procedure for export - import[1]

8/8/2019 Procedure for Export - Import[1]

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PROCEDURE FOR EXPORT IMPORT

By : Divya Alok



Compliance with the Legal Framework

Concluding an Export deal

Procuring/Manufacturing of goodsArranging X finance Appointing CFA agent

Arranging Cargo Insurance Booking Shipping Space

Sending Docs to C&F

agentsDispatch of goods to C7F

agents

Receipt of Docs & Cargoby C7F agents

Customs Clearance ,Completion of Port Formalities & Cargo Loading by C&F agents



Sending Docs to the Exporter by C&F agent

Sending Shipping Advice to the Importer

Claiming exportersIncentives

Presentation of Docs toNegotiating Bank

Receiving ExportIncentives Exporter Receives

Payment

Continued..



1. COMPLIANCE WITH LEGAL

FRAMEWORK

Obtaining Import/Export Code from DGFT

Registration with

EPC

Registration with Sales

Tax Authorities

Registration with

Jurisdictional Centralexcise Authorities



OBTAINING IMPORT EXPORT CODE NUMBER :

Mandatory

Required for other docs prescribed under Foreign Trade(D&R) Act 1992.

Obtained from the Regional Licensing Authority.

Number needs to be mentioned in a number of docs.

REGISTRATION WITH EXPORT PROMOTION COUNCIL:

Benefits under Export-Import Policy.

Application accompanied by self certified copy of IEC No.

Besides EPC, other bodies are :

Marine Products Export Development Authority

(MPEDA) Agriculture and Processing food Development

Authority (APEDA)

Commodity Boards :

Tea, Coffee, Spices, Jute Commission

Khadi and Village Industry.

Special Economic Zones (SEZ)



Export Promotion Agencies issue RCMC valid for 5yrs.

The exporters are required to submit the regular export returns to the

registration agencies.

REGISTRATION WITH SALES TAX AND INCOME TAX AUTHORITY :

Goods exported are exempted from State Sales Tax, Central Sales

Tax and Central Excise Duty.

Both Manufacturer and merchant exporter have option of

Resumption and Remission.

Either deposit the Central excise duty at the time of export and avail

of its refund later.

OR

Take the goods out by signing a bond with the Central excise

Authority without paying the duty.

Once the Central Excise receives the proof of shipment along with the

B/L, S/B, and ARE1/ARE2, exporters running account is credited.



2.Concluding An Export Deal

Identity & Negotiate with Importer

Confirm the deal

Receive an export Order/Contract

Examine thoroughly & ask for amendment (If any)

Receive Letter of Credit

Scrutinize thoroughly , Compare with the term of Contract , ask for Amendment ,

if needed

Receive Amended



Recommended that the export activity should comply with the

written contract rather than relying on verbal agreements to

avoid future disputes.

A substantial amount of export from India esp. in case of Gems

and Jewellery, Garments, Handicraft, Handlooms etc. are carried

out without written contracts.

Constructed Contract : When no written contract and sufficient

communication made by fax, telex, letter, pro forma invoice, L/C

etc.



3. ARRANGING EXPORT FINANCE

May avail of Packing credit facility from commercial banks in India at

concessional rates for manufacturing, purchasing and packing of

goods.

Extended to meet working capital requirement.

Pre shipment credit generally provided for : Packing credit/shipping loan in Rupees.

Packing credit advance in foreign currencies.

Advance against export incentives.

Import finance for opening L/C for the importing goods

needed as I/P manufacturing of export goods. Export credit is normally given on collateral security through a

third party guarantee or mortgage of immovable property.

The working capital requirement may be at the pre shipment or post

shipment stage.



Date of Receipt of Export Order

Date of Shipment

Date of realization of Proceeds

Pre Shipment Credit

Post- Shipment Credit



Procedure:

The exporter submits an evidence of export such as an

irrevocable L/C issued by a reputed international bank OR

confirmed order placed by the buyer.

Bank calculates the amount of Packing credit to be granted,

generally doesnt exceed the FOB value of goods.

Bank fixes 10-12% as margin (exporters contribution) andrelease the funds debiting to the Packing credit to the

exporters a/c.

The exporter would be required to send the goods through the

approved transport and forwarding agency.

Exporters are also required to take adequate insurance whilewarehousing and transport of goods.



4. PROCURING OR MANUFACTURING OF GOODS

Send Delivery Note to factory /Purchase Dep

Goods Manufactured/ Procured

Pre Shipment Inspection

Central Excise Clearance

Packing , Marking or Labeling

Dispatch of Goods to the Port



PRE SHIPMENT INSPECTION :

Before clearing for shipment, Custom authorities require

submission of an inspection certificate in compliance with the

Government rules.

Under Export Quality Control and Inspection Act 1963 about

1000 commodities under the group of fisheries, food and

agriculture, Organic and Inorganic Chemicals, jute products,light engineering etc. are subjected to compulsory pre

shipment inspection.

It can be :

In Process QC

Self certificationConsignment wise QC

To be done by the excise before sealing of consignment.

Exporter has to apply for it and attain certificate.



CENTRAL EXCISE CLEARANCE ON GOODS FOR EXPORTS :

Export of goods under claim for Excise duty rebate

Exporter first makes payment of excise duty and subsequently gets the refund.

Refund of duty paid on raw material(except Nepal and Bhutan).

Exporter has option to get goods examined at its premises by excise, such goods

are not examined at port by Customs.

Exporter prepares six copies of ARE1 / ARE2 forms and submit it to the

superintendent who deputes an inspector to carry out inspection and sealing.

Export of goods under Bond

Remove export excisable goods/ Inputs for export production without payment of

export duty.

(i) Examination of goods at place of dispatch.

(ii) Removal of goods under self certification.

(iii) Examination at the place of export.

(iv) Removal of excisable input for export production.



APPOINTMENT OF CLEARING AND FORWARDING AGENT :

Carryout a number of functions, including:

Advising exporter on choice of shipping routes.

Reservation of shipping space.Inland transportation at port.

Packing

Studying provisions of L/C or contract and take necessary action.

Warehousing insurance

Port, shipping and Customs formalities.

Arranging overseas transport service.Rendering assistance in filing claims.

Monitor movement of goods to importer.

General advisory service.

ARRANGING CARGO INSURANCE :

Soon after receiving the docs.

Liability is mentioned in the contract.

FOB & CFR - Importer

CIF Exporter

Nature of risk cover and insurable value is also specified in the contract.

Other procedural formalities such as arranging ECGC cover, COO etc are finalized at thisstage.



BOOKING SHIPPING SPACE :

While getting the Excise clearance and pre shipment inspection - Export dep. Gets the

shipping space reserved.

Shipping order is issued by the shipping company as the proof of space reservation.

DISPATCH OF GOODS TO THE PORT :

Once space reserved production dep. Arranges for transport of goods to the port.

Goods are generally consigned to the port in the name of CFA

Indian railways allot wagon on the priority basis for the transportation of export cargo tothe port of shipment.

Following docs are needed :

Railway/Lorry/Truck receipt

ARE 1/ARE 2 form

Inspection certificate

PORT PROCEDURE AND CUSTOM CLEARANCE :

Soon after receiving the cargo - initiates action to obtain custom clearance and seeks

permission of the port authorities for bringing the cargo to the shipment shed.



PORT PROCEDURES AND CUSTOMS CLEARANCE

C & F agents receives Docs from exporter

C & F agents takes delivery of cargo

C & F agents stores cargo in W/H till Shipment

C & F agents prepares S/B & submits along

with other Docs to custom house

Documentary Checks by customs Examiner who also Instructs Docks

Appraiser about extent of Physical Examination of Cargo

Cargo bought to Port Shed for Loading



Objective of customs control is :

Ensure that trade is in compliance with the various related regulations.

Ensure authenticity of the value of goods and check incorrect invoicing.

Accurately assess and collect the customs duty Customs department makes both documentary and physical examination

CFA prepares the Shipping bill and submits following docs for clearance :

Shipping Bill

Export order/ Contract

L/C (original)

Commercial InvoiceGR form

Inspection certificate (original)

ARE1 / ARE2 forms

Any other docs needed by customs

These docs are examined by appraiser for following:

Compliance to the rules, regulations and other procedural req.

Declaration of value and quantity in the Shipping Bill vis avis export

order or L/C.

After value appraisal and examination of docs, the customs appraiser makes and

endorsement on the duplicate copy of the Shipping bill and gives direction to the dock

appraiser to the extent of physical inspection required.

Except original SB, original GR form and a copy of commercial invoice all docs. are

returned to the CFA.



Port trust copy of the SB - Shed Superintendent to obtain order forcarting the cargo in

the transit shed for physical examination by the Dock Appraiser.

In case of shed cargo separete dock chalan is needed, while in the case of ship loading

dock charges are mentionad in the SB itself.

For getting the Physical examination done by the Dock Appraiser, following docs are

needed :

Shipping Bill

Commercail Invoice

Packing List

Inspection certificate

ARE1 / ARE2 forms

GR form

After physical examination - Dock appraiser endorses LET EXPORT on the duplicate

copy of the SB.

CFA presents this SB to - Preventive Officer

Officer supervises the cargo loading in the vessel, examines and checks the content,

weight etc.Makes an endorsement of LET SHIP on the duplicate copy of the SB.

Authorizes the shipping company to accept cargo in the vessel for shipment.

After loading on board Master of the vessel issues the Mates receipt to the Shed

Superintendent of the port.

CFA takes the Mates receipt after the payment of port charges.



Mates receipt - presented to Preventive officer, who certifies that shipment has

taken place and mentions it on all the copies of the SB, ARE 1/ ARE 2 etc.

The Mates receipt then presented to the shipping company to issue Bill of Lading.

DISPATCH OF DOCUMENTS TO THE EXPORTER :

After receiving the B/L, the CFA sends the following docs to the exporter :

Full set of `clean on board B/L

Copies of commercial invoice attested by customs.

Duty drawback copy of the SB

Original export order / contract.

Original L/C

ARE1/ARE2 forms

GR forms

SENDING SHIPMENT ADVICE :

Send to Importer Date of Shipment, Name of the vessel and its ETA

Shipment Advice is accompanied by the commercial invoice, Packing List, non

negotiable copy of the B/L to enable the importer to take delivery of the goods.



PRESENTATION OF DOCUMENTS AT THE BANK:

Complete set of docs presented to the bank after shipment.

Bank scrutinizes all docs and forward to the issuing bank .

Payment made by the bank on the receipt of the docs.

Once the payment is received by the importers bank, the duplicate copy of the GR form

is directly transmitted by the exporters bank to the Exchange control Department of the RBI

Exporter is returned the original copy of the bank certificate.

The authorised dealer forwards the duplicate copy of the bank certificate to the

jurisdictional DGFT office.

CLAIMING EXPORT INCENTIVES:

Soon after shipment, exporter claims for incentives.

Claiming excise rebate :

Exporter or the CFA files claim with the maritime commissioner of the central excise

authority in the port town or jurisdictional Central Excise Authority.Refund of the Excise duty paid credited in the personal ledger A/C (PLA)

discharge of bond liability.

The duplicate copy of the ARE1/ARE2 certified by the customs and the B/L or the SB

are the only docs required for the purpose.



Receiving Duty Draw back:

Application to the drawback department of the customs.

Submitting drawback claim pro forma, bank or custom certified copy of the

commercial invoice and non negotiable copy of the B/L.

procedure for export - import[1]

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