COMSATS Road, Off GT Road, Sahiwal

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY

SAHIWAL

Leather Coordinators

Tufail Shaheed Road, Mohalla Rajpura, Sahiwal

SUBMITTED TO:

MR. MOAZZAM ALI

LECTURER

DEPARTMENT OF MANAGEMENT SCIENCES

SUBMITTED BY:

ABU SUFIAN RASHEED

CIIT/SP14-BBS-011/SWL

RASHID WAQAS

CIIT/SP14-BBS-012/SWL

SALMAN YAMIN

CIIT/SP14-BBS-006/SWL

DECEMBER 11, 2015

Table of Contents

1. General Perspective of Export Documentation .......................................... 1

1.1. NTN ........................................................................................................ 1

1.2. Sales Tax Registration ........................................................................... 1

1.3. Bank Account Current ............................................................................ 1

1.4. Chamber Membership ............................................................................ 1

1.5. Documents for Clearing Agent ............................................................... 1

1.6. Form “E” ................................................................................................. 2

1.7. Submission of Export Documents to the bank. ...................................... 2

2. Export procedure of Leather Coordinator (Mr.Iqbal, 2015) ........................ 2

2.1. Order Sheet ........................................................................................... 2

2.2. Performa Invoice .................................................................................... 3

2.3. Cargo and Custom clearing documentation ........................................... 6

2.3.1. The Shippers Letter of Instruction for Issuing AIRWAY bill .............. 6

2.3.2. Packing List/Weight Note ................................................................ 6

2.3.3. Invoice ............................................................................................. 7

2.3.4. Letter of credit .................................................................................. 7

2.3.5. Cargo Agent .................................................................................... 8

2.3.6. Form E ............................................................................................. 8

2.3.7. Clearing Agent ................................................................................. 8

2.3.8. Covering letter ................................................................................. 9

2.3.9. Covering schedule ........................................................................... 9

Charges for Exports ....................................................................................... 10

Bibliography ................................................................................................... 11

Appendices .................................................................................................... 12

Appendix-A Performa Invoice .................................................................... 12

Appendix-B The Shippers Letter of Instruction for Issuing AIRWAY bill .... 12

Appendix-C Packing List/Weight Note ....................................................... 12

Appendix-D Invoice ................................................................................... 12

Appendix-E Form-E ................................................................................... 12

Appendix-F AZO Certificate ...................................................................... 12

Appendix-G GSP Form-A .......................................................................... 12

Appendix-H AIRWAY Bill ........................................................................... 12

Appendix-I GD-I Form .............................................................................. 12

Appendix-A Performa Invoice ............................................................... 13

1

1. General Perspective of Export Documentation

Now a days export license is no more required to export. Only the following

initial documents are required to export:

1.1. NTN

National Tax Number Certificate, which is issued by the Income Tax

Department on filing of application form accompanied with one attested copy

of NIC.

1.2. Sales Tax Registration

Commercial exporter is not required to register with Sales Tax Department.

But if you pay the sale tax on the goods from local market it will be better for

you to get yourself registered with sales tax department so that you may claim

your input tax deducting on your purchases. Once you are registered in sales

tax department you will be obliged to the monthly sales tax return irrespective

of the fact that you have been involved in any sales tax activity or not.

1.3. Bank Account Current

Bank Account is required for export proceedings and documents.

1.4. Chamber Membership

Membership certificate of Chamber of Commerce and Industries or any

relevant trade association is required.

1.5. Documents for Clearing Agent

Once the consignment, to be exported arrives at the port, usually a clearing

agent services are sought. The following documents are required to provide to

clearing agent to clear the consignment.

Packing List.

Commercial Invoice.

Letter of Credit (L/C).

Certificate of Origin which is issued by Chamber of Commerce.

National Tax Number Certificate.

2

1.6. Form “E”

Form “E” (State bank form): All exports from Pakistan which are subject to

Foreign Exchange Regulations are required to be declared on form „E‟ which

is in sets of four copies each. The exporter should submit the full set of Form

„E‟ to the bank after it has been completed and signed by the exporter himself

or his authorized agent. While certifying Form „E‟, bank should ensure that

exporters give only one address in Form „E‟. After the form is certified by the

bank, it should be submitted to the Customs/Postal authorities at the time of

shipment along with the shipping bill. The Customs authorities will detach the

original copy and after filling in the portion relating to them and affixing their

seal and signature thereon forward it to the State Bank. The Customs

authorities will return the duplicate, triplicate and quadruplicate copies to the

exporter or his authorized agent who will retain the quadruplicate for his own

record and submit the duplicate and triplicate copies to the Authorized Dealer

along with the shipping documents within 14 days from the date of shipment.

1.7. Submission of Export Documents to the bank.

All shipping documents covering goods exported from Pakistan and declared

on form „E‟ must be passed through the medium of bank within 14 days from

the date of shipment. The exporter must submit the duplicate (bearing

Customs seal and signature of Customs Officials with Code number) and

triplicate copies of form „E‟ along with the shipping documents, invoices etc.,

to the bank who had certified the form „E‟. An extra copy of the shipper‟s

invoice must be attached to the triplicate copy of the form „E‟.

2. Export procedure of Leather Coordinator (Mr.Iqbal, 2015)

2.1. Order Sheet

Process start with placement of online order by importer or an order sheet that

importer send to exporter in which all order related detail are disclosed like,

Quality

Quantity

Size

Rate

Sample design (in paper or soft form)

3

Other necessary document vary order to order

2.2. Performa Invoice

Performa Invoice prepared by Exporter is basically an agreement of order in

which all details are discussed as:

Buyers

Buyers name like XYZ Company of France

Description of Goods

Style and quality, quantity, price per unit, total value of goods

Total Quantity

780 units of Garments

Value

49980.00€

Currency

Currency should be defined like EURO, DOLLAR

Shipment Type

BY AIR or SEA and INLAND WATERWAY

Delivery Date

INCOTERMS

The Incoterms® rules have become an essential part of the daily

language of trade. They have been incorporated in contracts for the

sale of goods worldwide and provide rules and guidance to importers,

exporters, lawyers, transporters, insurers and students of international

trade (ICC, 2015).

• EXW Ex Works

“Ex Works” means that the seller delivers when it places the goods at

the disposal of the buyer at the seller‟s premises or at another named

place (i.e.,works, factory, warehouse, etc.). The seller does not need to

load the goods on any collecting vehicle, nor does it need to clear the

goods for export, where such clearance is applicable.

• FCA Free Carrier

“Free Carrier” means that the seller delivers the goods to the carrier or

another person nominated by the buyer at the seller‟s premises or

another named place. The parties are well advised to specify as clearly

4

as possible the point within the named place of delivery, as the risk

passes to the buyer at that point.

• CPT Carriage Paid To

“Carriage Paid To” means that the seller delivers the goods to the

carrier or another person nominated by the seller at an agreed place (if

any such place is agreed between parties) and that the seller must

contract for and pay the costs of carriage necessary to bring the goods

to the named place of destination.

• CIP Carriage And Insurance Paid To

“Carriage and Insurance Paid to” means that the seller delivers the

goods to the carrier or another person nominated by the seller at an

agreed place (if any such place is agreed between parties) and that the

seller must contract for and pay the costs of carriage necessary to

bring the goods to the named place of destination.

„The seller also contracts for insurance cover against the buyer‟s risk of

loss of or damage to the goods during the carriage. The buyer should

note that under CIP the seller is required to obtain insurance only on

minimum cover. Should the buyer wish to have more insurance

protection, it will need either to agree as much expressly with the seller

or to make its own extra insurance arrangements.”

• DAT Delivered At Terminal

“Delivered at Terminal” means that the seller delivers when the goods,

once unloaded from the arriving means of transport, are placed at the

disposal of the buyer at a named terminal at the named port or place of

destination. “Terminal” includes a place, whether covered or not, such

as a quay, warehouse, container yard or road, rail or air cargo terminal.

The seller bears all risks involved in bringing the goods to and

unloading them at the terminal at the named port or place of

destination.

• DAP Delivered At Place

“Delivered at Place” means that the seller delivers when the goods are

placed at the disposal of the buyer on the arriving means of transport

ready for unloading at the named place of destination. The seller bears

all risks involved in bringing the goods to the named place.

5

• DDP Delivered Duty Paid

“Delivered Duty Paid” means that the seller delivers the goods when

the goods are placed at the disposal of the buyer, cleared for import on

the arriving means of transport ready for unloading at the named place

of destination. The seller bears all the costs and risks involved in

bringing the goods to the place of destination and has an obligation to

clear the goods not only for export but also for import, to pay any duty

for both export and import and to carry out all customs formalities.

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

• FAS Free Alongside Ship

“Free Alongside Ship” means that the seller delivers when the goods

are placed alongside the vessel (e.g., on a quay or a barge) nominated

by the buyer at the named port of shipment. The risk of loss of or

damage to the goods passes when the goods are alongside the ship,

and the buyer bears all costs from that moment onwards.

• FOB Free On Board

“Free On Board” means that the seller delivers the goods on board the

vessel nominated by the buyer at the named port of shipment or

procures the goods already so delivered. The risk of loss of or damage

to the goods passes when the goods are on board the vessel, and the

buyer bears all costs from that moment onwards.

• CFR Cost and Freight

“Cost and Freight” means that the seller delivers the goods on board

the vessel or procures the goods already so delivered. The risk of loss

of or damage to the goods passes when the goods are on board the

vessel. the seller must contract for and pay the costs and freight

necessary to bring the goods to the named port of destination.

• CIF Cost, Insurance and Freight

“Cost, Insurance and Freight” means that the seller delivers the goods

on board the vessel or procures the goods already so delivered. The

risk of loss of or damage to the goods passes when the goods are on

board the vessel. The seller must contract for and pay the costs and

freight necessary to bring the goods to the named port of destination.

6

“The seller also contracts for insurance cover against the buyer‟s risk of

loss of or damage to the goods during the carriage. The buyer should

note that under CIF the seller is required to obtain insurance only on

minimum cover. Should the buyer wish to have more insurance

protection, it will need either to agree as much expressly with the seller

or to make its own extra insurance arrangements.”

Payment Mode

Letter of credit

Advance Payment

CAD1

D/A2

Port of shipment

Any Pakistani port can be used for shipment as per convenience and

availability of resources

Bank Details

Exporter Bank detail through which payment should proceeded. Like

Meezan Bank Ltd

Packing

Usually Export packing is used for Exporting.

2.3. Cargo and Custom clearing documentation

After preparation of Performa invoice it will be sent to importer via reliable

source of communication and importer respond back in form of acceptance.

When the agreement done between parties in form of acceptance of Performa

invoice by importer then further process started that is cargo and custom

clearing agent documentation

2.3.1. The Shippers Letter of Instruction for Issuing AIRWAY bill

2.3.2. Packing List/Weight Note

Production Provide packing list or weight note, Normally Hard board Box are

used for packing. Packing list contain detail of boxes as,

1 Cash Against Document

2 Document Delivered against Acceptance

7

BOX NO.

PO No.

Style

Quality

Color

Size

Total PCS per Box-normally one Box contain 10 PCS

2.3.3. Invoice

Based on packing list (quantity taken) and Performa invoice (Price Taken in

account), invoice of partial or full order are prepared. If Letter of credit

involved then mentioned clearly

2.3.4. Letter of credit

A guarantee from the importer‟s bank that it will act on behalf of the importer

and pay the exporter for the merchandise if all relevant documents specified

in the letter of credit are presented according to the terms of the letter of

credit.

Document Required

Draft

Invoice

Packing List

AWB3 Consignment No.

B/L4 Consignment to: Buyer information

GSP5 Form A: Issued by TDAP6 which benefits to importer in tax

rebate against import from devolping countries.

Certificate of origin

Inspection certificate: Issued by Agent of importer

Declaration

AZO Free certificate

3 AIRWAY BIL

4 Bill of lading

5 Generalized system of procedure

6 Trade development Authority of Pakistan

8

AZO is a chemical that and German law require all the used dyes are

must be free from AZO chemical and Now a days it will become

requirement for international Trade.

Weight Note

Summary Note

5% commission Certificate_ in case of agent as middleman

Insurance Certificate _Covered by applicants

2.3.5. Cargo Agent

Cargo agent is member of IATA7. After all above Cargo agent issue Airway bill

that is named as MASTER Bill of any Airline

2.3.6. Form E

Online Form issued by Exporter bank main branch. All exports from Pakistan

which are subject to Foreign Exchange Regulations are required to be

declared on form „E‟ which is in sets of four copies each. The exporter should

submit the full set of Form „E‟ to the bank after it has been completed and

signed by the exporter himself or his authorized agent. While certifying Form

„E‟, bank should ensure that exporters give only one address in Form „E‟.

After the form is certified by the bank, it should be submitted to the

Customs/Postal authorities at the time of shipment along with the shipping bill.

The Customs authorities will detach the original copy and after filling in the

portion relating to them and affixing their seal and signature thereon forward it

to the State Bank. The Customs authorities will return the duplicate, triplicate

and quadruplicate copies to the exporter or his authorized agent who will

retain the quadruplicate for his own record and submit the duplicate and

triplicate copies to the Authorized Dealer along with the shipping documents

within 14 days from the date of shipment.

2.3.7. Clearing Agent

Clearing agent issue GD-I8 Form and present to customs authorities likewise

Invoice

7 International Air Traffic Authority

8 Goods declaration Form

9

Packing list

AIRWAY Bill

GD-I

For AIRWAY bill bank issue 3 certificate with attachments of form E for

issuance of AIRWAY Bill by Custom authority. After all this clearance of

shipment clearing Agent sent back following Document to Exporter for

further procedure.

Invoice

Packing list

Airway bill

Form-E

GD-I Form

2.3.8. Covering letter

After receiving documents from clearing agent exporter make covering letter

which include all necessary documents that will further proceeded to exporter

bank for preparing of Covering schedule.

2.3.9. Covering schedule

After receiving covering letter exporter bank prepare covering schedule and

send to Importers bank.

Covering schedule basically contain all documents necessary provided by

exporter like Invoice Packing list, Airway bill, Form-E, GD-I Form e.t.c.

After Acceptance of covering schedule, Bankers Acceptance received and

exporter bank notify to exporter about it.

At maturity payment will disburse to exporter on his demand

Before Maturity Exporter can Discount Bankers Acceptance

After Maturity Exporter sold foreign currency to bank on above market

rate after negotiating with treasury department of his Bank.

Bank issue Proceed realization certificate which cover all transaction

detail.

Leather coordinator submit this certificate and all relevant documents

for rebate on tax paid against Imports of chemicals

10

Basically Government of Pakistan provide 4% subsidy on Garments

and 1.7% on leather

Charges for Exports

Service Charges=0.15% minimum

With holding Tax= 1% @Leather

Export development charges= FOB value 0.25% (MEHKARI, 2003)

Courier charges=1500 min.

Container charges= 1200$-2500$ per Container

11

Bibliography

ICC. (2015, December 09). Home: Products and Services: Tools for Trade:

Incoterms® 2010 . Retrieved from International Chamber of Commerce (ICC)

Website: http://www.iccwbo.org/products-and-services/trade-

facilitation/incoterms-2010/the-incoterms-rules/

MEHKARI, M. R. (2003, January 3). Circulars/Notifications: . Retrieved

December 11, 2015, from State Bank of Pakistan :

http://www.sbp.org.pk/epd/2003/FECL2.htm

Mr.Iqbal. (2015, December 10). Leather Coordinator Export. (A. S. Rasheed,

Interviewer)

12

Appendices

Appendix-A Performa Invoice

Appendix-B The Shippers Letter of Instruction for Issuing AIRWAY bill

Appendix-C Packing List/Weight Note

Appendix-D Invoice

Appendix-E Form-E

Appendix-F AZO Certificate

Appendix-G GSP Form-A

Appendix-H AIRWAY Bill

Appendix-I GD-I Form

13

Appendix-A Performa Invoice

14

Appendix-B The Shippers Letter of Instruction for Issuing AIRWAY bill

15

Appendix-C Packing List/Weight Note

16

Appendix-D Invoice

17

Appendix-E Form-E

18

Appendix-F AZO Certificate

19

Appendix-G GSP Form-A

20

Appendix-H AIRWAY Bill

21

Appendix-I GD-I Form