“A COMPREHENSIVE STUDY ON GENERAL PROCEDURES FOR EXPORTS AND IMPORTS”

PRESENTED ByKishore PGDM/09/19

Company Guide:Mr. Anand PurushothamanGeneral Manager, Eastern India

Objectives of the Study

To know about the present scenario in Indian Shipping Industry.

To know the procedure in exports and imports.

To know about the various agencies involved and their responsibilities.

To know how the customs duty is calculated.

Research Methodology

The data which has been collected from various sources can be categorized

into two fields mainly:-

1. Primary Data:

Primary data collected through personal interview with the employees of the

India Pvt. Ltd. and I have initiated my research going through

the whole step wise processes of its routine activities.

2. Secondary Data:

Secondary data is collected through some good articles of shipping times

and some sites from internet

Present Scenario of the Indian Shipping Industry

India has 12 major ports and 185 minor/intermediate ports. Over 90 percent by volume

and 70 percent by value of India’s overseas trade, aggregate of exports and imports, is

carried out through maritime transport along its 7617 km long coast line.

India has the largest merchant shipping fleet among the developing countries and its

merchant shipping fleet ranks 18th in the world, in terms of fleet size.

Another silver lining is the average age of the India’s merchant shipping fleet is only

12.7 years as compared to the international average of 17 years

India’s share, sadly, constitutes only 1.45% of the world’s cargo carrying capacity.

Indian shipping has remained a deferred subject till independence. Only after independence,

the development of shipping has attracted the state policy.

Freight Forwarder

• Freight forwarding is a service used by companies that deal in international or

multi-national import and export.

• While the freight forwarder doesn't actually move the freight itself, it acts as an

intermediary between the client and various transportation services.

• Sending products from one international destination to another can involve a

multitude of carriers, requirements and legalities.

• Freight forwarding plays an important role in facilitating international

trade, fulfilling a number of distinct functions.

Multi Modal Transport Operations

• Transport system usually operated by one carrier with more than one mode of transport under the control or ownership of one operator

• It involves more than one mode of transport like truck, railcar, aero plane or ship in succession to each other.

Advantages of Multimodal

• Minimizes time loss at trans-shipment points• Provides faster transit of goods• Reduces burden of documentation and formalities• Saves cost• Establishes only one agency to deal with• Reduces cost of exports

Forms of multimodal transport operation

•Land/ Sea/ Land •Road/ Air/ Road•Sea/ Air/ Sea•Rail/ Road/ Inland waterways/ Sea•Sea train/ RO-RO

Air : IATA Areas

World is divided into 3 parts for the operations of the imports or export of the

consignment through air, and these areas are called International Air Traffic

Authority (IATA) Areas. They are:

IATA Area 1

IATA Area 2

IATA Area 3

Containerization

• The process when the cargo has to be loaded first into the truck and later truck is to driven

to the port, unload the goods at the port and then into the ship at the port which

is time consuming.

• Completing the exercise, ships are detained in the port for about ten days for the entire

process of unloading and loading

• With the arrival of containerization, shippers have started stuffing into containers, at their

own place, and containers are brought to the container yard (inland container depot)

for shipment.

• More than 90% of world merchandise trade is carried by sea and over 50% of that

volume is containerized.

Break-up of Commodities Handled at Major Ports

INCOTERMS

• Inco terms are ICC's standard definitions of trade terms and are internationally recognized as indispensable evidence of the buyer's and seller's responsibilities for delivery under a sales contract.

EXW FCA FAS FOB CFR CIF CPT

SERVICES Ex Works Free CarrierFree Alongside

Ship

Free Onboard

VesselCost & Freight

Cost Insurance

& FreightCarriage Paid To

Warehouse Storage Seller Seller Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller Seller Seller

Loading Charges Buyer Seller Seller Seller Seller Seller Seller

Inland Freight BuyerBuyer/

Seller*1Seller Seller Seller Seller Seller

Terminal Charges Buyer Buyer Seller Seller Seller Seller Seller

Forwarder’s Fees Buyer Buyer Buyer Buyer Seller Seller Seller

Loading On Vessel Buyer Buyer Buyer Seller Seller Seller Seller

Ocean/Air Freight Buyer Buyer Buyer Buyer Seller Seller Seller

Charges On Arrival At Destination Buyer Buyer Buyer Buyer Buyer Buyer Seller

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer Buyer Buyer Buyer

Delivery To Destination Buyer Buyer Buyer Buyer Buyer Buyer Buyer

CIP DAF DES DEQ DDU DDP

SERVICES

Carriage

Insurance Paid

To

Delivered At

Frontier

Delivered Ex

Ship

Delivered Ex

Quay Duty

Unpaid

Delivered Duty

Unpaid

Delivered Duty

Paid

Warehouse Storage Seller Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller Seller

Loading Charges Seller Seller Seller Seller Seller Seller

Inland Freight Seller Seller Seller Seller Seller Seller

Terminal Charges Seller Seller Seller Seller Seller Seller

Forwarder’s Fees Seller Seller Seller Seller Seller Seller

Loading On Vessel Seller Seller Seller Seller Seller Seller

Ocean/Air Freight Seller Seller Seller Seller Seller Seller

Charges On Arrival At Destination Seller Buyer Buyer Seller Seller Seller

Duty, Taxes & Customs Clearance Buyer Buyer Buyer Buyer Buyer Seller

Delivery To Destination Buyer Buyer Buyer Buyer Seller Seller

• Choosing a suitable Inco-term allows the buyer and seller to negotiate a price best suited to their needs and to be confident that there will be no confusion over who pays the costs.

• Inco-terms should be decided upon in the negotiation phase of any international purchasing contract.

Approach Client for EXIM inquiry

Inquiry raised by Client for Import/Export (Sea/Air)

Make Entry in Inquiry Register

Request for quote (RFQ) to Suppliers

Supplier to quote at best rates with negotiations

Prepare Comparison Statement for Quotations received from suppliers

Select the supplier on the basis of Statement

Prepare Quote for Client and Submit to the Client

Approval of Quote from Client

Forward the Customer Confirmation to Operation Team.

Negotiations with Client

ApprovedRevision

General EXIM Process

Conti…

Received Customer Confirmation from AGM

Get Shippers Contact Details with Order Confirmation / PO from Client and inform the same to supplier and get overseas agent details

Give our overseas agents details to Shipper as well as client

Get Scan Document from Client / Shipper

Get Shipment Pickup Confirmation from Supplier/ Suppliers agent and inform it to client

Get Booking status of shipment from Supplier and forward it to client

Get Pre-Alert from Supplier and submit it to Client

Get suppliers Bill along with CAN (ensure client name appears) and submit CAN with Invoice to Client

Collect Octroi amount from the client (if applicable) and follows up with the supplier for confirmation of delivery.

Get set of Bill of Entry/ documents from supplier/CHA and forward it to client.

Follows up with the supplier for customs clearance and delivery.

Ensure Supplier/CHA files B/E and sends the checklist. Forward it to client for approval. Collect the delivery address details from client & gives to supplier./CHA

Upon checklist approval, submits the DD details to the client collect the DD and hand it over to supplier.

EXPORT PROCEDURE

Documents submitted by CHA to the customs

• Invoice.• Packing list.• Self Declaration Form Or GR Form• Acceptance of contract.• Letter of credit.• Quality Control Certificate

Lists of documents required to be submitted by the exporter to various authorities, organizations, and agencies.

To the custom authority

• Commercial invoice• SDF Form ( Original and Duplicate )• Shippers Declaration Form• Copy of the Export Contract / L/C / Export Order• Inspection certificate• AR-4 Form Export License• Export license• Weighment Certificate• Shipping bill

To the port authorities

• Port Trust Copy of the Shipping Bill• Wharf age application.

 To the bank

• Letter of credit • Commercial invoice• Bill of lading• Insurance Policy/Certificate• Bill of exchange• GR Form (duplicate copy)• Bank certificate• Export Inspection Certificate• Certificate of Origin• Shipment advice

To the Local Bank

• Copy of the invoice • Sales Contract• Bill of lading • Inspection / Analysis Report

To the EXIM Bank

• Export contract• Letter of Contract• Balance sheet of the exporter• Statement of profit and loss in the transaction covered by the export contract• Statement regarding the projections of the credit requirement.

Exporter’s incentives & drawback

Duty Free Replenishment Certificate (DFRC)

DFRC is issued to a merchant exporter or manufacturer exporter for the duty free import

of inputs such as raw materials, components, intermediates, consumables, spare parts,

including packing materials to be used for export production. Such license is given subject

of the fulfillment of time bound export obligation.

Duty Entitlement Passbook Scheme (DEPB)

an exporter may apply for credit as a specified percentage of FOB value of exports,

made in freely convertible currency. The credit shall be available against such export

products and at such rates as may be specified by the Director General of Foreign

Trade (DGFT) by way of public notice issued in this behalf, for import of raw materials,

intermediates, components, parts, packaging materials, etc.

Export Promotion Capital Goods Scheme (EPCG)

To enable manufacturer exporter to import machinery and other capital goods

for export production at confessional or no customs duties at all.

100% Export Oriented Unit

Units undertaking to export their entire production of goods and services,

may be setup under the export oriented unit (EOU) scheme.

Electronic Hardware Technology Park (EHTP) scheme,

Software Technology Park (STP) scheme,

Bio-Technology Park (BTP) scheme for manufacturer of goods,

Repair and re-making,

reconditioning,

re-engineering and

rendering of services.

Import Procedure

CALCULATION OF DUTY IN IMPORT

The duty has been calculated on the basis of assessable value.

If the shipping line does not give the freight and if party does not give the insurance amount,

Then according to the customs rule 20% on invoice value is taken as freight charges and insurance is 1.125% on invoice value.

Duty calculation is done by CHA as per the given rate of duty for a particular product.

There are six kinds of duties, which have to be paid at the time of custom clearance in case of imports those are:

Basic Custom Duty CVD Additional cess on CVD Secondary and higher cess on CVD CESS Custom sec & higher education cess Additional Custom Duty

Assessment Duty and Clearance of Goods

1. Assessment of Customs Duty

2. Appraising of goods

3. Valuation of Goods

4. Payment of Customs Duty

5. Examination of Goods

6. Out of Customs Charge Order

SUGGESTIONS

• The custom clearance for Export and Import cargo is such a long procedure where it takes

a lot of time for clearance, so the officials in the customs must be try to make their

work on time and quick.

 

• Some of the complicated procedure is custom clearance, so if we get the support

of all employees it must be easy.

 

• Documentation which is done on paper plays a major role in International competition,

if custom clearance done through online then it should be simpler with less paper movement.

 

• The IT infrastructure in the government should be much more advanced than the present.

 

• Online payments should be implemented to reduce the time, since at present the payment

is done only through DD, Cheque or in Cash which is time consuming

BIBILIOGRAPHY

Websites

www.cbec.gov.inhttp://www.gmbports.org/port_pog.htmwww.eximpolicy.netwww.nsict.co.inhttp://www.cygnusindia.com/pdfs/CONTAINERISATION%20-%20India%20and%20Global%20Scenario.pdfwww.utcoverseas.comwww.maerskline.comwww.dateyvs.comhttp://www.projectsmonitor.com/NewsImages/photo%207/Transport%20Table.jpg Articles

EXIM News Paper Daily Shipping News

Thank You……