UNIT – 5

EXPORT PROCEDURES AND

DOCUMENTATION
PROCEDURE TO START UP A GARMENT UNIT
 Select Product Category
• What type of garments you are going to make? If you
plan to make knits garment (T-Shirts, Polo ), you would
not try to make woven products (Shirts, Trousers) at
the same time.

• Again in woven and knits there is wide range of

product categories.

• Narrow you product profile as much as possible. Lets

say, you are going to make woven shirts - Formals and
Casuals. Write name of the product in your note book
and move to the second point.
Estimate Production Requirement
• How many pieces are you planning to make daily? 50 shirts or 500
shirts per day?

• It would be difficult to decide the figure at this stage but you have
to estimate a rough number.

• Later you can modify this figure depending on the budget and
customer demand. Otherwise you can't move forward making your
business plan.

• When my clients ask me question how many machines and what all
machines they need to buy for their garment manufacturing set up,

• I ask them what (product name or type) do they want to make and
how many pieces of garments they are planning to make per day.
 Number of Machines
• On the above I have said to you to estimate
production requirement.

• If you have decided the production figure, and

product type, number of sewing machines and
other equipment requirement can be calculated.

• Calculation can be also done in reverse way. In

case you have a plan of setting specific number of
machines, and product type, estimated
production per day can be calculated.
 Type of Machines
• Next step is to find what types of machines are required to
make garments that you have selected from the wide range
of product categories.

• It is also important to find number of machines to be

purchased in each machine type. This step would help you
to calculate capital investment in machines.

• With sewing machines, make a list of other essential

machines, equipment and set up requirements. For
example, pressing tables, cutting room machines, Boiler
(steam generator) for pressing table, diesel generator for
power back-up, finishing room equipment, furnishings etc.
 Raw Materials Requirement
• You have already selected the product that
you are going to make. Now make a list of raw
materials required to make the garment with
average consumption. This would help you to
prepare your budget on material sourcing.
 Factory Space Requirement
• How much space is required for installing machines
and office for staff?

• To set up factory you need space for installing

machines, office space and setting up departments for
production and associated processes.

• Calculate space requirement. According to that you

have can plan for a factory building or rent a space.
Estimate rent amount for the project budget.
 Manpower Requirement
• You have already planned for machines and materials.

• Now plan for the requirement of manpower for the

business.

• Manpower is one of the primary resources for a business.

• In manpower planning, include number of staffs,

supervisors and workers (operators and helpers) you need
to hire to make projected garments and to run business
smoothly.

• Also estimate salaries for each employee and add to your

budget to running cost. Get an idea from the market how
much salary you need to pay to managers and workers.
 Project Cost
• To know the estimated budget you have to prepare cost of
the project.

• You need to calculate total capital investment, Rent, EMI

amount (if you are taking loan), salary for staff, workers
wages and running costs.

• Also include finance required for sourcing raw materials for

initial months and other expense etc.

• To run you business without financial problem, prepare

monthly cash flow requirement for at least one year.
 Internal Process Flow
• Make detailed process flow of an order.

• This will help you to decide what all

departments you need to set up and you can
plan hiring people accordingly.

• You can cross check about your equipment

requirement process by process.
 Supplier Listing
• This process is not essential at first place.

• But you can start working on finding good and

reliable suppliers for fabrics, trims and other
necessary items required to manufacture your
garments.

• Start establishing suppliers with your region, then

go to other state and even you can source from
international market for the quality and cost
effective materials.
 Reach to Your Customers
• You have finished the major part of making
the garment manufacturing project.

• Now make a list of potential customers and

start contacting them for business leads.
 100% EOU - Introduction
• The Export Oriented Units (EOU) scheme was
introduced to boost exports, increase foreign
earnings and created employment in India.

• The EOU scheme is complementary to the

scheme for Free Trade Zone, Export Processing
Zone.

• Units that are undertaking to export their entire

production of goods are allowed to setup as a
EOU.
 100% EOU
• Export oriented units are units undertaking to
export their entire production of goods.

• EOUs can be engaged in manufacturing, services,

development of software, repair, remaking,
reconditioning, re-engineering including making
of gold / silver / platinum jewellery and articles.

• Further, units involved in agriculture, agro-

processing, aquaculture, animal husbandry, bio-
technology, floriculture, horticulture, pisciculture,
viticulture, poultry, sericulture and granites can
also obtain the status of EOU.
 BENEFITS OF 100% EOU
• EOUs are allowed to procure raw material or capital good duty free,
either through import or through domestic sources

• EOUs are eligible for reimbursement of GST

• EOUs are eligible for reimbursement of duty paid on fuels procured

from domestic oil companies

• EOUs are eligible for claiming input tax credit on the goods and
services and refund thereof

• Fast track clearance facilities

• Exemption from industrial licensing for manufacture of items

reserved for SSI sector
 ELIGIBILITY CRITERIA FOR EOU
• For being accorded the status of EOU, the project
must have a minimum investment of Rs.1 crore in
plant and machinery.

• This condition does not apply for software

technology parts, electronics hardware
technology parks and bio-technology parks.

• Further, EOU involved in handicrafts, agriculture,

animal husbandry, information technology,
services, brass hardware and handmade jewellery
do not have any minimum investment criteria.
 OBTAINING EOU STATUS
• To obtain EOU status, application for setting up of unit
under EOU scheme must be made to the Board of
Approval.

• If approved, a validity of Letter of Permission for setting up

EOU is provided.

• The Letter of Permission will have a initial validity of 2 years

to enable the unit to construct the plant and install the
machinery.

• Further extension can be obtained for a period of upto one

year.

• On starting operation, in a period of 5 years, the EOU will

have to achieve positive net foreign exchange earning
cumulatively.
 Role of government policies - EXPORT
IMPORT POLICY
• The Government of India, Ministry of Commerce and
Industry announced New `Foreign Trade Policy on 01st
April 2015 for the period 2015-2020, earlier this policy
known as Export Import (Exim) Policy.

• After five years foreign trade policy needs amendments

in general, aims at developing export potential,
improving export performance, encouraging foreign
trade and creating favorable balance of payments
position.

• The Export Import Policy (EXIM Policy) or Foreign Trade

Policy is updated every year on the 31st of March and
the modifications, improvements and new schemes
becomes effective from April month of each year.
 Objectives of EXIM policy
• To strengthen the base for export production and thereby
to create sound and favourable situation (exportable
surplus) for export promotion through diversification.

• To facilitate technological upgradation and modernization

of domestic production so as to facilitate product
diversification and marketing of goods abroad on
competitive terms and conditions.

• To reduce imports through import substitution,

encouragement to indigenous production and thereby to
conserve foreign exchange for better purposes and use.
 Objectives of EXIM policy
• To simplify and streamline import export procedures for the
convenience of those engaged in import-export trade directly or
indirectly.

• To impart stability and continuity to export policy so as to enable

exporters to draw long term export plans and strategies.

• To provide necessary institutional support to export initiatives by

establishing suitable institutions to provide finance, market
intelligence and other facilities, required by the exporter. In
addition, to provide liberal import facilities to promote exports over
a long period.

• To offer different types of export incentives, concessions and

facilities so as to encourage manufacturers and exporters to take
more initiative in export promotion activities.
 Highlights of EXIM policy 2015 – 2020
SIMPLIFICATION AND MERGER OF REWARD SCHEMES
• Merchandise Exports from India Scheme (MEIS)
– Rewards for export of notified goods to notified markets under
‘Merchandise Exports from India Scheme (MEIS) shall be
payable as percentage of realized FOB value (in free foreign
exchange).

• Service Exports from India Scheme (SEIS)

– The rate of reward under SEIS would be based on net foreign
exchange earned. The reward issued as duty credit scrip,
would no longer be with actual user condition and will no
longer be restricted to usage for specified types of goods but
be freely transferable and usable for all types of goods and
service taxdebits on procurement of services / goods.

• Incentives (MEIS & SEIS) to be available for units located

in SEZs
 Highlights of EXIM policy 2015 - 2020
• Duty credit scrips to be freely transferable and
usable for payment of custom duty, excise duty
and service tax.

• Business leaders who have excelled in

international trade and have successfully
contributed to country’s foreign trade are
proposed to be recognized as Status Holders and
given special treatment and privileges to
facilitate their trade transactions, in order to
reduce their transaction costs and time.
Highlights of EXIM policy 2015 – 2020
BOOST TO MAKE IN INDIA
• Reduced Export Obligation (EO) for domestic
procurement under EPCG scheme:
– Specific Export Obligation under EPCG scheme, in
case capital goods are procured from indigenous
manufacturers, which is currently 90% of the normal
export obligation (6 times at the duty saved amount)
has been reduced to 75%, in order to promote
domestic capital goods manufacturing industry.
• Higher level of rewards under MEIS for export
items with high domestic content and value
addition.
 Highlights of EXIM policy 2015 – 2020
TRADE FACILITATION AND EASE OF DOING BUSINESS
• Online filing of documents/ applications and Paperless trade in 24x7
environment.

• It is proposed to have Online inter-ministerial consultations for approval

of export of SCOMET items, Norms fixation, Import Authorisations,
Export Authorisation, in a phased manner, with the objective to reduce
time for approval. As a result, there would not be any need to submit
hard copies of documents for these purposes by the exporters.

• Simplification of procedures/processes, digitisation and e-governance.

• Facilitating & Encouraging Export of dual use items

• Facilitating & Encouraging Export of Defence Exports

• e-Commerce Exports
 Highlights of EXIM policy 2015 – 2020
TRADE FACILITATION AND EASE OF DOING BUSINESS
• Calicut Airport, Kerala and Arakonam ICD, Tamil Nadu have been
notified as registered ports for import and export.

• India has already extended duty free tariff preference to 33 Least

Developed Countries (LDCs) across the globe

• to resolve quality complaints and trade disputes, between

exporters and importers, a new chapter, namely, Chapter on
Quality Complaints and Trade Disputes has been incorporated in
the Foreign Trade Policy.

• Government has already recognized 33 towns as export excellence

towns. It has been decided to add Vishakhapatnam and
Bhimavaram in Andhra Pradesh as towns of export excellence
(Product Category– Seafood)
 Registration of export units
• TIN - NOW GST
• CST
• IEC
• AEPC
 Obtaining Permanent Account
Number (PAN)
• Export income is subject to a number of
exemptions and deductions under different
sections of the Income Tax Act.

• For claiming these exemptions and deductions,

exporters are required to register their
organisation with the Income Tax Authorities and
obtain the Permanent Account Number (PAN).
PAN is also necessary for obtaining IEC number.
 Registration of Organisation

– Exporters have to register the types of

organisation selected by them under the
appropriate Act of the country for undertaking
their export operations, viz.,:
– A joint stock company under the Companies Act,
1956.
– A partnership firm under the Indian Partnership
Act, 1932.
– A sole trader should seek permission from the
local authorities, as required.
 Opening Bank Account
• Exporters are required to open a current
account in the name of their firms or
companies with a commercial bank which is
authorised by the Reserve Bank of India (RBI)
to deal in foreign currency transactions. All
financial transactions of the exporter
organisation are routed through this account.
Such bank also serves as a source of pre-
shipment and post-shipment finance for the
exporters.
 Registration with GST
• Goods manufactured for export purpose as well as
those purchased from local market for export purpose
are completely exempted from Value Added Tax and
Central Sales Tax, provided exporter or his firm is
registered with the Value Added Tax authority of the
state concerned and obtains exemption as per the
procedure laid down in the concerned Acts.

• GST registration is required to be completed by every

exporter with effect from appointed date fixed by
government of India by 2017.
 Obtaining Importer-Exporter Code
Number (IEC No.)
• Prior to 1.1.1997 it was obligatory for every
exporter to obtain Exporter's Code Number (CNX)
number from the RBI.

• However, since then, the CNX number has been

replaced by Importer Exporter Code (IEC) number
issued by the Direct General for Foreign Trade
(DGFT).

• The application form for obtaining IEC number

should be accompanied by fee of Rs. 1000.
 Registration with Export Promotion
Council (EPC)
• It is compulsory for every exporter to register
with appropriate Export Promotion Council (EPC)
and obtain the Registration-cum-Membership
Certificate' (RCMC).

• At present, there are 21 EPCs dealing with various

commodities.

• The benefits extended to exporters under the

new Foreign Trade Policy 2009-2014 are
extended only to the registered exporters having
valid RCMC.
 Registration with Export Credit and Guarantee
Corporation of India (ECGC)
• Exporters are exposed to commercial as well as
political risks in the international market.

• Therefore, in order to protect themselves against

such risks it is necessary for exporters to get
themselves registered with the ECGC.

• ECGC also helps exporters in obtaining financial

assistance from commercial banks and other
financial institutions.
 Registration with other Authorities
• Exporters are also required to register with a
number of other authorities and institutions
such as:
– Federation of Indian Export Organisation (FIFO),
– Indian Trade Promotion Organisation (ITPO),
– Chambers of Commerce (COC),
– Productivity Councils, etc.
• Defines Responsibilities of Seller & Buyer
regarding

• Delivery Place
• Expenses
• Safe Delivery
 EXW - ExWorks (2000 and 2010)
• This term represents the seller's minimum
obligation, since he only has to place the
goods at the disposal of the buyer.

• The buyer must carry out all tasks of export &

import clearance. Carriage & insurance is to
be arranged by the buyer.
 FCA - Free Carrier (2000 and 2010)

• This term means that the seller delivers the

goods, cleared for export, to the carrier
nominated by the buyer at the named place.

• Seller pays for carriage to the named place.

 FAS - Free Alongside Ship (2000 and
2010)
• This term means that the seller delivers when the
goods are placed alongside the vessel at the named
port of shipment.

• The seller is required to clear the goods for export.

• The buyer has to bear all costs & risks of loss or

damage to the goods from that moment.

• This term can be used for ocean transport only.

• Seller’s ( Exporter ) Responsibility

1. Production & Packing

2. Internal Transportation
3. Export Clearance
4. Loading on Board
• Seller’s ( Exporter ) Responsibility

1. Production & Packing

2. Internal Transportation
3. Export Clearance
4. Loading on Board
+
5.Payment of Freight upto Port of Destination

CFR = FOB + FREIGHT

• Seller’s ( Exporter ) Responsibility
1.Production & Packing
2.Internal Transportation
3.Export Clearance
4.Loading on Board
+
5.Freight Payment
6.Insurance Premium Payment

CIF = FOB + INSURANCE + FREIGHT

 CPT - Carriage Paid To (2000 and
2010)
• This term means that the seller delivers the goods to
the carrier nominated by him but the seller must in
addition pay the cost of carriage necessary to bring the
goods to the named destination.

• The buyer bears all costs occurring after the goods

have been so delivered.

• The seller must clear the goods for export. This term
may be used irrespective of the mode of transport
(including multimodal).
DAP – DELIVERED AT PLACE

DAT – DELIVERED AT TERMINAL

DDP – DELIVERED DUTY PAID

• Advance Payment
• Documents against Payment (DP)
• Documents against Acceptance (DA)
• Letter of Credit (LC)
• Open Account
Information to Provide
• Company Name & Address
• Bank Name & Address
• Account Number
• Bank SWIFT Code Number
• Documents against Payment (DP)
Sight Draft
• Documents against Acceptance (DA)
Usance Draft
Contract Finalisation
 Contract Finalisation

Goods
 Contract Finalisation

Bill of Lading
Goods
By Sea = Bill of Lading By Train = Railway Receipt

By Air = Air Way Bill

By Land = Lorry Receipt

 Documents

Payments

Payments

Documents Documents

Contract Finalisation

Goods
Bill of Lading
Goods

Documents
 DOCUMENTS AGAINST ACCEPTANCE (DA)
PAYMENT
Documents

Payments

Payments
ACCEPTANCE
Documents Documents

Contract Finalisation

Goods
Bill of Lading
Goods

Documents
• Also known as Letter of credits (LC)

• Documentary credit is for an exporter the next

best thing after Payment in Advance.

• Compared to other payment forms, the role of

banks is substantial in documentary credit
transactions.
• A documentary credit, or letter of credit is an
undertaking issued by a bank for the account
of the buyer (applicant), to pay the seller
(beneficiary) provided the terms and
conditions of the documentary credit are
complied with.
 LC PROCESS - BEFORE SHIPMENT
ISSUE OF LC

4
2
LC ADVISE
LC APPLICATION
1
Contract Finalisation
 LC PROCESS - POST SHIPMENT
Documents

Payments

Payments
Payments

LC + Documents Documents

Goods
Bill of Lading
Goods

Documents
LC TYPES
Revocable
Irrevocable
Confirmed
Unconfirmed
Sight
Usance
Transferable
 ROLE OF FORWARDING AGENT
• Export-import procedures are very complex and
time-consuming.

• Therefore, every exporter should avail the

services of Clearing and Forwarding (C&F) agent
who are expert and well versed with the customs
and shipment procedures.

• For smooth and timely shipment of goods, the

exporter must appoint a competent C&F agent
who is able to provide the following services:
 ROLE OF FORWARDING AGENT - Essential Services
• Transportation of goods to docks and arrangement of warehousing at port.

• Warehousing facilities before the goods are transported to docks.

• Booking of shipping space or air freighting and advice on relative cost of

sending goods by sea and air.

• Arrangement for loading of goods on board.

• Equipped with information on shipping lines and freight to different

destinations, and various charges payable by exporters.

• Obtaining marine insurance policies.

• Preparation and processing of shipping documents, Bills of Lading, Dock

Receipt, Export Declarations, Consular Invoice, Certificate of Origin, etc.

• Forwarding of banking collection papers.

 ROLE OF FORWARDING AGENT -
Desirable Services
• Storage facilities abroad, at least in major
international markets, to warehouse the goods in
case importer refuses to take delivery on any
account.

• Can trace the goods, if shipment goes off track

through his international connections.

• Arrangement for assessing the damage to

shipment during its journey.
 CONCEPT OF GST- What is GST?
• GST is an Indirect Tax which has replaced many Indirect Taxes in
India.

• The Goods and Service Tax Act was passed in the Parliament on
29th March 2017. The Act came into effect on 1st July 2017;

• Goods & Services Tax Law in India is a comprehensive, multi-

stage, destination-based tax that is levied on every value addition.

• In simple words, Goods and Service Tax (GST) is an indirect tax

levied on the supply of goods and services.

• This law has replaced many indirect tax laws that previously existed
in India.

• GST is one indirect tax for the entire country.

BEFORE GST – TAX PATTERN
 CONCEPT OF GST
• Under the GST regime, the tax is levied at
every point of sale.

• In the case of intra-state sales, Central GST

and State GST are charged. Inter-state sales
are chargeable to Integrated GST.
 CONCEPT OF GST
• Now let us try to understand the definition of Goods and Service
Tax – “GST is a comprehensive, multi-stage, destination-based
tax that is levied on every value addition.”

Multi-stage
• There are multiple change-of-hands an item goes through along its
supply chain: from manufacture to final sale to the consumer.
Let us consider the following case:
• Purchase of raw materials
• Production or manufacture
• Warehousing of finished goods
• Sale to wholesaler
• Sale of the product to the retailer
• Sale to the end consumer
 CONCEPT OF GST
• Goods and Services Tax is levied on each of
these stages which makes it a multi-stage tax
 VALUE ADDITION
• The manufacturer who makes biscuits buys flour, sugar and other
material. The value of the inputs increases when the sugar and flour are
mixed and baked into biscuits.

• The manufacturer then sells the biscuits to the warehousing agent who
packs large quantities of biscuits and labels it.

• That is another addition of value after which the warehouse sells it to

the retailer.

• The retailer packages the biscuits in smaller quantities and invests in the
marketing of the biscuits thus increasing its value.GST is levied on these
value additions i.e. the monetary value added at each stage to achieve
the final sale to the end customer.
 Destination-Based

• Consider goods manufactured in Maharashtra

and are sold to the final consumer in
Karnataka.

• Since Goods & Service Tax is levied at the

point of consumption.

• So, the entire tax revenue will go to Karnataka

and not Maharashtra.
 Journey of GST in India
• The GST journey began in the year 2000
when a committee was set up to draft law.
• It took 17 years from then for the Law to
evolve.
• In 2017 the GST Bill was passed in the Lok
Sabha and Rajya Sabha. On 1st July 2017 the
GST Law came into force.
 3. Advantages Of GST
• GST has mainly removed the Cascading effect on the sale of
goods and services.

• Removal of cascading effect has impacted the cost of

goods.

• Since the GST regime eliminates the tax on tax, the cost of
goods decreases.

• GST is also mainly technologically driven.

• All activities like registration, return filing, application for

refund and response to notice needs to be done online on
the GST Portal; this accelerates the processes.
 What are the components of GST?

• There are 3 taxes applicable under this

system: CGST, SGST & IGST.

– CGST: Collected by the Central Government on an

intra-state sale (Eg: transaction happening within
Maharashtra)

– SGST: Collected by the State Government on an intra-

state sale (Eg: transaction happening within
Maharashtra)

– IGST: Collected by the Central Government for inter-

state sale (Eg: Maharashtra to Tamil Nadu)
 GST Illustration
• Let us assume that a dealer in Gujarat had sold the
goods to a dealer in Punjab worth Rs. 50,000. The tax
rate is 18% comprising of only IGST.

• In such case, the dealer has to charge Rs. 9,000 as IGST.

This revenue will go to the Central Government. The
same dealer sells goods to a consumer in Gujarat
worth Rs. 50,000. The GST rate on the good is 12%.
This rate comprises of CGST at 6% and SGST at 6%.

• The dealer has to collect Rs. 6,000 as Goods and

Service Tax. Rs. 3,000 will go to the Central
Government and Rs. 3,000 will go to the Gujarat
government as the sale is within the state.
 Improvement in tax structure
• The following is the list of indirect taxes in the pre-GST regime:
– Central Excise Duty
– Duties of Excise
– Additional Duties of Excise
– Additional Duties of Customs
– Special Additional Duty of Customs
– Cess
– State VAT
– Central Sales Tax
– Purchase Tax
– Luxury Tax
– Entertainment Tax
– Entry Tax
– Taxes on advertisements
– Taxes on lotteries, betting, and gambling
• CGST, SGST, and IGST has replaced all the above taxes
 What changes has GST brought in?
• In the pre-GST regime, every purchaser including the
final consumer paid tax on tax.

• This tax on tax is called Cascading Effect of Taxes.

• GST has removed this cascading effect as the tax is

calculated only on the value-addition at each stage of
the transfer of ownership.

• This indirect tax system under GST has improved the

collection of taxes as well as boosted the development
of Indian economy by removing the indirect tax
barriers between states and integrating the country
through a uniform tax rate.
 GST Illustration
• calculations in earlier regime:

• calculations in current regime:

 E-way bill
• GST regime also brought a centralized system of
waybills by the introduction of “E-way bills”.

• This system was launched on 1st April 2018 for Inter-

state movement of goods and on 15th April 2018 for
intra-state movement of goods in a staggered manner.

• Under the e-way bill system, manufacturers, traders &

transporters are now able to generate e-way bills for
the goods transported from the place of its origin to its
destination on a common portal with ease.

• Tax authorities are also benefitted as this system has

reduced time at check -posts and help reduce tax
evasion
 EXPORT DOCUMENTATION
• There are a number of documents, which
have to be prepared by the exporter in order
to arrange export of his consignments.
• These documents can be mainly classified
into two i.e.
(a) Commercial Documents and
(b) Regulatory Documents
EXPORT DOCUMENTATION
 COMMERCIAL DOCUMENTS
• 8 Principal documents
– The Commercial Invoice,
– Packing List
– Bill of Lading/Air Waybill
– Certificate of
Inspection/Quality
control
– Certificate of origin
– Bill of Exchange and
– Shipment Advice
– Insurance Certificate
• 7 Auxiliary documents
– Proforma Invoice
– Intimation for inspection
– Shipping instructions
– Insurance Declaration
– Application for certificate
of origin.
– Shipping order
– Mate's Receipt
– Letter to bank of
collection/negotiation of
documents
 REGULATORY DOCUMENTS
• There are seven regulatory documents associated with the pre-shipment
stage of the export transaction.

1. ARE Form ( for Central Excise)

2. Shipping Bill/Bill of Export (for Customs)

3. Port Trust Copy of Shipping Bill/ Export Application/Dock Challan - Port

4. Vehicle ticket - Port

5. Exchange Control Declaration/GR/PP forms - RBI

6. Freight Payment Certificate - Steamer Agents

7. Insurance Premium Payment Certificate - Insurance Co.

8. Receipt of payment of port charges

 8 principal documents
Commercial invoice by exporter
• It is a formal demand note for payment issued by the
exporter to the importer for goods sold under a sales
contract.

• It should give details of the goods sold, payment terms

and trade terms.

• It is also used for the customs clearance of goods and

sometimes for foreign exchange purpose by the
importer.
 Packing list by shipper
• A list providing information needed for transportation purpose,
such as details of invoice, buyer, consignee, country of origin,
vessel/flight date, port/airport of loading, port/airport of discharge,
place of delivery, shipping marks / container number, weight /
volume of merchandise and the fullest details of the goods,
including packing information.

Bill of lading by Shipping company

• The bill of lading is usually the first common document used in

international shipment and it is a contract between the owner of
the goods and the carrier.

• It will state what goods are shipping, where they are going and
where the shipment started.

• In addition, once the shipment is picked up, the bill of lading serves
as a receipt issued by the carrier.
 Certificate of inspection – exporter or inspection company
• A report issued by an independent surveyor (inspection
company) or the exporter on the specifications of the
shipment, including quality, quantity, and/or price, etc;
required by certain buyer and countries.

Certificate of origin
• This document is prepared by the manufacturer and is
certified by a government entity or chamber of commerce.

• It’s used to identify the country of the manufacturer where

the goods were made.

• For example, the U.S. Food & Drug Administration requires

a certificate of origin for every product imported to the US.
 Bill of exchange - exporter
• An unconditional written order, in which the
importer addressed to and required by the
exporter to pay on demand or at a future date a
certain amount of money to the order of a person
or bearer.
Shipment advice
• Letter or form sent by an exporter to a foreign
buyer informing that the shipment of the ordered
goods is on its way. A copy of the invoice and the
packing slip (and sometimes a copy of bill of
lading) may also be attached. Also
called advice note.
 Insurance certificate
• An insurance policy is an insurance document
evidencing insurance has been taken out on
the goods shipped, and it gives full details of
the insurance coverage.

• An insurance certificate certifies that the

shipment has been insured under a given
open policy and is to cover loss of or damage
to the cargo while in transit.
 7 auxiliary documents
Proforma Invoice
• An invoice provided by a supplier prior to the shipment of
merchandise, informing the buyer of the kinds and quantities of
goods to be sent, their value, and importation specifications
(weight, size and similar characteristics).
Intimation for inspection
• It is the document which is offered by the inspection company
about the inspection
Shipping instructions
• A shipping instruction (SI) is a document, provided by a customer
to the carrier, containing details of the cargo to be shipped and the
requirements for its physical transportation. The SI contains basic
information that is required to draw up the bill of lading (B/L), such
as: Booking number or B/L number.
Insurance Declaration
• A brief declaration by the exporter about the basic facts of
shipment
 Application for certificate of origin
• This is the application applied to government to obtain certificate of
origin.

Shipping order
• A Shipping Order (SO) is a document issued by the carrier that
confirms a shipment’s booking on a vessel. An SO will contain the
location of the empty container for pickup, and may also contain
booking details like the vessel number and sailing time.

Mate's Receipt by shipping company

• A receipt to confirm the receipt of cargo on quay/warehouse
pending shipment. The dock receipt is used as documentation to
prepare a bill of lading. It has no legal role regarding processing
financial settlement.

Letter to bank of collection/negotiation of documents

• This letter is written to bank for the collection of export documents
pertaining to bank.
 REGULATORY DOCUMENTS
ARE Form ( for Central Excise)

• Application for Removal of Excisable Goods for Export by (Air/Sea/Post/Land).

Shipping Bill/Bill of Export (for Customs)

• Every exporter who is willing to export goods is required to file a shipping bill. In
order to obtain the customs clearance, the exporter is required to prepare the
shipping bill. Shipping bill/bill of export is the important document which is
required by the customs authority after the filing of which the customs authority
allows the goods to be shipped.
Port Trust Copy of Shipping Bill/ Export Application/Dock Challan – Port

• Ports in India have prescribed their own documents for payment of port charges
and handling shipment. Dock Challan at Kolkata Export Application in Chennai
and Cochin Port Trust copy at Mumbai
 REGULATORY DOCUMENTS
Vehicle ticket – Port

• It is an entry pass issued by the port trust authority to the shipper

to allow the latter to bring export cargo to the port for their
dispatch to the importer. The customs official give vehicle chit
when the goods enter the custom designated area so that the duty
can be assessed and let export seal can be availed from the customs
for loading the cargo to the ship.
Exchange Control Declaration/GR/PP forms – RBI

• Declaration about the value of the export goods for exchange

 Freight Payment Certificate - Steamer Agents

• A certificate showing that the freight for the consignment has been
paid to the shipping company. It is a supplementary evidence to
avail the second bill of lading in case original has been lost.
Insurance Premium Payment Certificate - Insurance Co.

• The shipping company demands an insurance premium certificate

for the insurance cover of goods. The carriage of goods through
ship
Receipt of payment of port charges
• It is the proof for payment of port charges
Export Claiming Assistance Documents
• These are documents which are to be prepared
and submitted to the relevant authorities for
availing the export assistance.

• The documents for claiming assistance include,

– Drawbacks of central excise and customs duties
– Packing credit facilities etc
– Certificate of origin
– Exchange Control Declaration Form-GR Form
 Packing credit facilities etc

• Packing credit is basically a loan provided to

exporters or sellers to finance the goods'
procurement before shipment.
• The bank will make the funds available to a
letter of credit issued favoring the seller and a
confirmed order for selling the goods or
services.
 Documents required by importing
countries
• These documents are submitted To satisfy the
requirements of the importer Government
• Thus the Exporters submit,
– G R Form – Guaranteed Remittance
– Export License
– Inspection Certificate
– Legalized Invoice and
– Certificate of Origin
 G R Form – Guaranteed Remittance

• GR form is a declaration that exporter gives

against each shipment that he will realize the full
export proceeds. He submits the declaration in
duplicate to the Customs at the time of shipment.

• The idea of GR form procedure is to monitor

realization of export proceeds against each
shipment. This is like putting a policeman behind
each transaction.
 EXPORT LICENSE
• Though many items are permitted to be exported
freely, exports of some items are banned and of
some items controlled by means of licenses.
Needless to say, the exporter should make sure
that the item sought to be exported is not one
which falls in the banned list.

• If the item to be exported requires a license, it is

necessary to obtain it before finalizing the
contract.
DOCUMENTATION
• PRE-SHIPMENT
DOCUMENTATION
PURPOSE : CLEARANCES
• POST SHIPMENT
DOCUMENTATION
PURPOSE : PAYMENTS
• Commercial Invoice
• Tax Invoice ( GST Purpose )
• Packing List
• Authorisation to CHA
• Certificate of Origin
(Preferential / Non – preferential CO)
• EWAY BILL

For AGRI PRODUCTS – PHYTO SANITARY CERTIFICATE

• Receipt of documents from CHA
• Original BL – 3 No’s
• Shipping Bills
• SDF Forms
• Receipts
• Post Shipment Documentation
Post – Shipment Documentation
1.Covering Letter
2.Bill of Exchange – 2 sets
3.LC Copy / PO Copy
4.Documents as per LC / PO
5.Shipping Bill – Copy
PROFORMA INVOICE
COMMERCIAL INVOICE
Certificate of Origin
Shipping bill
Bill of exchange
Bill of lading
Packing list
 EXCHANGE CONTROL REGULATIONS
ON EXPORTS - objectives
• To conserve foreign exchange and ensure its
utilization for national priorities;

• Control and surveillance of foreign capital and

the activities financed by it; and

• The proper accounting of foreign exchange

receipts and payments for statistical purposes.
 EXCHANGE CONTROL REGULATIONS
ON EXPORTS
• The administrative authority for foreign
exchange regulation is vested in the Reserve
Bank of India and the routine work of
exchange control is delegated to those
commercial banks, which are authorised to
deal in foreign exchange business.

• Such banks are known as "authorised

dealers".
 Exchange control
• Purchase, sale and other dealings of foreign exchange and maintenance of
balances at foreign centres.

• Procedure for realisation of export proceeds and payment for imports.

• Payments to non residents or to their accounts in india,

• Transfer of securities between residents and non residents and acquisition

and holding of foreign exchange,

• Foreign travel with or without foreign exchange

• Export and import of currency, cheques, travellers cheques, securities,

jewellery, etc.
 Exchange control
• Trading, commercial and industrial activities, acquisition
and holding of shares and immovable property by foreign
firms and foreign nationals in india.

• Appointment of non-residents and foreign nationals and

companies, etc, as agents, technical/management advisers
in india.

• Employment, profession, etc, undertaken by foreign

nationals in india.

• Acquisition, holding and disposal of immovable property

outside india, by residents in india.
 Exchange control on exports
• Under the Exchange Controls, it is obligatory for an
exporter to declare the full export value of the goods
or the value he expects to receive for the sale of the
goods abroad.

• The forms, in which declaration of exports to various

destinations has to be made, are prescribed by the
Reserve Bank of India.

• Every exporter must obtain, from the RBI, a code

number, which should be indicated on the declaration
form.
 Exchange control on exports
• Full proceeds of payment for export of goods from India must be
realised from abroad :
– within 3 months from the date of shipment in the case of exports to
Pakistan, Afghanistan,
– within 6 months from the date of shipment in the case of exports to
all other countries.

• All shipping documents covering exports from India, together with

the declaration forms, must be handed over to an authorised dealer
in foreign exchange, within 21 days from the date of shipment of
goods.

• Payment for exports from India must be realised by one of the

approved methods of p a y m e n t .