Exporters should seriously
consider having the freight forwarder handle the formidable amount of
documentation that exporting requires; freight forwarders are specialists in
this process. The following documents are commonly used in exporting; which
of them are actually used in each case depends on the requirements of both
our government and the government of the importing country.
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1. Commercial invoice
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2. Bill of lading
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3. Consular invoice
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4. Certificate of origin
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5. Inspection certification
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6. Dock receipt and warehouse
receipt
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7. Destination control statement
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8. Insurance certificate
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9. Export license
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10. Export packing list
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STEP1: Enquiry :
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- The starting point for any
Export Transaction is an enquiry.
- An enquiry for product
should, inter alia, specify the following details or provide the
following data
- Size details - Std. or
oversize or undersize
- Drawing, if available
- Sample, if possible
- Quantity required
- Delivery schedule
- Is the price required on FOB
or C& F or CIF basis
- Mode of Dispatch - Sea, air
or Sea/air
- Mode of Packing
- Terms of Payment that would
be acceptable to the Buyer - If the buyer proposes to open any Letter of
Credit, any specific requirement to be complied with by the Exporter
- Is there any requirement of
Pre-shipment inspection and if so, by which agency
- Any Certificate of Origin
required - If so, from what agency.
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STEP 2: - Proforma generation :
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- After studying the enquiry in
detail, the exporter - be it Manufacturer Exporter or Merchant Exporter
- will provide a Proforma Invoice to the Buyer.
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STEP 3: Order placement :
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- If the offer is acceptable to
the Buyer in terms of price, delivery and payment terms, the Buyer will
then place an order on the Exporter, giving as much data as possible in
terms of specifications, Part No. Quantity etc. (No standard format is
required for such a purchase order)
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STEP 4: Order acceptance :
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- It is advisable that the
Exporter immediately acknowledges receipt of the order, giving a
schedule for the delivery committed.
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STEP 5: Goods readiness &
documentation :
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- Once the goods are ready duly
packed in Export worthy cases/cartons (depending upon the mode of despatch),
the Invoice is prepared by the Exporter.
- If the number of packages is
more than one, a packing list is a must.
- Even If the goods to be
exported are excisable, no excise duty need be charged at the time of
Export, as export goods are exempt from Central Excise, but the AR4
procedure is to be followed for claiming such an exemption.
- Similarly, no Sales Tax also
is payable for export of goods.
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STEP 6: Goods removal from works :
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- There are different
procedures for removing Export consignments to the Port, following the
AR4 procedure, but it would be advisable to get the consignment sealed
by the Central Excise authorities at the factory premises itself, so
that open inspection by Customs authorities at the Port can be avoided.
- If export consignments are
removed from the factory of manufacture, following the AR4 procedure,
claiming exemption of excise duty, there is an obligation cast on the
exporter to provide proof of export to the Central Excise authorities
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STEP 7: Documents for C & F
agent :
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- The Exporter is expected to
provide the following documents to the Clearing & Forwarding Agents,
who are entrusted with the task of shipping the consignments, either by
air or by sea.
- Invoice
- Packing List
- Declaration in Form SDF (to
meet the requirements as per FERA) in duplicate.
- AR4 - first and the second
copy
- Any other declarations, as
required by Customs
- On account of the
introduction of Electronic Data Interchange (EDI) system for processing
shipping bills electronically at most of the locations - both for air or
sea consignments - the C&F Agents are required to file with Customs
the shipping documents, through a particular format, which will vary
depending on the nature of the shipment. Broad categories of export
shipments are:
- Under claim of Drawback of
duty
- Without claim of Drawback
- Export by a 100% EOU
- Under DEPB Scheme
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STEP 8: Customs Clearance :
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- After assessment of the
shipping bill and examination of the cargo by Customs (where required),
the export consignments are permitted by Customs for ultimate Export.
This is what the concerned Customs officials call the ‘LET EXPORT’
endorsement on the shipping bill.
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STEP 9: Document Forwarding :
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- After completing the shipment
formalities, the C & F Agents are expected to forward to the
Exporter the following documents:
- Customs signed Export Invoice
& Packing List
- Duplicate of Form SDF
- Exchange control copy of the
Shipping Bill, processed electronically
- AR4 (original duplicate) duly
endorsed by Customs for having effected the Export
- Bill of Lading or Airway
bill, as the case may be.
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STEP 10: Bills negotiation :
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- With these authenticated
shipping documents, the Exporter will have to negotiate the relevant
export bill through authorized dealers of Reserve Bank, viz., Banks.
- Under the Generalized System
of Preference, imports from developing countries enjoy certain duty
concessions, for which the exporters in the developing countries are
expected to furnish the GSP Certificate of Origin to the Bankers, along
with other shipping documents.
- Broadly, payment terms can
be:
- DP Terms
- DA Terms
- Letter of Credit, payable at
sight or payable at... days.
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Step11: Bank to bank documents
forwarding :
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- The negotiating Bank will
scrutinize the shipping documents and forward them to the Banker of the
importer, to enable him clear the consignment.
- It is expected of such
authorized dealers of Reserve Bank to ensure receipt of export proceeds,
which factor has to be intimated to the Reserve Bank by means of
periodical Returns.
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STEP 12: Customs obligation
discharge :
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- As indicated above, Exporters
are also expected to provide proof of export to the Central Excise
authorities, on the basis of the Customs endorsements made on the
reverse of AR4s and get their obligation, on this score, discharged.
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STEP 13: Receipt of Bank
certificate :
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- Authorized dealers will issue
Bank Certificates to the exporter, once the payment is received and only
with the issuance of the Bank Certificate, the export transaction
becomes complete.
- It is mandatory on the part
of the Exporters to negotiate the shipping documents only through
authorized dealers of Reserve Bank, as only through such a system
Reserve Bank can ensure receipt of export proceeds for goods shipped out
of this country.
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