import procedures and documentation

7/30/2019 Import Procedures and Documentation

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(Infor Education Partner)

EXPORT DOCUMENTATION ANDPROCEDURE, Nakul Singh

Copyright 2008 Infor. All rights reserved. www.infor.com. Training Session by : Merino Services Limited
http://www.infor.com/http://www.infor.com/


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Disclaimer

This Training Session is designed and conducted by MerinoServices Limited (MSL) on behalf of Infor. MSL is InforEducation Partner and specializes in Education &Trainingon Infor ERP LN. To know more about Merino ServicesLimited please visit www.merinoservices.com.

2 Copyright 2008 Infor. All rights reserved. www.infor.com. Training Session by : Merino Services Limited
http://www.merinoservices.com/http://www.infor.com/http://www.infor.com/http://www.merinoservices.com/


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Course Objective


To understand the Basics of Export

To understand the different documents required for the export procedures.


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4

Introduction



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Introduction

To be an exporter you are ready with the product you wish to export and have found the market for the same, you areready to proceed further. Following sequences can be followed:

Any one, who wishes to export, must first of all get an Importer Exporter Code Number (IE Code).This can beobtained by making a formal application to the office of the Regional Directorate General of Foreign Trade (DGFT).

Get yourself registered with the related Export Promotion Council andbecome a member. Also arrange to obtainRegistration-Cum-Membership Certificate (RCMC) from the council. This has twin objectives:

Under the Foreign Trade Policy, it is mandatory that an exporter gets him registered with the Export Promotion Council toavail of various export facilities.

Many foreign buyers send their enquiries for the imports to the Export Promotion Council. Hence you will have few

customers interested in your product. If you are a manufacturer, find out the provisions under the EXIM Policy of getting the raw materials duty free.

Get familiar with the excise formalities as goods meant for export can be cleared without payment of C. Excise duty onthe finished product subject to compliance of certain formalities.

Understand the local government regulations in relations to the export of the product.

Get information of the governments regulations of the importing country as to restrictions on the quantity, productspecification, packing regulations, customs regulations, requirement of specific documents/information etc.

Availability of Vessels/Airlines, the transport charges, frequency of operation etc.,

To look for a Custom House Agent (CHA) (also know as freight forwarders or clearing agents) for handling thedocuments/cargo in the customs.

If the product is covered under any quota regulation, find out the agency/council who are handling the quota distributionfor the product and the availability of quota for exports.



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6

Export Process



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Export Process

Mr. Ram Mr. Suzuki

Sends Performa Invoice

Issued International Purchase Order

Contract of sale is established

Establish L/C

IssuingBank

Request Rams bank to advise L/C

Advising Bank

Advise Ram ofL/C

Checked andAccepted L/C

Applied ForL/C


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Export Process


Union

ministry ofcommerce

Books FreightIssues Forwarding instructionsand Delivers Cargo Marked andPackaged

Freight Forwarder

Accepts L/C

Customs

Now Mr. Ram Have1.Commercial Invoice2. Packing List3. Certificate Of origin4. Phytosanitary Certificate5. Insurance Certificate7. Bill of lading.8. Bill Of entry

Authorized agency forcertification

Port


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Concept


Issuing Bank

Advising Bank

PresentsDocument

Checks andAcceptsdocument andPays for thedocuments

Sends document to issuing bank and

get reimbursed

Pays Bank

ReceivesDocument

Follow UpCustom clearance Bysubmitting documentand goods arereceived.


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Export Documentation


Export documentation is used to

Keep shipment and delivery on schedule

To describe cargo

For customs clearance

To indicate the ownership of goods for collection purposes or in the event of dispute

To obtain payment.


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Incoterm


Incoterms are standard, internationally recognized trade terms used in sales

contracts to help traders in different countries understand one another. Export documentation requirements often depends on the Incoterms used. Under the E-TERM (EXW), the seller only makes the goods available to the buyer at the sellers own premises. It

is the only one of that category.

Under the F-TERM (FCA, FAS, &FOB), the seller is called upon to deliver the goods to a carrier appointed by thebuyer.

Under the C-TERM (CFR, CIF, CPT, & CIP), the seller has to contract for carriage, but without assuming the riskof loss or damage to the goods or additional cost due to events occurring after shipment or discharge.

Under the D-TERM (DAF, DEQ, DES, DDU & DDP), the seller has to bear all costs and risks needed to bring thegoods to the place of destination

INCOTERMS

Ex Works:

Free Carrier:

Free Alongside Ship:

Free on Board: Cost and Freight:

Cost, Insurance and Freight:

Carriage Paid To:

Carriage and Insurance Paid To:

Delivered At Frontier:

Delivered Ex Ship:

Delivered Ex Quay:

Delivered Duty Unpaid:Delivered Duty Paid:


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Export Documents


These documents can be mainly classified into two i.e.

( a) Commercial Documents and(b) Regulatory Documents

There are a number of documents, which have to be prepared by theexporter in order to arrange export of his consignments.


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Export Document Classification


Export Documents

Commercial Documents Regulatory Documents(7)

Principal(8) Auxiliary(7)


14/3514 Copyright 2008 Infor. All rights reserved. www.infor.com. Training Session by : Merino Services Limited

1. The Commercial Invoice,2. Packing List

3. Bill of Lading/Air Waybill

4. Certificate of Inspection/Quality control

5. Certificate of origin

6. Bill of Exchange and

7. Shipment Advice

8. Insurance Certificate

Principal documents


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Commercial invoice

It is also known as a 'Document of Contents

It is prepared by the exporter after the execution of export order giving details about the goods shipped.

It is essential that the invoice is prepared in the name of the buyer or the consignee mentioned in the letter of credit.

It is a prima facie evidence of the contract of sale or purchase and therefore, must be prepared strictly in accordancewith the contract of sale.

Significance

It is the basic document useful in preparation of various other shipping documents.

It is used in various export formalities such as quality and pre-Shipment inspection excise and customs procedures etc.

It is also useful in negotiation of documents for collection and claim of incentives.

It is useful for accounting purposes to both exporters as well as importers.


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Commercial Invoice

CONTENTS OF COMMERCIAL INVOICE

Name and address of the exporter.

Name and address of the consignee.

Name and the number of Vessel or Flight.

Name of the port of loading.

Name of the port of discharge and final destination.

Invoice number and date.

Exporter's reference number.

Buyer's reference number and date.

Name of the country of origin of goods.

Name of the country of final destination.

Terms of delivery and payment.

Marks and container number.

Number and packing description.

Description of goods giving details of quantity, rate and total amount in terms of internationally accepted price quotation.

Signature of the exporter with date.


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Packing List

It commonly includes an itemized detail of the package contents and does not include customer pricing. It serves toinform all parties, including transport agencies, government authorities, and customers, about the contents of the

package. It helps them deal with the package accordingly.


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Bill Of Lading

The bill of lading is a document issued by the shipping company or its agent acknowledging the receiptof goods on board the vessel, and undertaking to deliver the goods in the like order and condition asreceived, to the consignee or his order, provided the freight and other charges as specified in the billhave been duly paid.

It is also a document of title to the goods and as such, is freely transferable by endorsement anddelivery.

Bill of Lading serves three main purposes:

As a document of title to the goods;

As a receipt from the shipping company; and

As a contract for the transportation of goods.

.


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CONTENTS OF BILL OF LADING

Name and logo of the shipping line.

Name and address of the shipper.

Name and the number of vessel.


Name of the port of discharge and place of delivery.


Packing and container description.

Total number of containers and packages,

Description of goods in terms of quantity.

Container status and seal number.

Gross weight in kg. and volume in terms of cubic meters.

Amount of freight paid or payable.

Shipping bill number and date.

Signature and initials of the Chief Officer

Bill Of Lading


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BILL OF LADING

Significance of Bill of Lading for Exporters

It is a contract between the shipper and the shipping company for carriage of the goods to the port of destination.

It is an acknowledgement indicating that the goods mentioned in the document have been received on board for thePurpose of shipment.

A clean bill of lading certifies that the goods received on board the ship are in order and good condition.

It is useful for claiming incentives offered by the government to exporters

The exporter can claim damages from the shipping company if the goods are lost or damaged after the issue of a cleanbill of lading.

Significance of Bill of Lading for Importers

It acts as a document of title to goods, which is transferable endorsement and delivery.

The exporter sends the bill of lading to the bank of the importer so as to enable him to take the delivery of goods.

The exporter can give an advance intimation to the foreign buyer about the shipment of goods by sending him a non-negotiable copy of bill of lading

Significance of Bill of Lading for Shipping Company

It is useful to the shipping company for collection of transport charges from the importer, if not collected from theexporter.


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Inspection Certificate

The certificate is issued by the inspection authority such as the export inspection agency. This certificate states that the

goods have been inspected before shipment, and that they confirm to accepted quality standards.


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Certificate of Origin

The importers in several countries require a certificate of origin without which clearance to import is refused.

The certificate of origin states that the goods exported are originally manufactured in the country whose name is

mentioned in the certificate.

Certificate of origin is required when:-

The goods produced in a particular country are subject to preferential tariff rates in the foreign market at the timeimportation.

The goods produced in a particular country are banned for import in the foreign market.

SIGNIFICANCE

Certificate of origin is required for availing of concessions under Generalized System of Preferences (GSP) as well asunder Commonwealth Preferences (CWP).

It is to be submitted to the customs for the assessment of duty clearance of goods with concessional duty.

It is required when the goods produced in a particular country are banned for import in the foreign market.

It helps the buyer in adhering to the import regulations of the country.

Sometimes, in order to ensures that goods bought from some other country have not been reshipped by a seller, acertificate of origin IS required.


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Certificate Of Origin

CONTENTS

Name and logo of chamber of commerce.

Name and address of the exporter.

Name and address of the consignee.

Name and the number of Vessel of Flight





Total number of containers and packages.


Signature and initials of the concerned officer of the issuing authority.

Seal of the issuing authority.


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Declaration of Insurance

Where the contract terms require that the insurance to be covered by the exporter, the shipper has to give details of theshipment to the insurance company for necessary insurance cover. The detailed declaration will cover:

Name of the shipper \ exporter.

Name & address of buyer.

Details of goods such as packages, quantity, value in foreign currency as well as in Indian Rs. Etc.

Name of the Vessel \ Aircraft.

Value for which insurance to be covered.


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1. Performa Invoice

2. Intimation for inspection

3. Shipping instructions

4. Insurance Declaration

5. Application for certificate of origin.

6. Mate's Receipt

8. Shipping order.

7. Letter to bank of collection/negotiation of documents

Auxiliary documents


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Performa Invoice

The starting point of the export contract is in the form of offer made by the exporter to the foreign customer. The offermade by the exporter is in the form of a Performa invoice. It is a quotation given as a reply to an inquiry. It normallyforms the basis of all trade transactions.

Importance of Proforma Invoice

It forms the basis of all trade transactions.

It may be useful for the importer in obtaining import license.

Contents of Performa Invoice

Name and address of the exporter. Name and address of the importer.

Mode of transportation, such as Sea or Air or Multimodal transport.


Name of the port of discharge and final destination.

Provisional invoice number and date.

Exporter's reference number.

Buyer's reference number and date.

Name of the country of origin of goods.

Name of the country of final destination.

Marks and container number. .

Number and packing description.

Description of goods giving details of quantity, rate and total amount in terms of internationally accepted pricequotation.

Signature of the exporter with date.


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Inspection Intimation & Declaration Of Insurance


Intimation for Inspection:Whenever the consignment requires the pre-

shipment inspection, necessary application is to be made to the concerned

inspection agency for conducting the inspection and issue of certificate thereof.

Declaration of Insurance:Where the contract terms require that the

insurance to be covered by the exporter, the shipper has to give details of the

shipment to the insurance company for necessary insurance cover. The

detailed declaration will cover:


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Shipping Instructions

At the pre-shipment stage, when the documents are to sent to the CHA for customs clearance, necessary instructions

are to be give with relevance to

The export promotion scheme under which goods are to be exported.

Name of the specific vessel on which the goods are to be loaded.

If goods are to be FCL or LCL.

If freight amount are to be paid / collected.

If shipment are covered under A.R.E.-1 procedure.

Instructions for obtaining Bill of Lading etc.


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Application of the Certificate Origin

In case the exporter has to obtain Certificate of Origin from the concerned authorities, an application has to be made to

the concerned authority with required documents. While the simple invoice copy will do for getting C\O from the chamber of commerce, in respect of obtained the same

from the office of the Textile Committee or Export Promotion Council, the documents requirement are different.


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Mates Receipt

Mate's receipt is a receipt issued by the Commanding Officer of the ship when the cargo is loaded on the ship.

The mate's receipt is a prima facie evidence that goods are loaded in the vessel.

The mate's receipt is first handed over to the Port Trust Authorities. After making payment of all port dues, the exporteror his agent collects the mate's receipt from the Port Trust Authorities.

It must be handed over to the shipping company in order to get the bill of lading.

Bill of lading is prepared on the basis of the mate's receipt.

Significance of Mate's Receipt

It is an acknowledgement of goods received for export on board the ship.

It is a transferable document. It must be handed over to the shipping company in order to get the bill of lading.

Bill of lading, which is the title of goods, is prepared on the basis of the mate's receipt.

It enables the exporter to clear passage

To Obtaining Mate's Receipt

The goods are then loaded on board the ship for which the Mate or the Captain of the ship issues Mate's Receipt to the

Port Superintendent ort trust dues to the Port Trust Authorities.


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Mates Receipt

Contents of Mate's Receipt

Name and logo of the shipping line.

Name and address of the shipper.

Name and the number of vessel.





Total number of containers and packages.


Container status and seal number.

Gross weight in kg. and volume in terms of cubic meters.

Shipping bill number and date.

Signature and initials of the Chief Officer.


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Shipping order

It is issued by the Shipping/Conference Line

It intimating the exporter about the reservation of space for shipment of cargo which the exporter intends to ship.

Contents

Details of the vessel

Port of the shipment

The date on which the goods are to be shipped are mentioned.

This order enables the exporter to make necessary arrangements for customs clearance and loading of the goods


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Bank letter for negotiation of documents


At the post shipment stage, the exporter has to submit the documents to a bank for negotiation or discounting or

collection for forwarding the same to the customer and also for realization of export proceeds.

The bank letter is the set of instruction for the bank as to how to handle the documents by them and by the bank at the

buyers country which may include

Name and address of the buyer.

Details of various documents being sent and the number of the copies thereof.

Name and address of the buyers bank if available.

If the documents are sent L/C or on open terms.

If the proceeds are to adjusted against any pre-shipment packing credit loan. If the bill amount is to be adjusted against any forward exchange cover.

In case of credit bill who has to bear the interest, either exporter or if the same is to be collected from the buyer.

Instructions in case non-acceptance/non-payment by the buyer.


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1. ARE Form ( for Central Excise)2. Shipping Bill/Bill of Export(for Customs)

- For export of goods Ex. Bond

- For export of duty free goods

- For export of dutiable goods

- For export of goods under claim of drawback

-For export of goods under claim of DEPB

3. Bank Certificate For realization.

4. Vehicle ticket Port.

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

6. Export Application.

-These documents will be discussed in next session.

Regulatory documents