
1. www.poonawallagroups.com
2. www.seruminstitute.com
3. www.google.com
4. www.wikipedia.com
5. www.sezindia.nic.in
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