EXIM - DOCUMENTS

SCOPE OF STUDY
Need & Importance of documents
Nature and characteristic features of export import documents

Need of Documents
The commercial practices & legal systems are different Protection of respective interests of the buyer & seller Physical distance between the seller and the buyer

Rationale of documents
Commercial perspective Legal perspective Incentive perspective

Commercial Perspective
Exporter- ships contracted goods in agreed form by agreed mode of
transport as per agreed time schedule Importer- remit sale value to exporter as per agreed terms of

payment
Neither exporter nor the importer is personally involved Goods are handed over to a shipping company or an airline

company which issues a receipt for the goods

The goods are in transit for a long time, susceptible to damage in transit. Insurance cover may be required Exporter ensures that the documents are not in possession of the importer unless payment made THE DOCUMENTS SYMBOLISES OWNERSHIP OF GOODS

Legal Perspective
All over the world, laws regulating export- import trade as well as movement of foreign exchange has been enacted No country in world where movement of goods and money is absolutely free Minimum regulations- record movement of goods from & into a country Government all over the world regulate movement of goods to protect political, economic, cultural and other interests and for implementing trade agreements with other countries Documents are needed for protecting the economic and social interests of the trading countries Government regulations governing quality, standards, foreign exchange flows, valuation of goods for calculating custom duties etc. Compliance with regulations necessitates documents Documents are also needed for fulfilling requirements under trade agreements DISPUTE RESOLUTION

Incentive perspective
Export assistance and incentive measures have become an integral part of trade policy Bonafides of the claim have to be established for receiving incentives. The application has to be accompanied by number of supporting documents

Exim Documents
Commercial Documents

Principal Export Documents

Auxiliary Export Documents

Legal/Regulatory Documents

Principal Export Documents

Commercial Invoice Packing List Bill of Lading/Airway Bill/Combined Transport Document Certificate of Inspection/Quality Control Insurance Certificate

Certificate of Origin
Bill of Exchange

Shipment Advice

Auxiliary Export Documents

Proforma Invoice Intimation for Inspection Shipping Instructions Insurance Declaration Shipping Order/Shipping Bill Mate Receipt Application for certificate of Origin Letters to bank for collection / negotiation of documents

Standard size of paper for commercial documents

Paper : A4 Length : 297 mm Width : 210 mm Margin

Top Left Right Bottom

: 10 mm : 20 mm : 06 mm : 07 mm

Inside measurements Length : 280 mm Width : 184 mm

Tolerance Limits : +/- 01 mm

Commercial Invoice
It is a statement of account, which must contain identification marks and numbers, description of goods and quantity of goods It is the sellers bill given to the buyer. As a bill it must contain the name and address of the seller & buyer, unit price, amount and authorised signatures with designation. A detailed breakup of the amount to be recorded on the invoice for enabling the customs authority in the importing to calculate the import duty The commercial invoice also sets forth the terms of sale (i.e. FOB/CIF/C&F) etc, mode and date of shipment and terms of payment. It can also serve as packing list and certificate of origin

Other purposes served by Commercial Invoice:

Obtaining export inspection certificate

Getting Excise Clearance

Getting Customs Clearance

Securing incentives

Bill of Lading(B/L)
Issued by the shipping company or its agents. Essentially a transport document it serves 3 distinct functions:
This document evidences the contract of affreightment (transport) between the shipping company and the shipper (exporter & importer) It is a receipt given by the shipping company for cargo received by it It is document of title (most significant function)

Bill of Lading is the only evidence to file a claim against the shipping company in the event of non-delivery, defective delivery or short delivery of the cargo at destination Law requires that as a receipt, it must contain leading identification marks, number of packages, quantity, weight or any other unit of account, and apparent order and condition of the goods

Types of B/L:
Received for Shipment B/L: It is issued by the shipping company when goods have been given into the custody of the shipping company but have not yet been placed on board On Board Shipped B/L: It certifies that the goods have been received on board the ship Clean B/L: It indicates a clean receipt. It implies that there was no defect in the apparent order and condition of the goods at the time of receipt of the receipt or shipment of goods by the shipping company. ONLY A CLEAN B/L IS ACCEPTABLE FOR NEGOTIATION OF DOCUMENTS WITH THE BANK

Claused or Dirty B/L: This bears a superimposed clause an annotation, which expressly declares a defective condition of the goods Combined B/L: It covers several modes of transport for performing the complete journey from the exporting country to country of destination or destination point Through B/L: It covers goods being transshipped enroute but where the first carrier has the responsibility as the principal carrier for all stages of the journey Trans-Shipment B/L: It has similar characteristics as Through B/L except in this case the first carrier acts only as an agent for effecting Trans-shipment of cargo Charter Party B/L: It covers shipment on a chartered ship

B/L is not negotiable but transferable by endorsement

Airway Bill (AWB)

In air carriage, the transport document is known as Airway Bill. It serves similar as Bill of lading. By itself, AWB is not a document of title, nor is this document transferable. General practices in the trade are to get the Consignee named in AWB and goods may be delivered to the consignee without much hindrance. AWB can be made document of title and even transferable by incorporating a clause

Packing List
A packing list is more detailed and informative as it itemizes the material in each individual pack and indicate the type of package. It contains the date of packing, connecting invoice number, order number, details of shipping, bill of lading number etc. It also contains quantity and weight

Certificate of Inspection/Quality Control

It is required by some purchasers and countries to attest the specifications of the goods shipped. This is usually performed by third party and often obtained from independent testing organisations

Insurance Certificate
In international trade, when goods are in transit, they are exposed to marine perils. Marine insurance is intended to protect the insured against the risk of loss or damage to goods in transit

Certificate of Origin
A certificate stating that the goods are made from the exporters country. Some countries may accept the certificate of origin issued by a chamber of commerce of an exporting country, some from their own consulates. It assists importers to have benefits under trade treaties. GSP- Generalised System of Preference

Bill of Exchange
It is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to or to the order of person or to the bearer of the instrument. Further, the person to whom it is addressed is to pay either on demand or at fixed or determinable future

Mates Receipt
It is issued by the chief of vessel after the cargo is loaded and has similar information as in B/L. The mate receipt must be presented immediately at the shipping companys office to be exchanged into Bill of Lading

Aligned Documentation System (ADS)

With a view to overcome the problem in preparation of preshipment documents, the Govt. of India (Ministry of Commerce) has come out with standardized pre-shipment Export documents, showing that most of the commercial and regulatory documents can be prepared from only two master documents The ADS is the methodology of creating information on a set of standardized forms printed on paper of same size. ADS is based on the Un Layout key

Regulatory Documents
Foreign Exchange Regulations:
GR Form: required to be filled in duplicate for all exports in physical form other than post, where customs processing of documents is manual SDF Form: when processing id done electronically
PP Form: it is required to be filled in duplicate for all exports to all countries made by post parcel SOFTEX : It is required to be prepared in triplicate for export of computer software in non-physical form

Shipping Bill
Under Indian customs Act, goods cannot be loaded on board the carriers unless permission from customs authorities have been obtained. This permission is accorded on a document prescribed by the customs authorities known as shipping bill Free Shipping Bill- usually printed on white paper Dutiable Shipping Bill- Yellow Drawback Shipping Bill- Green Shipping Bill under DEPB- Blue Shipping Bill for Shipment Ex Bond- Pink

Export Permits- required for goods that are subjected to export trade control policy
Inspection Certificates required for goods under Export (Quality Control Inspection) Act 1962 Health / Veterinary/ Sanitary Certificate