A Report on Visit of

Suraj Forwarders Pvt Ltd

International Business Industry Visit

Xcellon Institute School of Business

PGPGBM Batch 2015-17

March 2017

Submitted to: Submitted by:

Prof Vaibhav Shah Priyansh Mehta
M00273
 Table of Content

Sr. No. Particulars Page no

1 Introduction. 3
2 Learnings. 4
2.1 Import Procedure... 4
2.2 Types of Bill of Entry. 5
2.3 Import Duty Structure 5
2.4 How to take factory stuffing permission. 6
2.5 Beneficial schemes of government for export of goods.. 6
3 Costing Analysis. 8
4 Conclusion.. 10

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1. Introduction

The company was founded in 2004 as Clearing & Forwarding Agents to

provide supply-chain services for handling import and export clearance,
both at ICD Sabarmati and Air Cargo Complex Ahmedabad, India.

By the end of year 2006, the company was established as one of the
privately owned company that ensured its steady growth. It established its
presence in the market by the expansion of its dealings with renowned to
be Clearing & Forwarding Agents in Kandla and Mundra, since 10 years.

In year 2004-05, Company was rewarded with an excellence award by

Container Corporation of India for out class import clearance of at ICD
Sabarmati.

Moreover, the company was first to clear the metal scrap consignment
ever, under mechanized handling & PSIC regimes. In year 2007, the
company got an honour to reach the top 10 CHA (Imports). In year 2007-
08, it was awarded 3rd position for Import Clearance and being first CHA
to make duty payments via Electronic Fund transfer. The company also
did remarkable efforts and excelled to get awarded for 1st position in year
2009.

The company provides following services to its clienteles.

Custom clearance
Freight Forwarding
LCL Consolidation
Transportation
Warehousing
DGFT Consultancy
Shipping Agents

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2. Learnings

2.1 Import Procedure

There is a certain procedure to be followed by merchants or traders to

import the material in India. The process of import consists of following
steps.

Step 1. Get IEC License from DGFT.

Step 2. Locate overseas seller of the product which you want to import.

Step 3. Open L/C according to mutual understanding of both the parties.

Step 4. Get the documents which are sent by the seller released form the
bank by paying the amount mentioned in the L/C.

Step 5. Appoint a CHA to do the documentation work with customs.

Step 6. File the IGM to the customs by carrier. (It is filed on the basis of
bill of lading and Container Number) (It contains data about the goods to
be imported)

Step 7. Prepare Bill of Entry on the basis of IGM and pay the duty
according to the duty structure of the Government of India.

Step 8. Get the material unloaded, transport it to the factory.

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2.2 Types of Bill of Entry

There are 3 types of Bill of Entry available in India

1) Home consumption Bill of entry: This has to be filed when the importer
wants to clear the goods on payment of duty and remove them to his
premises immediately. (Section 46 of the Custom Act 1962).

2) In-bond Bill of entry: It is also known as Warehousing Bill of Entry. This

has to be filed when the importer does not want to pay duty immediately
but prefers to keep the goods in a warehouse and pay the duty
subsequently and clear the goods for home consumption. (Section 46 and
60 of Custom Act 1962).

3) Ex-bond Bill of entry: This has to be filed when the importer wants to
clear the warehoused goods for home consumption on payment of duty
(Section 68 of Customs Act 1962).

2.3 Import Duty Structure

The imported goods are levied with a Basic Customs Duty (BCD) on the
assessable value (CIF Value + 1% Landing Charge). On the value thus
arrived (after adding the BCD) an additional duty or Countervailing Duty
(CVD), equivalent to the excise duty on like products (to countervail the
same) is levied. Further an Additional CVD of 4% is charged to countervail
the sales tax in India. A cess of 3% is charged on BCD & CVD. In addition
other duties like anti-dumping, safe guard duties are applicable in specific
cases. The duties normally are ad-valorem, but in some cases even
specific duties are levied.

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While in the Case of High Seas assessable value for calculating duty will
be CIF value of the material imported + High Seas Charges + 1% Landing
Charge.

2.4 How to take factory stuffing permission

1) Write a letter for this purpose and submit it in the excise.

2) The matter will be examined by the board, earlier every exporter had to
renew the permission of factory stuffing every six month. Now this rule has
been eradicated. Unless there is any adverse with the exporter the
permission will not be withdrawn.

3) These instructions may be brought to the notice of all concerned by

way of issuance of suitable public notice or standing order.

2.5 Beneficial schemes of government for exports of goods

Indian government has launched many beneficial schemes for exporting
goods from India. Some of them are as follows.

Advance Authorisation scheme

An Advance Licence (Authorisation) is issued to allow duty free import of

inputs, which are physically incorporated in the export product (making
normal allowance for wastage). In addition, fuel, oil, energy, catalysts etc.
which are consumed in the course of their use to obtain the export product,
may also be allowed under the scheme. It can be issued for physical
export, intermediate export and deemed export. Such licences (other than
Advance Licence for deemed exports) are exempted from payment of
basic customs duty, additional customs duty, education cess, anti-
dumping duty and safeguard duty, if any.

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 MEIS (Merchandise Export from India Scheme)

Duty Credit Scripts shall be granted as rewards under MEIS. The Duty
Credit Scripts and goods imported / domestically procured against them
shall be freely transferable. Export of more than 4000 items are eligible to
get benefit under MEIS. For the first time exports from SEZ also covered
under this incentive scheme. Under this scheme destination countries
have been classified as Group A, Group B and Group C.

E-BRC (Electric Bank Realisation Certificate)

BRC is issued by a bank to their customers who has been in to export

business on each shipment of export proceeds. Various export promotion
agencies provide incentives, import duty exemptions and other financial
assistance to the exporters. These agencies requires to be submitted
export proof by exporters to claim such benefits. This can be used as a
proof to get incentives. Now DGFT (Directorate General of Foreign Trade)
has made this facility online. Now banks can generate online BRC bill,
hence it is called E-BRC.

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3. Costing Analysis

Above picture shows the costing bifurcation of export from 2 options

available. 1) From Khodiyar ICD to Colombo

2) From Mundra port to Colombo

There are major difference in freight charges, ICD is charging very less
amount while Port is charging nearly double amount. Moreover there is
additional amount in ICD option which is of transportation while in Port
option there is additional amount of CFS charges. In total the amount

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charged does not differ highly from other option. Hence if any exporter
wants to choose between ICD and Port the main factor that should be
considered is the geographic location between the factory and ICD/Port.
This plays major part. Lets understand it with an example, if the exporter
is situated near Ahmedabad then he should be going for ICD while if the
exporter is situated near Port area than he should be choosing port.

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4. Conclusion

From the visit to Suraj Forwarders Pvt Ltd I had come to know about
various costing aspects of CHA and the mind-set people keep while
dealing with forwarding agents. There are various costing aspects which
I came to know during the visit. I also came to know about various
government schemes for promoting export of India. In total the visit to
Suraj Forwarding Pvt Ltd had been very fruitful to me.

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