export report

8/2/2019 Export Report

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AProject Report

On

EXPORT PROCEDURE OF G.J.EXPORTSAt

G.J.EXPORTS

By

Patel Kamal H.

MBA 1st

year

Roll No. : 40

SUBMITTED TO

Guided By: Faculty Guide:Mr.Subhashkumar Jindal Dr. Subhadra Ragothaman


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Declaration

I declare that the project entitled _EXPORT PROCEDURE OF G.J.EXPORTSsubmitted for the partial fulfillment of the Semester4 in Master of Business Economics[M.B.E.] in the subject of is my original work and carried it out at Department of

Economics, Veer Narmad South Gujarat University- Surat.

The project or any part of it has not been previously submitted for any degree.

Name of the Student along with signature

Date: (Sharma Prakashchandra Shyamlal )

Place:


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CERTIFICATE

This is to certify that Mr. SHARMA PRAKASHCHANDRA S. has prepared the Project

Report entitled on "EXPORT PROCEDURE OF G. J. EXPORTS" under my guidance &

supervision.

This project embodies the result of his work and is of the standard expected of a candidate

for the award of Master of Business Economics Degree.

Date: 11 June 2011.

Place: Surat

Guided By:

(Mr. Subhashkumar Jindal)


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Acknowledgement

In carrying out this study & preparing the project report, i have been received assistancefrom all the corners. In this respect we are indeed grateful to company head,Mr.Subhashkumar Jindal and all firm member of G.J.EXPORTS, SURAT who hasgiven me such an opportunity for learning.

I express my deep sense of gratitude and sincere thanks to Mr.Subhashkumar Jindal,owner ofG.J.EXPORTS, SURAT My sincere thanks Mr. Vishal Jindal for all their co-operation & guidance throughout my training period.

I am also thankful to all the employees at G.J.EXPORTS,SURAT for giving me all theguidance regarding training and for preparing project report.

Finally, i would like to express our gratitude towards all colleagues, friends and otherswho have directly or indirectly helped during the course of training as well as in

completion of the report.

Date:11 June 2011. Sharma Prakashchandra S.


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PREFACE

One Can Not Swim Only By Reading A Book On Swimming. It Must Require APractice. Practice Makes A Man Perfect. So Theoretical Knowledge Is Only A Half Way

In Study Network, And Therefore It Should Be Supplemented By Practical Experience.

We Have Been Fortunate To Have My Project Training At G.J.EXPORTS, SURAT.This Training Has Really Made Us Aware About Practical Aspects Of Real Life BusinessSpecifically In Competitive Environment.

This Report Includes All The Relevant Information That I Have Collected DuringTraining And Also The Analysis Of The Survey Conducted For The Research.

I Am Very Glad To Present This Report. If Any Mistake Or Fault Has Occurred In TheReport, It Is Purely Due To Oversight. Any Advice And/or Suggestion Regarding ThisReport Will Be Appreciated.


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INDEX

SR NO. PARTICULAR PAGE NO.

1) INTRODUCTION 7

2) EXPORT PROCEDURE STAGES 11

3) STAGES

(A) REGISTRATION STAGE 12

(B) PRE- SHIPMENT STAGE 17

(C) SHIPMENT STAGE 38

(D) POST- SHIPMENT STAGE 54

4) BIBLOGRAPHY 57


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G.J.EXPORTS

Nature of Business:

Manufacturer, Exporter, Trader

Contact Person:Mr. Subhash Kumar Jindal

Telephone:+(91)-(261)-3076200

Mobile / Cell Phone:+(91)-9426118687

Address:Head Office

3012 to 3020, Golden Plaza Market,Ring Road,Surat

Surat, Gujarat - 395 002 (India)


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AboutWe, G.J Exports, introduce ourselves as suppliers of Fancy Ladies Dress materialslike Punjabi Suit Dupatta, Printed fabrics, Crepe fabric, Georgett fabric, Fancy

embroidery & sequence work etc. We have experience of 15 years into this business.Being in the field G.J Exports today has created a niche for itself by sticking to the corepolicy of providing Quality Products, Reasonable Pricing and Efficient Services.

We offer a wide collection of superior quality products at the most moderate price. Ourproducts hold a unique place in the national and international market, owing to theirquality, durability, reliability and above all, for their economical price. We have raised ourstandards of excellence by offering unique and creative designs that are in accordancewith the taste and preferences of our clients.

Our range of textiles are sourced from the most reliable manufacturer and can be madeavailable to the customers exactly as per the given specification.In response to the global needs of our clients, we have designed this page. A series ofBusiness Categories has been focused here. The information in this page include list ofManufacturers, Exporters, Importers, Suppliers and Service Providers doing business inthe global marketplace. Tradebiz.com not only provide a biggest platform for B2B marketbut also one can learn here about successful international business tactics.

As the economy is growing, the demand for resources is growing as well. HereTradebiz.com plays a major role in coordinating all Business persons from worldwide.Below are listed continents and countries from where you can browse different Productsand Suppliers and also other Business types. As a whole you can say that Tradebiz.comprovide the best platform to all Business person to do their Business Globally.

Our Products

G.J Exports is continuously making sincere efforts for the betterment of its products to

cater to the need of the end customer and to satisfy them through its regular research anddevelopment in the ever-changing taste and liking. Our unparalleled range of productsinclude,

Fabrics

Polyester Fabrics Georgette Fabrics Crepe Fabrics Chiffon Fabrics Satin Fabrics


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Bamboo Fabrics Modal Fabrics Viscose Fabrics Nylon Fabrics Pure Silk Fabrics Yarn Dyed Fabrics Printed Fabrics

We provide Fancy fabrics for Dress Materials like Punjabi Suit Dupatas,Western,Bridal,etc.

Quality Assurance

Quality is imbibed in every aspect of our products and methods. From the products thatwe create to the efficiency of our packaging and delivery systems, quality is omnipresentthrough the length and breadth of our business operations. It is through this emphasis oncomplete quality, that we maintain our leading position in the industry.

Customization Capabilities

We have, through the years, enhanced and refined our expertise and today have thecapability to provide our customers with products as per the requirements of our clients.Today, we have the ability to transform & flesh out the most visionary and challenging ofour customers' ideas into reality.

Infrastructure

We are outfitted with a good infrastructure, specifically equipped for checking of grey /finished/processed fabrics before the dispatch to clients, showing our niche for qualityconsciousness and high commitment towards delivering what promised.

Clients

Apart from local market we do supply directly to international markets also.

Vision

Our vision is to supply garments at competitive rates keeping quality & service intake.


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Export Procedure has consist of following stages

A. Registration stage

B. Pre-shipment stage

C. Shipment stage

D. Post-shipment stage


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A) Registration Stage

1) Obtaining Pan Number

Export income is the subject of exemptions and deductions under

Different section of income tax act. For that exporter is required to

Registered his organization with the income tax authorities and obtain the

Permanent account number.

The following document is necessary if any person want to apply for pan card.

Two passport size photos

Residency proof (here it is important that address must be write in pan card

application form what is mention in residency proof if is there any mistake in

address in residency proof than we can not change at the time of filling application

form)

Living certificate

2) Opening Bank Account


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The exporter is required to open current account in the name of firm or company with

commercial bank which is regulated by Reserve Bank of India to deal in Foreign

Exchange.

3) Obtaining Export- Import Code number (IEC No.)

Prior to 1-1-1997, it is necessary for all export trade to obtain CNX number From

RBI.

However since than CNX has been replaced by IEC number issued by the Director

General for Foreign Trade. The application form for obtaining IEC number should be

accomplished by fees of RS.1000.

No import or export is possible by any person without obtaining IEC Code number.

Therefore any person whether individual or firms or company who is engaged in export &

import of goods from India will require to obtain Import-Export Code number.

IEC code number is obtain from following Address in Surat

6th

Floors Resham Bhavan

Near lal Darwaja, Surat

4) Obtaining Sales Tax number

Whatever goods are export by Exporter is a exempted from the sales tax but for that

exporter is require to register his organization with Sales Tax Authorities.

The following documents are required if any want to obtain Sales Tax number

Copy of Pan Card

Two passport Size photo

Form number 101

Articles of Association / Memorandum of Association

List of Partner & Director

Last year purchase & sales Figure

Copy of a first Purchase bill and Sales Bill

NSC of RS.10000

25000 Rs Cash deposit if turnover is not more than Rs.5,00,000


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In Surat Sales tax office is situated near DAYALJI GARDEN, MAKKAI POOL

where the firm can obtain their sales tax numbers.

5) Registration with export council & corporation of India

The exporter should require registering with export credit and guaranteeing

corporation of India in order to secure overseas payment against the political and

commercial risks.

6) Registration with Reserve Bank of India (RBI)Prior to 1997, it was necessary for every first time exporter to obtain IEC number fromReserve Bank of India (RBI) before engaging in any kind of export operations. But nowthis job is being done by DGFT.

7) Registration with Director General of Foreign Trade (DGFT)

For every first time exporter, it is necessary to get registered with the DGFT (DirectorGeneral of Foreign Trade), Ministry of Commerce, Government of India.

DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code requiredfor the purpose of export as well as import. No exporter is allowed to export his good

abroad without IEC number.

However, if the goods are exported to Nepal, or to Myanmar through Indo-Myanmarboarder or to China through Gunji, Namgaya, Shipkila or Nathula ports then it is notnecessary to obtain IEC number provided the CIF value of a single consignment does notexceed Indian amount of Rs. 25, 000 /-.

Application for IEC number can be submitted to the nearest regional authority of DGFT.Application form which is known as "Aayaat Niryaat Form - ANF2A" can also besubmitted online at the DGFT web-site: http://dgft.gov.in.

While submitting an application form for IEC number, an applicant is required to submithis PAN account number. Only one IEC is issued against a single PAN number. Apartfrom PAN number, an applicant is also required to submit his Current Bank Accountnumber and Bankers Certificate.

A amount of Rs 1000/- is required to submit with the application fee. This amount can besubmitted in the form of a Demand Draft or payment through EFT (Electronic FundTransfer by Nominated Bank by DGFT.


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8) Registration with Export Promotion Council

It is obligatory for every exporter to register with export promotionCouncil and obtain Registration-Cum-Membership Certificate (RCMC)

The following documents are required in order to obtain RCMCCertificate

Application Form

Copy of a IEC no certificate

Copy of a PAN Card

Bank Receipt

List of Partner/ Directors

Bank certificate in order to know Financial Position of a applicants

Partnership Deed

Postal cover with Rs.25 stamps

In Surat RCMC Certificate is issued by

6th

Floor Resham Bhavan

Near lal Darwaja

Surat.

Registered under the Indian Company Act, Export Promotion Councils or EPC is a non-profit organisation for the promotion of various goods exported from India in internationalmarket. EPC works in close association with the Ministry of Commerce and Industry,Government of India and act as a platform for interaction between the exportingcommunity and the government.

So, it becomes important for an exporter to obtain a registration cum membershipcertificate (RCMC) from the EPC. An application for registration should be accompaniedby a self certified copy of the IEC number. Membership fee should be paid in the form ofcheque or draft after ascertaining the amount from the concerned EPC.

The RCMC certificate is valid from 1st April of the licensing year in which it was issued


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and shall be valid for five years ending 31st March of the licensing year, unless otherwisespecified.

9) Registration with Commodity Boards

Commodity Board is registered agency designated by the Ministry of Commerce,Government of India for purposes of export-promotion and has offices in India and

abroad. At present, there are five statutory Commodity Boards under the Department ofCommerce. These Boards are responsible for production, development and export of tea,coffee, rubber, spices and tobacco.Registration with Income Tax AuthoritiesGoods exported out of the country are eligible for exemption from both Value Added Taxand Central Sales Tax. So, to get the benefit of tax exemption it is important for anexporter to get registered with the Tax Authorities.

10) Registration with the other organization

Federation of Indian export organization (FIEO)

Indian Trade Promotion Organization (ITPO)

Chamber of Commerce (COC),

Productivity council etc..


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B) Pre-Shipment Stage

1) Obtaining the foreign buyers

It is getting very difficult these days for new units to find buyers of their own inhandicraft products. Besides whatever efforts you have been putting on

yourself, try:

- through established export houses,- your overseas contacts, if any- involve some agents/intermediaries abroad- search through internet, yellow pages, classifieds- Participate in exhibitions, fairs abroad and introduce ur products

2) Inquiry and offer

An inquiry is a request from the prospective importer about description of a goods,

their standers or grade, size, weight or quality, terms of payment etc,

After getting an inquiry exporter must proceed forward by making an offer in the

form of Performa invoice.

3) Confirmation of order

Once a negotiation is completed and terms and condition are finalized, exporter

send three copies of Performa invoice to the importer for the confirmation of

order.The importer sign this copy and send back two copies to exporter.

4) Quotation

you can build a quotation for companies with whom you do business. Thesequotations can use company information and product information you've already enteredinto Shipment Wizard, so you can rapidly create these quotation documents to quicklyrespond to your customer requests.

5) Proforma Invoice

Using the Global Wizard Shipment Wizard module, you can build proforma

invoices, sometimes called pro forma invoices. These proforma invoices can use companyinformation and product information you've already entered into Shipment Wizard, so youcan rapidly create proforma invoice documents to rapidly respond to your customerrequests.

Global Wizard can produce the proforma invoices in either portrait or landscape format ineasy-to-print Portable Document

6) Purchase Order

Using the Global Wizard Shipment Wizard module, you can build a purchase order, also

known as a PO, for companies with whom you do business. These purchase orders can usecompany information and product information you've already entered into Shipment


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Wizard, so you can rapidly create these documents to quickly respond to your customerrequests.

7) Order Confirmation

Using the Global Wizard Shipment Wizard module, you can build an order confirmation ifyour company provides this document. Order confirmations can use company information

and product information you've already entered into Shipment Wizard, so you can rapidlycreate these documents to quickly respond to your customer orders.

8) Order Acknowledgement

Using the Global Wizard Shipment Wizard module, you can build an orderacknowledgement if your company provides this document. Order acknowledgements canuse company information and product information you've already entered into ShipmentWizard, so you can rapidly create these documents to quickly respond to your customerorders.

9) Opening a letter of credit

Letter of credit is also known as a documentary credit. Letter of credit is the bestmode in order to settle the international transaction. The importer open letter of creditaccount in the favour of exporter, if agreed upon in contract. A letter from a bankguaranteeing that a buyer's payment to a seller will be received on time and for the correctamount. In the event that the buyer is unable to make payment on the purchase, the bankwill be required to cover the full or remaining amount of the purchase. Letters of credit areoften used in international transactions to ensure that payment will be received. Due to thenature of international dealings including factors such as distance, differing laws in eachcountry and difficulty in knowing each party personally, the use of letters of credit hasbecome a very important aspect of international trade. The bank also acts on behalf of thebuyer (holder of letter of credit) by ensuring that the supplier will not be paid until thebank receives a confirmation that the goods have been shipped.


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Letter Of Credit Types

There are several types of letters of credit.


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o The differences are found in the wording.

Revocable versus Irrevocable

o You should always insist and carefully check that a letter of credit isirrevocable.

Once an irrevocable letter of credit is open it cannot be changedwithout the written consent of all parties including the beneficiary.

A revocable letter of credit can be change or withdrawn withoutnotifying the beneficiary.

Confirmed versus Advised

o Confirmed is preferred, as the Confirming Bank promises to pay.o Advised does not guarantee the creditworthiness of the Opening Bank.

Straight versus Negotiation

o A negotiation letter of credit can be presented to any bank.o A straight letter of credit can only be paid in the country of the Paying

Bank.

Sight versus Usance

o At sight means the Beneficiary is paid as soon as the Paying Bank hasdetermined that all necessary documents are in order.

o Usance time can be between 30 and 180 days after the bill of lading date. This is a form of delayed payment, and should be avoided.

Requesting A Letter Of Credit

Once you have sent a pro forma invoice or an order acknowledgement to yourbuyer, you should request a letter of credit.

o Details on what such a request should contain are available from banks thathandle letters of credit.

Here is a list of items that you should ask your buyer to provide when preparing aletter of credit.
http://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/pforma.htmhttp://www.pierobon.org/export/ch12/order.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/order.htmhttp://www.pierobon.org/export/ch12/pforma.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htm


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o That the letter of credit be confirmed, irrevocable, and at sight.o Suggest a Paying Bank that is convenient to you.o Quantity of items being shipped.o Value of items being shipped.o Specify the currency.o Specify the latest shipping and expiration date.o Specify the appropriate Incoterm.

o State whether partial shipments are allowed.o Specify which documents that are required for payment.

It is best to provide the buyer with a sample form for requesting a letter of credit.

Sample Form For Requesting A Letter Of Credit

Dear International Buyer:

We are providing the following instructions as a guideline to be used whenopening a letter of credit to us. Because a letter of credit is a very criticaldocument, please verify that the information is accurate and complete, withoutany mistakes which can create a discrepancy and lead to our subsequent requestfor an amendment, and delay the shipment.

Regarding your purchase order number dated , please ask yourbank to open an irrevocable, at sight, commercial letter of credit according to thefollowing terms and conditions.
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Beneficiary Name

Beneficiary Address

Requested Advising Bank Name

Requested Advising Bank Address

Telephone Fax Swift

In the amount of US$

The letter of credit must be payable at the counters ofname of ban

or it must be

negotiable and payable at the counters of a bank incity near the s

.

The letter of credit must be in the possession of the Advising Bank and

received by us days before the agreed upon shipment date.

Shipment will occur days after an acceptable letter of credit is in thepossession of the Advising Bank.

Shipment terms are:EXW - EX WORKS

Incoterms 2000destination

Partial shipments are permitted.

Latest shipment date is . Latest expiration date is .

Documentary requirements are:

1. Signed commercial invoice originals and copies

2. Packing list originals and copies

3.

4.

Documents are to be presented within days from the shipping date.

All bank charges will be paid by the Applicant.

Receiving A Letter Of Credit


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Here is a partial list of questions you need to ask once you have received a letter ofcredit.

o Is the letter of credit irrevocable?o Is the letter of credit at sight?o Do you trust the Paying Bank?o Can you convert the currency to your currency?o Are the value and quantities correct?

o Are the shipping terms correct?o Can you provide the required documents?o Are the letter of credit fees as you had agreed?o Is the merchandise correctly described?o Is there sufficient time to meet the shipping date and expiration date?o Are the shipping terms correct?o Specify which documents that are required for payment.

Do not ship the goods if you are unable or unwilling to meet all the conditionsstated in the letter of credit.

o Request an amendment to the letter of credit.

Presenting A Letter Of Credit

Once a letter of credit has been received, it needs to presented to the bank forpayment along with other documents which may include:

o Commercial invoiceo Consular invoiceo Insurance documentso Bill of ladingo Certificate of origino Packing list

o Inspection certificateso Import permits

The bank will not pay if there are discrepancies and the documentation is not in

order. Presenting A Letter Of Credit

Once a letter of credit has been received, it needs to presented to the bank forpayment along with other documents which may include:

o Commercial invoiceo Consular invoiceo Insurance documents
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o Bill of ladingo Certificate of origino Packing listo Inspection certificateso Import permits

The bank will not pay if there are discrepancies and the documentation is not in

order.

Documentary Collection Against Payment

Documentary collection against payment is the closest international equivalent tocash on delivery.

o It is not as expensive as a letter of credit.o

The seller must ship before getting paid.o The buyer does not receive the goods until payment is made

The buyer receives the goods after signing a note promising to pay.

This promisory note may be negotiable.

There is risk with this form of payment.o The buyer may not contact the collecting bank to acknowledge acceptance.o The collecting bank is under no obligation to force such an

acknowledgement.

Open Account

An open account is an unsecured credit extended to the buyer.o It should only be used with well-established customers with excellent credit

ratings.o Payment terms should be clearly state when payment is due.

Net 30.

Because an open account is the perferred term from the buyer's perspective it iseasy to negotiate.


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Disadvantages of an open account are:o No assurance of payment.o Loss of possession of goods.o Difficulty of collection.

Minimum Guarantee

A minimum guarantee works when the buyer pays a certain minimum.o This may only cover the cost of carriage, freight and insurance.o It should only be used with well established customers with excellent credit

ratings.o A minimum guarantee works well when the price of the product fluctuates

due to market demand.o The seller has the right to inspect the buyer's records to verify all sales.

The advantange of a minimum guarantee is that the exporter has a firm order tosell.

o The price may be very low, but at least there is a minimum guarantee.o The minimum guarantee may be assured through a letter of credit.

Consignment

Consignment means the exporter is paid when the importer resells the product.o It should only be used with well established customers with excellent credit

ratings.o The exporter is entrusting its money to the sales abilities of the overseas

reseller.

Which Payment Term

Economic Stability Unstable Stable Very Stable

Type of Order Custom Regular Production In Stock
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Transaction Size Large Moderate Small

Cash Flow Always Never Never

Financing Exports Through Your Bank Here is a simple table listing factors to

consider when offering payment terms.

Factor

Require

Letter of

Credit

Consider

Documentary Collection

Against Payment

Consider

Open

Account

Type OfCustomer

Undetermined Acceptable Excellent

Relationship New Established Established

Banks like export collections because:o There is evidence of the movement of goods.o There is the likelihood of the buyer paying for the goods.

Proceeds can be used to pay the bank in advance.o There is a strong probability the transactions will be monitored

independently of the exporter.o Financing may be provided on a transaction-by-transaction basis.

Banks are more eager to lend when there is credit insurance.o Credit insurance can be obtained from government agencies established to

promote exports.

International Banks

Make sure your bank abides by the International Banking Standard Practice (IBSP)for Uniform Customs and Practice for Documentary Credits (UCP600).
http://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/doc.htmhttp://www.pierobon.org/export/ch12/doc.htmhttp://www.pierobon.org/export/ch12/open.htmhttp://www.pierobon.org/export/ch12/open.htmhttp://www.pierobon.org/export/ch8/custid.htmhttp://www.pierobon.org/export/ch8/custid.htmhttp://www.pierobon.org/export/ch4/bank.htmhttp://www.pierobon.org/export/ch4/bank.htmhttp://www.pierobon.org/export/ch8/custid.htmhttp://www.pierobon.org/export/ch8/custid.htmhttp://www.pierobon.org/export/ch12/open.htmhttp://www.pierobon.org/export/ch12/open.htmhttp://www.pierobon.org/export/ch12/doc.htmhttp://www.pierobon.org/export/ch12/doc.htmhttp://www.pierobon.org/export/ch12/loc.htmhttp://www.pierobon.org/export/ch12/loc.htm


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9) Arrangement of a pre-shipment Finance

On securing letter of credit, the exporter procures a pre-shipment finance from

his bank for procuring raw materials and other components, processing and

packaging of goods and transfer of a goods to the port of shipment.


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A pre requisite to avail of pre-shipment financing is that the Exporter should have acredit facility in place with a bank. Each bank has a credit process that determines theamount of funding the bank can give the company.

1. Who is eligible for pre-shipment credit?

An exporter who holds an export order or Letter of Credit(LC) in his own name toperform an export contract can avail of pre-shipment credit.

Banks may also grant pre-shipment advances without insisting on prior lodgmentof LCs or purchase orders. This is known as the "Running Account Facility".

2. What is the purpose of this finance?

Pre-shipment finance can be availed of only for the specific purpose of procuringraw materials / purchasing / manufacturing / processing / transporting /

warehousing / packing and shipping the goods meant for export.

3. How much financing can I as an exporter get?

This is need based financing, - which means that banks will lend an amount to you afterfactoring in a particular margin (this margin is calculated as a percentage of the value ofthe order). The margin differs from bank to bank. Margins are stipulated for the followingreasons :

to ensure that the exporter has some stake in the transaction

to cover any erosion in the value of goods, and to ensure that there is no lending against the exporter's profit margin.

The banking practice is that the exporter can obtain 90% of the FOB value of the order or75% of the CIF value of the order.

1. What is the tenor of this funding?

The RBI has allowed banks to grant this funding at a concession for a maximumperiod of 180 days. This period can be extended by the bank without referring toRBI for a further period of 90 days. Banks grant this extension in cases where theexporter faces genuine hardships in completing his order.

If an extension is required beyond 270 days (i.e. 180+90 days), the RBI has thediscretion to grant another (maximum) extension of 90 days. However, if theexports do not take place at the end of this period, the bank will charge interest

from day one, at a rate left to the banks discretion.
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2. In what currency's can the exporter obtain pre-shipment credit?

Most often the pre-shipment borrowable is in the domestic currency, in the case ofan exporter based in India, the Indian Rupee. However in some cases, the exportermay want to borrow in foreign currency because his product has a large import

component or he finds the cost of borrowing in foreign currency lower thanborrowing in the local currency. Borrowing in foreign currency is feasible whenthe cost of Rupee borrowing (less the currency premium) is greater than the cost ofborrowing in the foreign currency. This is discussed in greater detail in " whendoes foreign currency risk arise?"

This will be easier to understand with the help of an example. Let us assume thatan exporters exports and imports are both payable in US Dollars. Let us also

assume that the import component is significant at, say, 70%. In this case, theexporter is open to the effects of currency movements both at the time of import,and then at the time of export. Borrowing in USD can hence partially hedge his

currency risk on the export side, since his exports are also going to be in the samecurrency.

The above facility, allowed to exporters to avail of pre-shipment credit in foreigncurrency, is termed as Pre-Shipment Credit in Foreign Currency or PCFC.

3. What is the cost of pre-shipment finance ?

Pre-shipment credit :

Up to 180 days - 10%

Between 180270 days - 13%

Over 270 days - Commercial rates which are likely to be higher than the rateapplicable up to 270 days.

USD Lending (PCFC) - Maximum of Libor + 1.5 pct

4. What are the ways in which I can liquidate the pre-shipment finance?

The pre-shipment facility can be liquidated by proceeds of export bills negotiated,

purchased or discounted. As far as possible, banks don't encourage liquidation by debit tocash credit account.


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Another interesting thing is that, once the goods are shipped out and documents tenderedto the bank, the pre-shipment advance is converted to post-shipment advance.

In the case of PCFC credit, pre-shipment finance is liquidated by discounting bills underthe Rediscounting of Export Bills Abroad scheme. PCFC can be liquidated by

discounting of export bills, or by grant of foreign currency loans by a bank. Once theexporter avails of PCFC, he will not be eligible for post-shipment credit in rupees; he will

have to avail of post-shipment funding in the same currency in which he availed of thepre-shipment funding.

9) Production or procurement of goods

On securing the pre-shipment finance from the bank, the exporter either

arranges production of required goods or procures them from the domestic

markets as per the specification of the importer.

10)Packing and markingThen after the good should be properly packed and mark with

necessary details like port of shipment, destination, country of origin, gross and

net weight etc. Packing and marking is an essential part of delivering goods

from one place to another. Its of great importance to pack and mark your

goods proper way to have them in the right conditions in the right place.

Packing goods for export is a highly specialized job. If the goods are improper

packed and marked, the carrier will refuse to accept them, or will make qualificationsabout the unsatisfactory condition of packing in the Bill of Lading.

Packingcan be:

- external (crate, bag)

- internal (box, packet, flask, etc.)in which the goods are sold.

In case of consumer goods packing has a double function:

- protection

- advertising of a product (to attract customers)

The mainconditions of the packingusually mentioned in contract are the follows:

The equipment and spare parts are to be shipped in export sea packing meeting therequirement of each particular type of equipment. The packing is to secure full safety ofthe goods from any kinds of damage and corrosion during transportation by sea, rail wayand combined transport. The packing shall be suitable for loading by crane, by autocrats,

by tracks or manually. The seller shall be responsible for any damage to or breakage of the
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goods that may be caused by poor packing or for corrosion which may appear due toimproper or insufficient coating.

Marking should be in indelible paint with recognized kind of marks. Often there areinstructions to the crane driver: e.g. use no hooks, stow away from boilers, fragile, thisway up. The shipping marks are important for loading because the cargo, which is goingto be unloaded in the last port of call, has to be loaded first and vice versa.

The main conditions of the marking usually mentioned in contract are the follows:

The cases in which the equipment is packed are to be marked on three sides: on the top ofthe case and two non-opposite sides. The marking shall be clearly made with indeliblepaint in English and language of origin All cases which need special handling must havean additional marking (handle with care, top, do not turn over) as well as other indicationsif specific handling of a particular case is required.

Usually, when we talk of packaging, we mean the wrapping of products for display inshops such as packets of biscuits, boxes of matches and jars of jam. The term packing

refers to larger quantities packed for transport such as tea chest, crates of machinery andbarrels of wine.

Nowadays more and more goods in foreign trade are carried in large containers. But thereare still many ports and ships, which use the old kind of packing. That means that goodsare packed separately (break-bulk) and not in bulk quantities.

Inspite the fact of the automatization being so advantageous, old stile loading is still oftenused. Many goods re palletized .. The sacks or cartons re stacked on pallets which re

than lifted by crane or folk-lift trucks.

I also cant but mention the way the Exporter calculates the freight costs. The price of

sending goods by sea, the freight charges, is measured either by volume or weight. If thegoods re made by heavy materials the freight is calculated according to weight, if thegoods are made of light according to volume. The measurement ton for sea freight is40 cubic feet (over 1 cubic meter). If one ton of the goods takes up less space than 40cubic feet the freight is charged according to the weight, if more according to volume.When u export goods & want to know the cost of freight, u need to know the stowagefactor of the goods. The stowage factor is the weight of 40 cubic feet of the goods.

Big ports have changed completely in the last twenty years. Docks and ships look quite

different nowadays. Instead of forests of tall thin cranes lifting pallets, we see a fewhuge heavily built transporter cranes lifting big steel boxes. Instead of hundreds ofstevedores working in the holds and on the quayside we see no men at all; we justsee huge machines . Instead of long warehouses at the dockside, we see open spaceswith stacks of boxes. Lines of goods trains with the same boxes stand nearby. The shipsthemselves look like huge steel tanks with lots of smaller tans stacked in them.

The capital cost of containerizing ports is enormous. So the majority of ports still usetraditional methods.

Containers are steel boxes of different sizes but usually 8 by 8 by 20 or 40 feet (2.4 by

5.9 or.12 meters). This size is limited by the width of roads. But all containers are samewidth and height. This is a revolution in transport.
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The advantages are:

Handling at docks can be done mostly by machines. Ships specially designed can receivethe containers.

Very few stevedores are needed. A traditional ship took one hundred men, three to fourweeks to unload. A container ship of the same size takes twelve to fifteen men, three to

four days.

Unloading and loading a container ship is very fast. Fewer ships can deliver goods morequickly.

Packing can be done in suppliers factories. Containers neednt be opened except forCustoms inspection until they reach the customers.

Warehouses are unnecessary. Containers are waterproof and can be stacked bystraddle carriers outside in the rain.

During Ro/or transportation, containers can be handled in two ways: can be off-loadedfrom lorries belonging to traders onto slave trailers & parked to speed handling operations.Containers can also be double-stacked & than towed on board; or they can be stacked inthe marshalling areas & carried on board by folk-lift trucks. Trailers too can be parked inthe marshalling areas & then towered on board temperature controlled trailers can beconnected to the electrical plant in the ship. Small-unit containers are pre-loaded ontoslave-trailers & protected by tarpaulins if necessary these can be folk-lifted on board.Wheeled or self propelled cargo such as cars, can be driven on board & stowed in thelower hold.

Ro/or ships have lifts to take containers to upper & lower decks& can often carry as manyas 3 hundred containers & a hundred 30 foot trailers.

11)Pre-shipment inspection

Before exporting finalize goods it is necessary for the exporter should contact

export inspection agency (EIA) for obtaining an inspect certificate.

Pre Shipment Inspection

The Government of India had enacted export (quality control and inspection) act, 1963,which came into force from January 1, 1964. The Government of India had set up exportinspection councils (EIC) to provide the sound development of the export trade throughquality control and pre shipment inspection. The Government has prescribed standard ofquality and inspection of various commodities meant for export.

The Government of India notified 1057 items under the compulsory quality control andpre shipment inspection. These items related to the product group of* Engineering products

* Chemical and allied products* Food and agricultural products


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* Jute and jute products* Coir and coir products* Footwear and footwear components* Cashew* Fish and fish products

System of inspection

There are three systems of inspection. These are* Consignment inspection* In - process quality control* self- certification scheme.

Consignment inspection

Under the Consignment wise inspection system, each export consignment is inspected andtested by the recognized inspection agencies. The selection of the items is made on thebasis of statistical plan to satisfy conformity of the product with the prescribed standard.After inspection, the recognizes inspection agency issue the pre shipment inspectioncertificate to the exporter.The exporter giving the detail of the shipment to the inspection agency along with thefollowing documents at least 7 days in advance of the expected date of shipment/dispatchshould make application for pre shipment inspection.* Copy of contact* Detail of packing specification* Commercial invoice giving evidence of the FOB valve* Fee of inspection by check/Demand draft.

The inspection fee is generally 0.4% of FOB value of shipment. the inspectionagency will depute an inspector to conduct the pre shipment inspection at the expoterfactory or warehouse.

After the satisfactory completion of the inspection a certificate of inspection isissued to the exporter, which he has to submit to the export department of custom, for theclearance of export cargo.

In - process quality control

In - process quality control units are issued pre shipment inspection certificate on requestby EIA. Such units have to submit a statement of certificate issued in respect of variousshipments during a months. the statement must be submitted by 15 day of the followingmonths. the inspection fee is 0.2% of FOB value of each consignment and is to beremitted along with monthly statements.


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In - self- certification scheme

The manufacturing units which have proven record of maintenance of quality are givenhave record of maintenance of quality are given of self-certification so that they can issuepre shipment inspection certificate themselves. The unit will be well equipped with testingfacilities. The unit indenting to avail of this facility should apply to the director (inspectionand quality control). The director, while considering the application, will inspect themanufacturing unit for proper maintenance and testing facilities provided in the units,

these units are required to pay a fee at the rate of 0.1% of FOB value subject to aminimum of Rs 2500 and maximum of Rs 1 lacks in 1 year and the recognition may beextended if the manufacturing unit continues to fulfill the recognized norms.

Fumigation

The export of goods prone to infestation in storage and transit are subjected to compulsoryfumigation to ensure that the goods reach their destination in safe condition. Such goodsinclude de-oiled rice bran, crushed bones, hooves and horns.

ISI/AGMARK Units

ISI/AGMARK are invariable recognized as a mark of adequate quality foe export purpose.Products manufactured by the units, which are allowed to use ISI/AGMARK, are notrequired to be inspected by any inspection agency. The custom authorities will allow theexport of product of purpose marked ISI or AGMARK without any pre shipmentinspection certificate.

ISI/Appeal against rejection

If the consignment is not approved for export, the concerned EIA will issue a rejectionnote. An exporter can file an appeal against rejection within 10 days of the receipt ofrejection note to the EIA. The EIA will convene the meeting of the application panel toexamine the consignment, if deemed necessary. The decision of panel will be final.

Exemption from pre shipment inspection

*Export house, star export house, trading house, star trading house, premier trading househave been exempted from the preview of compulsory pre shipment inspection.* 100% EOUs and units set up in EPZ/FTZ/SEZ are exempt from pre shipment inspection

12) Central Excise clearance

The exporters are totally exempted from the payment of central excise duty.

However, exemption should be claimed in one of the following ways:

a. Export under Rebate

b. Export under bond


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13) Obtaining insurance cover

The exporter must take an appropriate policy in order to insure

Risk.

c. ECGC policy in order to cover credit risk

d. Marine Policy, if price quotation agreed upon is CIF.

What is ECGC?

Export Credit Guarantee Corporation of India Limited, was establishedin the year 1957 by the Government of India to strengthen the exportpromotion drive by covering the risk of exporting on credit.

Being essentially an export promotion organization, it functions underthe administrative control of the Ministry of Commerce & Industry,Department of Commerce, Government of India. It is managed by a

Board of Directors comprising representatives of the Government,Reserve Bank of India, banking, insurance and exporting community.ECGC is the fifth largest credit insurer of the world in terms of coverage of national exports.The present paid-up capital of the company is Rs.800 crores and authorized capital Rs.1000crores.

14) Appointment of C&F Agents

Exporting is a complex and time consuming process; the

exporter is required to appoint a clearing and forwarding agent for the smooth

clearance of goods from the customs and preparation and submission of various

export documents.

1.C&Fs (Customs Clearing and Forwarding Agent) grew out of the need to providebusinesses with smart shipping resources and provide up-to-date knowledge to get throughcustoms quickly and easily.

One of the primary jobs of a C&F is to keep your shipping costs low, by providing a range ofavailable transportation modes with services related to shipping, like packaging, and acting as

experts in clearing customs.

The best service they can provide for you is tailoring shipping needs particularly suited foryour business according to the goods that you ship and where they are sourced. For importingclients, they work to get the best mode of transportation from the manufacturer or wholesalerto the local customs office upon arrival. For exporting, they choose the best method to takegoods from your doorstep to the destinations customs office. A C&F can greatly reduce

shipping expenses and the time you spend on customs forms, etc.

3. Shipment Stages


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Export cargo can be exported to the various ways like Air, Ship, and Land. However,

Shipment by sea is a more popular and cheapest way of export.

a. Reservation of shipping space

Once the export order is finalized, the export reserve required space in the

vessel for the shipment. On accepting exporter request, shipping company

issues a shipping order.

b. Arrangement of internal transportation up to the port of

shipment

The exporter makes necessary arrangement for transportation of goods to

the port either by road or railway.

c. Preparation and processing of shipping documents

i. Letter of credit along with export contract or export order

ii. Commercial invoice

iii. Packing list or packing note

iv. Certificate of origin

v. GR form

vi. ARE-1 form

vii. Certificate of inspection where necessary

viii. Marine insurance policy

d. Customs Clearance

The cargo must be clear from the customs before it is loaded on the ship

Procedure for Clearance of Imported and Export Goods

I. Import:

Bill of EntryCargo Declaration:

Goods imported in a vessel/aircraft attract customs duty and unless these are not meant forcustoms clearance at the port/airport of arrival by particular vessel/aircraft and areintended for transit by the same vessel/aircraft or transhipment to another customs stationor to any place outside India, detailed customs clearance formalities of the landed goodshave to be followed by the importers. In regard to the transit goods, so long as these arementioned in import report/IGM for transit to any place outside India, Customs allowstransit without payment of duty. Similarly for goods brought in by particularvessel/aircraft for transshipment to another customs station detailed customs clearanceformalities at the port/airport of landing are not prescribed and simple transshipment


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procedure has to be followed by the carrier and the concerned agencies. The customsclearance formalities have to be complied with by the importer after arrival of the goods atthe other customs station. There could also be cases of transshipment of the goods afterunloading to a port outside India. Here also simpler procedure for transshipment has beenprescribed by regulations, and no duty is required to be paid. (Sections 52 to 56 of theCustoms are relevant in this regard)

2. For other goods which are offloaded importers have the option to clear the goodsfor home consumption after payment of the duties leviable or to clear them forwarehousing without immediate discharge of the duties leviable in terms of thewarehousing provisions built in the Customs Act. Every importer is required to file interms of the Section 46 an entry (which is called Bill of entry) for home consumption orwarehousing in the form, as prescribed by regulations.

3. If the goods are cleared through the EDI system no formal Bill of Entry is filed as itis generated in the computer system, but the importer is required to file a cargo declarationhaving prescribed particulars required for processing of the entry for customs clearance.

4. The Bill of entry, where filed, is to be submitted in a set, different copies meant fordifferent purposes and also given different colour scheme, and on the body of the bill ofentry the purpose for which it will be used is generally mentioned in the non-EDIdeclaration.

5. The importer clearing the goods for domestic consumption has to file bill of entryin four copies; original and duplicate are meant for customs, third copy for the importerand the fourth copy is meant for the bank for making remittances.

6. In the non-EDI system along with the bill of entry filed by the importer or hisrepresentative the following documents are also generally required:-

Signed invoice Packing list Bill of Lading or Delivery Order/Airway Bill GATT declaration form duly filled in Importers/CHAs declaration License wherever necessary Letter of Credit/Bank Draft/wherever necessary Insurance document Import license

Industrial License, if required Test report in case of chemicals Adhoc exemption order DEEC Book/DEPB in original Catalogue, Technical write up, Literature in case of machineries, spares or

chemicals as may be applicable Separately split up value of spares, components machineries Certificate of Origin, if preferential rate of duty is claimed No Commission declaration

7. While filing the bill of entry and giving various particulars as prescribed therein the

correctness of the information given has also to be certified by the importer in the form adeclaration at the foot of the bill of entry and any mis-declaration/incorrect declaration has


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legal consequences, and due precautions should be taken by importer while signing thesedeclarations.

8. Under the EDI system, the importer does not submit documents as such forassessment but submits declarations in electronic format containing all the relevantinformation to the Service Centre. A signed paper copy of the declaration is taken by theservice centre operator for non-reputability of the declaration. A checklist is generated for

verification of data by the importer/CHA. After verification, the data is submitted to thesystem by the Service Centre Operator and system then generates a B/E Number, which isendorsed on the printed checklist and returned to the importer/CHA. No originaldocuments are taken at this stage. Original documents are taken at the time ofexamination. The importer/CHA also need to sign on the final document after Customsclearance.

9. The first stage for processing a bill of entry is what is termed the noting of the billof entry, vis--vis, the IGM filed by the carrier. In the non-EDI system the importer has toget the bill of entry noted in the concerned unit which checks the consignment sought tobe cleared having been manifested in the particular vessel and a bill of entry number is

generated and indicated on all copies. After noting the bill of entry gets sent to theappraising section of the Custom House for assessment functions, payment of duty etc. Inthe EDI system, the Steamer Agents get the manifest filed through EDI or by using theservice centre of the Custom House and the noting aspect is checked by the system itselfwhich also generates bill of entry number.

10. After noting/registration of the Bill of entry, it is forwarded manually orelectronically to the concerned Appraising Group in the Custom House dealing with thecommodity sought to be cleared. Appraising Wing of the Custom House has a number ofGroups dealing with earmarked commodities falling under different Chapter Headings ofthe Customs Tariff and they take up further scrutiny for assessment, import permissibilityetc. angle.

Assessment:

11. The basic function of the assessing officer in the appraising groups is to determinethe duty liability taking due note of any exemptions or benefits claimed under differentexport promotion schemes. They have also to check whether there are any restrictions orprohibitions on the goods imported and if they require any permission/license/permit etc.,

and if so whether these are forthcoming. Assessment of duty essentially involves properclassification of the goods imported in the customs tariff having due regard to the rules ofinterpretations, chapter and sections notes etc., and determining the duty liability. It alsoinvolves correct determination of value where the goods are assessable on ad valorembasis. The assessing officer has to take note of the invoice and other declarationssubmitted along with the bill of entry to support the valuation claim, and adjudge whetherthe transaction value method and the invoice value claimed for the basis of assessment isacceptable, or value needs to be predetermined having due regard to the provisions ofSection 14 and the valuation rules issued there under, the case law and various instructionson the subject. He also takes note of the contemporaneous values and other information onvaluation available with the Custom House.


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12. Where the appraising officer is not very clear about the description of the goodsfrom the document or as some doubts about the proper classification which may bepossible only to determine after detailed examination of the nature of the goods or testingof its samples, he may give an examination order in advance of finalization of assessmentincluding order for drawing of representative sample. This is done generally on the reverseof the original copy of the bill of entry which is presented by the authorized agent of theimporter to the appraising staff posted in the Docks/Air Cargo Complexes where the

goods are got examined in the presence of the importers representative.

13. On receipt of the examination report the appraising officers in the group assessesthe bill of entry. He indicates the final classification and valuation in the bill of entryindicating separately the various duties such as basic, countervailing, anti-dumping,safeguard duties etc., that may be livable. Thereafter the bill of entry goes to AssistantCommissioner/Deputy Commissioner for confirmation depending upon certain valuelimits and sent to copyist who calculates the duty amount taking into account the rate ofexchange at the relevant date as provided under Section 14 of the Customs Act.

14. After the assessment and calculation of the duty liability the importers

representative has to deposit the duty calculated with the treasury or the nominated banks,where after he can go and seek delivery of the goods from the custodians.

15. Where the goods have already been examined for finalization of classification orvaluation no further examination/checking by the dock appraising staff is required at thetime of giving delivery and the goods can be taken delivery after taking appropriate ordersand payment of dues to the custodians, if any.

16. In most cases, the appraising officer assesses the goods on the basis of informationand details furnished to the importer in the bill of entry, invoice and other relateddocuments including catalogue, write-up etc. He also determines whether the goods arepermissible for import or there are any restriction/prohibition. He may allow payment ofduty and delivery of the goods on what is called second check/appraising basis in casethere are no restriction/prohibition. In this method, the duties as determined and calculatedare paid in the Custom House and appropriate order is given on the reverse of theduplicate copy of the bill of entry and the importer or his agent after paying the dutysubmits the goods for examination in the import sheds in the docks etc., to the examiningstaff. If the goods are found to be as declared and no other discrepancies/mis-declarationsetc., are detected, the importer or his agent can clear the goods after the shed appraisergives out of charge order.

17. Wherever the importer is not satisfied with the classification, rate of duty orvaluation as may be determined by the appraising officer, he can seek an assessmentorder. An appeal against the assessment order can be made to appropriate appellateauthority within the time limits and in the manner prescribed.

EDI Assessment:

18. In the EDI system of handling of the documents/declarations for taking importclearances as mentioned earlier the cargo declaration is transferred to the assessing officerin the groups electronically.

19. The assessing officer processes the cargo declaration on screen with regard to allthe parameters as given above for manual process. However in EDI system, all the


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calculations are done by the system itself. In addition, the system also supplies usefulinformation for calculation of duty, for example, when a particular exemption notificationis accepted, the system itself gives the extent of exemption under that notification andcalculates the duty accordingly. Similarly, it automatically applies relevant rate ofexchange in force while calculating. Thus no copyist is required in EDI system. Ifassessing officer needs any clarification from the importer, he may raise a query. Thequery is printed at the service centre and the party replies to the query through the service

centre.

20. After assessment, a copy of the assessed bill of entry is printed in the servicecentre. Under EDI, documents are normally examined at the time of examination of thegoods. Final bill of entry is printed after out of charge is given by the Custom Officer.

21. In EDI system, in certain cases, the facility of system appraisal is available. Underthis process, the declaration of importer is taken as correct and the system itself calculatesduty which is paid by the importer. In such case, no assessing officer is involved.

22. Also, a facility of tele-enquiry is provided in certain major Customs stationsthrough which the status of documents filed through EDI systems could be ascertainedthrough the telephone. If nay query is raised, the same may be got printed through fax inthe office of importer/exporter/CHA.

Examination of Goods:

23. All imported goods are required to be examined for verification of correctness ofdescription given in the bill of entry. However, a part of the consignment is selected onrandom selection basis and is examined. In case the importer does not have completeinformation with him at the time of import, he may request for examination of the goodsbefore assessing the duty liability or, if the Customs Appraiser/Assistant Commissionerfeels the goods are required to be examined before assessment, the goods are examinedprior to assessment. This is called First Appraisement. The importer has to request for firstcheck examination at the time of filing the bill of entry or at data entry stage. The reasonfor seeking First Appraisement is also required to be given. On original copy of the bill ofentry, the Customs Appraiser records the examination order and returns the bill of entry tothe importer/CHA with the direction for examination, who is to take it to the import shedfor examination of the goods in the shed. Shed Appraiser/Dock examiner examines thegoods as per examination order and records his findings. In case group has called for

samples, he forwards sealed samples to the group. The importer is to bring back the saidbill of entry to the assessing officer for assessing the duty. Appraiser assesses the bill ofentry. It is countersigned by Assistant/Deputy Commissioner if the value is more than Rs.1 lakh.

24. The goods can also be examined subsequent to assessment and payment of duty.This is called Second Appraisement. Most of the consignments are cleared on secondappraisement basis. It is to be noted that whole of the consignment is not examined. Onlythose packages which are selected on random selection basis are examined in the shed.

25. Under the EDI system, the bill of entry, after assessment by the group or first

appraisement, as the case may be, need to be presented at the counter for registration forexamination in the import shed. A declaration for correctness of entries and genuineness


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of the original documents needs to be made at this stage. After registration, the B/E ispassed on to the shed Appraiser for examination of the goods. Along-with the B/E, theCHA is to present all the necessary documents. After completing examination of thegoods, the Shed Appraiser enters the report in System and transfers first appraisement B/Eto the group and gives 'out of charge' in case of already assessed Bs/E. Thereupon, thesystem prints Bill of Entry and order of clearance (in triplicate). All these copies carry theexamination report, order of clearance number and name of Shed Appraiser. The two

copies each of B/E and the order are to be returned to the CHA/Importer, after theAppraiser signs them. One copy of the order is attached to the Customs copy of B/E andretained by the Shed Appraiser.

Green Channel facility:

26. Some major importers have been given the green channel clearance facility. Itmeans clearance of goods is done without routine examination of the goods. They have tomake a declaration in the declaration form at the time of filing of bill of entry. The

appraisement is done as per normal procedure except that there would be no physicalexamination of the goods. Only marks and number are to be checked in such cases.However, in rare cases, if there are specific doubts regarding description or quantity of thegoods, physical examination may be ordered by the senior officers/investigation wing likeSIIB.

Execution of Bonds:

27. Wherever necessary, for availing duty free assessment or concessional assessmentunder different schemes and notifications, execution of end use bonds with BankGuarantee or other surety is required to be furnished. These have to be executed inprescribed forms before the assessing Appraiser.

Payment of Duty:

28. The duty can be paid in the designated banks or through TR-6 challans. DifferentCustom Houses have authorized different banks for payment of duty. It is necessary tocheck the name of the bank and the branch before depositing the duty. Bank endorses thepayment particulars in challan which is submitted to the Customs.

Amendment of Bill of Entry:

29. Whenever mistakes are noticed after submission of documents, amendments to theof entry is carried out with the approval of Deputy/Assistant Commissioner. The requestfor amendment may be submitted with the supporting documents. For example, if theamendment of container number is required, a letter from shipping agent is required.Amendment in document may be permitted after the goods have been given out of chargei.e. goods have been cleared on sufficient proof being shown to the Deputy/AssistantCommissioner.

Prior Entry for Bill of Entry:


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30. For faster clearance of the goods, provision has been made in section 46 of theAct, to allow filing of bill of entry prior to arrival of goods. This bill of entry is valid ifvessel/aircraft carrying the goods arrive within 30 days from the date of presentation ofbill of entry.

31. The importer is to file 5 copies of the bill of entry and the fifth copy is calledAdvance Noting copy. The importer has to declare that the vessel/aircraft is due within 30days and they have to present the bill of entry for final noting as soon as the IGM is filed.Advance noting is available to all imports except for into bond bill of entry and alsoduring the special period.

Mother Vessel/Feeder vessel:

32. Often in case of goods coming by container ships they are transferred at anintermediate ports (like Ceylon) from mother vessel to smaller vessels called feedervessels. At the time of filing of advance noting B/E, the importer does not know as to

which vessel will finally bring the goods to Indian port. In such cases, the name of mothervessel may be filled in on the basis of the bill of lading. On arrival of the feeder vessel, thebill of entry may be amended to mention names of both mother vessel and feeder vessel.

Specialized Schemes:

33. The import of goods are made under specialized schemes like DEEC or EOU etc.The importer in such cases is required to execute bonds with the Customs authorities forfulfillment of conditions of respective notifications. If the importer fails to fulfill theconditions, he has to pay the duty livable on those goods. The amount of bond would beequal to the amount of duty livable on the imported goods. The bank guarantee is alsorequired along with the bond. However, the amount of bank guarantee depends upon thestatus of the importer like Super Star Trading House/Trading House etc.

Bill of Entry for Bond/Warehousing:

34. A separate form of bill of entry is used for clearance of goods for warehousing.All documents as required to be attached with a Bill of Entry for home consumption arealso required to be filed with bill of entry for warehousing. The bill of entry is assessed inthe same manner and duty payable is determined. However, since duty is not required tobe paid at the time of warehousing of the goods, the purpose of assessing the goods at this

stage is to secure the duty in case the goods do not reach the warehouse. The duty is paidat the time of ex-bond clearance of goods for which an ex-bond bill of entry is filed. Therate of duty applicable to imported goods cleared from a warehouse is the rate in-force onthe date on which the goods are actually removed from the warehouse.

(References: Bill of Entry (Forms) Regulations, 1976, ATA carnet (Form Bill of Entry andShipping Bill) Regulations, 1990 ,Uncleared goods (Bill of entry) regulation, 1972, ,CBEC Circulars No. 22/97, dated 4/7/1997, 63/97, dated 21/11/1997).


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II. Export :

For clearance of export goods, the export or his agents have to undertake the followingformalities:

(a) Registration:

35. The exporters have to obtain PAN based Business Identification Number(BIN)from the Directorate General of Foreign Trade prior to filing of shipping bill for clearanceof export goods. Under the EDI System, PAN based BIN is received by the CustomsSystem from the DGFT online. The exporters are also required to register authorizedforeign exchange dealer code (through which export proceeds are expected to be realized)and open a current account in the designated bank for credit of any drawback incentive.

36. Whenever a new Airline, Shipping Line, Steamer Agent, port or airport comes

into operation, they are required to be registered into the Customs System. Whenever,electronic processing of shipping bill etc. is held up on account of non-registration of theseentities, the same is to be brought to the notice of Assistant/Deputy Commissioner in-charge of EDI System for registering the new entity in the system.

(b) Registration in the case of export under export promotion schemes:

37. All the exporters intending to export under the export promotion scheme need toget their licenses/DEEC book etc. registered at the Customs Station. For such registration,original documents are required.

(c) Processing of Shipping Bill - Non-EDI:

38. Under manual system, shipping bills or, as the case may be, bills of export arerequired to be filed in format as prescribed in the Shipping Bill and Bill of Export (Form)regulations, 1991. The bills of export are being used if clearance of export goods is takenat the Land Customs Stations. Different forms of shipping bill/bill of export have beenprescribed for export of duty free goods, export of dutiable goods and export underdrawback etc.

39. Shipping Bills are required to be filed along with all original documents such as

invoice, AR-4, packing list etc. The assessing officer in the Export Department checks thevalue of the goods, classification under Drawback schedule in case of Drawback ShippingBills, rate of duty/cess where applicable, exportability of goods under EXIM policy andother laws enforce. The DEEC/DEPB Shipping bills are processed in the DEEC group. Incase of DEEC Shipping bills, the assessing officer verifies that the description of thegoods declared in the shipping bill and invoice match with the description of the resultantproduct as given in the DEEC book. If the assessing officer has any doubts regardingvalue, description of goods, he may call for samples of the goods from the docks. He mayalso call for any other information required by him for processing of shipping bill. He mayassess the shipping bill after visual inspection of the sample or may send it for test andpass the shipping bill provisionally.


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40. Once, the shipping bill is passed by the Export Department, the exporter or hisagent present the goods to the shed appraiser (export) in docks for examination. The shedappraiser may mark the document to a Custom officer (usually an examiner) forexamining the goods. The examination is carried out under the supervision of the shedappraiser (export). If the description and other particulars of the goods are found to be asdeclared, the shed appraiser gives a let export order, after which the exporter may

contact the preventive superintendent for supervising the loading of goods on to the

vessel.

41. In case the examining staff in the docks finds some discrepancy in the goods, theymay mark the shipping bill back to export department/DEEC group with theirobservations as well as sample of goods, if needed. The export department re-considersthe case and decide whether export can be allowed, or amendment in description, valueetc. is required before export and whether any other action is required to be taken underthe Customs Act, 1962 for mis-declaration of description of value etc.

(d) Processing of Shipping Bill - EDI:

42. Under EDI System, declarations in prescribed format are to be filed through theService Centers of Customs. A checklist is generated for verification of data by theexporter/CHA. After verification, the data is submitted to the System by the ServiceCenter operator and the System generates a Shipping Bill Number, which is endorsed onthe printed checklist and returned to the exporter/CHA. For export items which are subjectto export cess, the TR-6 challans for cess is printed and given by the Service Center to theexporter/CHA immediately after submission of shipping bill. The cess can be paid on thestrength of the challan at the designated bank. No copy of shipping bill is made availableto exporter/CHA at this stage.

(e) Octroi procedure, Quota Allocation and Other certification for Export

Goods:

43. The quota allocation label is required to be pasted on the export invoice. Theallocation number of AEPC is to be entered in the system at the time of shipping billentry. The quota certification of export invoice needs to be submitted to Customs along-with other original documents at the time of examination of the export cargo. Fordetermining the validity date of the quota, the relevant date needs to be the date on whichthe full consignment is presented to the Customs for examination and duly recorded in theComputer System. In EDI System at Delhi Air cargo, the quota information isautomatically verified from the AEPC/TEXPROCIL system.

44. Since the shipping bill is generated only after the 'let export order' is given byCustoms, the exporter may make use of export invoice or such other document as requiredby the Octroi authorities for the purpose of Octroi exemption.

(f) Arrival of Goods at Docks:

45. The goods brought for the purpose of examination and subsequent 'let export' isallowed entry to the Dock on the strength of the checklist and other declarations filed by

the exporter in the Service Center. The Port authorities have to endorse the quantity ofgoods actually received on the reverse of the Check List.


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(g) System Appraisal of Shipping Bills:

46. In many cases the Shipping Bill is processed by the system on the basis ofdeclarations made by the exporters without any human intervention. In other cases wherethe Shipping Bill is processed on screen by the Customs Officer, he may call for the

samples, if required for confirming the declared value or for checking classification underthe Drawback Schedule. He may also give any special instructions for examination ofgoods, if felt necessary.

(h) Status of Shipping Bill:

47. The exporter/CHA can check up with the query counter at the Service Centerwhether the Shipping Bill submitted by them in the system has been cleared or not, beforethe goods are brought into the Docks for examination and export. In case any query israised, the same is required to be replied through the service center or in case of CHAshaving EDI connectivity through their respective terminals. The Customs officer may pass

the Shipping Bill after all the queries have been satisfactorily replied to.

(i) Customs Examination of Export Cargo:

48. After the receipt of the goods in the dock, the exporter/CHA may contact theCustoms Officer designated for the purpose present the check list with the endorsement ofPort Authority and other declarations as aforesaid along with all original documents suchas, Invoice and Packing list, AR-4, etc. Customs Officer may verify the quantity of thegoods actually received and enter into the system and thereafter mark the ElectronicShipping Bill and also hand over all original documents to the Dock Appraiser of theDock who many assign a Customs Officer for the examination and intimate the officersname and the packages to be examined, if any, on the check list and return it to theexporter or his agent.

49. The Customs Officer may inspect/examine the shipment along with the DockAppraiser. The Customs Officer enters the examination report in the system. He thenmarks the Electronic Bill along with all original documents and check list to the DockAppraiser. If the Dock Appraiser is satisfied that the particulars entered in the systemconform to the description given in the original documents and as seen in the physicalexamination, he may proceed to allow "let export" for the shipment and inform theexporter or his agent.

(j) Variation Between the Declaration & Physical Examination:

50. The check list and the declaration along with all original documents is retained bythe Appraiser concerned. In case of any variation between the declaration in the ShippingBill and physical documents/examination report, the Appraiser may mark the ElectronicShipping Bill to the Assistant Commissioner/Deputy Commissioner of Customs (Exports).He may also forward the physical documents to Assistant Commissioner/DeputyCommissioner of Customs (Exports) and instruct the exporter or his agent to meet theAssistant Commissioner/Deputy Commissioner of Customs (Exports) for settlement ofdispute. In case the exporter agrees with the views of the Department, the Shipping Bill

needs to be processed accordingly. Where, however, the exporter disputes the view of the


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Department principles of natural justice is required to be followed before finalization ofthe issue.

(k) Stuffing / Loading of Goods in Containers

51. The exporter or his agent should hand over the exporter copy of the shipping billduly signed by the Appraiser permitting "Let Export" to the steamer agent who may then

approach the proper officer (Preventive Officer) for allowing the shipment. In case ofcontainer cargo the stuffing of container at Dock is dome under Preventive Supervision.Loading of both containerized and bulk cargo is done under Preventive Supervision. TheCustoms Preventive Superintendent (Docks) may enter the particulars of packagesactually stuffed in to the container, the bottle seal number particulars of loading of cargocontainer on board into the system and endorse these details on the exporter copy of theshipping bill presented to him by the steamer agent. If there is a difference in thequantity/number of packages stuffed in the containers/goods loaded on vessel theSuperintendent (Docks) may put a remark on the shipping bill in the system and thatshipping bill requires amendment or changed quantity. Such shipping bill also may not betaken up for the purpose of sanction of Drawback/DEEC logging, till the shipping bill is

suitably amended for the changed quantity. The Customs Preventive Officer supervisingthe loading of container and general cargo in to the vessel may give "Shipped on Board"endorsement on the exporters copy of the shipping bill.

(l) Drawal of Samples:

52. Where the Appraiser Dock (export) orders for samples to be drawn and tested, theCustoms Officer may proceed to draw two samples from the consignment and enter theparticulars thereof along with details of the testing agency in the ICES/E system. There isno separate register for recording dates of samples drawn. Three copies of the test memoare prepared by the Customs Officer and are signed by the Customs Officer andAppraising Officer on behalf of Customs and the exporter or his agent. The disposal of thethree copies of the test memo are as follows:-

i) Original to be sent along with the sample to the test agency.ii) Duplicate Customs copy to be retained with the 2nd sample.iii) TriplicateExporters copy.

53. The Assistant Commissioner/Deputy Commissioner if he considers necessary,

may also order for sample to be drawn for purpose other than testing such as visualinspection and verification of description, market value inquiry, etc.

(m) Amendments:

54. Any correction/amendments in the check list generated after filing of declarationcan be made at the service center, provided, the documents have not yet been submitted inthe system and the shipping bill number has not been generated. Where corrections arerequired to be made after the generation of the shipping bill No. or after the goods havebeen brought into the Export Dock, amendments is carried out in the following manners.

i) If the goods have not yet been allowed "let export" amendments may be permittedby the Assistant Commissioner (Exports).


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ii) Where the "Let Export" order has already been given, amendments may bepermitted only by the Additional/Joint Commissioner, Custom House, in charge of exportsection.

55. In both the cases, after the permission for amendments has been granted, theAssistant Commissioner/Deputy Commissioner (Export) may approve the amendments onthe system on behalf of the Additional /Joint Commissioner. Where the print out of the

Shipping Bill has already been generated, the exporter may first surrender all copies of theshipping bill to the Dock Appraiser for cancellation before amendment is approved on thesystem.

(n) Export of Goods Under Claim for Drawback:

56. After actual export of the goods, the Drawback claim is processed through EDIsystem by the officers of Drawback Branch on first come first served basis. There is noneed for filing separate drawback claims. The status of the shipping bills and sanction ofDBK claim can be ascertained from the query counter set up at the service center. If anyquery has been raised or deficiency noticed, the same is shown on the terminal. A print out

of the query/deficiency may be obtained by the authorized person of the exporter from theservice center. The exporters are required to reply to such queries through the servicecenter. The claim will come in queue of the EDI system only after reply toqueries/deficiencies are entered by the Service Center.

57. All the claims sanctioned on a particular day are enumerated in a scroll andtransferred to the Bank through the system. The bank credits the drawback amount in therespective accounts of the exporters. Bank may send a fortnightly statement to theexporters of such credits made in their accounts.

58. The Steamer Agent/Shipping Line may transfer electronically the EGM to theCustoms EDI system so that the physical export of the goods is confirmed, to enable theCustoms to sanction the drawback claims.

(o) Generation of Shipping Bills:

59. After the "let export" order is given on the system by the Appraiser, the ShippingBill is generated by the system in two copies i.e., one Customs copy, one exporters copy

(E.P. copy is generated after submission of EGM). After obtaining the print out theappraiser obtains the signatures of the Customs Officer on the examination report and therepresentative of the CHA on both copies of the shipping bill and examination report. The

Appraiser thereafter signs & stamps both the copies of the shipping bill at the specifiedplace.

60. The Appraiser also signs and stamps the original & duplicate copy of SDF.Customs copy of shipping bill and original copy of the SDF is retained along with theoriginal declarations by the Appraiser and forwarded to Export Department of the CustomHouse. He may return the exporter copy and the second copy of the SDF to the exporter orhis agent.

61. As regards the AEPC quota and other certifications, these are retained along withthe shipping bill in the dock after the shipping bill is generated by the system. At the time

of examination, apart from checking that the goods are covered by the quota certifications,the details of the quota entered into the system needs to be checked.


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(p) Export General Manifest:

62. All the shipping lines/agents need to furnish the Export General Manifests,Shipping Bill wise, to the Customs electronically within 7 days from the date of sailing ofthe vessel.

63. Apart from lodging the EGM electronically the shipping lines need to continue to

file manual EGMs along with the exporter copy of the shipping bills as per the presentpractice in the export department. The manual EGMs need to be entered in the register atthe Export Department and the Shipping lines may obtain acknowledgements indicatingthe date and time at which the EGMs were received by the Export Department.

64. The above is the general procedure for export