export-import procedure from seaport

8/3/2019 Export-import Procedure From Seaport

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Onkar Singh Bhati/AMET University. Chennai Page 1

EXECUTIVE SUMMARY

Water transport refers to movement of goods and passengers on waterways by using

various means like boats, steamers, launches, ships, etc. With the help of these means goods and

passengers are carried to different places, both within as well as outside the country. Within the

country, rivers and canals facilitate the movement of boats, launches, etc. Since the goods and

passengers move inside the country, this type of transport is called inland water transport. When

the different means of transport are used to carry goods and passengers on the sea route it is

termed as ocean transport.

As given above waterway is one of the cheapest and easiest way of transport goods and

passengers but in my report i only consider the goods transported by the waterway transportation

and hoow the ports helps to the import and export of the goods from the port.

What all are the value which country imported or exported form of to other countries and

what amount of share is given by seaport of the country to transport or import-export of the

goods or cargo.

And in my give project i have done detailed study on the import export from the seaport

in the india and also done the research study on import export procedure from the port for the

particular cargo.


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CHAPTER :- 1

INTRODUCTION


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INTRODUCTION ABOUT INDIAN SHIPPING INDUSTRIES

Shipping plays an important role in the Indian economy. Approximately 95% ofIndias

international trade by volume and 70% by value is seaborne. Shipping has a multiplier effect on

the economy & creates employment. Although shipping plays a major role in facilitating the

countrys international trade (sea borne trade ac-counts for 32% of the countrys foreign trade),

the same cannot be said for the Indian shipping industry. Indian shipping companies collectively

owned about 704 vessels with 8.3 million gross tonnage (GT) or around 13.75 million

deadweight tonnage. India ranks 15th in the world by flag of registry forming approxi-mately

1.5% of the total world tonnage with a favourable average age as compared to the world fleet.

Contrib-uting approximately 0.3% to the countrys GDP, share of the Indian shipping industry in

Indias sea borne trade has declined from 40.7% in FY1988 to around 30-32% over the last few

years. In terms of Indias overseas trade, the share of Indian shipping industry is only around

14% (comprising 5.6% for general cargo, 8% for dry bulk, 27% for POL and products). The low

share of Indias shipping industry in Indias seaborne trade is largely on account of policies

which have affected the industrys competitiveness vis--vis foreign companies. Thus, although

shipping as a service is of tremendous importance, the Indian shipping industry has only

moderate importance in the country. India is naturally endowed with a long coastline spanning

7,517 km wherein the countrys 13 major ports and around 200 non-major ports (including

minor, intermediate and captive ports) are located across nine maritime States. Of the non-major

ports, around 66 are operational and these are mainly in the States of Gujarat, Andhra Pradesh,

Goa, and Maharashtra. The distinction between major and minor ports is done not according to

size but on the basis of who they are administered by. The major ports are administered by the


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Central Government while the non-major ports are controlled by the State Governments

concerned either directly or through State maritime boards. Most of the major ports (except

Ennore) are trusts while the minor ports are corporate entities, generally special purpose vehicles

(SPVs). Tariff setting for all the major ports (except Ennore) is done by the Tariff Authority for

Major Ports (TAMP), which sets the ceiling tariffs that can be levied on the basis of a normative

cost plus return on capital employed. The minor ports on the other hand enjoy tariff setting

flexibility and price their services on the basis of market conditions, port facilities, capital costs,

and such other factors. Up to the 1990s, port activity in India was dominated by the Government

sector, with the major ports accounting for most of the cargo handled. This was so because of the

capital intensive nature and the long gestation period associated with port investments, besides

the criticality of ports from the trade and security points of view. However, the problems

of capacity constraints, performance inefficiencies, increasing demand from the countrys

industrial and trading activities and the large scale investment requirements necessitated the

privatisation of the sector. Post-liberalisation, the participation of private players (domestic as

well as global entities) in the port sector has been encouraging, as is evident from their

investments in greenfield commercial and captive ports and in various port related logistics and

support activities. Even the major ports now appear to be tilting towards a landlord port model

wherein most operations and new development would be outsourced to private players under

PPP arrangements.


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Cyclicality

As international trade tends to be cyclical, demand for shipping services is also cyclical.

High cyclicality of the industry is reflected in volatile freight rates. The shipping industry is

generally characterised by a continu-ous demand-supply imbalance. Demand depends on factors

such as volume of trade, shifting global trade patterns, regional disparities, oil price

developments for tankers, and regulatory interventions. Supply invari-ably follows demand, with

growing demand positively impacting freight rates and encouraging new shipbuild-ing activity.

The stock of vessels can be influenced by changes in scrapping of old vessels or changes in the

stream of new builds. The delivery of new vessels can be one or several years after the order and

as such time-lags in vessel deliveries influence market dynamics. In a scenario of depressed

freight rates, lower revenues can lead to the elimination of marginal players as well as influence

the scrapping of old ships. Owing to highly cyclical demand and capital intensive nature of the

business (ships can cost anything between US$20-200 million depending upon size and

specification), shipping companies frequently buy and sell ships to adjust their asset and expense

base in light of expected demand conditions. Typically, ships are sold/scrapped when the

companies stop recovering the variable costs. Prices of ships also tend to be cyclical and timing

of ship sale/purchase can be an important determinant of profitability. Therefore, if effec-tively

managed, ship buying and selling can neutralise the demand cycles to some extent.


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SENSITIVITY OF INDUSTRY TO GOVERNMENT POLICIES

Indias shipping industry is governed by the Ministry of Shipping, which encompasses

within its fold shipping and port sectors which include shipbuilding and shiprepair, major ports,

national water-ways and inland water transport. Until recently, the Government had not

responded to the industrys demands for rationalisation of the taxation structure. However, this

has changed with introduction of tonnage tax scheme. Government has rationalised the fiscal

regime for the industry by introducing the Tonnage Tax system from FY2005, in order to

provide Indian shipping industry a level playing field vis--vis international shipping companies

and also facilitate the growth of Indian tonnage. This regime aligns the income tax incidence on

shipping in-comes of Indian industry to levels applicable to most of the global shipping tonnage.

However, permission to register ships in Flag of Convenience (FOC) countries is still awaited.

This raises the costs for Indian-shipping companies in relative terms and affects the industrys

competitive position adversely, which is reflected in its declining market share. However, even

so, the downside risk (arising out of adverse policy developments) on this front appears limited.


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COMPANY PROFILE MUNDRA PORT & SEZ(ADANI GROUP)

INTRODUCTION

Adani Group is a business behemoth based in India having a global footprint with

interests in Infrastructure, Power, Global Trading, Logistics, Energy, Port & SEZ, Mining, Oil &

Gas, Agri Business, FMCG products, Real Estate Development, Bunkering, et al. It is a name

well established among the distinguished corporate entities of India, with a young and highly

motivated taskforce of professionals who are a prized asset of the organisation.

Founded in 1988 with a capital of INR 500,000, Adani Enterprises Ltd. (formerly known

as Adani Exports Ltd.) is today the flagship company of the Adani conglomerate which posted

INR 260 billion revenue in the previous financial year.

The Adani Group has many distinctions to its merit:

* Operator of the largest private port in India

* Developer of the largest multiproduct SEZ in India

* Owns the largest edible oil refining capacity in India

* One of the largest trading houses in India

* Largest Integrated Coal Management Firm in India

* Promoter of Indias first supercritical technology based power plant

* Operator of the worlds largest automated import Coal Terminal having 60 MnT

capacity


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Vision

The Adani Group is engaged in a continuous endeavour to maximise the realisation of

potential in its employees and market opportunities by synergising the multiple ventures of the

Group; thus creating an optimum business model that benefits both, stakeholders and society.

CORPORATE COMMANDMENTS :

* To be driven by excellence at all levels

* To approach all aspects of the business innovatively

* To be intensely competitive in all endeavours

* To constantly raise the bar

* To be a globally preferred business associate

* To be committed to the welfare of employees and stakeholders

* To adopt universal best practices in corporate governance

* To be a responsible business entity towards society and the environment

Mission

To assimilate knowledge, develop capabilities and manage collective enterprise to profitably tap

global business opportunities for the maximal benefit of everyone associated with Adani.


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SCOPE OF THE STUDY

Having narrowed the scope to water transportation ports, it is our next objective to

identify where the Port "begins and ends." Typically, a "Port" includes the harbor facility and

related channels connecting it to at ocean or gulf. The facilities include wharves, docks, storage

facilities, mechanical devices for handling cargo, parking facilities, and more.

Traffic in the waterways includes liners, tramp steamers, barges, tugboats, lightering

vessels, supply boats, crew boats, and repair boats to name only some of the vessels. Services

provided include port pilots, ships chandlers providing everything from cable to toilet paper, and

mobile repair units to repair vessels before entering port.

Various facilities are available along the waterways from drydocks to warehouses;

however, the "Port" is extended to include operations contained in a "Commercial Zone." (In

Houston this zone includes an area within a 50-mile radius of the Houston Port facilities.) The

Commercial Zone contains various related activities such as stevedores, cartage haulers,

container terminals, packing facilities, foreign freight forwarders, customs brokers, warehouses,

shipping lines and agents, rail transportation, and container trucking. Miscellaneous servicemen

related to the port include electricians, mechanics, tire repairmen, and travel agents. Nearly any

conceivable occupation or industry is represented by activity at the port.


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CHAPTER :- 2

RESEARCH METHODOLOGY


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RESEARCH METHODOLOGY

Research is an art ofscientific investigation. The advanced Learners Dictionary of current

English lays down the meaning of research as A careful investigation or inquiry specially

through search for new facts in any branch of knowledge. Research is an academic activity and

as such the term should be used in a technical sense. According to Cliffor Woody Research

comprises defining and redefining problems, Formulating hypothesis of suggested solutions;

collecting, organizing and evaluating data, making deductions and reaching conclusions; and at

last carefully testing the conclusions to determine whether they fit the formulating hypothesis.

A.RESEARCH OBJECTIVES To understand the overall process of EXIM trade To identify the role of seaport in indias EXIM trade To analyze the cargo potential of in the EXIM trade To identify the seaport efficiency with the help of improved infrastructure facilities. To understand the government regulations in India for EXIM trade.

B.RESEARCH DESIGNA research design is the arrangement for the collection and analysis of data in a manner that

aims to combine relevance to the research purpose with economy in procedure.In fact, the

research design is the conceptual structure within which research is conducted; it constitutes the

blue print for the collection, measurement and analysis of data.


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A. Type of research

Type of research is exploratory. The objective of the exploratory research is the development

of hypothesis rather than their testing.

C.SOURCE AND TYPE OF DATASources of data can be classified into two types. They are

Primary data Secondary data

a. Primary data

The primary data are those, which are collected afresh and for the first time, and thus

happen to be original in character. In this research primary data is not collected becouse the

research topic is extreamly wide and the time and area give is not sufficient for the research.

b. Secondary data

Secondary data means data that are readily available i.e., they refer to the data, which

have already been collected and analyzed by someone else. In this research secondary data is

mainly collected through

Reports prepared by research scholars Public records and statistics Reports and publications journals


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Books, Magazines and newspapers Internet

D.RESEARCH TOOLThe reaseach tools means the way or the technique or the equipments which all are used in

the research of the perticular subject like questionnaire, interview, etc.

E.DATA ANALYSISAnalysis of data is a process of inspecting, cleaning, transforming, and modeling

data with the goal of highlighting useful information, suggesting conclusions, and

supporting decision making. Data analysis has multiple facets and approaches,

encompassing diverse techniques under a variety of names, in different business, science,

and social science domains.

All the data given in the report is mainly exploratory data so all the data analysis

is done by exploratory method of data analysis.

F.LIMITATIONS OF THE STUDYThere were certain limitations to the research that the researcher has forced:-

Lack of sufficient data Companies do not ready to share their information The Time was the major constraint for the researcher in collecting the data.


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The topic of the study is really wide so that individual could not able to getaproperiate data.


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CHAPTER :- 3

REVIEW OF LITERATURE


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KEY TRENDS - DEMAND AND SUPPLY

Past trend in cargo growth robust except in 2008-09; outlook favourable for

medium to long term: Cargo traffic at Indian ports reported a compounded annual growth rate

(CAGR) of 10% from 579 million metric tonnes (mmt) in 2005-06 to around 846 mmt in 2009-

10, being driven by the growth in GDP and in trading activities (exports and imports). Traffic

flows posted a CAGR of 16% over the period 2005-06 to 2009-10 at non-major ports and of 7%

at the major ports (the lower growth rate of the latter to be seen in the context of a larger base).

After being on a consistently upward trajectory with yoy growth in the range of 10-12%, fiscal

2008-09 proved weak for the port sector with cargo volumes growing by a meagre 1% because

of the overall weak macroeconomic environment, global recessionary conditions, and fall in

trade activity and cargo movement. While the major ports were able to post a 2% yoy growth in

2008-09, cargo volumes at the non-major ports dipped 1% yoy that year. However in 2009-10,

volume growth rebounded following a pickup in economic activity and reported a 15% yoy

increase over 2008-09 with cargo volumes up by a substantial 41% yoy at the non-major ports

and by a 6% yoy at the major ports. In 2009-10, the major ports accounted for 66% of the total

cargo handled and the non-major ports for the rest 34% (the latters share being on a consistently

upward trend). (Refer Figures 1 and 2 for cargo volumes and growth rates for the major and non-

major ports.) Among the major ports, Kandla in Gujarat leads in terms of cargo volumes

(handled 79.52 mmt in 2009-10) and is followed by Vishakhaptnam in Andhra Pradesh (65.50

mmt); among the non-major ports, most of the traffic is accounted for mainly by Gujarat (206

mmt) and Andhra Pradesh (40 mmt).


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SUMMARY OPINION

Cargo growth at Indian ports was moderate in 2010-11, with the overall increase in throughput at

4% year-on-year (yoy). This resulted from the low growth in cargo volumes at the major ports

(1.6% yoy increase) because of a significant reduction in volumes of iron ore, a major cargo

category, following Karnatakas banning of iron ore exports since August 2010. Cargo growth

at the non-major ports however continued to be robust, with volumes increasing by 9% on yoy

basis. In market share terms, the non-major ports increased their share marginally from 34% of

the total cargo in 2009-10 to 35% in 2010-11. The outlook for cargo growth remains favourable,

given the robust domestic demand from key end-user industries. The main cargoes, the volumes

of which are expected to drive growth, include coal; crude oil and containers. Accordingly, port

ventures with an exposure to these cargo categories stand to gain.

The last fiscal saw the completion of the first phase of some major projects, including

the mega container transhipment terminal at Vallarpadam (Kochi), bulk terminals at Dahej;

Mundra and Hazira (all in Gujarat) while the first phase at Dhamra (Orissa), a greenfield port,

was completed in May 2011. These success stories notwithstanding, progress on the award and

execution of new projects at both the major and non-major ports remained below par because of

various systemic impediments. With many of these hurdles yet to be overcome and the

backlog of projects being large, supply addition in the port sector is expected to lag demand

growth over the medium to long term, resulting in high capacity utilisation for incumbents.

The regulatory and institutional environment in the Indian port sector is currently

undergoing changes with new laws and policy measures being formulated. The National

Maritime Agenda 2010-20 unveiled in January 2011 outlines the framework for the development


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of the port sector over the next decade and includes in its ambit capacity creation projects

(target capacity of over 3 billion tonnes by 2020 with most of the projects being executed and

funded by the private sector) and certain policy related initiatives to improve the operating

efficiency and competitiveness of Indian ports. The Draft Port Regulatory Authority Bill,

2011, inter alia seeks to bring tariffs and the performance of non-major ports under regulatory

purview, and these proposals if accepted could have an adverse impact on the business and

financial risk profiles of non-major ports that have hitherto enjoyed high pricing flexibility

and operational freedom. This apart, policies relating to regulation of monopoly in the port sector

and captive port projects, have been framed and certain initiatives have been taken for

improvement in the operating environment for the port sector including review and proposed

refinement of the Model Concession Agreement; review of the tariff setting process; and

facilitation of land acquisition through the Land Acquisition Bill 2011 amongst others.

While the favourable demand -supply scenario in the Indian port sector augurs well for

industry participants, from a credit perspective ICRA believes that its rated portfolio of

companies is faced with certain challenges the most prominent of which include: project

execution risks given that many companies are in a moderate to large scale capital expenditure

mode; the hardening interest rate environment; regulatory risks emanating from an evolving

policy environment; cargo concentration risk particularly for entities having a high exposure to

iron-ore cargo given the ongoing uncertainties on iron-ore mining activities in various states;

possibility of temporary capacity overhang in some cargo segments and incremental risks

associated with expansion in scope of business/inorganic growth.


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CARGO TRENDS & OUTLOOK

Cargo growth moderates in 2010-11 following decline in iron ore volumes: Cargo traffic

at Indian ports increased to 883 million tonnes (mmt) in 2010-11 from 850 mmt in 2009-10. The

lower yoy increase in cargo at 4% in 2010-11 (14% yoy growth in 2009-10) may be attributed

partly to the larger cargo base and partly to the low growth (2% yoy in 2010-11) in the volume of

cargo handled by the major ports. The weak performance of the major ports followed mainly the

decline in volumes of one of the principal commodities, iron ore, by 13% yoy to 87 mmt in

2010-11 from 100 mmt in 2009-10 with iron ore exports being banned in Karnataka. The non-

major ports on the other hand reported a 9% yoy increase in cargo volumes and as a result gained

market share (35% in 2010-11 as against 34% in 2009-10). Over the five-year period from

2005-06 to 2010-11, cargo at Indian ports reported a 9% compounded annual growth rate

(CAGR), with the major ports achieving a CAGR of 6% and the non-major ports of 15% (refer

Figures 1)


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FIGURE 1: CARGO VOLUMES AT INDIAN PORTS

Among the major ports, Kandla in Gujarat continued to lead in terms of cargo volumes

(82 mmt in 2010-11, at 3% yoy growth) followed by Vishakhapatnam in Andhra Pradesh (68

mmt at 4% yoy growth). While cargo volumes at all the major ports increased in 2010-11,

although in single digits, the volumes at New Mangalore and Paradip reported a dip of 11% and

2% yoy respectively, primarily because of their high exposure to iron ore. Among the non-major

ports, Mundra Port and Special Economic Zone Limited located in Gujarat was the largest

operator (52 mmt in 2010-11), followed by Essar Ports (40 mmt) which has two facilities at

Vadinar and Hazira , both located in the state of Gujarat.

0

100

200

300

400

500

600

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Mejor Ports

Non-Mejor Ports


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By cargo mix, petroleum, oil & lubricants (POL) continued to account for the largest

share of 32% in 2010-11 (31% in 2009-10), followed by containers (20% against 18%). The

share of iron ore dipped from 18% to 15% of the total volumes over the same horizon while the

share of coal remained stable at 13%. (Refer Figure 3 for the cargo composition at major

ports.) Over the period April-July 2011, the major ports have cumulatively handled cargo

volumes of 193 mmt, which marks a 5% increase over the corresponding previous. While

volumes of iron ore and fertilisers have seen a decline (12% and 46%, respectively) during this

period, the increase in volumes of coal (20%) and fertiliser raw material [FRM] (18%) have

enabled an overall growth in throughput.ICRAs view on cargo growth over the medium to long

term remains positive based on the level of activities in the key end-user industries. Going

forward, growth of traffic at Indian ports is expected to be driven mainly by higher volumes of

coal (to meet the requirements of the large number of current and proposed thermal power

projects based on imported coal); containers (given the market under-penetration and potential

for cost savings); crude oil and POL (large upcoming refinery capacity); fertilisers (strong

domestic demand and low self-sufficiency); and steel (mega projects proposed in the eastern part

of the country). In line with the expected growth, most of the incremental investments in port

capacity are being designed to specifically service these cargo categories. In this regard, it may

be noted that most of the expected traffic growth in India is largely based on domestic demand

drivers that are fundamentally stronger and more stable compared with international trade related

demand, which is a function of global conditions and may be volatile and uncertain. This

favourable demand environment is also expected to spur growth in various port-related logistics

and service activities although competitive pressures in these business lines would remain high.

According to the estimates of the Ministry of Shipping (MoS), cargo volumes in India are


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expected to breach the 1 billion tonne mark in the current fiscal (2011-12); the 2 billion tonne

mark by 2016-17 (seven-year CAGR of 13%); and 2.4 billion tonnes by 2019-20 (10-year

CAGR of 11%). Growth at the non-major ports is expected to outpace that at the major ports,

with the former commanding a 51% share of the total cargo in a decades time. By composition,

coal (expected 10-year CAGR of 18%) and containers (expected10-year CAGR of 15%) are

expected to drive much of the growth, as Table 1 shows. Thus, port ventures with a higher

exposure to these cargo categories are favourably placed.

FIGURE 2: CARGO PROFILE AT MEJOR PORTS 2009-2010

In terms of cargo composition, Indias basket over the years has diversified from

the traditional crude oil and iron ore to other cargo categories including coal, petroleum, oil &

lubricants (POL), and containers. In 2009-10, of the total traffic handled at the major ports, POL

accounted for the maximum at (32%), followed by containers (20%); iron ore (15%), and coal

(13%), as Figure 3 shows. Going forward, ICRA expects cargo growth to continue on an

% Share

POL

IRON ORE

COAL

Containers

Fertilisers & Fertiliser Raw

Materials

Other


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upward trajectory over the medium to long 13% Fertilisers & Fertiliser Raw Materials 3%

Source: Industry and ICRAs Analysis 18% term, given the ongoing and proposed

investments in the key user segments. The cargoes that are expected to drive growth include

(i) coal; (ii) containers; (iii) crude oil and POL; (iv) fertilisers; and (v) steel products. (refer

Box 1). Volume of iron ore, which is one of the major export items at present would continue

to be a function of policy and any restriction or ban on iron ore fines or lumps (like the recent

one instituted by the state government of Karnataka), could impact ports and terminals, where

the share of iron ore cargo is high in the overall cargo mix. Traffic related to offshore exploration

and production activities and emerging trend of coastal shipping (for petroleum products and dry

bulk cargo) would be other revenue contributors for ports.

TABLE :1 TREND OF TRAFFIC AT VARIOUS TIME PERIODS

ERA Period MejorPorts Non-Mejor

Ports

Total Cargo(%)

Pre-

Liberalisation

1950-51

to

1990-91

20.01

To

152.85

2.50

To

12.78

22.51

to

165.63

5.20

Pre-Private

Sector

Participation

1990-91

to

2000-01

152.85

To

281.13

12.78

To

87.37

165.63

to

368.50

6.28

Post- Private

Sector

Participation

2000-01

to2005-06

281.13

to423.41

87.37

to145.53

368.50

to568.94

8.54

Projected

Traffic

2005-06

to

2013-2014

423.41

to

834.00

145.53

To

391.00

568.94

to

1225.0

11.47


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TABLE :2 INDIAS TOTAL EXPORT

Year USD- Millions Growth By Ports

2010-2011 251135.89 40.49 238578.25

2009-2010 178751.45 -3.53 169813.88

2008-2009 185295.36 13.59 176030.59

2007-2008 163132.18 29.05 154975.40

2006-2007 126414.05 22.62 120093.30

2005-2006 103090.53 97935.50

TABLE :- 3 INDIAS TOTAL IMPORT

Year USD- Millions Growth By Ports

2010-2011 369769.13 28.23 351280.55

2009-2010 288372.88 -5.05 273953.40

2008-2009 303696.31 20.68 288511.20

2007-2008 251654.01 35.49 239071.30

2006-2007 185735.24 24.52 176448.25

2005-2006 149165.73 141706.75


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TABLE :- 4 TRAFFIC HANDELED AT MAJOR PORTS 2006-07

TO 2010-11

PORT 06-07 07-08 08-09 09-10 10-11

Kolkata 12.60 13.74 12.43 13.05 12.54

Haldia 42.45 43.59 41.79 33.38 34.89

Paradip 38.52 42.44 46.41 57.01 56.03

Vizag 56.38 64.60 63.91 65.50 68.04

Ennore 10.17 11.56 11.50 10.70 11.01

Chennai 53..41 57.15 57.49 61.06 61.46

Tuticorin 18.00 21.48 22.01 23.79 25.72

Cochin 15.25 15.81 15.23 17.43 17.87

NMPT 32.04 36.02 36.69 35.53 31.55

Mormugoa 34.24 35.13 41.68 48.85 50.02

Mumbai 52.36 57.04 51.88 54.54 54.58

JNPT 44.81 55.84 57.29 60.76 64.29

Kandla 52.98 64.92 72.23 79.50 81.88

Total 463.75 521.47 532.53 562.74 569.90


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CHAPTER :- 4

EXPORT-IMPORT PROCEDURE

FROM SEAPORT


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GENERAL PROVISIONS

Goods are imported in India or exported from India through sea, air or land. Goods can

come through post parcel or as baggage with passengers. Procedures naturally vary depending on

mode of import or export. Procedures discussed in this Chapter are applicable for imports by sea,

air or land, but not as baggage or postal dispatch.

COMPUTERISATION OF CUSTOMS WORK

Work of customs at Delhi airport has been computerized. Work at Mumbai port is also

computerized. Whenever the work is computerized, documents like IGM and Bill of Entry have

to be filed electronically. Procedure in computerized environment has been specified in CC, New

Delhi PN 22/98 dated 8.5.1998. Guidelines for preparing data file for Bill of Entry and shipping

bills for Mumbai Customs House has been prescribed vide PN 108/99 dated 30-9-1999 and PN

10/2001 dated 30.1.2001.

ENTRY

Entry in relation to goods means an entry made in a Bill of Entry, Shipping Bill or Bill

of Export. It includes (a) label or declaration accompanying the goods which contains

description, quantity and value of the goods, in case of postal articles u/s 82 (b) Entry to be

made in case of goods to be exported (c) Entry in respect of goods imported which are not

accompanied by label or declaration made as per provisions of section 84. [section 2(16)].


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AMENDMENT TO DOCUMENTS

Importer, exporter or 'Person In charge' have to submit various documents to customs

authorities like Bill of Entry, Import Manifest, Export Manifest etc. Some times, it may become

necessary to amend the document due to various reasons like change in classification, clerical

mistake in document, change in unloading / loading plan of vessel etc. In such case, permission

to amend these documents have to be obtained from customs authorities. [section 149]. Such

permission can be given if there are no fraudulent intentions.

In case of bill of entry, shipping bill or bill of export, it can be amended after clearance

only on the basis of documentary evidence which was in existence at the time the goods were

cleared, warehoused or exported, and not on basis of any subsequent document. [proviso to

section 149].

CUSTOMS STATION

Imported goods are permitted to be unloaded only at specified places. Similarly, goods

can be exported only from specified area. In view of this, a definition of Customs Station is

important.

Customs area means all area of Customs Station and includes any area where imported

goods or export goods are ordinarily kept pending clearance by Customs authorities. Thus,

Customs Area could include some area even outside the Customs Station. Customs Station

means (a) customs port (b) inland container depot (c) customs airport and (d) land customs

station.

Section 7 of Customs Act empowers CBEC (Board) to appoint * Customs ports *


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Customs airports * Places for inland container depots * Coastal ports. These are appointed by

issuing a notification. Section 8 authorises Commissioner of Customs to approve proper places in

any customs port, customs airport or costal port for unloading and loading of goods or for any

class of goods and specify the limits of customs area. Thus, the place (city / town / village etc.) is

approved by CBEC, while exact location within that city / town / village is approved by

Commissioner of Customs.

IMPORT PROCEDURES

Procedures have to be followed by person-in-charge of conveyance as well as the

importer.

WHO IS 'PERSON IN CHARGE'

As per section 2(31), 'person in charge' means (a) In case of vessel - its master (b) In case

of aircraft - its commander or pilot-in-charge (c) In case of train - its conductor or guard and (d)

In case of vehicle or other conveyance - its driver or other person in charge.

The significance of this definition is

He is responsible for submitting Import Manifest and Export Manifest

He is responsible to ensure that the conveyance comes through approved route and lands

at approved place only.

He has to ensure that goods are unloaded after written order, at proper place. Loading

also has to be only after permission.


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He has to ensure that conveyance does not leave without written order of Customs

authorities.

He can be penalised for (a) Giving false declaration and statement (b) shortages or non-

accounting of goods in conveyance

PROCEDURE TO BE FOLLOWED BY THE CARRIER

The 'person in charge of conveyance' (carrier of goods) has to follow prescribed

procedure.

Arrival at customs port only - Section 29 provides that person-in-charge of a vessel

entering India shall call or land at customs port only. It can land at other place only if compelled

by accident, stress of weather or other unavoidable cause. In such case, he should report to

nearest police station or Customs Officer. While arriving by land route, the vehicle should come

by approved route to land customs station only.

Import Manifest - Person-in-charge of vessel, aircraft or vehicle has to submit Import

Manifest / Report. [also termed as IGM - Import General Manifest]. (In case of a vessel, it is

called import manifest, while in case of vehicle, it is called import report.) The import manifest

in case of vessel is required to be submitted prior to arrival of a vessel. Import report (in case of

vehicle) has to be submitted within 12 hours of arrival at the customs station. If the report /

manifest could not be submitted within prescribed time, person-in-charge or any person specified

as responsible by a notification is liable to penalty upto Rs 50,000. Such penalty will not be

imposed if the excise officer is satisfied that there was sufficient cause for the delay. [section


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30(1)].

IGM can be submitted electronically through floppy where EDI facility is available.

Import manifest is required to be submitted before arrival of vessel -

Section 30(1) of Customs Act provides that Import Manifest should be filed before arrival of

ship. Normally, the Agents submit the Import Manifest before arrival, so that maximum possible

formalities are completed before vessel arrives. This also enables importers to file Bill of Entry

in advance.

Grant of Entry Inwards by Customs Officer - Unloading of cargo can start

only after Customs Officer grant Entry Inwards. Such entry inwards can be granted only when

berthing accommodation is granted to a vessel. If there is heavy congestion at port, shipping

berth may not be available and in such case, Entry Inwards cannot be granted. This date is

highly relevant for determining rate of customs duty applicable.

Carrier responsible for shortages during unloading - If the goods are short

landed, the carrier is liable to pay penalty upto twice the amount of duty payable on such short

landed goods. It has been held that tally sheet prepared by Port Trust authorities on unloading of

goods is a statutory document and should be accepted in preference to steamer survey - Scindia

Steam Navigation v. CC - 1988 (33) ELT (CEGAT) followed in re India Steamship Co. Ltd. -

1992 (57) ELT 510 (GOI).


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PROCEDURE TO BE FOLLOWED BY THE IMPORTER

The importer importing the goods has to follow prescribed procedures for import by

ship/air/road. (There is separate procedure for goods imported as a baggage or by post.)

Bill of Entry - This is a very vital and important document which every importer has to

submit under section 46. The Bill of Entry should be in prescribed form. The standard size of

Bill of Entry is 16" 13". However, for computerisation purposes, 15" 12" size is permitted.

(Mumbai Customs Public Notice No. 142/93 dated 3-11-93).

Bill of Entry should be submitted in quadruplicate - original and duplicate for customs, triplicate

for the importer and fourth copy is meant for bank for making remittances.

Under EDI system, Bill of Entry is actually printed on computer in triplicate only after out of

charge order is given. Duplicate copy is given to importer.

Types of Bill of Entry - Bills of Entry should be of one of three types. Out of these, two

types are for clearance from customs while third is for clearance from warehouse.

BILL OF ENTRY FOR HOME CONSUMPTION - This form, called Bill

of Entry for Home Consumption, is used when the imported goods are to be cleared on payment

of full duty. Home consumption means use within India. It is white coloured and hence often

called white bill of entry.


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BILL OF ENTRY FOR WAREHOUSING - If the imported goods are not

required immediately, importer may like to store the goods in a warehouse without payment of

duty under a bond and then clear from warehouse when required on payment of duty. This will

enable him to defer payment of customs duty till goods are actually required by him. This Bill of

Entry is printed on yellow paper and often called Yellow Bill of Entry. It is also called Into

Bond Bill of Entry as bond is executed for transfer of goods in warehouse without payment

of duty.

BILL OF ENTRY FOR EX-BOND CLEARANCE - The third type is for

Ex-Bond clearance. This is used for clearance from the warehouse on payment of duty and is

printed on green paper. The goods are classified and value is assessed at the time of clearance

from customs port. Thus, value and classification is not required to be determined in this bill of

entry. The columns in this bill of entry are similar to other bills of entry. However, declaration by

importer is not required as the goods are already assessed.

RATE OF DUTY FOR CLEARANCE FROM WAREHOUSE - It may

be noted that rate of duty applicable is as prevalent on date of removal from warehouse. Thus, if

rate has changed after goods are cleared from customs port, customs duty as assessed on yellow

bill of entry and as paid on green bill of entry will not be same.

Mention of BIN on Bill of Entry - A BIN (Business Identification Number) is

allotted to each importer and exporter w.e.f. 1.4.2001. It is a 15 digit code based on PAN of

Income Tax (PAN is a 10 digit code). [Earlier an EC (Import Export code) number issued by

DGFT was required to be mentioned on Bill of Entry].


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Filing of Bill of Entry - Normally, Bill of Entry is filed by CHA on behalf of the

importer. Customs work at some ports has been computerised. In that case, the Bill of Entry has

to be filed electronically, i.e. through Customs EDI system through computerisation of work.

Procedure for the same has been prescribed vide Bill of Entry (Electronic Declaration)

Regulations, 1995.

Documents to be submitted by Importer - Documents required by customs

authorities are required to be submitted to enable them to (a) check the goods (b) decide value

and classification of goods and (c) to ensure that the import is legally permitted. The documents

that are essentially required are : (i) Invoice (ii) Packing List (iii) Bill of Lading / Delivery Order

(iv) GATT declaration form duly filled in (v) Importers / CHAs declaration duly signed (vi)

Import Licence or attested photocopy when clearance is under licence (vii) Letter of Credit /

Bank Draft wherever necessary (vii) Insurance memo or insurance policy (viii) Industrial

License if required (ix) Certificate of country of origin, if preferential rate is claimed. (x)

Technical literature. (xi) Test report in case of chemicals (xii) Advance License / DEPB in

original, where applicable (xiii) Split up of value of spares, components and machinery (xiv) No

commission declaration. - A declaration in prescribed form about correctness of information

should be submitted. - Chapter 3 Para 6 and 7 of CBE&Cs Customs Manual, 2001.

The Noting is now done electronically in large ports, while it is done manually in small ports.

Thoka Number (Serial Number) is given while noting the Bill of Entry.

Electronic submission under EDI system - Where EDI system is implemented,

formal submission of Bill of Entry is not required, as it is generated in computer system.


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Importer should submit declaration in electronic format to Service Centre. A signed paper copy

of declaration for non-repudiability should be submitted. Bill of Entry number is generated by

system which is endorsed on printed check list. Original documents are to be submitted only at

the stage of examination.

ASSESSMENT OF DUTY AND CLEARANCE

The documents submitted by importer are checked and assessed by Customs authorities

and then goods are cleared. Section 2(2) defines assessment as follows - Assessment includes

provisional assessment, reassessment and any order of assessment in which the duty assessed is

Nil. Thus, assessment includes Nil assessment.

Noting of Bill of Entry - Bill of Entry submitted by importer or Customs House Agent

is cross-checked with Import Manifest submitted by person in charge of vessel / carrier. It is

noted if the description tallies. Noting really means taking on record by customs officer. This

date is relevant for determining rate of customs duty. Thoka number (serial number) is given in

the import section. Otherwise, it is returned for clarifications. In case of EDI system, noting is

done by the system itself which also generates bill of entry number.

Date of presentation of bill of entry is highly relevant and the rate of duty as applicable on this

date will be considered for calculating the duty payable. Bill of Entry is accepted only after

proper scrutiny vis-a-vis import manifest and various declarations given in bill of entry and

attached documents like invoice, bill of lading etc. If such documents are not attached, the

authorities can refuse to accept the Bill of Entry, and hence submission of such incomplete Bill

of Entry cannot be taken as date of presentation of Bill of Entry - Simla Agencies v. CC -


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1993 (63) ELT 248 (CEGAT).

Prior Entry of Bill of Entry - After the goods are unloaded, these have to be cleared

within stipulated time -usually three working days. If these are not so removed, demurrage is

charged by port trust/airport authorities, which is very high. Hence, importer wants to complete

as many formalities as possible before ship arrives. Proviso to Section 46(3) of Customs Act

allows importer to present bill of entry upto 30 days before expected date of arrival of vessel. In

such case, duty will be payable at the rate applicable on the date on which Entry Inward is

granted to vessel and not the date of presentation of Bill of Entry, but rate of exchange will be as

prevalent on date of submission of bill of entry. - confirmed in CC, New Delhi circular No 64/96

dated 10.12.1996 and CBE&C circular No 22/97-Cus dated 4.7.1997.

Assessment of Customs duty - Section 17 provides that assessment of goods will be

made after Bill of Entry is filed. Date stamp of receipt is put on the Bill of Entry and then it is

sent to appraising department either manually or electronically

There are various Appraising groups for different Chapter headings. Each group is under an

Assistant/Deputy Commissioner. Group consists ofExaminers and Appraisers.

APPRAISING THE GOODS

Appraiser has to (a) correctly classify the goods (b) decide the Value for purpose of Customs

duty (c) find out rate of duty applicable as per any exemption notification and (d) verify that

goods are not imported in violation of any law. He can call for any further documents that may

be required for assessment. If he is of the opinion that goods have to be examined for appraisal,

he will issue an examination order, usually on the reverse of Bill of Entry. If such order is issued,


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the Bill of Entry is presented to appraising staff at docks / air cargo complexes, where the goods

are examined in presence of importers representative. Assessment is finalised after getting the

report of examination. - Chapter 3 Para 11 and 12 of CBE&Cs Customs Manual, 2001.

VALUATION OF GOODS As per rule 10 of Customs Valuation Rules, the

importer has to file declaration about full 'value' of goods. If the assessing officer has doubts

about the truth and accuracy of 'value' as declared, he can ask importer to submit further

information, details and documents. If the doubt persists, the assessing officer can reject the

value declared by importer. [rule 10A(1) of Customs Valuation Rules]. If the importer requests,

the assessing officer has to give reasons for doubting the value declared by importer. [rule

10A(2)]. If the value declared by importer is rejected, the assessing officer can value imported

goods on other basis e.g. value of identical goods, value of similar goods etc. as provided in

Customs Valuation Rules. [This amendment has been made w.e.f. 19.2.98, as per WTO

agreement. However, it has been held that burden of proof of under valuation is on department].

- - Assessing Officer should not arbitrarily reject the declared value and increase the assessable

value. He should follow due process of law and issue appealable order. - MF(DR) circular No.

16/2003-Cus dated 17-3-2003.

PAYMENT OF CUSTOMS DUTY - After assessment of duty, necessary duty is

paid. Regular importers and Custom House Agents keep current account with Customs

department. The duty can be debited to such current account, or it can be paid in cash/DD

through TR-6 challan in designated banks.


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After payment of duty, if goods were already examined, delivery of goods can be taken from

custodians (port trust) after paying their dues. If goods were not examined before assessment,

these have to be submitted for examination in import shed to the examining staff. After shed

appraiser gives out of charge order, delivery of goods can be taken from custodian.

EXAMINATION OF GOODS - Examiners carry out physical examination and

quantitative checking like weighing, measuring etc. Selected packages are opened and examined

on sample basis in Customs Examination Yard. Examination report is prepared by the

examiner.

Out of Customs Charge Order - After goods are examined, it is verified that import

is not prohibited and after customs duty is paid, Customs Officer will issue Out of Customs

Charge order under section 47. Goods can be cleared from customs area only on receipt of such

order. This is an adjudicating order within the meaning of Customs Act, even if it is passed by

Appraiser and not by Assistant Commissioner.

EXPORT PROCEDURES

Procedures have to be followed by (a) person-in-charge of conveyance and (b) the exporter.

The procedures are similar to procedures for import, of course, in reverse direction.

No stoppage of export consignment - Exports are vital for our economy. Any

stoppage in export consignment means loss of export orders to the exporter and loss of foreign


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exchange to the country. Hence, it has been provided that movement of export consignment will

not be interrupted and no export consignment shall be withheld for any reason whatsoever. In

case of any doubt, customs authorities may ask for an undertaking that the export is on sole

responsibility of the exporter. [Highlights of EXIM policy 1997-2002 as amended on 13.4.1998].

Procedures by person in charge of conveyance - Any new airline, shipping

line, steamer agent should be registered in Customs Systems for electronic processing of

shipping bills etc.

The person in charge of conveyance has to follow prescribed procedures.

Loading with permission - Export goods can be loaded only after Shipping Bill or Bill

of Export, duly passed by Customs Officer is handed over by Exporter to the person-in-charge of

conveyance. In case of baggage and mail bags, shipping bill is not necessary, but permission of

Customs Officer is required (section 40).

Export Manifest - As per section 41, an Export Manifest/Export Report in prescribed

form should be submitted before departure. [The report is popularly called as Export General

Manifest - EGM]. The details required are similar to import manifest.

PROCEDURES TO BE FOLLOWED BY EXPORTER

Export procedures have been summarized in Chapter 3 Part II of CBE&Cs Customs

Manual, 2001.


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Every exporter should take following initial steps -

Obtain BIN (Business Identification Number) from DGFT. It is a PAN based number

Open current account with designated bank for credit of duty drawback claims

Register licenses / advance license / DEPB etc. at the customs station, if exports are under Export

Promotion Schemes

Exporter has to submit shipping bill for export by sea or air and bill of export for

export by road. Goods have to be assessed for duty, even if no duty is payable for most of

exports, as Nil Duty assessment is also an assessment.

Shipping Bill to be submitted by Exporter - Shipping Bill and Bill of Export

Regulations prescribe form of shipping bills. It should be submitted in quadruplicate. If

drawback claim is to be made, one additional copy should be submitted.

Excise formalities at the time of Export - If the goods are cleared by

manufacturer for export, the goods are accompanied by ARE-1 (earlier AR-4). This form should

be submitted to customs authorities. The Customs Officer certifies that the goods under this form

have indeed been exported.

Duty drawback formalities - If the exporter intends to claim duty drawback on his

exports, he has to follow prescribed procedures and submit necessary papers. The procedures are

discussed in the chapter on Export Incentives'.


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G R / SDF / SOFTEX Form under FEMA - Reserve Bank of India has

prescribed GR / SDF form under FEMA. G R stands for Guaranteed Receipt form, while

SDF stands for 'Statutory Declaration Form). SDF form is to be used where shipping bills are

processed electronically in customs house, while GR form is used when shipping bills are

processed manually in customs house.

Other documents required for export - Exporter also has to prepare other

documents like (a) Four copies of Commercial Invoice (b) Four copies of Packing List (c)

Certificate of Origin or pre-shipment inspection where required (d) Insurance policy. (e) Letter

of Credit (f) Declaration of Value (g) Excise ARE-1/ARE-2 form as applicable (h) GR / SDF

form prescribed by RBI in duplicate (i) Letter showing BIN Number.

Examination of goods before export - After shipping bill is passed by export

department, the goods are presented to shed appraiser (exports) in dock for examination. Goods

will be examined by examiner. This inspection is necessary (a) to ensure that prohibited goods

are not exported (b) goods tally with description and invoice (c) duty drawback, where

applicable, is correctly claimed.

Let Export Order by Customs Authorities - Customs Officer will verify the

contents and after he is satisfied that goods are not prohibited for exports and that export duty, if

applicable is paid, will permit clearance. (section 51) by giving let ship or let export order.


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BIBLIOGRAPHY

A) Books

C.R.Kothari, Research Methodology,2nd Revised edition 2004

B) Magazines, Journals and Newspapers

The Hindu Business Line Times Shipping Journal

C) Online Sources

http://www.shipping.nic.in/ http://www.ipa.nic.in/ http://www.infrastructure.gov.in/ http://www.commerce.nic.in

D) Reports

ICRA Rating Feature Sep 2011(Shipping And Ports) ICRA Rating Feature Aug 2010(Shipping And Ports) ICRA Research Analysis 2006(Shipping And Ports)
http://www.shipping.nic.in/http://www.shipping.nic.in/http://www.infrastructure.gov.in/http://www.infrastructure.gov.in/http://www.infrastructure.gov.in/http://www.infrastructure.gov.in/http://www.shipping.nic.in/