Académique Documents
Professionnel Documents
Culture Documents
SERIAL
NUMBER CONTENT PAGE NUMBER
1 INTRODUCTION 6
2 HOW TO SET UP AN EXPORT ORGANISATION 8
3 HOW ONE BEGINS TO DO EXPORT 14
4 EXPORT SALES & CONTRACT TERMS & CONGITIONS 17
5 TERMS OF SHIPMENT – INCOTERMS. 20
6 PROCESSING AN EXPORT ORDER 27
7 FINANCIAL RISK INVOLVED IN FOREIGN TRADE 28
8 EXPORT DOCUMENTS 29
9 OCTROI 53
10 QUALITY CONTROL & PRE-SHIPMENT INSPECTION 57
11 SHIPPING ANG CUSTOMS FORMALITIES 60
12 SALES TAXES EXEMPTION PROCEDURE 66
13 METHODS OF RECEIVING PAYMENTS AGAINST EXPORTS 68
14 THE LETTER OF CREDIT 71
15 PREPARATION AND SUBMISSION OF DOCUMENTS FOR BANK NEGOTIATIONOR PURCHASE 88
16 SHIPMENT THROUGH COURIERS 91
17 CUSTOM PROCEDURE FOR EXPORT UNDER EDI SYSTEM 92
18 THE ECGC COVER. 112
INTRODUCTION
India has a mission to capture 2% of the global share of trade by 2010, up from the present level of
less than 1%. Export is one of the lucrative business activities in India. The government also
provides various promotional schemes to the exporters for earning valuable foreign exchange for
the country and for meeting their requirements for importing modern technology and essential
inputs. Besides, the income from export business is also exempted to the specified extent under the
Income Tax Act, 1961, Refund of Central Excise and Custom Duty on export is also made under the
Duty Drawback Scheme and other export promotion schemes of the Government.
Exports can be of goods or services which can be moved physically from one country to another or
can be rendered.
Physical Exports: If the goods physically go out of the country or services are rendered outside the
country then it is called as physical export. The Foreign Trade defines exports as taking out of India
any goods by land, sea, air. Although the act does not term them as “Physical Exports”, we have to
put phrase to distinguish it from “Deemed Exports” which is sales in India but considered as exports
for limited purpose.
TYPES OF EXPORTERS:
Exporters can be basically classified into two groups
1 Manufacturer Exporter: As the exporter has the facility to manufacturer the product he intends to
export and hence he exports the products manufactured by him.
2 Merchant Exporter: An exporter who does not have the facility to manufacture an item. But, he
procures the same from other manufacturers or from the market and exports the same.
An exporter can be both a manufacturer exporter as well as a merchant exporter, he can export
product manufactured by him or he can export items bought from the market.
Once it is decided to export, it is mandatory on your part to follow certain procedures, rules and
regulations as prescribed by various regulatory authorities such as DGFT, RBI, and Customs. These
procedures, rules and regulations are laid down in the Exim Policy 2004-09, Exchange Control
Manual, Customs Act etc. Accordingly Export documents are required to be prepared keeping in
view of the requirement of the foreign buyers and our regulatory authorities.
Before selecting a product, one must simultaneously made a study and find out the prospective
market. For finding out the market for the selected product, the following methods will help.
• Get statistical information as to imports of the product by various countries and their growth
prospects in the respective countries
• Approach the chamber of commerce for their guidance to find out the market.
• Approach the Export Promotion Council dealing in the product of selection to get more
information.
The Preliminary
Once you are ready with the product you wish to export and have found the market for the same,
you are ready to proceed further. Following sequences can be followed:
1 Any one, who wishes to export, must first of all get an Importer Exporter Code Number (IE
Code).This can be obtained by making a formal application to the office of the Regional Directorate
General of Foreign Trade (DGFT).
• Get yourself registered with the related Export Promotion Council and become a member. Also
arrange to obtain Registration-Cum-Membership Certificate (RCMC) from the council. This has twin
objectives:
o Under the Foreign Trade Policy, it is mandatory that an exporter gets him registered with the
Export Promotion Council to avail of various export facilities.
o Being a member, you will have access to all the information relating to the product that could be
made available by the council
o Many foreign buyers send their enquiries for the imports to the Export Promotion Council. Hence
you will have few customers interested in your product.
2 If you are a manufacturer, find out the provisions under the EXIM Policy of getting the raw
materials duty free.
3 Get familiar with the excise formalities as goods meant for export can be cleared without payment
of C. Excise duty on the finished product subject to compliance of certain formalities.
4 Understand the local government regulations in relations to the export of the product.
5 Get information of the government’s regulations of the importing country as to restrictions on the
quantity, product specification, packing regulations, customs regulations, requirement of specific
documents/information etc.
6 Availability of Vessels/Airlines, the transport charges, frequency of operation etc.,
7 To look for a Custom House Agent (CHA) (also know as freight forwarders or clearing agents) for
handling the documents/cargo in the customs.
8 If the product is covered under any quota regulation, find out the agency/council who is handling
the quota distribution for the product and the availability of quota for exports.
FINDING A CUSTOMS
Once you have selected the market, the next step is to find a prospective customer. This you can
get
1 From the directory of importers of the country you intend to export to
2 By writing to the Embassy of India in that country for assistance
3 By writing to the chamber of commerce of that country
4 By means of participation in a Fair/Exhibition abroad either directly or through the Export
Promotion Council
5 By participating in international fair if organized locally
6 Through the personal contacts in that country. By these processes one can only have the list of
customers. One has to dialogue or correspond with these customers by sending samples, getting
feedback from the customers etc. to ultimately select the customer with whom to deal with. It is
necessary to know the financial standing of the company which can be obtained through the bank
channel or through the office of ECGC.
NEGOTIATING CONTRACT:
Once the prospective customer is found, the business deal has to be concluded. The following
aspects may be considered before entering into a final contract with the buyer.
1 Credit Worthiness of the Customer.
2 Availability of the Steamer/Airlines and the frequency
3 The freight charges
4 The full product specification
5 The quantity, Price
6 Terms of Payment
7 Type of packing and markings on the packages
8 Mode of shipment & Shipment schedule
9 Tolerance of quantity to be shipped
10 Documentation requirement for the customer
11 Documentation requirement of the government of importing country
12 Compliance of the local governmental rules and regulations
Before entering into contract one should take note of the above factors. While these are indicative,
the requirements will vary from country to country, product to product and buyer to buyer.
ARBITRATION:
Arbitration clause recommended by the Indian Council of Arbitration:”All disputes or differences
whatsoever arising between the parties out of / relating to the meaning, construction and operation
or effect of this contract or the breach thereof shall be settled by arbitration in accordance with the
rules of Arbitration of the Indian Council of Arbitration and the award made in pursuance thereof
shall be binding on the parties” (or any other arbitration clause that may be agreed upon between
the parties).
“E”-term,”F”-term, “C”-term &”D”-term: Incoterms 2000, like its immediate predecessor, groups
the term in four categories denoted by the first letter in the three-letter abbreviation.
1 Under the “E”-TERM (EXW), the seller only makes the goods available to the buyer at the seller’s
own premises. It is the only one of that category.
2 Under the “F”-TERM (FCA, FAS, &FOB), the seller is called upon to deliver the goods to a carrier
appointed by the buyer.
3 Under the “C”-TERM (CFR, CIF, CPT, & CIP), the seller has to contract for carriage, but without
assuming the risk of loss or damage to the goods or additional cost due to events occurring after
shipment or discharge.
4 Under the “D”-TERM (DAF, DEQ, DES, DDU & DDP), the seller has to bear all costs and risks
needed to bring the goods to the place of destination.
All terms list the seller’s and buyer’s obligations. The respective obligations of both parties have
been grouped under up to 10 headings where each heading on the seller’s side “mirrors” the
equivalent position of the buyer. Examples are Delivery, Transfer of risks, and Division of costs. This
layout helps the user to compare the parties respective obligations under each Incoterms.
EXPORT DOCUMENTS
Any export shipment involved various documents required by various authorities such as customs,
excise, RBI, Inspection and according depending upon the requirements, there are categorized into
2 categories, namely commercial documents and regulatory documents.
A. Commercial Documents. : - Commercial documents are required for effecting physical transfer of
goods and their title from the exporter to the importer and the realisation of export sale proceeds.
Out of the 16 commercial documents in the export documentation framework as many as 14 have
been standardised and aligned to one another. These are proforma invoice, commercial invoice,
packing list, shipping instructions, intimation for inspection, certificate, of inspection of quality
control, insurance declaration, certificate' of insurance, mate's receipt, bill of lading or combined
transport document, application for certificate origin, certificate of origin, shipment advice and letter
to the bank for collection or negotiation of documents. However, shipping order and bill of
exchange could not be brought within the fold of the Aligned Documentation System,
1. Commercial Invoice: Commercial invoice is an important and basic export document. It is also
known as a 'Document of Contents' as it contains all the information required for the preparation
of other documents. It is actually a seller's bill of merchandise. It is prepared by the exporter after
the execution of export order giving details about the goods shipped. It is essential that the invoice
is prepared in the name of the buyer or the consignee mentioned in the letter of credit. It is a prima
facie evidence of the contract of sale or purchase and therefore, must be prepared strictly in
accordance with the contract of sale.
Contents of Commercial Invoice
1 Name and address of the exporter.
2 Name and address of the consignee.
3 Name and the number of Vessel or Flight.
4 Name of the port of loading.
5 Name of the port of discharge and final destination.
6 Invoice number and date.
7 Exporter's reference number.
8 Buyer's reference number and date.
9 Name of the country of origin of goods.
10 Name of the country of final destination.
11 Terms of delivery and payment.
12 Marks and container number.
13 Number and packing description.
14 Description of goods giving details of quantity, rate and total amount in terms of internationally
accepted price quotation.
15 Signature of the exporter with date.
Significance of Commercial Invoice
1 It is the basic document useful in preparation of various other shipping documents.
2 It is used in various export formalities such as quality and pre-Shipment inspection excise and
customs procedures etc.
3 It is also useful in negotiation of documents for collection and claim of incentives.
4 It is useful for accounting purposes to both exporters as well as importers.
5 Inspection Certificate: The certificate is issued by the inspection authority such as the export
inspection agency. This certificate states that the goods have been inspected before shipment, and
that they confirm to accepted quality standards.
6 Marine insurance policy: Goods in transit are subject to risk of loss of goods arising due to fire on
ship, perils of sea, theft etc. marine insurance protects losses incidental to voyages and in land
transportation. Marine insurance policy is one of the most important document used as collateral
security because it protects the interest of all those who have insurable interest at the time of loss.
The exporter is bound to insure the goods in case of CIF quotation, but he can also insure the goods
in case of FOB contract, at the request of the importer, but the premium payment will be made by
the exporter. There are different types of policies such as
• SPECIFIC POLICY: This policy is taken to cover different risks for a single shipment. For a regular
exporter, this policy is not advisable as he will have to take a separate policy every time a shipment
is made, so this policy is taken when exports are in frequent.
• Floating Policy: This is taken to cover all shipments for some months. There is no time limit, but
there is a limit on the value of goods and once this value is crossed by several shipments, then it
has to be renewed.
• Open Policy: This policy remains in force until cancelled by either party i.e. insurance company or
the exporter.
• Open Cover Policy: This policy is generally issued for 12 months period, for all shipments to one or
more destinations. The open cover may specify the maximum value of consignment that may be
sent per ship and if the value exceeded, the insurance company must be informed by the exporter.
• Insurance Premium: Differs upon product to product and a number of such other factors, such as,
distance of voyage, type and condition of packing, etc. Premium for air consignments are lowered
as compared to consignments by sea.
4. Consular Invoice: Consular invoice is a document required mainly by the Latin American
countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Myanmar, Iraq, Australia, Fiji,
Cyprus, Nigeria, Ghana, Guinea, Zanzibar, etc. This invoice is the most important document, which
needs to be submitted for certification to the Embassy of the importing country concerned. The
main purpose of the consular invoice is to enable the authorities of the importing country to collect
accurate information about the volume, value, quality, grade, source, etc., of the goods imported
for the purpose of assessing import duties and also for statistical purposes. In order to obtain
consular invoice, the exporter is required to submit three copies of invoice to the Consulate of the
importing country concerned. The Consulate of the importing country certifies them in return for
fees. One copy of the invoice is given to the exporter while the other two are dispatched to the
customs office of the importer's country for the calculation of the import duty. The exporter
negotiates a copy of the consular invoice to the importer along with other shipping documents.
Significance of Consular Invoice for the Exporter
1 It facilitates quick clearance of goods from the customs in exporter's as well as importer's
country.
2 Certification' of goods by the Consulate of the importing country indicarer that the importer has
fulfilled all procedural and licensing formalities for import of goods.
3 It also assures the exporter of the payment from the importing country.
Significance of Consular Invoice for the Importer
1 It facilitates quick clearance of goods from the customs at the port destination and therefore, the
importer gets quick delivery of goods.
2 The importer is assured that the goods imported are not banned for imported in his country.
Significance of Consular Invoice for the Customs Office
1 It makes the task of the customs authorities easy.
2 It facilitates quick calculation of duties as the value of goods as determine by the Consulate is
considered for the purpose.
5. Certificate of Origin: The importers in several countries require a certificate of origin without
which clearance to import is refused. The certificate of origin states that the goods exported are
originally manufactured in the country whose name is mentioned in the certificate. Certificate of
origin is required when:-
1 The goods produced in a particular country are subject to’ preferential tariff rates in the foreign
market at the time importation.
2 The goods produced in a particular country are banned for import in the foreign market.
Types of the Certificate of Origin
(a) Non-preferential Certificate, of Origin: - Non-preferential certificate of origin is required in
general by all countries for clearance of goods by the importer, on which no preferential tariff is
given. It is issued by: ¬
1 The authorised Chamber of Commerce of the exporting country.
2 Trade Association. Of the exporting country.
(b) Certificate of Origin for availing Concessions under GSP :- Certificate of origin required for
availing of concessions under Generalised System of Preferences (GSP) extended by certain,
countries such as France, Germany, Italy, BENELUX countries, UK, Australia; Japan, USA, etc. This
certificate can be obtained from specialised agencies, namely;
1 Export Inspection Agencies.
2 Jt. Director General of Foreign Trade..
3 Commodity Boards and their regional offices.
4 Development Commissioner, Handicrafts.
5 Textile Committees for textile products.
6 Marine Products Export Development Authority for marine products.
7 Development Commissioners of EPZs
(c) Certificate for availing Concessions under Commonwealth Preferences (CWP): Certificate of
origin for the purpose of Commonwealth Preference is also known as 'Combined Certificate of Origin
and Value'. It is required by two member countries, i.e. Canada and New Zealand of the
Commonwealth. For concession under Commonwealth preferences, the certificates or origin have to
be submitted in special forms obtainable, from the High Commission of the country concerned.
(d) Certificate for availing Concessions under other Systems of Preference:- Certificate of origin is
also required for tariff concessions. under the Global System of Trade Preferences (GSTP), Bangkok
Agreement(BA) and SAARC Preferential Trading Arrangement (SAPTA) under which India grants and
receives tariff concessions On imports and exports. Export Inspection Council (EIC) is the sole
authority to print blank Certificates of Origin under BA, SAARC and SAPTA which can be issued by
such agencies as EPCs, DCs of EPZs, EIC, APEDA, MPEDA, FIEO, etc...
Contents of Certificate of Origin
1 Name and logo of chamber of commerce.
2 Name and address of the exporter.
3 Name and address of the consignee.
4 Name and the number of Vessel of Flight
5 Name of the port of loading.
6 Name of the port of discharge and place of delivery.
7 Marks and container number.
8 Packing and container description.
9 Total number of containers and packages.
10 Description of goods in terms of quantity.
11 Signature and initials of the concerned officer of the issuing authority.
12 Seal of the issuing authority.
C. Regulatory Document: Regulatory pre-shipment export documents are prescribed by the different
government departments and bodies in order to comply with various rules and regulations under
the relevant laws governing export trade such as export inspection, foreign exchange regulation, ex
port trade control, customs, etc. Out of 9 regulatory documents four have been standardised and
aligned. These are shipping bill or bill of export, exchange control declaration (GR from), export
application dock challan or port trust copy of shipping bill and receipt for payment of port charges.
1. Shipping Bill: Shipping bill is the main customs document, required by the customs authorities for
granting permission for the shipment of goods. The cargo is moved inside the dock area only after
the shipping bill is duly stamped, i.e. certified by the customs. Shipping bill is normally prepared in
five copies :-
1 Customs copy.
2 Drawback copy.
3 Export promotion copy.
4 Port trust copy.
5 Exporter's copy.
Types of Shipping Bill
Based on the incentives offered by the government, customs authorities have introduced three
types of shipping bills:-
1 Drawback Shipping Bill: - Drawback shipping bill is useful for claiming the customs drawback
against goods exported.
2 Dutiable Shipping Bill: - Dutiable shipping bill is required for goods which are subject to export
duty.
3 Duty-free Shipping Bill: - Duty-free shipping bill is useful for exporting goods on which there is no
export duty.
In order to facilitate easy recognition and quick processing, following colours have been provided to
different kinds of shipping bills :
Types of goods By Sea By Air
Drawback shipping bill Green Green
Dutiable shipping bill Yellow Pink
Duty-Free shipping bill White Pink
Contents of Shipping Bill
1 Name and address of the exporter.
2 Name and address of the importer.
3 Name of the vessel, master or agents and flag.
4 Name of the port at which goods are to be discharged.
5 Country of final destination.
6 Details about packages, description of goods, marks and numbers, quantity and details of each
case.
7 FOB price and real value of goods as defined in the Sea Customs Act.
8 Whether Indian or foreign merchandise to be re-exported
9 Total number of packages with total weight and value.
Significance of Shipping Bill
a) Shipping bill is the main customs document, required by the customs authorities for granting
permission for the shipment of goods.
b) The cargo is moved inside the dock area only after the shipping bill is duly stamped, i.e. certified
by the customs.
c) Duly endorsed shipping bill is also necessary for the collection of export incentives offered by the
government.
d) It is useful to the Customs Appraiser while determining the actual value of goods exported.
2. A.R.E. 1 form (Central excise): this form ARE-1 is prescribed under Central Excise rules for
export of goods. In case goods meant for export are cleared directly from the premises of a
manufacturer, the exporter can avail the facility of exemption from payment of terminal excise duty.
The goods may be cleared for export either under claim for rebate of duty paid or under bond
without payment of duty. In both the events the goods are to be cleared under form A.R.E-1 which
will show the details of the goods being exported, the relevant duty involved and if the duty is paid
or goods being cleared under bond, details of goods being sealed either by the exporter or Central
Excise officials etc.
3. Exchange Control declaration Form (GR/PP/SOFTEX): under the exchange control regulations all
exporters must declare the details of shipment for monitoring by the Reserve Bank of India. For
this purpose, RBI has prescribed different forms for different types of shipments like GRI, PP forms
etc. These declaration forms must be presented to the customs officials at the time of passing of
export documentation. Under the EDI processing of shipping bill in the customs, these forms have
been dispensed with and a new form SDF has to be submitted to the customs in the place of above
forms.
4. Export Application: this is the application to be made to the customs officials before shipment of
goods. The prescribed form of the application is the Shipping Bill/Bill of Export. Different types are
required for shipment like ex-bond, duty free goods, and dutiable goods and for export under
different export promotion schemes such as claims for duty drawback etc.
5. Vehicle Ticket/Cart Ticket/Gate Pass etc.: before the goods are being taken inside the port for
loading, necessary permission has to be obtained for moving the vehicle into the customs area. This
permission is granted by the Port Trust Authority. This document will contain the detail of the export
cargo, name and address of the shippers, lorry number, marks and number of the packages,
driver’s licence details etc.
6. Bank Certificate of Realisation: this is the form prescribed under the Foreign Trade Policy,
wherein the negotiating bank declares the fob value of exports and for the date of realisation of the
export proceeds. This certificate is required fore obtaining the benefit under various schemes and
this value of fob is reckoned as fob value of exports.
D. Other Document:
1 Black List Certificate: it certifies that the ship/aircraft carrying the cargo has not touched the
particular country on its journey or that the goods are not from the particular country. This is
required by certain nations who have strained political and economical relations with the so called
“Black Listed Countries”.
2 Language Certificate: Importers in the European Community require a language certificate along
with the GSP certificate in respect of handloom cotton fabrics classifiable under NAMEX code 55.09.
Generally four copies of language certificate are prepared by the concerned authority who issues
GSP certificate. Three copies are handed over to the exporter. A copy is sent along with the other
documents for realisation of export proceeds.
3 Freight Payment Certificate: in most of the cases, the
B/L or AWB will mention the transportation and other related charges. However if the exporter does
not want these details to be disclosed to the buyer, the shipping company may issue a separate
certificate for payment of the freight charges instead of declaring on the main transport documents.
This document showing the freight payment is called the freight certificate.
4 Insurance Premium Certificate: this is the certificate issued by the Insurance Company as
acknowledgement of the amount of premium paid for the insurance cover. This certificate is
required by the bank for arriving at the fob value of the goods to be declared in the bank
certificate of realisation.
5 Combined Certificate of Origin and Value: this certificate is required by the Commonwealth
Countries. This certificate is printed in a special way by the Commonwealth Countries. This
certificate should contain special details as to the origin and value of goods, which are useful for
determining import duty. All other details are generally the same as that of Commercial Invoice,
such as name of the exporter and the importer, quality and quantity of the goods etc.
6 Customs Invoice: this is required by the countries like Canada, USA for imposing preferential tariff
rates.
7 Legalized Invoice: this is required by the certain Latin American Countries like Mexico. It is just
like consular invoice, which requires certification from Consulate or authorised mission, stationed in
the exporter’s country.
Special Provision under Uniform Customs and practice for Documentary Credit UCP-500, for
Commercial Invoice:
1 Article-37: Commercial Invoice
2 Must appear on their face to be issued by the beneficiary named in the credit.
3 Must be made out in the name of the applicant.
4 Need not be signed
5 Banks may refuse Commercial Invoice issued for amounts in excess of the amount permitted by
the credit except otherwise stated.
6 The description of the goods in the commercial invoice must correspond with the description of
the credit. In all other documents the goods may be described in the General in general terms not
inconsistent with description in the credit. In all documents goods may be described in general
terms not inconsistent with the Description of the goods in the credit.
Pre-Shipment Documents:
1 Shipping bill.
2 Export order/Sales contract/Purchase order.
3 Letter of Credit
4 Commercial invoice.
5 Packing list.
6 Certificate of origin.
7 Guaranteed Remittance (G.R/SDF/PP/SOFTEX),or SDF.
8 Certificate of Inspection.
9 Various declarations required as per custom procedure.
Exchange Control Declaration Form: all exports to which the requirement of declaration apply must
be declared on appropriate forms as indicated below unless the consignment is of samples and of
‘No Commercial Value’
1 GR FORM: to be completed in duplicate for exports otherwise than by post including export of
software in physical form i.e. magnetic tape/discs and paper media.
2 SDF FORM: to be completed in duplicate and appended to the Shipping Bill for export declare to
the customs offices notified by the Central Government which have introduced EDI system for
processing Shipping Bill.
3 PP FORM: to be completed in duplicate for export by post.
4 SOFTX: to be completed in triplicate for export of software otherwise than in the physical form i.e.
magnetic tapes/discs and paper media.
These forms are available for sale in Reserve Bank of India
Export declaration forms have utmost importance and are binding on the exporters. It is, therefore,
necessary that enough care is taken while declaring exports on these forms, with special reference
on the following points.
1 Name and address of the authorised dealer through whom proceeds of exports have been or will
be realized should be specified in the relevant column of the form.
2 Details of commission and discount due to foreign agent or buyer should be correctly declared
otherwise difficulties may arise at the time of remittance of such commission.
3 It should be clearly indicated in the form whether the export is on ‘outright sale basis’ or ‘on
consignment basis’ and irrelevant clauses must be stuck out
4 Under the term ‘analysis of full export value’ a break up of full export value of goods under F.O.B
value, freight and insurance should be furnished in all cases, irrespective of the terms of contract.
5 All documents relating to the export of goods from India must pass through the medium of an
authorised dealer in foreign exchange in India within 21 days of shipment.
6 The amount representing the full export value of goods must be realized within six months from
date of shipment.
Disposal of Copies of Export Documentation Form
1 GR forms covering export of goods other than jewellery should be completed by the exporter in
duplicate and both the copies should be submitted to customs at the port of Shipment. Customs will
give their running serial number on both the copies of the GR forms after verifying the particulars
and admitting the corresponding shipping bill. The value declared by the exporter will also be
verified by the customs and they will also record the assessed value. Duplicate copy will be returned
to the exporter and the original will be remained by the customs for onward submission to the
Reserve Bank. Duplicate form of the GR form will again be presented to the customs at the time of
actual shipment. After examination of goods and certifying the quantity passed for shipment the
duplicate copy will again be returned to exporter for submission to an authorised dealer. However,
an exception to submission of GR forms to the Customs authorities have been made in case of deep
sea fishing.
2 (a) PP forms are to be first presented to an authorised dealer for countersignature. The form will
be countersigned by the authorised dealer only if the post parcel is addressed to his branch or
correspondent bank in the country or import. The concerned overseas branch or correspondent is
to be instructed to deliver the post parcel against payment or acceptance of relevant bill, as the
case may be.
(b) For post parcel addressed directly to the consignee, the authorised dealer will countersign the
form, provided —
(i) an irrevocable letter of credit for the full value of export has been opened in favour of exporter
and has been advised through authorised dealer concerned; or
(ii) the full value of shipment has been received in advance by the exporter through an authorised
dealer; or
(iii) On receipt of full value of shipment declared on this form the authorised dealer will forward to
RBI the duplicate copy along with the certified copy of shipper’s invoice.
(iv) The authorised is satisfied on the basis of standing and track record of the exporter and
arrangements made for realisation of the export proceed that he cold do so. If the authorised dealer
is not satisfied about standing etc. of the exporter, the application is rejected. No reference is
entertained by the Reserve Bank in such cases.
(c) The original PP form countersignature will be returned to the exporter by the authorised dealer
and the duplicate will be retained by him. Original PP form should then be submitted to the post
office along with the parcel. The post office through the goods have been dispatched will forward
the original to RBI.
The export of computer software may be undertaken in physical form i.e. software prepared on
magnetic tape and paper media as well as in non-physical form by direct data transmission through
dedicated earth stations/satellite links. The export of computer software in physical form is subject
to normal declaration on GR/PP form and regulations applicable there to will also be applicable to
such exports. However, export of non-physical form should be declared on SOFTEX Form. Besides
computer software, export of video / T.V. Software and all other types of software products /
packages should also be declared on the SOFTEX forms. Since export of software is fraught with
many risks and special guidelines have been framed for handling such exports.
OCTROI
1 Octroi is the local tax levied by the civic body on goods entering into the city.
2 There are three procedures for clearing goods which are meant for export.
Procedure – 1, Export on payment of octroi duty and refund thereof after export.
Pay the Octroi Duty and apply for refund of payment made.
1 At Octroi Naka form B is issued with cash receipt for the payment of Octroi Duty.
2 Cargo is moved to the docks.
3 At Docks Octroi officer prepares form”C” & endorses Shipping Bill Number & Steamers Name.
4 After shipment exporter prepares claim for refund by submitting following documents:
5 Covering Letter for refund of Octroi Duty.
6 Original receipt of Octroi paid.
7 Original Form B.
8 Original Form C.
9 Invoice under which material was bought to the city.
10 Export invoice issued by the Exporter to the importer.
11 Export Promotion Copy of Shipping Bill – Photo Copy.
12 Bill of Lading or Airway Bill Copy.
1 Verification of Documents: The Customs Appraiser verifies the documents and appraises the value
of goods. He then makes an endorsement of “Examination Order” on the duplicate copy of shipping
bill regarding the extent of physical examination of the goods at the docks. All documents are
returned back to the agent or exporter, except
o Original Copy of GR to be forwarded to RBI
o Original copy of shipping bill
o One copy of commercial invoice
2 Carting Order: The exporter’s agent has to obtain the carting order from the Port Trust
Authorities. Carting Order is the permission to bring the goods inside the docks. The carting order is
issued by the superintendent of Port Trust. Carting Order is issued only after verifying the
endorsement on the duplicate copy of shipping bill. The Carting Order enables the exporter’s agent
to cart goods inside the docks and store them in proper sheds.
3 Storing the Goods in the Sheds: After securing the carting order, the goods are moved inside the
docks. The goods are then stored in the sheds at the docks.
4 Examination of Goods: The exporter’s agent then approaches the customs examiner to examine
the goods. The customs examiner examines the cargo and records his report on the duplicate copy
of the shipping bill. The customs examiner then sings the “Let Export Order”
5 Let Export Order: The Let Export Order is then shown to the Customs Preventive Officer, along
with other documents. The CPO is in charge of supervision of loading operations on the vessel. If
CPO finds everything in order, he endorses the duplicate copy of shipping bill with the “Let Ship
Order” This order helps the exporter/shipper to load the goods on the ship.
6 Loading Goods: The goods are then loaded on the ship. The CPO supervises the loading
operations. After loading is completed, the Chief Mate (Cargo Officer) of the ship issues the “Mate’s
Receipt”. The Mate’s Receipt is sent to the Port Trust Office. The C&F agent pays the port trust dues
and collects the mate’s receipt. The C&F agent then approaches the CPO and gets the certification of
shipment of goods on AR Forms and other documents
7 Obtaining Bill of Lading: The Mate’s Receipt is then handed over to the shipping company (on
whose vessel the goods are loaded). The shipping company issues bill of lading. The Bill of Lading is
issued in:
o 3 negotiable copies of Bill of Lading
o 10 to 12 Non-negotiable copies of Bill of Lading.
The negotiable copies have title to goods; whereas non-negotiable copies do not have title to goods
but are used for record purpose.
PROCEDURE OF EXCISE CLEARANCE:
The common procedure of excise clearance under “bond” and under “rebate” is discussed as
follows:
1 Preparing of Invoice: The export goods have to be cleared from the factory under invoice. The
invoice contains details like name of the exporter, value of goods, excise duty chargeable, etc. The
invoice is to be prepared in triplicate. In case of export under Bond, the invoice should be marked
as “For Export without payment of duty”. In addition to the invoice, a prescribed for ARE 1 has to be
filed in by exporter.
2 Filling up of ARE-1 form (Annexure-20): The ARE-1 form needs to be filled in four copies. A fifth
(Optional) may be filled in by the exporter, which can be used at the time of claiming other export
incentives. The ARE-1 copies have distinct color for the purpose of verification and processing.
3 Application to Assistant Commissioner of Central Excise (ACCE): The exporter has to make an
application to ACCE regarding the removal of goods from the factory/warehouse for export purpose.
4 Information to Range Superintendent of Central Excise (RSCE): The ACCE will inform the RSCE
under whose jurisdiction the goods are intended to be cleared for export
5 Deputation of Inspector: The RSCE will then depute an inspector to clear the goods, either at the
factory or warehouse, and in certain cases at the port.
6 Processing of ARE-1 Form: The Excise Officer/Inspector will make endorsement on all copies of
ARE-1. The handling of ARE-1 Form is done as follows:
o The inspector returns the original and duplicate copies to the exporter
o The triplicate copy is sent to officer (ACCE or Maritime Commissioner (MCCE) to whom bond was
executed or letter of undertaking (LUT) was given. This copy can also be handed over to the
exporter in a tamper proof sealed cover to be submitted to ACCE/MCCE.
o The 4th copy will be retained by the excise inspector.
o The 5th copy is also handed over to the exporter.
o At the time of export, original, duplicate and the 5th copy (optional) will be submitted to customs
officer. The customs officer will examine these copies and then export will be allowed.
o The customs officer will then make endorsement of export on all copies of ARE-1. He will cite
shipping bill number and date and other particulars of export on ARE-1.
o The original copy and quintuplicate (optional) will be returned to the exporter. The duplicate copy
will be sent directly to the ACCE\MCCE i.e. excise officer with whom bond was executed will get 2
copies, one from RSCE (or excise inspector) when goods are cleared from factory and other Custom
Officer after export. This will enable him to keep track to ensure that all goods cleared from factory
or warehouse without payment of duty are actually exported. In case of export after payment of
duty, under claim of rebate, the basic procedure is same as above, except that the triplicate copy
(by excise inspector) and duplicate copy(by customs officer)will be sent to the officer to whom
rebate claim is filed. If claim of rebate is by electronic submission, these copies well be sent to
excise rebate audit section at the place of export.
7 Refund or Release of Bond: The exporter should make an application to the excise officer for
refund or release of bond. The application must be supported by original copy of ARE-1 form. The
excise officer crosschecks the original copy of ARE-1 form and the duplicate and triplicate copies of
ARE-1 form, which he had received earlier. If the copies match, then refund is given or the bond is
released.
FACTORY STUFFING OF CARGO
Clearance of goods to docks: If the goods meant for export is of a small quantity which may not be
sufficient to make one full container, the cargo is said to be less than container load (LCL) cargo.
Such cargo has to be taken to the docks where the goods will be consolidated (combining the cargo
of other exporters to make up quantity for a full container) by the agent and loaded into a
container. Here the examination of the cargo is done at the docks.(There are also inland container
depots approved by the customs where the goods can be consolidated and stuffed into the container
by the agent under the supervision of the customs officer)
If the goods meant for export is of sufficient quantity to make up a full container, the exporter has
the option to take the goods to the docks and get them examined and stuffed into a separate
container. An exporter gets the benefit on the freight amount for a full container. (Generally called
box rate)
Alternatively, he can have a container allotted to him and get the same to his Mills Premises. The
goods meant for exports can be stuffed into the container under the supervision of the regional
Central Excise Authority. Here the exporter has to
1 Obtain permission from the Customs for getting the container to his mills premises for stuffing
(House Stuffing)
2 Inform the C.Excise Authorities at least 24 hours before bringing the container for loading.
The C.Excise Authority will supervise the loading, seal the container and certify the invoice as
directed in the permission given by the custom authorities. A special Lock is used to lock the doors
of the container. Samples from the goods will be drawn, if necessary, as required under the
customs permission. Such samples will be sealed and forwarded along with the container. The
examiner in the docks may arrange to send the sample for testing. Then the container is moved to
the dock for loading. Generally, such containerized goods are not subject to further examination in
the customs. They will be directly taken for loading.
Highlights:
1. Simplified procedure for payment of premium
2. 10% of projected premium is waived when exports increase beyond projection
3. Increased discretionary limit
4. BUYER EXPOSURE POLICY :
The Buyer Exposure Policy is to insure the exporters having large number of shipments with
simplified procedure and rationalized premium. An exporters can chose to obtain exposure based
cover on the selected buyer. The cover would be cover against commercial and political risk. The
option to exclude LC shipment is available. If the exporter has opted for commercial and political
risks cover, failure of LC opening bank with World Rank up to 25,000 as per latest Bankers Almanac
is available. If exporters opts for only political risks for LC exports premium at a less rate is offered
Period of the Policy: 12 months
Risk covered: Buyer Risk
LC Opening Bank Risks
Political Risks
Percentage of Cover: 90% for Standard policyholder and 80% for others
Important Obligations of the Exporter:
1 Premium Payable in advance
2 Option to pay the premium quarterly in advance is available
3 Premium non refundable
4 Obtaining approval for extension in due date beyond 180 days
5 Declaration of overdue payments
6 Filing of claim within 12 months from due date
7 Sharing of recovery
Highlights:
1. 5% discount premium if paid in advance
2. Declaration procedure waived
3. Exporter to approach only for default in claim
4. One Policy for one buyer
Highlights:
1. Policy is best suited for exporters who make frequent shipments
2. Reduced premium rates available on conditions
3. 5% reduction on total premium on lump sum payment
4. No declaration required
5. All buyers in open countries covered on conditions
6. Protection up to Aggregate Loss Limit and Individual buyer up to 10% of All.
8. CONSIGNMENT EXPORTS POLICY (STOCKHOLDING AGENT)
Economic liberalization and gradual removal of international barriers for trade and commerce are
opening up various new avenues of exports opportunities to Indian exporters of quality goods. A
method increasingly adopted by Indian exporters is consignment exports where goods are shipped
and held in stock overseas ready for sale to overseas buyers, as and when orders are received.
Thus separate Credit Insurance Policy is introduce to cover exclusively shipments on consignment
basis taking into account their special features, providing adequate incentives and simplifying
procedures considerably
Period of the Policy: 12 Months
Risks covered:
1 Commercial Risks on stockholding agent and/or ultimate buyer
2 Political Risks
Percentage of Cover: 90% for Standard Policyholders and 80% for others
Important obligations of Exporters:
1 Advance deposit of premium in advance on quarterly or monthly basis
2 Obtaining credit limit on ultimate buyers beyond the discretionary limit
3 Quarterly/Monthly statement of actual exports
4 Overdue declaration
5 Filing of claim
6 Sharing of recovery
Highlights:
1 Covers only the consignments exports
2 Rationalized premium for 360 days
3 Automatic cover for ultimate buyers upto discretionary limit
4 Commercial risks on agents covered
5 Extended period for realization upto 360 days
9 CONSIGNMENT EXPORTS POLICY (GLOBAL ENTITY)
A method adopted by India exporters is consignment exports where goods are shipped to their own
branch office overseas ready for sale to overseas buyers, as and when orders are received. Thus
separate credit insurance policy is introduce to cover exclusively shipments by the exporters to their
branches overseas on consignment basis taking into account their special features, providing
adequate incentives and simplifying the procedures considerably.
Period of the Policy: 12 Months
Risks covered:
3 Commercial Risks on overseas branch on conditions
Percentage of Cover: 90% for Standard Policyholders and 80% for others
Important obligations of Exporters:
7 Advance deposit of premium in advance on quarterly or monthly basis
8 Obtaining credit limit on ultimate buyers beyond the discretionary limit
9 Quarterly/Monthly statement of actual exports
10 Overdue declaration
11 Filing of claim
12 Sharing of recovery
Highlights:
6 Covers only the consignments exports
7 Rationalized premium for 360 days
8 Automatic cover for ultimate buyers upto discretionary limit
9 Commercial risks on agents covered
10 Extended period for realization upto 360 days
10. SERVICES POLICIES
Services Policies offer protection to Indian firms against payments risks involved in rendering
services to foreign parties. A wide range of services, hiring or leasing can be covered under these
policies. The exporters can opt for whole Turnover Services Policy or for Specific Services Policy
depending on the nature of services provided. The premium rates applicable. To standard policy will
be applied for whole turnover services policy and specific shipment policy (SSP-ST) premium rates
will be applied for Specific Service Policy.
Period of the Policy: 12/24 Months
Risks covered:
4 Commercial Risks on ultimate buyers
5 Political Risks
6 LC Opening Bank Risks
Percentage of Cover: 90% for Standard Policyholders and 80% for others
Exporters Obligations:
2 Registration and obtaining permitted limit on the buyer
3 Payment of factoring charges with statement of exports made
4 Inform developments
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