45271996 garment export procedure

7/29/2019 45271996 Garment Export Procedure

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INTERNATIONAL

TRADEDOCUMENTATION AT

Abhilasha Exim Pvt. Ltd.

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AMIT MATHUR

KANIKA GUPTA

LALIT SHARMAPANKIL MOOLCHANDANI

SWATI SINGHANIA

VED PRAKASH SHARMA

GROUP MEMBERS

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PRESENTATION FLOW

Introduction of Export Firm

Methods of Payment

Pre-Shipment Finance

Post-Shipment Finance

Letter of Credit Open Account

Factoring

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Company profile Name : Abhilasha Exim Pvt. Ltd.

Established As : A Private Ltd. Company & as Manufacturers & Exporters

Products : Ready to Wear Garments, Textiles & Fashion Accessories.

Year of Establishment 1997

Address : Reg. Office:Jwala Building, C/21A, Bhagwan Das Road,

Jaipur-302 001 (Rajasthan) INDIAPh: +91 - 93140 63699

Works:

F-160/A, Sitapura Industrial Area, Tonk Road,Jaipur-302 022 (Raj.) INDIA

Ph: +91-141-277 0728, 277 0729Cell: +91- 94140 76688Fax: +91-141- 2771399

Production capacity: 25,000 - 40,000 units of Hi-Fashion garments per month.

Turnover: US $ 3.4 million

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Members of..

Registered with the following Export PromotionOrganisation (s), Association (s), & Chamber (s) ofCommerce : :

Apparel Export Promotion Council. (Govt. Of India)

Export Promotion Council for Handicrafts & Textiles(Govt. of India)

CII (Confederation of India Industry)

CIAe (Confederation of Indian Apparel Exporters)

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Bankers : Punjab National Bank

Swift Code - BIC : PUNB IN BB JMI

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Cliental Details

USA

Canada

Spain

South Africa

Egypt

Greece

Australia

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INTERNATIONAL TRADE

Advantages

Market expansion

Economies of scale

Surplus not wasted

BOP

Global productivity

Socio economic setup of

country

Disadvantages

Annihilation of infant

industry

Exchange ratefluctuation

Unequal distribution of

wealth

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FISCAL INCENTIVES TO PROMOTE

EXPORT

Duty Drawback

Tax Concession

Market development assistance

Export promotion of capital goods scheme

Cash compensatory support

Air Freight Subsidiary

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METHODS FOR INTERNATIONAL

TRADE FINANCE

According to stage of financing

Pre-shipment finance

Post-shipment finance

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METHODS FOR INTERNATIONAL

TRADE FINANCE

Instruments/methods of financing

Letter of credit

Open account

Factoring

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Financial assistance extended to theexporter from the date of receipt of theexport order till the date of shipment is

known as pre-shipment credit.

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Export Documents

Commercial Documents Regulatory Documents

Principal Auxiliary

EXPORT DOCUMENTATION

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Document Functions Prepared by

Quotation

Sales

Contract

An offer to sell goods and shouldstate clearly the price, details ofquality, quantity, trade terms,delivery terms, and payment terms.

An agreement between the buyerand the seller stipulating everydetails of the transaction. It is a

legally binding document. It istherefore advisable to seek legaladvice before signing the contract.

Exporter

ExporterandImporter

Commercial Documents

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PerformaInvoice

Commerci

al Invoice

An invoice provided by a supplier prior tothe shipment of merchandise, informingthe buyer of the kinds and quantities ofgoods to be sent, their value, andimportation specifications (weight, size

and similar characteristics).

It is a formal demand note for paymentissued by the exporter to the importer forgoods sold under a sales contract. It

should give details of the goods sold,payment terms and trade terms. It is alsoused for the customs clearance of goodsand sometimes for foreign exchangepurpose by the importer.

Exporter

Exporter


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Packing List

Inspection

Certificate

A list with detailed packinginformation of the goods

shipped.

A report issued by anindependent 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.

Exporter

InspectionCompany orExporter


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InsurancePolicy/

Certificate

Product

Testing

Certificate

An insurance policy is an insurancedocument evidencing insurance has beentaken out on the goods shipped, and itgives full details of the insurancecoverage. An insurance certificate

certifies that the shipment has beeninsured under a given open policy and isto cover loss of or damage to the cargowhile in transit.

A certificate to certify the products areconformed to a certaininternational/national technical standard,such as product quality, safety andspecifications, etc.

Insurer orInsurance

Agent orInsuranceBroker

AccreditedLaboratories


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Bill of

Lading

(B/L)

An evidence of contract between theshipper of the goods and the carrier.The customer usually needs the

original as proof of ownership to takepossession of the goods.

ShippingCompany

Transport Documents

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AirWaybill

(AWB)

Packing

List

A kind of waybill used for the carriageof goods by air. This serves as areceipt of goods for delivery andstates the condition of carriage but is

not a title document or transferable/negotiable instrument.A list providing information needed fortransportation purpose, such as details ofinvoice, 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 detailsof the goods, including packing information.

Airline

Shipper

Transport Documents

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Documentary Credit

Bill of

Exchange

(B/E) or

Draft

A bank instrument began (issuing or openingbank), at the request of the buyer,evidencing the bank's undertaking to theseller to pay a certain sum of moneyprovided that specific requirements set out in

the D/C are satisfied.

An unconditional written order, inwhich the importer addressed to and

required by the exporter to pay ondemand or at a future date a certainamount of money to the order of aperson or bearer.

Issuing Bankupon anapplicationmade by theImporter

Exporter

Financial Documents

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Regulatory DocumentsThere are seven regulatory documents associated with the pre-shipment

stage of the export transaction. They are:

1. GRE 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

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

4. Vehicle ticket

5. Exchange Control Declaration/GR/PP forms

6. Freight Payment Certificate

7. Insurance Premium Payment Certificate

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Government steps in by picking up a part ofthe interest burden

Interest subvention of 2 per cent on the pre-

shipment credit for seven employment-oriented export sectorTextiles including handloomsHandicraftsCarpetsLeatherGems & JewelleryMarine productsSmall & Medium exporters.

INTEREST SUBVENTION

SCHEME

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Post Shipment Finance is a kind of

loan provided by a financial institutionto an exporter or seller against ashipment that has already been made.

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Export Bills Purchased / Discounted

Export Bills Negotiated

Advance Against

Export Bills Sent On Collection Basis

Export On Consignments Basis

Claims Of Duty Drawback

TYPES OF POST SHIPMENT

FINANCE

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CompetitivenessExporter able to offer creditterms to buyer

Energized Cash flowsProducer receives cashfrom export proceeds upfront and can continue

production activities.

Expansion Of Client BaseExporter able toexpand client base due to availability offinancing

BENEFITS TO EXPORTERS

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A formal document issued by a bank

on behalf of customer, stating theconditions under which the bank willhonour the commitment of thecustomer

The letter of credit isalso known as bankers

commercial credit ordocumentary letter ofcredit.

L/C used in domestictrade are called inland

L/Cs. 28


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Importer or Applicant

Issuing Bank

Beneficiary

Advising Bank

Negotiating/ The Paying Bank.

PARTIES TO A LETTER OF CREDIT

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1. ContractSeller(Beneficiary)

Buyer

Applicant

2. Documentary

credit Application

ISSUING

BANK.

3. Documentary creditAdvising Bank

4. Advice of

Documentay

credit

LETTER OF CREDIT THE

PROCESS

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Open Account is aform of trade

whereby sales aremade to the buyer

without entering intoany formal contract.

The system works oncomplete trust

between buyer &

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Open Account is the most advantageous optionto the importer in cash flow and cost terms.

It is consequently the highest risk option for anexporter.

Exporters may also wish to seek export working

capital financing to ensure that they have accessto financing for both the production for exportand for any credit while waiting to be paid.

OPEN ACCOUNT

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Open account terms may be offered in competitivemarkets with the use of one or more of the followingtrade finance techniques:

1. Export Working Capital Financing

2. Export Credit Insurance

3. Export Factoring

OPEN ACCOUNT

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Pros & Cons

Pros:

Boost competitiveness in the global market.

Establish and maintain a successful trade

relationship.

Cons:

Exposed significantly to the risk of nonpayment

Additional costs associated with risk mitigation

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TARGET VENDOR

BANK

Purchase order

Goods

OPEN ACCOUNT PROCESS

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Financial transaction

whereby a business

sells its accountsreceivable to a thirdparty called a factor

(financial institution) at

a discount in exchangefor immediate moneywith which to financecontinued business.

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Customer Client

Factor

(1) Credit Sale

of Goods

(2) Invoice

(3)

Submit

Invoice

Copy(4)Payment

upto 80%

initially

(6) Pays

the

balance

(5) Pays the amount

(In recourse type

customer pays

through client)

FLOW CHART OF FACTORING

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