EXPORT-IMPORT

EXPORT-
PROCEDURE- STEP BY
STEP
Dr. Ram Singh
Associate Professor
International Trade Operations & Logistics
Indian Institute of Foreign Trade
New Delhi
Email: ramsingh@iift.ac.in

INTERACTION WITH PARTICIPANTS OF MSME TRAINING INSTITUTE

 AGENDA
 Understanding trade supply chain; stages & stakeholders
invovled.
 Documentation: Overview of Commercial and Regulatory
documents ; apprasial of managerial aspects.
 Understanding Incoterms for cost effective trade supply
chain.
 Understanding payments realisation; regualtory
framework and mangerial aspects.
 Understandign transport logistics for automobiles
 Breifly understanding various incentives/ benefits/ duty
neutralisation.
 Any other issue as desired ……..
 UNDERSTADING TRADE SUPPLY CHAIN
Buy Ship Pay

Order/Prepare Transport Customs Payment

Exporter/ Importer Freight forwarder Custom Clearance Bank

Packers & Custom House Agent
DGFT Financial
EPC/ CB/ EDA/ FIEO Consolidators
ICDs/ CFSs Institutions
Excise Department Transporter
Fumigation & Pest Health Authorities/ Factor /
VAT Department
Control PHO
Insurance Company forfaitors
Chamber of Commerce Carrier /MTO Terminal Operators
Shipping line Port Management
Other
Export/Import Agent
Embassies Export Inspection Other Intermediaries Intermediaries
ECGC/Credit Checking Agency
Suppliers / Sub Other Intermediaries
Contractors
Other Intermediaries
STAKHOLDERS IN TRADE SUPPLY CHAIN
UNDERSTANDING
STAKEHOLDERS
IN TRADE SUPPLY
CHAIN
 ROLE OF DGFT
 Foreign Trade Policy :
 Drafted by Director General of Foreign Trade under the Ministry
of Commerce.

 Importer Exporter code/ Other Licenses issuued by DGFT. All

applications in Ayat-Niryat form .

 Trade Policy is implemented with the help of various other

Departments mainly Customs, Excise and RBI.

 In order to understand the co-relation, one must get familiar with

the various laws and functions of various departments.
 ROLE OF CUSTOMS & EXCISE
 Foreign Trade Policy :
 Customs Act, 1962
 Customs Tariff Act, 1975
 Foreign Exchange Management Act, 1999
 Central Excise Act, 1944
 Excise Tariff Act, 1985
 Industries Development and Regulation Act, 1951
 Laws of Weights and Measures

While some of these laws would be specific in nature for

certain commodities, the generic understanding should
be based on the following :
 Ministry of Finance
Customs
Coverage
Validity of imports and exports
Assessment and valuation
Determination of import /
export duty applicable
Collection of duty
Inspection and supervision
of cargo
Examining co-relation
and compliance with other laws
Excise
Coverage
Export
Under bond – clearance of excisable
goods for export under bond
Rebate of excise duty post exports
where exports have been effected after
payment of excise duty
Monitoring factory stuffed containers in
certain cases
Import
Monitoring CENVAT
Continued from the previous slide

Governing Acts/Laws/Manual Governing Acts/Laws/Manual

1. Customs Act, 1962 1. Central Excise Act, 1944

2. Customs Tariff Act, 1975 2. Good and Services Tax 2007

3. Customs Law Manual 3. GST Rules 2007

Tools : i) Notifications Tools : i) Notifications

ii) Public Notices ii) GST Circulars
iii) Customs Circular iii) General Exemption
iv) General Exemption Notifications
Notifications
 ROLE OF RESERVE BANK OF INDIA

RBI

Coverage
Monitoring Foreign Exchange
Inflow – on account of exports of goods and services
Outflow – on account of imports of goods and services

Governing Acts/Laws/Manual
1) Foreign Exchange Management Act 1999
2) Foreign Exchange Manual

Tools:
Master Circulars
FEMA Notifications
A.P. (DIR. Srs.) Circulars
 In order to understand full
implications of Foreign Trade
Policy one must get himself
familiarized with all the above
mentioned departments and their
working
 PURVIEW OF
EXPORT-IMPORT
 FLOW CHART – I
Knowledge Knowledge Knowledge Product
of of of Costing
Market Product Incentives

Proforma Sample if Confirmation Payment

Invoice necessary of Export terms
Contract

Scrutiny Amendments Preparation Benefits &

of L/C if Necessary of Physical Execution
Exports

Continued….
FLOW CHART – I (CONTINUE FROM THE PREVIOUS SLIDE)

Pre Post
Shipment Shipment

Confirmation from Buyer of

Receipt of Goods

Payment Realisation Statutory

Realisation of Benefits Records
 SESSION II
OVERVIEW OF
DOCUMENTATION
 DOCUMENTATION PRACTICES IN INTERNATIONAL BUSINESS
Documents Prepared Documents Prepared by Exporter & Importer Documents
by Shipping/Transport Prepared by
Company Facilitating Agencies
A. Transport Documents: By: Exporter: A. Certificate of
a. Negotiable Bill of A. Pro-forma Invoice Inspection / Quality
Lading B. Commercial Invoice Control
b. Non-Negotiable Bill C. Packing List A. Certificate of
c. Combined Transport D. Shipping Instruction Insurance
Document E. Intimation of Inspection B. Certificate of Origin
d. Airway Bill F. Insurance Declaration C. Receipt for Payment
e. Courier and Postal G. Application for COO of Port Charges
Receipt H. Bill of Exchange D. Vehicle Chit
f. Railway Consignment I. Shipment Advice E. Insurance Premium
Note /Road Transport J. Letter to the Bank for Collection / Negotiation of Payment Certificate
Document Documents
A. Shipping Order K. ARE ( I & II) Form
B. Freight Payment L. Shipping Bill / Bill of Export
Certificate M. Export Application / Dock Challan / Port Trust
C. Mate’s Receipt Copy of Shipping Bill
D. Export General N. Exchange Control Declaration (SDF/GR / PP/
Manifest SOFTEX/VOP) Forms
E. Import General By: Importer:
Manifest A. Import Order
F. Delivery Order B. Bill of Entry
C. Authorization to release the payment for import
D. Import Declaration Form
 QUOTE/ UNQUOTE ( BAAT PATTE KI)

“Don't Waste Time Learning The

"Tricks Of The Trade
(Documentation); Instead,
Learn The Trade
(Documentation)”
Anonymous
 SIGNIFICANCE OF DOCUMENTATION
Documents are important for the following reasons:
I. As an evidence of shipment and title of goods;
II. For obtaining payment;
III. To provide a specific and complete description of the goods;
IV. For assessment of correct Duty for clearance purpose;
V. For obtaining Export Licences;
VI. For obtaining export finance;
VII. For completing Pre-shipment Inspection;
VIII. For claiming export benefits like Duty Drawback, etc.
 COMMERCIAL / REGULATORY DOCUMENTS
 Commercial set of documents are mainly used for
Commerce. In other words these are documents normally
exchanged between buyer and seller.

 Regulatory documents are required in dealing with

various regulatory authorities such as customs, RBI, Excise,
Licensing authorities Inspection and other Export
Promotion bodies for availing incentives etc.
UNDERSTANDING
COMMERCIAL
DOCUMENTS
 COMMERCIAL DOCUMENTS USED IN
Auxiliary Commercial Principal Commercial
Documents Documents
1. Pro-forma Invoice 1. Commercial Invoice
2. Application / Intimation of 2. Certificate of Inspection /
Inspection Quality Control
3. Insurance Declaration 3. Certificate of Insurance
4. Application for Certificate of 4. Certificate of Origin
Origin 5. Packing List
5. Shipping Instruction 6. Bill of Exchange
6. Shipping Order 7. Bill of Lading / Combined
7. Mate’s Receipt Transport Document
8. Letter to the Bank for 8. Shipment Advice
Collection / Negotiation of
Documents
 COMMON TERMS IN COMMERCIAL DOCUMENTS
 All documents whether it is for export or import transaction generally
contain following information
 Name and address of the exporter and importer
 Document No. and date.
 Order No. and date
 Port of discharge
 Port of destination
 Country of origin
 Description of Goods
 Marks and nos., model nos. [if any]
 Weight
 ITC HS Code No.
 Value
 Currency
 Terms of payment
 Terms of shipment etc.
 PRO-FORMA INVOICE:
Performa invoice is first and important documents of
conveying exporter idea about the prices and description
of goods to importer. Exporter provides all the
information with respect to export purposes to importer
such information may includes:
1. Tentative prices of per unit of commodity

2. Tentative description of goods

3. Tentative idea about shipping terms

4. Tentative idea about payments terms

5. Mode of shipment

6. Expected time required by export for delivering date etc.

 COMMERCIAL INVOICE
 It is itemized statement prepared and issued by a seller
at the time of dispatching the goods to the buyer.

 It helps the Customs Authorities to:

 ensure that goods shipped are permitted by the export policy.
 compute the customs duty, if any, payable on the export or the
import.
 check the quantity of goods. They generally open a few
packages at random and check the veracity of details in the
invoice.
 check if there is any over-invoicing or under-invoicing (that
may be resorted to by the importer to reduce the import duty
payable).
 COMMERCIAL INVOICE
 Invoices are often called bills.

 Various types of invoices used in International Trade

are
 Proforma Invoice
 Commercial Invoice
 Consular Invoice
 Leagalized Invoice
 Customs Invoice
 SHIPPING INSTRUCTION
 The significance furnishing the shipping to freight forwarder
clearly, precisely is immense. In the modern times when
export activities has become so complex, it is rightly said that
the appointing a freight forwarder is a kind of extension to
exporter export department. Freight forwarder shall know as
much as exporter himself knows about the shipment and
process of shipping it. Freight forwarder needs to know as
much about the transaction as exporter know so as to comply
with all of importer's requirements for successful and
effective execution of contract and for keeping the importer
loyal for future purposes.
 IMPORTANT ASPECTS OF SHIPPING INSTRUCTIONS
 There may be failure to collect against a letter of credit as that the
forwarder was not known that there was a letter of credit involved in
trade transaction.
 There may be mistake on the part of freight forwarder in insuring the
shipment.
 Forwarder mistake to ship the goods on freight prepaid instead of
collect basis.
 Freight forwarder mistake in preparing the certain essential documents
which are important for letter of credit negotiation as freight forwarder
was thinking that the exporter would prepare them.
 Fright forwarder mistake in returning the original documents to the
shipper so as to distribute them, instead of sending them to a bank
and/or consignee for payment negotiation/purchase or discounting.
 SHIPPING ORDER
Shipping order is issued by the conference shipping lines
whereby intimating the exporter about the reservation of
space of shipment. Shipping order also describes that the
specific vessel along with shipping dates and specified port.
 INSURANCE DECLARATION
The standard Insurance declaration which is part of
standardized documents is based on the format which is
approved by the Institute of London Underwriters. It is
suggested that open cover/policy holders may be supplied
with blank forms of these documents and such forms can be
reproduced from the standardized master document which
can be sent by exporter to nearby office of General
Insurance Corporation for declaration of cargo so as to get
the insurance cover for the same. General insurance
company should issue the certificate of insurance to
exporter after completion of necessary entries and
certification by the Corporation.
 CERTIFICATE OF INSURANCE
 As international trade transportation is full of risks and
ocean carriers doesn’t take any responsibility for
loss/piracy/damage etc to the cargo if the cargo is shipped
without the insurance cover. Ocean carriers consider it
negligence on the part of exporter. Hence exporter is
mandatory required to arrange the cargo/marine insurance
for his export shipment. The insurance certificate indicate
the amount insured of the shipments and also describes that
awhile kind of risks are covered under the polices under
various institute cargo clauses.
 APPLICATION FOR INSPECTION CERTIFICATE
 “Certificate of Inspection” is issued by the Inspection Agency
concerned certifying that the consignment has been inspected before
shipment as per the requirements of the Exports (Quality Control and
Inspection) Act, 1963.

 It satisfies the conditions relating to quality control and inspection as

applicable to it and is certified export worthy.

 This certificate is required:

 by customs before allowing shipment of goods or
 by a banker to negotiate the documents.

 This certificate bears cross references of invoice or contract number.

 INSPECTION CERTIFICATE
 Inspection can be done by
 Inspection Agency appointed by the Government of India, i.e.
Export Inspection Agency, Textile Committee, Central Silk Board
etc.
 Inspection Agency may also be nominated by importing
countries’ Government i.e. SGS and OMIC by some African
Countries.
 Sometimes buyer himself appoints an independent private
inspector to inspect the goods.

 If an inspection is a part of transaction, then exporter is required to

arrange for necessary inspection.

 It can be a certificate of quality, weight, analysis, or the like.

 APPLICATION FOR CERTIFICATE OF ORIGIN
 Certificate of Origin is a document, which is used to avail
the preferential tariff rates as per some agreements such as
GSP, GSTP. Certificate of origin indicates that the goods
have been manufactured in the originating country material
hence they shall be entitled to preferential duties. In certain
cases countries which are giving such preferential treatment
require legalization of the document from their country
consular in exporter. Certification for origin of goods in
other cases can also be availed from Chamber of
Commerce such as PHDCCI or FICCI. However the
certificate of origin provided by Chambers of Commerce is
general and it has to be authenticated by importer country
chamber of commerce..
 CERTIFICATE OF ORIGIN [COO]
 It is a certificate indicating the fact that the goods which have been
exported have originated or manufactured in a particular country. So it
is a sort of declaration testifying the origin of export.

 It is normally required by an importer to clear goods from the

customs.

 For political and social reasons, it is insisted by Customs Authority of

importing country before goods are allowed to enter in the country.

 It helps the importer to take an advantage in duty concession, if any.

For e.g. goods imported under Free Trade Agreement.
 CERTIFICATE OF ORIGIN [COO]
 On the basis of COO, Customs can ensure that certain prohibited
goods of particular countries are not imported.

 It also ensures that goods have not been reshipped (in the same
form availing COO) by a seller who has brought them into his
own country from some other place of origin.

 It is sent to the importer by the exporter.

 It is issued or signed by an independent official organization,

such as a Chamber of Commerce, on prescribed form.
 CERTIFICATE OF ORIGIN
 These are often required:
 to meet Customs requirements in the importing state
 to comply with Banking requirements
 for other official and commercial reasons.

 There are two categories of Certificate of Origin :

1. Preferential Certificate of Origin and
2. Non-preferential Certificate of Origin
 PREFERENTIAL CERTIFICATE OF ORIGIN
 It entitles preferential treatment in duty in the importing country.

 These certificates are governed by rules of origin which are always part
of Preferential Trading Agreements entered into between two or more
countries.

 As far as India is concerned the following agreements are noteworthy:

 Generalized System of Preferences (GSP)

 Generalized System of Trade Preferences (GSTP)

 SAARC Preferential Trading Agreement (SAPTA)

 Asia- Pacific Trade Agreement (APTA)

 India-Sri Lanka Free Trade Agreement (ISLFTA)

 India- Asean FTA

 ………. Will discuss other cases with examples.

 PACKING LIST
 It is a consolidated statement in a prescribed format detailing how
goods are packed, marked and numbered including weight and
dimensions of each package.

 It is useful for customs at the time of examination and warehouse

keeper of buyer to maintain inventory record and to effect delivery.

 It have many details common from invoice but it does not indicate unit
rate value of goods.

 The exporter or his/her agent, the customs broker or the freight

forwarder, reserves the shipping space based on the gross weight or
the measurement shown in the packing list.
 PACKING LIST
 Customs uses it as a check-list to verify:
 the outgoing cargo (in exporting) and
 the incoming cargo (in importing).

 Basic functions of Packing List are:

 To confirm the contents of a shipment as it left the exporter’s
premises.
 To indicate weights, measures and the piece count (i.e. the
number of cartons or cases) in that shipment.

 It is prepared in 7-10 copies or as per the requirement.

 MATE RECEIPT
 Port authorities recover port dues from exporter on production of this receipt.

 On payment of Dock dues, the exporter or his agent collects the receipt from the
Port-Trust authorities and hands over to shipping company for preparing Bill of
Lading.

 Bill of Lading is prepared on the basis of Mate’s Receipt.

 It is of a transferable nature.

 In case of ascertaining the exact date of shipment, the mate’s receipt date is also
very important.

 Normally, the date of Export is regarded as “the date of Mate Receipt or the date
of Bill of Lading, whichever is later”.
 MATE RECEIPT
 Mate’s receipt is a receipt issued by the Master or Mate of the vessel
stating that certain goods have been received on board his vessel.

 It is prima-facie evidence that the goods are loaded in the vessel.

 It contains:
 the name of shipping line and vessel,
 port of loading, port of discharge and place of delivery,
 marks and numbers,
 number and kind of packages, gross weight,
 description of goods,
 container status/seal number,
 shipping bill number and date and
 condition of cargo at the time of its receipt on board the vessel.

 It is serially numbered.
 BILL OF LADING
A legal document between the shipper of a
particular good and the carrier detailing the type,
quantity and destination of the good being
carried.
 The bill of lading also serves as a receipt of
shipment when the good is delivered to the
predetermined destination.
 This document must accompany the shipped goods,
no matter the form of transportation, and must be
signed by an authorized representative from the
carrier, shipper and receiver.
 DEFINITION OF BILL OF LADING
 A document signed by a carrier (a transporter of goods)
or the carrier's representative and issued to a consignor
(the shipper of goods) that evidences the receipt of
goods for shipment to a specified designation and
person.

 The term derives from the noun "bill", a schedule of

costs for services supplied or to be supplied, and from
the verb "to lade" which means to load a cargo onto a
ship or other form of transport.
SPECIMEN OF BILL OF LADING
 BILL OF LADING (B/L)
 Bill of Lading contains the following information:
 Shipping company’s name and address.
 Consignee’s name and address.
 Notify party
 Name of the vessel,
 Port of loading/Shipment and port of discharge.
 Shipping marks and Numbers, Cubic measurements, weights
 Description of the goods
 Number of packages.
 Shipped on board with date-rubber stamp.
 Gross weight and net weight.
 Freight details
 Signature of the shipping company’s agent.
 Container number if any.
 Shipper’s name and address.
 B/L Number and Date
 Originals
 Terms (on reverse)
 FUNCTIONS OF BILL OF LADING
 All bills of lading should be signed by either
shipping company，captain ，authorized carrier
agent. Generally , bill of lading has three main
function：
 It is a receipt from the carrier to the shipper;
 It is quasi- negotiable document.
 It is a documents of title;
 It is an evidence of the contract of carriage between
the carrier and the shipper.
 Promise that the goods will be delivered to
destination.
CLASSIFICATION/KINDS OF BILL OF LADING

“ To Order” bills of Lading

“Straight to” bills of Lading

Surrender Bill of Lading

Bearer Bill of Lading

 TYPES OF BILL OF LADING: CONFUSIONS &
CLEARANCES

Shipped on Board / On Board/ On Deck Bill of Lading

“Received for Shipment” / "Advance” Bill Of Lading

Master/ Groupage Bill Of Lading

Split / House / Freight Forwarder Bill of lading

“Through” or “Direct” Bill of Lading

Transhipment Bill of Lading

Multimodal Transport / Combined Transport Bills Of Lading

 TYPES OF BILL OF LADING: CONFUSIONS &
CLEARANCES

Clean Bill of Lading

Claused/ Foul/ Stale/ Dirty Bills Of Lading

“Anti-dated” or “Daoqianchichan” Bill Of Lading

Short Form Bills Of Lading

Long Form Bill Of Lading

Minimum/ “Freight” Bill Of Lading

Ocean/Maritime / Seaway/ Non Negotiable Bill Of Lading

 TYPES OF BILL OF LADING: CONFUSIONS &
CLEARANCES
Secret /Blank /Open Bill of Lading

Exchange/ Switch Bill of Lading

Separate or “Zhuanghuochan “ Bill of Lading

Parcel Receipts / Parcel Bill of Lading

Bolero Bill of Lading

Liner/ Congen Bill of Lading

Charterer Party Bill of Lading

 NO .OF COPIES IN BILL OF LADING
 Bills of lading are usually made out in four copies,
three signed and one unsigned.

 The unsigned copy is retained by the ship’s

master for his own use.

 The three signed copies, or three originals,

constitute the “set” commonly referred to in
commercial contracts or letters of credit.

 Though there may be more or fewer copies

according to the requirements specified in the
particular contract or credit.
 CLEAN BILL OF LADING
 A clean bill of lading is one which acknowledges
receipt of the goods “ in apparent good order and
condition” without any qualification. If a bill of
lading bears such notations as “ five boxes
broken”, “ some bags torn”, “ case No. 12
missing,” etc. is known as an Unclean Bill of
Lading, which would be refused by the opening
bank whose credit calls for Clean B/L.
 SHIPPED ON BOARD BILL OF LADING
 The carrier issuing a “shipped on board bill of
lading” acknowledges that the goods have been
loaded on board his ship.
 In case a “ received for shipment” bill of lading is
issued, it means that he confirms only that the
goods have been delivered under his custody.
 For payment under documentary Ls/C, the
Received for Shipment B/L is not acceptable.
 SOME USEFUL TERMS IN BILL OF LADING
 Marked Freight Prepaid or Paid : When freight
charges are included in the invoice but the bill of
lading is not marked with the words “freight prepaid”
or “freight paid:,” the opening bank might refuse to
make payment to the exporter.
 This applies, of course, to C&F and CIF contracts
only. For FOB contracts, bills of lading are usually
marked “freight collect” or “ freight payable at
destination”.
 PAY ATTENTION TERMS IN BILL OF LADING
1. Consignee:
 To order
 To order of the shipper/xxx Bank
 To bearer （open B/L） Consigned to
… only ((straight B/L)
 If the L/C stipulates…Bill of Lading made out to
order and blank endorsed..,
 Consignee：To order
2. Notify party: the whole name of the notify party
except there is “Same As Consignee”: ….. Bill of
Lading made out to order …… notify the
applicant: the name and full address of applicant.
 PAY ATTENTION TERMS IN BILL OF LADING
 3. Shipping terms
 Port of Loading: the specific port such as JNPT Mumbai;

India
 Port of Discharge/Port of Destination such as Houston, USA

 Final Destination (inland city) such as Detriot, USA

 Port of Transshipment/Via/Through ( Singapore)

 Pre-carriage by Place of receipt; Pimpri; Pune

 Vessel/S.S./Ocean Vessel

 Voyage No. /Voy. No.

 Sailing Date/On or about… ：DEC. 25th, 2011

 AIRWAY BILL (AWB)
 Airway Bill is a transport document associated with Airfreight.

 It serves as a receipt for goods and an evidence of the contract of

carriage, but it is not a document of title to the goods. Hence, the
AWB is non-negotiable.

 It contains the following details:

 number of packages
 dimensions or volume
 gross weight
 shipping marks
 The goods in the air consignment are consigned directly to the
consignee.
 AIRWAY BILL (AWB)

 On the reverse side of the airway bill are the airline’s terms and
conditions of carriage whereby an airline is obligated to transport a
consignment to its final destination once it has confirmed receipt of
the shipper’s consignment.

 Airway bill can be comprised in two parts:

 MAWB (Master Airway bill) – shipments sent on a direct basis,
not consolidated.

 HAWB (House Airway bill) – shipments sent on a

consolidation basis whereby grouping together various clients
consignments under one MAWB being issued by the freight
forwarder.
 BILL OF EXCHANGE
 Bill of Exchange [BE] is a document drawn and is an order
by the exporter to the buyer to pay the money in specified
exchange.

 It is also known as a draft.

 A bill of exchange is accompanied by commercial

documents which are presented by a bank and released to
the buyer either against payment (at sight) or against a
signature for payment on a specified future date.

 It is an unconditional written order.

 BILL OF EXCHANGE
 When a BE is drawn on foreign firm it is termed as a
foreign draft or bill of exchange.

 It is prepared either in an international currency or Indian

rupees depending on the terms of the contract.

 Accordingly, the bill is known by the name of currency in

which it is drawn.
e.g. a bill drawn in US dollars is known as a “Dollar Bill”
and when drawn in Rupees, it is termed as “Rupees Bill”.
 BILL OF EXCHANGE
 Features of a Bill of Exchange:
 A bill must be in writing, duly signed by its drawer,
accepted by its drawee and properly stamped.
 It must contain an order to pay. Words like ‘please pay
US $ 5,000 on demand and oblige’ are not used.
 The order must be unconditional.
 The sum payable mentioned must be certain or capable
of being made certain.
 The parties to a bill must be certain.
 BILL OF EXCHANGE
 The most common versions of a bill of exchange are:

A) Sight Draft –
 When the drawer (exporter) expects the drawee
(importer) to make payment immediately upon the
draft being presented to him.

 Unless and until the Draft is received, the Negotiating/

Collecting Bank does not hand over the Shipping
documents and the buyer cannot take delivery of
goods.
 BILL OF EXCHANGE

B) Usance Draft –
 When draft is drawn for payment at a date later than
the date of presentation.
 It may be a fixed future (specific) date or determinable
date according to the period of credit viz. 30 days, 60
days or 90 days etc.
 It is presented to the drawee (importer) who will retire
the documents by accepting the draft by putting his
signature and date.
 BILL OF EXCHANGE
 When the payment is received in advance no Bill of
Exchange is required to be drawn.

 Parties to a bill of exchange

i. Drawer – who makes the order for making payment.
ii. Drawee – whom the order to pay is made.
iii. Payee – whom the payment is to be made.
 SHIPPING ADVICE
Shipping advice is prepared so as to provide information
the overseas importer about the shipment of goods. This
document is sort of intimation to the importer that goods
has been shipped to importer as per agreed terms and
condition in sales contract and commercial invoice.
 LETTER TO BANK FOR PURCHASE/ DISCOUNT/
NEGOTIATION TRADE DOCUMENTS
 Bills Negotiation / Bills Discounting allows a seller to
obtain financing and receive immediate payment upon
shipment of goods, based on trade transaction documents.
The bank will negotiate when purchasing a Sight Bill of
Exchange and discount when purchasing a Usance Bill Of
Exchange.
 Transactional Process:
 After shipping the goods, the seller presents the shipping and/or
financial documents to the bank.
 The bank checks the documents (if accompanied by a Letter Of Credit),
purchases them, and credits the net proceeds to the seller's account.
 The bank then sends the documents to the buyer's bank and claims
reimbursement.
 Regulatory
Documentation
Practices in India
 REGULATORY DOCUMENTS USED IN INDIA

Main & Important 1. Allied Regulatory

Regulatory Documents Documents
1. Shipping Bill / Bill of 1. Port Trust Charges or
Export Dock Challan
2. Bill of Entry 2. Terminal Handling
3. GSTR 1 & GSTR-2 Charges
4. LUT ( GST- RFD- 11) 3. Gate Pass/Vehicle Chit
5. GST-RFD- 1 (for refunds) 4. Freight Payment
6. Exchange Control Declaration Certificate
(EDPMS/ IDPMS/EDF/SOFTEX) 5. Insurance Premium
Forms Payment Certificate
7. Bank Realization Certificate
(e-BRC)
 SHIPPING BILL / BILL OF EXPORT
 Goods cannot be loaded on board the carrier unless
permission from the customs authorities has not been
obtained. Such permission to exporter is accorded on a
document prescribed by the customs authorities. In cases
where the goods are sent by sea, this document is known
as Shipping Bill and when goods are sent by land/rail it is
known as bill of export. Bill of Export is also known as
Application for Export.
 SHIPPING BILL
 Shipping Bill normally contains:
 the name and address of the importer/consignee and exporter,
 invoice number and date,

 name of vessel carrying the goods,

 name of master or agents,

 port at which goods are to be discharged,

 country of final destination,

 description of goods, quantity details of each case,

 value of the goods as defined in the Sea Customs Act,

 number of packages with total weight,

 marks and numbers, etc.

 SHIPPING BILL
 Shipping bill is required to be submitted in quadruplicate. If
Drawback/DEPB claim is to be made, one additional copy should be
submitted.

 Copies of Shipping Bill are as under:

 Customs Copy: For record of Customs
 Exporter’s Copy: For record of Exporters/ Exporter may forward it to
shipping company.
 Export Promotion Copy: For office of DGFT. This copy is the most
important document for claiming duty Neutralisation/Exemption
benefits plus export incentives wherever applicable.
 Exchange Control Copy: For negotiating the export documents in bank.
It is Proof of export for exchange purposes.
 DEPB Copy: For use in the import cell of customs for registration of
licence.
 TYPES OF SHIPPING BILL/ BILL OF EXPORT
 Shipping Bill:
 Shipping Bill for export of goods under claim for duty drawback
 Shipping Bill for export of goods under DEPB
 Shipping Bill for export of dutiable goods
 Shipping Bill for export of duty free goods
 Shipping Bill for export of duty free goods ex-bond
 ATA Carnet Shipping Bill
 Bill of Export:
 Bill of export for goods under claim for duty drawback
 Bill of export for export of goods under DEPB
 Bill of export for dutiable goods
 Bill of export for duty free goods
 Bill of export for duty free goods ex-bond
 ATA Carnet Shipping Bill
 Form of Bill of Entry to be filed by a passenger intending to take delivery of
gold or silver from a customs bonded warehouse in India
 COLOR SCHEMES IN PROCESSING OF SHIPPING BILL
Types of Shipping Bill Color Schemes Number of Copies

Duty Free Exportable Goods White 3 copies of the

Shipping bill

Drawback Claim Shipping Bill Green 4 Copies of Shipping

Bill

Dutiable Goods Shipping Bill Yellow 3 copies of the

Shipping bill

DRPB Schemes Shipping Bill Blue 7 copies of the

Shipping bill

Re- Export of Imported Material Buff 4 Copies of Shipping

Shipping Bill or Ex-Bond Bill
 PROCESSING OF DOCUMENTS IN SHIPPING BILL
 Commercial Invoices which contains all relevant particulars like
number of packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct
& full description of goods to be exported.
 Packing list or cargo manifest mentioning the contents, quantity, gross
and net weight of each package of the cargo to be exported.
 SDF/GR/PP/ forms (in duplicate) for shipment to all the countries.
 Export Sales Contract, L/C, and Purchase Order of the overseas buyer
as the case may be.
 ARE I & II (both original and duplicate) and commercial invoice/
legalized invoice/ customs invoice (as the case may be).
 Pre-shipment Inspection/ Examination Certificate of quality control.
 Certificate of Origin ( if applicable)
 Technical Literature ( Some times)
 BILL OF ENTRY
 Bill of Entry is a declaration on a prescribed form by an
importer to the customs authorities about the exact
nature, precise quantity and value of goods that have
landed or entered inwards in the country. Importer
request with this document to custom authorities
(custodian of cargo) to clear his cargo after having
assessed the duty payable on them. Customs authorities
examine its accuracy and conformity with the country
tariff and regulations.
 BILL OF ENTRY
 Salient features of a Bill of Entry which is to be
presented for clearance of goods for home
consumption are mentioned below:
 Origin & Vessels Particulars
 Particulars of the Goods
 Value
 Duties Leviable
 Code
 Declaration of Importers/Clearing Agents
 BILL OF ENTRY
 Documents required by customs authorities are required to be
submitted to enable them to (a) check the goods (b) decide value and
classification of goods and (c) to ensure that the import is legally
permitted.

 Documents presented to customs along with the Bill of Entry generally

include:
 Invoice,
 Packing List,
 Bill of Lading or Delivery Order,
 Import Licence(s) / Customs Clearance Permit,
 Letter of Credit / Bank Draft wherever necessary
 Insurance Policy,
 Certificate of Origin etc.
 GATT declaration form duly filled in
 Importers / CHAs declaration duly signed
 TYPES OF BILL OF ENTRY
 Bill of Entry for Home Consumption

 Bill of Entry for Warehousing

 Bill of Entry for Ex-bond Clearance for Home

consumption

 EDI Bill of Entry

 PROCESSING OF BILL OF ENTRY
 The documents that are essentially required are :
 Invoice
 Packing List
 Bill of Lading / Delivery Order
 GATT declaration form duly filled in
 Importers / CHAs declaration duly signed
 Import License or attested photocopy when clearance is under license
 Letter of Credit / Bank Draft wherever necessary
 Insurance memo or insurance policy
 Industrial License if required
 Certificate of country of origin, if preferential rate is claimed.
 Technical literature.
 Test report in case of chemicals
 Advance License / DEPB in original, where applicable
 Split up of value of spares, components and machinery
 No commission declaration
 EXCHANGE CONTROL DECLARATION
 The Foreign Exchange Management Act 1999 and
subsequent rules has prescribed certain forms to be
used by exporters for declaring the foreign exchange
which they shall be bringing to the country through the
exports in following forms. It is to be noted that
declaration has to be made with appropriate forms as
mentioned below for all exports as per Foreign Exchange
Management Act Rules and regulations to RBI.
 EXPORT DECLARATION FORMS (SDF/EDF/ SOFTEX)

 As per the exchange regulations, exporters, wishing to ship goods

abroad, are required to submit Export Declaration Forms to the
Customs authorities (whenever the value of the shipment exceeds US
$ 25,000) before any export of goods from India is made.

 It is to be filed by exporter stating that export proceeds would be

realized within 365 days for non-status holder exporters and higher
period for status holder exporters.
 CONTENTS DETAILS OF EXPORT DECLARATION
FORMS
 These forms normally contain:
 Name and address of exporter, IEC code number and description of
goods.
 Name and address of authorised dealer through whom the proceeds of
the exports have been, or will be, realised.
 Details of commission due to foreign agent or buyer should be correctly
declared. Otherwise, difficulties may arise at the time of remittances of
such commission/ payment. An exporter should note this point very
carefully.
 It should be clearly indicated whether the export is on “Outright Sale
Basis” or “On Consignment Basis”
 An exporter is required to give analysis of full export value, a break-up of
FOB value, freight, insurance, discount, commission, etc.
 An exporter has to mention the period within which he will realise full
export value of transaction. If the shipment is on DA terms, then an
exporter has to bring forex within that period. However, normally
maximum period allowed is 180 days.
 TYPES OF EXCHANGE CONTROL DECLARATION
FORMS
SDF Used in Electronic Documentation; In India 95% of trade
documentation at Ports at is through EDI. It is merged with
Shipping Bill/ Bill of Exports with amendment in Shipping Bill
(Electronic filing) rules 2011.

EDF Form Manual Documentation , In 5% of cases; where ICDs/CFSs/LCSs

are still manually operating

SOFTEX FORM Used by the exporters who are into Services Industry;
Use on rise with growth of India’s Services Industry
 STATUTORY DECLARATION FORM [SDF]
 Procedure for Distribution / disposal of copies of SDF
 The SDF form should be submitted in duplicate (to be
annexed to the relative shipping bill) to the
Commissioner of Customs concerned.

 After verifying and authenticating the declaration in

form SDF, the Commissioner of Customs will hand over
to the exporter, one copy of the shipping bill marked
‘Exchange Control Copy’ in which form SDF has been
appended for being submitted to the bank within 21
days from the date of export.
 STATUTORY DECLARATION FORM [SDF]
 Banks should accept the Exchange Control (EC) copy of
the shipping bill and form SDF appended thereto,
submitted by the exporter for collection/negotiation of
shipping documents.

 The manner of disposal of EC copy of shipping Bill (and

form SDF appended thereto) is the same as that for GR
forms.
 BANK REALIZATION CERTIFICATE

 Once the export proceeds are realised, the exporter has to

prepare Bank Certificate of Export and Realisation for the
purpose of claiming export benefits, incentives, etc.

 It is prepared as per Form No.1, given in Appendix 22A of

Handbook of procedures 2004-09 (Vol. I).

 To prepare this certificate, the date of realisation is most

essential, as the exporters have to apply for the export
benefits, incentives, etc. within six months following the
month/quarter of the realization month.
 BANK REALIZATION CERTIFICATE
 It is signed by the authorized signatory of the
firm/company with full name in block letters with
designation, full official and residential addresses.

 Bankers attest this certificate as true and correct after

verifying the particulars, including the date of mate
receipt. This date is the most important, as this is the
actual date of export.
DOCUMENTATION FOR BANK REALIZATION CERTIFICATE
 It is signed by an authorized signatory of the bank with his
name and designation.
 Bankers affix certificate number and date and also mention
the Authorized Foreign Exchange Dealer's Code number
allotted to Bank by Reserve bank of India.
 For this purpose, this certificate must be accompanied with
the following documents:-
 A copy of invoice,
 A copy of customs attested export promotion copy of the shipping

bill,
 A copy of Bill of Lading/ PP receipt/ Airway bill,

 A copy of the insurance certificate/Insurance policy/cover.

 TIPS FOR PROPER DOCUMENTATION
 Implications of all Regulatory documents must be studied carefully.
For example; declaration on ARE1 forms.

 Filing of Shipping Bill electronically requires correct entries including

HS code for the product. Many times, small mistakes are extremely
difficult to correct later on.

 Shipping bills must be filed according to the scheme the exporter

wants to avail . For example; DEPB /DFIA/Drawback etc.

 Extra care should be taken when combination of schemes is intended

to be used. For example; DEEC – Drawback.

 Co-relation between customs, excise and DGFT is extremely

important. Many times documents do not match with each other,
which results in delay or denying of some benefit under one or the
other scheme.
 TIPS FOR PROPER DOCUMENTATION

 Each regulatory document is important from the point of view of

claiming various benefits associated with exports. Each document
therefore should be carefully looked into as to correctness of the
contents, description, quantity, weight, currency, declaration etc.

 Maintenance of statutory records: Since most of the schemes are in

the nature of the exemption / remission of the duty, documentary
compliances are insisted upon by all the government departments.
For example; Appendix 23 – Consumption register.
 Thank You

धनयवाद
Merci

Gracias Danke
Schon

Thank You 谢谢