LECTURE NOTES

ON

EXPORT IMPORT PROCEDURE AND DOCUMENTATION

(B.COM CA III YEAR V SEMESTER FOR MKU SYLLABUS)

2018 – 2019

BY

Ms. J. BOOMADEVI TEACHING ASSISTANT

DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES

PARVATHY’S ARTS AND SCIENCE COLLEGE

WISDOM CITY, MADURAI ROAD, DINDIGUL – 624002

UNIT 1

Export and Import Procedure in India

India ranks 19th in terms of overall export of merchandize and 12th in terms

of overall import of merchandize when compared to other countries. With more

trade liberalization deals to be signed by the pro-business Indian Government,

there is plenty of opportunity for establishing a successful import or export

business. To undertake an import or export business, the Entrepreneur must have a

strong understanding of all documentation pertaining to import or export

transactions. In this article, we cover basic export procedure and import procedure

in India along with the necessary documentation.

Export and Import Procedure

To being exporting or importing goods from India, the business or individual

must obtain an Import Export Code or IE Code from the Directorate General of

Foreign Trade. IE Code can be obtained by the business after obtaining PAN and

opening a bank account. India Filings can help you obtain IE Code.

Commercial Invoice

Commercial invoice is issued by the seller to the buyer containing the terms

of the transaction like date of transaction, seller details, buyer details, value,

shipping terms and more. Customs duty is levied on the shipment usually based on

the commercial invoice raised by the seller.

Sample Commercial Invoice

Air Waybills

An airway bill is a proof of shipment of goods by air. Air waybills serve as a

proof of receipt of goods for shipment by the air cargo agent, an invoice for the air

shipment, a certificate of insurance and a guide to the air cargo agent for handling,

dispatch and delivery of the consignment. A typical airway bill contains details

about the shipper and the consignee, the departure airport and destination airport,

description of the goods, sign and seal of the carrier.

Sample Air Waybill

Bill of Lading

Bill of Lading is provided by shipping agency for goods shipped by them.

Bill of lading usually contains information pertaining to the shipper, consignee,

carrying vessel, ports of loading and discharge, place of receipt and deliver, mode

of payment and name of the carrier.

Sample Bill of Lading

Bill of Exchange

Bill of exchange is used when an importer agrees to pay the exporter in future

on a date on or before that is mutually agreed upon. Bill of exchange is an

important written document in wholesale trade wherein large amounts of money is

involved. Bill of exchange can be classified as bill of exchange after date and bill

of exchange after sight. Bill of exchange after date is when the due date for

payment is counted from the date of drawing. Bill of exchange after sight is when

the due date for payment is counted from the date of acceptance of the bill.

Certificate of Origin

Certificate of origin is usually requested by the Customs Authority while

clearing Customs. Certificate of Origin is used to establish the origin of the product

and is issued by the Chamber of Commerce of the Exporter’s country. Certificate

of origin usually contains the name and address of the exporter, details of the

goods, package number or shipping marks and quantity, as applicable.

Sample Certificate of Origin

Packing List

Packing list contains detailed information about the goods being shipped,

quantity, weight and packing specifications. Packing list must contain description

of the goods and have details regarding the shipping marks.

Sample Export Packing List

Letter of Credit

Letter of Credit is an arrangement wherein a Bank on the request of it customer

agrees to make payment to a beneficiary on receipt of documents from beneficiary

as per the terms stipulated in the Letter of Credit. Letter of Credit or LC is used

extensively in international and domestic trade transactions. Click here to know

more about Letter of Credit (LC).

12 Steps Involved in the Processing of an Export Order

In reality, an export exercise is concluded successfully only after the

exporter has been able to deliver the consignment in accordance with the export

contract and receive payment for the goods.

This involves practice of prescribed procedure to be performed (Branch

2000). The fact is that one does not need only to be very well informed about

his/her export company, his/her products, his/her suppliers, his/her export chain,

his/her market, the world market, but one also needs to know the export rules and

terms, the different cultures that one targets and the final customers’ needs.

Then comes fulfilling these needs by the most competitive way and by

adding value to one’s services. This is so because all sell the same products with

minor changes , but what makes the difference is the method and the value added

services one provides to the ultimate consumers. Simply speaking, that making an

export company is an easy process, but making d successful and long lasting

export company is a very difficult task

Therefore, it seems pertinent now to make you learn the various steps’

involved in the processing of an export order. These are listed as follows:

1. Having an Export Order:

Processing of an export order starts with the receipt of an export order. An

export order, simply stated, means that there should be an agreement in the form of

a document, between the exporter and importer before the exporter actually starts

producing or procuring goods for shipment. Generally an export order may take the

form of proforma invoice or purchase order or letter of credit. You have already

learnt these just in the preceding section.

2. Examination and Confirmation of Order:

Having received an export order, the exporter should examine it with

reference to the terms and conditions of the contract. In fact, this is the most crucial

stage as all subsequent actions and reactions depend on the terms and conditions of

the export order.

The examination of an export order, therefore, includes items like product

description, terms of payment, terms of shipment, inspection and insurance

requirement, documents realising payment and the last date of negotiation of

documents with the bank. Having being satisfied with these, the export order is

confirmed by the exporter.

3. Manufacturing or Procuring Goods:

The Reserve Bank of India (RBI), under the export credit (interest subsidy)

scheme, extends pre-shipment credit to exporter to finance working capital needs

for purchase of raw materials, processing them and converting them into finished

goods for the purpose of exports. The exporter approaches the bank on the basis of

laid down procedures for the pre-shipment credit. Having received credit, the

exporter starts to manufacture / procure and pack the goods for shipment overseas.

4. Clearance from Central Excise:

As soon as goods have been manufactured/ procured, the process for

obtaining clearance from central excise duty starts. The Central Excise and Sale

Act of India and the related rules provide the refund of excise duty paid. There are

two alternative schemes whereby 100 per cent rebate on duty is given to export

products on the submission of the proof of shipment.

The first scheme is to make payment of the excise duty at the time of

removing the export consignment from the factory and file a claim for rebate of

duty after exportation of goods. The second scheme is to remove goods from

factory/warehouse without payment but under an appropriate bond with the excise

authorities. The exporter needs to apply on a form known as AR4 or AR4A to the

Central Excise Range Superintendent for obtaining excise clearance.

Form A is filed when goods are to be cleared after examination by the excise

inspector. In all other cases, form AR4A is filed.

5. Pre-Shipment Inspection:

There are number of-goods whose export requires quality certification as per

the Government of India’s notification. Consequently, the Indian custom

authorities will require the submission of an inspection certificate issued by the

competent and designated authority before permitting the shipment of goods takes

place.

Inspection of export goods may be conducted under:

(i) Consignment-wise Inspection

(ii) In-process Quality Control, and

(iii) Self-Certification.

The Inspection Certificate is issued in triplicate. The original copy is for the

customs verification. The second copy of the certificate is sent to the importer and

the third copy remains with the exporter for his reference purpose.

6. Appointment of Clearing and Forwarding Agents:

On completion of the process of obtaining the Inspection Certificate from

the custom agencies, the exporter appoints clearing and forwarding agents who

performa number of functions on behalf of the exporter.

The main functions performed by these agents include packing, marking and

labeling of consignment, arrangement for transport to the port arrangement for

shipment overseas, customs clearance of cargo, procurement of transport and other

documents.

In order to facilitate the exporter in discharging his duties, the following

documents are submitted to the agent:

(i) Commercial invoice in 8-10 copies

(ii) Customs Declaration Form in triplicate

(iii) Packing list

(iv) Letter of Credit (original)

(v) Inspection Certificate (original)

(vi) G.R. Form (in original and duplicate)

(vii) AR4/ AR4A (in original and duplicate)

(viii) GP-l/GP-2 (original)

(ix) Railway Receipt/Lorry Way Bill, as the case may be

7. Goods to Port of Shipment:

After the excise clearance and pre-shipment inspection formalities are

completed, the goods to be exported are packed, marked and labeled. Proper

marking, labeling and packing help quick and safe transportation of goods. The

export department takes steps to reserve space on the ship through which goods are

to be sent to the importer.

The shipping space can be reserved either through the clearing and

forwarding agent or freight broker who works on behalf of the shipping company

or directly from the shipping company. Once the space is reserved, the shipping

company issues a document known as Shipping Order. This order serves as a proof

of space reservation.

If goods are sent through a road carrier to the port, no specific formality is

involved. In case, the goods are sent by rail to the port of shipment, allotment of

wagon needs to be obtained from the Railway Board.

The following documents are submitted to the booking railway yard/station:

(i) Forwarding Note (A Railway Document)

(ii) Shipping Order

(iii) Wagon Registration Fee Receipt

Once wagons have been allotted, goods are loaded, for which railways will

issue Railway Receipt (RR). Then, this receipt and other documents are sent to the

clearing and forwarding agent at the port town. At the same time, the

production/export department takes insurance policy in duplicate for risk coverage

(internal as well as overseas) for the goods to be exported.

8. Port Formalities and Customs Clearance:

Having received the documents from the export department, the clearing and

forwarding agent takes delivery of the cargo from the railway station or the road

transport company and stores it in the warehouse. He also obtains customs

clearance and permission from the port authorities to bring the cargo into the

shipment shed.

The custom department grants permission for export at the office of the

customs and physical verification of goods in the shipment shed. The clearance for

export is given on the Shipping Bill.

The clearing and forwarding agent is required to submit the following

documents with the Customs House for obtaining customs clearance and

permission:

(i) Shipping Bill

(ii) Contract Form

(iii) Letter of Credit, if applicable

(iv) Commercial Invoice

(v) GR Form

(vi) Inspection Certificate

(vii) AR4/AR4A Form

(viii) Packing List, if needed

After receiving documents from the export department, the clearing and

forwarding agent presents the Port Trust Document to the Shed Superintendent of

the port. He obtains carting order bringing the cargo to the transit shed for physical

examination by the Dock Appraiser.

The Dock Appraiser is presented the following documents to facilitate him

in physical examination of export goods:

(i) Shipping Bill

(ii) Commercial Invoice

(iii) Packing List

(iv) AR4/ AR4A Form and Gate Pass

(v) GR Form (duplicate)

(vi) Inspection Certificate (original)

The Dock Appraiser, after making examination, makes ‘Let Export’

endorsement on the duplicate copy of the Shipping Bill and hands over it to the

Forwarding Agent. All these documents are presented to the Preventive Officer

who puts an endorsement ‘Let Ship’ on the duplicate copy of the Shipping Bill.

The preventive officer supervises the loading of cargo on board the vessel.

After the goods are loaded on board the vessel, the captain of the ship issues

a receipt known as ‘Mate’s Receipt’ to the Shed Superintendent of the port

concern. The forwarding, agent after paying port charges, takes the delivery of the

‘Mate Receipt’. He submits to Shipping Company and requests it to issue the Bill

of Lading.

9. Dispatch of Documents by Forwarding Agent to the Exporter:

After obtaining the Bill of Lading from the Shipping Company, the clearing

and forwarding agent dispatches all the documents to his / her exporter.

These documents include:

(i) Commercial Invoice (attested by the customs)

(ii) Export Promotion Copy

(iii) Drawback Copy

(iv) Clean on Board Bill of Lading

(v) Letter of Credit

(vi) AR4/ AR4A and Gate Pass

(vii) GR Form (in duplicate)

10. Certificate of Origin:

On receipt of above documents from the forwarding agent, the exporter now

applies to the Chamber of Commerce for a Certificate of Origin and obtains it. If

the goods are exported to countries offering GSP concessions, the exporter needs

to procure the GSP Certificate of Origin from the concerned authority like Export

Inspection Agency.

11. Dispatch of Shipment Advice to the Importer:

At last, the exporter sends ‘Shipment Advice’ to the importer intimating the

date of shipment of the consignment by a named vessel and its expected time of

arrival at the destination port of the importer.

The following documents are also sent to the importer to facilitate him for

taking delivery of the’ consignment:

(i) Bill of Lading (non-negotiable copy)

(ii) Commercial Invoice

(iii) Packing List

(iv) Customs Invoice

12. Submission of Documents to Bank:

At the end of the process, the exporter presents the following documents to

his bank for realisation of his amount due to the importer:

(i) Commercial Invoice’

(ii) Certificate of Origin

(iii) Packing List

(iv) Letter of Credit

(v) Marine Insurance Policy

(vi) GR Form

(vii) Bill of Lading

(viii) Bill of Exchange

(ix) Bank Certification

(x) Commercial Invoice

Claiming Export Incentives:

On completion of the processing of an export order at the three levels of

shipment i.e., pre-shipment, shipment and post-shipment, the exporter claims for

export incentives admissible to him / her.

What is Consignment?

Consignment is a business arrangement in which a business, also referred to

as a consignee, agrees to pay a seller, or consignor, for merchandise after the item

sells. Consignment businesses are typically retail stores that specialize in a

particular type of consumer product. The business accepts items for sale and agrees

to pay the seller a percentage of the proceeds if and when the goods do sell.

Common products sold through consignment, or second-hand, stores include:

a) Clothing

b) Shoes

c) Athletic equipment and gear

d) Baby furniture and accessories

e) Antiques and collectibles

f) Furniture

g) Toys

h) Musical instruments

i) Business Model

Each retailer determines their own pricing arrangement, but the typical split

between the business and the individual seller ranges from 50/50 to 40/60 or 60/40.

Who gets the bulk of the proceeds often depends on how established and

successful the store is.

Origins

The English word consignment is from the French word “consigner,” which

means “to deposit,” as in to drop off items for sale.

Advantages

The advantages of the consignment model to the business owner are:

No need to pay up front for inventory to sell, as most retail stores need to

Any products that don’t sell can be returned to consignors or disposed of Can build

a solid clientele who return regularly to scope out the changing merchandise

Payments can be made days or weeks after the item sells, improving cash flow The

advantages to the consignor, or seller, are:

No need to spend time creating listings on eBay or Etsy or Craiglist to sell items,

or setting up a retail storefront No need to ship or deliver sold items.

Disadvantages

The major disadvantages of the model to the business owner are:

Dependence on sellers to provide a steady stream of inventory Disposal fees

if there is a lot of merchandise left over, which can be reduced by donating

leftovers to charity A need for a software package that makes keeping track of

merchandise easier The major disadvantages to sellers are:

Receiving less than could be earned by selling direct to buyers online

Having to wait for payment Trends Demand for consignment goods is on the

upswing, says that Association of Retail Professionals. Growth in number of new

consignment stores is currently around 7% annually.

Introduction

Packaging is now generally regarded as an essential component of our

modern life style and the way business is organized. Packaging is the enclosing of

a physical object, typically a product that will be offered for sale. It is the process

of preparing items of equipment for transportation and storage and which embraces

preservation, identification and packaging of products. Packing is recognized as an

integral part of modern marketing operation, which embraces all phases of

activities involved in the transfer of goods and services from the manufacturer to

the consumer. Packaging is an important part of the branding process as it plays a

role in communicating the image and identity of a company.

How can we define Packaging?

Kotler defines packaging as “all the activities of designing and producing the

container for a product.” Packaging can be defined as the wrapping material

around a consumer item that serves to contain, identify, describe, protect, display,

promote, and otherwise make the product marketable and keep it clean. Packaging

is the outer wrapping of a product. It is the intended purpose of the packaging to

make a product readily sellable as well as to protect it against damage and prevent

it from deterioration while storing. Furthermore the packaging is often the most

relevant element of a trademark and conduces to advertising or communication.

Functional Requirements

1. Protection and preservation

A basic function of package is to protect and preserve the contents during

transit from the manufacturer to the ultimate consumer. It is the protection during

transport and distribution; From climatic effects (heat and cold, moisture, vapour,

drying atmospheres); from hazardous substances and contaminants; and from

infestation. Protection is required against transportation hazards spillage, dirt,

ingress and egress of moisture, insect infection, contamination by foreign material,

tampering pilferage etc. A package should preserve the contents in ‘Factory Fresh’

condition during the period of storage and transportation, ensuring protection from

bacteriological attacks, chemical reaction etc.

2. Containment

Most products must be contained before they can be moved from one place

to another. To function successfully, the package must contain the product. This

containment function of packaging makes a huge contribution to protecting the

environment. A better packaging help to maintain the quality of the product and

reachability of the product in the consumer’s hand without spillages It gives better

image to the organisation.

3. Communication

A major function of packaging is the communication of the product. A

package must communicate what it sells. When international trade is involved and

different languages are spoken, the use of unambiguous, readily understood

symbols on the distribution package is essential. It is the interest further that to get

appropriate communication to the consumer about the product, how to use it and

other utility informations. Packaging protects the interests of consumers.

Information includes: quantity; price; inventory levels; lot number; distribution

routes; size; elapsed time since packaging; colour; and merchandising and

premium data.

Types of packaging

An important distinction is to be made here between two types of packaging

O Transport packing: The product entering in to the trade need to be packed well

enough to protect against loss damage during handling, transport and storage. Eg:

fiberboard, wooden crate etc.

O Consumer Packing: This packaging holds the required volume of the

product for ultimate consumption and is more relevant in marketing. Eg:

beverages, tobacco etc.

Hazards of Transport

There are four main hazards of transport

* Drops and impacts

* Compression forces

* Vibration

* Climatic variations

Various Mechanical Tests

O Drop Test: This test help to measure the ability of the container and inside

packing materials to provide protection.

What is Shipping Order (S/O)

The shipping order---shipping permit---is issued by the shipping company to

a shipper with a confirmed space booking, authorizing the receiving clerk (cargo

checker) at the container terminal or dock to receive a specified amount of goods

from the named shipper.

A shipping order (S/O) typically contains the space booking number, names

and addresses of the shipper and customs broker or forwarder, vessel and voyage

number, sailing time, delivery date and location, customs closing date, and number

and type of packages.

The customs broker or forwarder usually requires the packing list of a

consignment in order to book the shipping space and to obtain the S/O and/or to

prepare the dock receipt (shipping note). In some cases, the presentation of the

packing list and a valid export permit is required to obtain the S/O. The S/O

accompanies the dock receipt and the deliverer of the goods presents these two and

other documents that may be required in the delivery to the receiving clerk (cargo

checker) at the closing location. In certain countries, only the space booking

number is needed instead of a formal S/O, since the information in an S/O is found

in the dock receipt.

Shipping and Customs Formalities

According the Section 40 of the Customs Act, the person in-charge of the

conveyance vessel, vehicle, aircraft, etc., cannot permit loading of export cargo at

the Customs Station unless and until a formal permission to the export given by the

authorised Customs Officer is presented.

Before granting the permission, the Customs Officer ensures that the goods

being exported are in accordance with different regulations, particularly in terms of

the following:

(a) The exporter. Goods are of the same type sort and value as have been

declared by the exporter.

(b) The duty or cess leviable thereon has been properly determined and

paid.

(C) Provisions of Export (Control) Order, Export (Quality Control and

Inspection) Act and Foreign Exchange (Regulation) Act are complied with.

The Procedure for shipping and customs clearance is as under:

(a) Preparation and Submission of Export Documents: For the

clearance of cargo from customs, the exporter or his agent is

required to submit the following set of documents along with five

copies of shipping NI to the Customs Appraiser at the Customs

House.

Letter of Credit along with export contract or export order.

Commercial Invoice (2 copies)

Packing List or Packing Note.

Certificate of Origin.

GR Form (original and duplicate)

ARE-I Form.

Original copy of Certificate of Inspection, where necessary.

Marine Insurance Policy.

(b) Verification of Documents: The Customs Appraiser verifies the

details listed in each document and ensures that all the formalities

relating to exchange control, pre-shipment inspection and licensing

have been complied with by the exporter. If satisfied, he issues a

‘Shipping Bill Number’, which is very important from exporter’s

point of view.

Valuation of the Goods: The Customs Appraiser assesses the shipping bill

and values the goods. The value of goods as determined by the Customs Appraiser

is considered for all future transactions, especially for the claim of Incentives. All

documents are returned to the exporter or his agents except:

Original copy of GR to be forwarded to the RBI.

Original copy of Shipping Bill.

One copy of Commercial Invoice.

The validity of assessed shipping bill is for one month only. If the exporter

fails to deliver the goods in that period, he will have to undergo the above

procedure again.

(c) Obtaining ‘Carting Order’ from the Port Trust Authorities: The

C&F agent, then, approaches the Superintendent of the concerned

Port Trust for Obtaining the ‘Carting Orders for moving the cargo

inside the dock. After obtaining the Carting Order, the cargo is

physically moved into the port area and stored in the appropriate

shed.

€ Customs Examination and Issue of ‘Let Export Order’: The Customs

Examiner at the port of shipment physically examines the goods and seals the

packages in his presence. The same can be arranged for at the factory or warehouse

of the exporter by making an application to the Assistant Collector of Customs.

The Customs Examiner, if satisfied, issues a formal permission for the loading of

cargo on the ship in the form of a ‘Let Export Order’. The above procedure is now

processed through Electronic Data Interchange (EDI) System.

(f) Obtaining ‘Let Ship Order’ from the Customs Preventive Officer: ‘Let

Export Order’ must be supplemented by a ‘Let Ship Order’ issued by the Customs

Preventive Officer. The C&F agent submits the duplicate copy of Shipping Bill,

duly endorsed by the Customs Examiner, to the Customs Preventive Officer who

endorses it with the ‘Let Ship Order’.

(g) Obtaining Mate’s Receipt and Bill of Lading: The goods are then loaded

on board the ship for which the Mate or the Captain of the ship issues Mate’s

Receipt to the Port Superintendent. The Port Superintendent, on receipt of port

dues, hands over the Mate’s Receipt to the C&F Agent. The C&F Agent surrenders

the Mate’s Receipt to the Shipping Company for obtaining the Bill of Lading.

UNIT 2

Export

The term export in international trade means the sending of goods or

services produced in one country to another country. The seller of such goods and

services is referred to as an exporter; the foreign buyer is referred to as an

importer. Export of goods often requires involvement of customs authorities. An

export’s reverse counterpart is an import.

Exporting

Many manufacturing firms began their global expansion as exporters and

only later switched to another mode for serving a foreign market.

Process

Methods of exporting a product or good or information include mail, hand

delivery, air shipping, shipping by vessel, uploading to an internet site, or

downloading from an internet site. Exports also include distribution of information

sent as email, an email attachment, fax or in a telephone conversation.

Barriers

Trade barriers are government laws, regulations, policy, or practices that

either protect domestic products from foreign competition or artificially stimulate

exports of particular domestic products. While restrictive business practices

sometimes have a similar effect, they are not usually regarded as trade barriers.

The most common foreign trade barriers are government-imposed measures and

policies that restrict, prevent, or impede the international exchange of goods and

services.

Strategic

International agreements limit trade in and the transfer of, certain types of

goods and information e.g. goods associated with weapons of mass destruction,

advanced telecommunications, arms and torture, and also some art and

archaeological artefacts. For example:

Nuclear Suppliers Group limits trade in nuclear weapons and associated

goods (45 countries participate).

The Australia Group limits trade in chemical & biological weapons and

associated goods (39 countries).

Missile Technology Control Regime limits trade in the means of delivering

weapons of mass destruction (35 countries)

The Wassenaar Arrangement limits trade in conventional arms and

technological developments (40 countries).

Tariffs

A tariff is a tax placed on a specific good or set of goods exported from or

imported to a country, creating an economic barrier to trade.

Usually the tactic is used when a country’s domestic output of the good is

falling and imports from foreign competitors are rising, particularly if the country

has strategic reasons to retain a domestic production capability.

Some failing industries receive a protection with an effect similar to

subsidies; tariffs reduce the industry’s incentives to produce goods quicker,

cheaper, and more efficiently. The third reason for a tariff involves addressing the

issue of dumping. Dumping involves a country producing highly excessive

amounts of goods and dumping the goods on another country at prices that are “too

low”, for example, pricing the good lower in the export market than in the

domestic market of the country of origin. In dumping the producer sells the

product at a price that returns no profit, or even amounts to a loss. The purpose and

expected outcome of a tariff is to encourage spending on domestic goods and

services rather than imports.

Tariffs can create tension between countries. Examples include the United

States steel tariff of 2002 and when China placed a 14% tariff on imported auto

parts. Such tariffs usually lead to a complaint with the World Trade Organization

(WTO). If that fails, the country may put a tariff of its own against the other nation

in retaliation, and to increase pressure to remove the tariff.

Advantages of exporting

Exporting has two distinct advantages. First, it avoids the often substantial

cost of establishing manufacturing operations in the host country.

Second, exporting may help a company achieve experience curve effects and

location economic.

India’s Import Policy: Procedures and Duties

In India, the import and export of goods is governed by the Foreign Trade

(Development & Regulation) Act, 1992 and India’s Export Import (EXIM) Policy.

India’s Directorate General of Foreign Trade (DGFT) is the principal

governing body responsible for all matters related to EXIM Policy.

Importers are required to register with the DGFT to obtain an Importer

Exporter Code Number (IEC) issued against their Permanent Account Number

(PAN), before engaging in EXIM activities. After an IEC has been obtained, the

source of items for import must be identified and declared.

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The Indian Trade Classification – Harmonized System (ITC-HS) allows for

the free import of most goods without a special import license.

Certain goods that fall under the following categories require special

permission or licensing.

1) Licensed (Restricted) Items – Licensed items can only be imported after

obtaining an import license from the DGFT. These include some consumer

goods such as precious and semi-precious stones, products related to safety

and security, seeds, plants, animals, insecticides, pharmaceuticals and

chemicals, and some electronic items.

2) Canalized Items – Canalized items can only be imported via specified

transportation channels and methods, or through government agencies such

as the State Trading Corporation (STC). These include petroleum products,

bulk agricultural products such as grains and vegetable oils, and some

pharmaceutical products.

3) Prohibited Items – These goods are strictly prohibited from import and

include tallow fat, animal rennet, wild animals, and unprocessed ivory.

Import Procedures

All importers must follow detailed customs clearance formalities when

importing goods into India. A comprehensive overview of EXIM procedures can

be found on the Indian Directorate of General Valuation’s website.

Bill of Entry

Every importer is required to begin by submitting a Bill of Entry under Section

46. This document certifies the description and value of goods entering the

country. The Bill of Entry should be submitted as follows:

1) The original and duplicate for customs

2) A copy for the importer

3) A copy for the bank

4) A copy for making remittances

Under the Electronic Data Interchange (EDI), no formal Bill of Entry is

required (as it is recorded electronically) but the importer is required to file a cargo

declaration after prescribing particulars required for processing of the entry for

customs clearance. Bills of Entry can be one of three types:

1) Bill of Entry for Home Consumption – This form is used when the

imported goods are to be cleared on payment of full duty. Home

consumption means use within India. It is white colored and hence

often called the ‘white bill of entry’.

2) Bill of Entry for Housing – If the imported goods are not required

immediately, importers may store the goods in a warehouse without

the payment of duty under a bond and then clear them from the

warehouse when required on payment of duty. This will enable the

deferment of payment of the customs duty until goods are actually

required. This Bill of Entry is printed on yellow paper and is thus

often called the ‘yellow bill of entry’. It is also called the ‘into bond

bill of entry’ as the bond is executed for the transfer of goods in a

warehouse without paying duty.

3) Bill of Entry for Ex-Bond Clearance – The third type is for ex-bond

clearance. This is used for clearance from the warehouse on payment

of duty and is printed on green paper.

It is important to note that the rate of duty applicable is as it exists on the

date a good is removed from a warehouse. Therefore, if the rate changes after

goods have been cleared from a customs port, the customs

India New Foreign Trade Policy (Exim Policy) 2015-2020

India New Foreign Trade Procedure 2015-2020

Exim Policy or Foreign Trade Policy is a set of guidelines and instructions

established by the DGFT in matters related to the import and export of goods in

India.

The Foreign Trade

Policy of India is guided by the Export Import in known as in short EXIM

Policy of the Indian Government and is regulated by the Foreign Trade

Development and Regulation Act, 1992.

DGFT (Directorate General of Foreign Trade) is the main governing body in

matters related to Exim Policy. The main objective of the Foreign Trade

(Development and Regulation) Act is to provide the development and regulation of

foreign trade by facilitating imports into, and augmenting exports from India.

Foreign Trade Act has replaced the earlier law known as the imports and Exports

(Control) Act 1947.

EXIM Policy

Indian EXIM Policy contains various policy related decisions taken by the

government in the sphere of Foreign Trade, i.e., with respect to imports and

exports from the country and more especially

Export promotion measures, policies and procedures related thereto. Trade

Policy is prepared and announced by the Central Government (Ministry of

Commerce). India’s Export Import Policy also know as Foreign Trade Policy, in

general, aims at developing export potential, improving export performance,

encouraging foreign trade and creating favorable balance of payments position.

History of Exim Policy of India

In the year 1962, the Government of India appointed a special Exim Policy

Committee to review the government previous export import policies. The

committee was later on approved by the Government of India. Mr. V. P. Singh, the

then Commerce Minister and announced the Exim Policy on the 12th of April,

1985. Initially the EXIM Policy was introduced for the period of three years with

main objective to boost the export business in India

EXIM Policy Documents

The Exim Policy of India has been described in the following documents:

Interim New Exim Policy 2009 – 2010

Exim Policy: 2004- 2009

Handbook of Procedures Volume I

Handbook of Procedures Volume II

ITC(HS) Classification of Export- Import Items

The major information in matters related to export and import is given in the

document named “Exim Policy 2002-2007”.

An exporter uses the Handbook of Procedures Volume-I to know the

procedures, the agencies and the documentation required to take advantage of a

certain provisions of the Indian EXIM Policy. For example, if an exporter or

importer finds out that paragraph 6.6 of the EXIM Policy is important for his

export business then the exporter must also check out the same paragraph in the

Handbook of Procedures Volume- I for further details.

The Handbook of Procedures Volume-II provides very crucial information

in matters related to the Standard Input-Output Norms (SION). Such Input output

norms are applicable for the products such as electronics, engineering, chemical,

food products including fish and marine products, handicraft, plastic and leather

products etc. Based on SION, exporters are provided the facility to make duty-free

import of inputs required for manufacture of export products under the

Duty Exemption Scheme or Duty Remission Scheme.

The Export Import Policy regarding import or export of a specific item is

given in the ITC- HS Codes or better known as Indian Trade Clarification Code

based on Harmonized System of Coding was adopted in India for import-export

operations. Indian Custom uses an eight digit ITC-HS Codes to suit the national

trade requirements. ITC-HS codes are divided into two schedules. Schedule I

describe the rules and Exim guidelines Related to import policies where as Export

Policy Schedule II describe the rules and regulation related to export policies.

Schedule I of the ITC-HS code is divided into 21 sections and each section is

further divided into chapters. The total number of chapters in the schedule I is 98.

Highlights of Exim Policy

Duty free import facility for service sector having a minimum foreign

exchange earning of Rs.10 lakhs. The duty free entitlement shall be 10% of the

average foreign exchange earned in the preceding three licensing years. However,

for hotels, the same shall be 5% of the average foreign exchange earned in the

preceding three licensing years. This entitlement can be used for import of office

equipments, professional equipments, spares and consumables. However, imports

of agriculture and dairy products shall not be allowed for imports against the

entitlement. The entitlement and the goods imported against such entitlement shall

be non-transferable.

Agro Exports

Corporate sector with proven credential will be encouraged to sponsor Agri

Export Zone for boosting agro exports. The corporates to provide services such as

provision of pre/post harvest treatment and operations, plant protection,

processing, packaging, storage and related R&D.

DEPB rate for selected agro products to factor in the cost of pre-production

inputs such as fertiliser, pesticides and seeds.

Status Holders

Duty-free import entitlement for status holders having incremental growth of

more than 25% in FOB value of exports (in free foreign exchange).

This facility shall however be available to status holders having a minimum

export turnover of Rs.25 crore (in free foreign exchange). The duty free

entitlement shall be 10% of the incremental growth in exports and can be used for

import of capital goods, office equipment and inputs for their own factory or the

factory of the associate/supporting manufacturer/job worker. The entitlement/

goods shall not be transferable. This facility shall be available on the exports made

from 1.4.2003.

Annual Advance Licence facility for status holders to be introduced to

enable them to plan for their imports of raw material and components on an annual

basis and take advantage of bulk purchases. The Input-Output norms for status

holders to be fixed on priority basis within a period of 60 days.

Status holders in STPI shall be permitted free movement of professional

equipments like laptop/computer.

Hardware/Software

To give a boost to electronic hardware industry, supplies of all 217 ITA-1

items from EHTP units to DTA shall qualify for fulfillment of export obligation.

To promote growth of exports in embedded software, hardware shall be admissible

for duty free import for testing and development purposes. Hardware upto a value

of US$ 10,000 shall be allowed to be disposed off subject to STPI certification.

100% depreciation to be available over a period of 3 years to computer and

computer peripherals for units in EOU/EHTP/STP/SEZ .

Gem & Jewellery Sector

Diamond & Jewellery Dollar Account for exporters dealing in purchase/sale

of diamonds and diamond studded jewellery. Nominated agencies to accept

payment in dollars for cost of import of precious metals from EEFC account of

exporter. Gem & Jewellery units in SEZ and EOUs can receive precious metal i.e

Gold/silver/platinum prior to exports or post exports equivalent to value of

jewellery exported. This means that they can bring export proceeds in kind against

the present provision of bringing in cash only.

Export Clusters

Upgradation of infrastructure in existing clusters/industrial locations under

the Department of Industrial Policy & Promotion (DIPP) scheme to increase

overall competitiveness of the export clusters. Supplemental efforts to be made

under the ASIDE scheme and similar schemes of other Ministries to bridge

technology and productivity gaps in identified clusters. 10 such clusters with high

growth potential to be reinvigorated based on a participatory approach.

Rehabilitation of Sick Units

For revival of sick units, extension of export obligation period to be allowed

to such units based on BIFR rehabilitation schemes.

Export Documentation and It’s Types (With Specimens)

The trade between two nations involves significant documentation process. In domestic

trade, an organization has to fulfill only the requirements of taxation department of the own

country and make a simple invoice against the customers. However, in case of international

trade, exporters and importers have to submit a number of documents to different institutions.

These institutions are as follows:

a. Importing organization that has placed order and exporting organization that is selling the

goods

b. Taxation, custom control, and exchange control authorities of both the countries

c. Port authorities for loading and unloading of goods

d. Shipping and warehousing authorities for transporting and storing goods

e. Inspection agencies that inspect and verify the products

f. Banks of exporting and importing countries if involved

Export documentation plays a vital role in the flow and movement of goods and services in

international markets. This documentation involves heavy and cumbersome paper work for

exporting organizations.

There are various outsourcing agencies/ experts that prepare these documents on behalf

of organizations and charge fee for it. Exporters have to understand the importance of each and

every document. If they miss any document, the contract may be cancelled.

The discussion of these documents is as follows:

(a) Regulatory Documents:

Refers to the pre-shipment documents prescribed by the exporting country. The compliance

of these documents is mandatory for an export contract.

The regulatory documents include:

i. Shipping bill

ii. Export application prescribed by port authorities

iii. Insurance payment certificate

iv. Excise gate pass for clearance of goods

(b) Commercial Documents:

Refer to those documents that are important for transferring the ownership from the exporter

to the importer. These documents are necessary to meet the rules of the export trade.

The documents include the following:

i. Bills of exchange

ii. Letter of credit

iii. Marine insurance policy

iv. Bills of lading

v. Shipping instructions

vi. Shipping order

vii. Inspection documents

viii. Certificate of origin of goods

C) Export Assistance Documents:

Involve those documents that are required for getting government assistance, such as

subsidies. It includes documents, such as export-import contract and certificate of quality

control.

D) Documents prescribed by importer’s country:

Include pre-inspection, quality approval, and child labor norms related documents. The

importer insists the exporter to submit these documents to fulfill the laws and regulations of the

importer’s country. The export documents are necessary from the stage when the exporter

receives the order till the final stage when he/she gets the payment from the importer. These

documents help in the regulation of trade and facilitation of export operation.

What Is a Letter of Credit?

When you hear the phrase ‘letter of credit,’ it might be natural to think it refers to a

document verifying that you are creditworthy, but that isn’t the case. A letter of credit is a

document issued by a third party that guarantees payment for goods or services when the seller

provides acceptable documentation. Letters of credit are usually issued by banks or other

financial institutions, but some creditworthy financial services companies, like insurance

companies or mutual funds, might issue letters of credit under certain circumstances.

A letter of credit generally has three participants. First, there is the beneficiary, the person

or company who will be paid. Next, there is the buyer or applicant of the goods or services. This

is the one who needs the letter of credit. Finally, there is the issuing bank, the institution issuing

the letter of credit. In addition, the beneficiary may request payment to an advising bank, which

is a bank where the beneficiary is a client, rather than directly to the beneficiary. This might be

done, for example, if the advising bank financed the transaction for the beneficiary until payment

was received.

Letters of credit are most often used in international trade, where they are governed by

the Uniform Customs and Practice for Documentary Credits (or UCP), the rules of the

International Chamber of Commerce. However, they can be used in other situations, as we shall

see.

Types and Features of Letters of Credit

Most letters of credit are import/export letters of credit, which, as the name implies, are

letters of credit that are used in international trade. The same letter of credit would be termed an

import letter of credit by the importer and an export letter of credit by the exporter. In most

cases, the importer is the buyer and the exporter is the beneficiary.

There are also other types of letters of credit. The revocable letter of credit can be

changed at any time by either the buyer or the issuing bank with no notification to the

beneficiary. The most recent version of the UCP, UCP 600, did away with this form of letter of

credit for any transaction under their jurisdiction. Conversely, the irrevocable letter of credit only

allows change or cancellation of the letter of credit by the issuing bank after application by the

buyer and approval by the beneficiary. All letters of credit governed by the current UCP are

irrevocable letters of credit.

A confirmed letter of credit is one where a second bank agrees to pay the letter of credit

at the request of the issuing bank. While not usually required by law, an issuing bank might be

required by court order to only issue confirmed letters of credit if they are in receivership. As

you might guess, an unconfirmed letter of credit is guaranteed only by the issuing bank. This is

the most common form with regard to confirmation.

A letter of credit may also be a transferrable letter of credit. These are commonly used

when the beneficiary is simply an intermediary for the real supplier of the goods and services or

is one of a group of suppliers. It allows the named beneficiary to present its own documentation

but transfer all or part of the payment to the actual suppliers. As you might guess, an un-

transferrable letter of credit does not allow transfer of payments to third parties.

A letter of credit may also be at sight, which is payable as soon as the documentation has

been presented and verified, or payment may be deferred. Deferred letters of credit are also

called a usance letter of credit and may be put off until a certain time period has passed or the

buyer has had the opportunity to inspect or even sell the related goods.

A red clause letter of credit allows the beneficiary to receive partial payment before

shipping the products or performing the services. Originally, these terms were written in red ink,

hence the name. In practical use, issuing banks will rarely offer these terms unless the

beneficiary is very creditworthy or an advising bank agrees to refund the money if the shipment

is not made.

Finally, a back-to-back letter of credit is used in a trade involving an intermediary, such

as a trading house. It is actually made up of two letters of credit, one issued by the buyer’s bank

to the intermediary and the other issued by the intermediary’s bank to the seller.

Documentation Requirements

In order to receive payment, the beneficiary must present documentation of completion of

their part in the transaction to the issuing bank. The documents that the issuing bank will accept

are specified in the letter of credit, but may often include:

Bills of exchange

Invoices

Government documents, such as licenses, certificates of origin, inspection certificates,

embassy legalizations, and phytosanitary certificates Shipping and transport documents, such as

bills of lading and airway bills Insurance policies or certificates, except cover notes Risks in

Letter of credit transactions are not without risks. The risks inherent in these types of transactions

include:

Fraud risk, in which the payment is obtained through the use of falsified or forged

documents for worthless or nonexistent merchandise

Regulatory risk, in which government action may prevent completion of the

transaction

Legal risk, in which legal action prevents completion of the transaction

Force majeure risk, in which completion of the transaction is prevented by an

external force, such as war or a natural disaster

Failure of the issuing or collecting bank

Or insolvency of the buyer or beneficiary

Credit Document from Amendment No. 3 to Third Amended and Restated Credit and

Guaranty Agreement (2012) by The Goldman Sachs Group, Inc. & Valeant Pharmaceutical

International, Inc.

“Credit Document” means any of this Agreement, the Notes, if any, the Canadian

Guarantee, the Barbados Guarantee, the Counterpart Agreements, if any, the Collateral

Documents, the Canadian Confirmation of Guarantee and Security, any documents or certificates

executed by Borrower in favor of Issuing Bank relating to Letters of Credit, and all other

documents, instruments or agreements executed and delivered by or on behalf of or at the request

of a Credit Party (or any officer of a Credit Party pursuant to the terms hereof) for the benefit of

any Agent, Issuing Bank or any Lender in connection herewith on or after the date hereof and all

annexes, appendices, schedules and exhibits to any of the foregoing, as may be amended,

restated, supplemented or otherwise modified from time to time.

INSURANCE DOCUMENTS

There are various insurance documents used for different types of insurance, which are

essential for all classes of insurance business. The object of insurance documents is give to the

insurer full particulars of the risk against which insurance protection is desired. It also provides

evidence of contract into which the parties have entered.

1. Proposal Forms

The company’s printed proposal form is normally used for making an application for the

required insurance cover. The proposal form contains questions designed to elicit all material

information about the particular risk proposed for insurance. The number and nature of questions

vary according to the particular class of insurance covered. In Marine Cargo Insurance,

Insurance document is not the practice to use a proposal form, although sometimes it is usual to

obtain a questionnaire or a declaration form duly completed. Proposal forms are used for hull

insurance. In Fire Insurance, the practice varies among the companies, proposal forms are not

generally used for large industrial risks where inspection of the risk is arranged before

acceptance of the risk. Forms are used for simple risks. Proposal forms are used in respect of

risks which are normally declined but have to be accommodated to retain the goodwill of the

client. In Miscellaneous Insurance, proposal forms are invariably required and they incorporate a

declaration which extends the common law duty of good faith. Fire proposal forms may or may

not have the declarations. The following items may be considered as common to all proposal

forms.

Proposer’s name in full

Proposer’s address

Proposer’s profession, occupation or business

Previous and present insurance

Loss experience

Sum insured

Other Section’s – Signature, date, place etc.

2. Policy Forms

Policy forms, like proposal forms, vary within wide limits as between different classes of

insurance but they have certain features in common. The policy is a document which provides

evidence of the contact of insurance. This document has to be stamped in accordance with

provisions of the Indian Stamp Act 1899. Where the insurance is governed by a Tariff or a

Market agreement, the policy wording is prescribed therein itself and it is obligatory for insurers

to use these wordings. In fire and miscellaneous insurance, the policy form used is on a

scheduled basis i.e. all individual details relating to a particular insurance are grouped together in

a schedule. Generally speaking policies are divisible into certain well defined sections and these

are as follows:

Recital Clause or Preamble

Operative Clause

Attestation Clause

Conditions

Schedule

3. Cover Note

A cover note is a document issued in advance of the policy. It is issued when the policy

cannot for some reason or the other, be issued straight away. Cover notes are issued when the

negotiations for insurance are in progress and it is necessary to provide cover on a provisional

basis or when the premises are being inspected for determining the actual rate applicable.

Pending the preparation of the policy, the cover note is issued as evidence of protection for a

temporary period of time and to prove that cover is in force. Here is a brief detail of cover.

In Marine Insurance, marine cover notes are normally issued when details required for the

issue of policy such as name of the steamer, number of packages or exact value etc are not

known. In Fire Insurance,, the operative clause of a fire cover note is issued in consideration of

the proposer named in the schedule having proposed the effect of an insurance against fire for the

period mentioned, on the usual terms and conditions of the company’s policy. In Motor Vehicle

Insurance, motor cover notes are to be issued in the form prescribed by the Motor

4. Certificate of Insurance

In motor insurance, in addition to the policy, a certificate of insurance is required by the

Motor Vehicle Act. 1988. This certificate provides evidence of insurance to the Police and

Registration authorities. It contains the essential features of the cover including the terms and

conditions. In Marine Insurance, certificate of insurance is issued to provide evidence of cover

on shipments insured under cargo open cover or floating policies.

5. Endorsements

It is the practice of insurers to issue policies is a standard form, covering certain perils and

excluding certain others. If it is intended, at the time of issuing the policy to modify the terms

and conditions of the policy, it is done by setting out the alteration ia a memorandum which is

attached to the policy and forms part of it. The memorandum is called an endorsement.

UNIT 4

Procedure and Steps Involved in Import of Goods

Import Procedure:

Import trade refers to the purchase of goods from a foreign country. The procedure for

import trade differs from country to country depending upon the import policy, statutory

requirements and customs policies of different countries. In almost all countries of the world

import trade is controlled by the government. The objectives of these controls are proper use of

foreign exchange restrictions, protection of indigenous industries etc. The imports of goods have

to follow a procedure. This procedure involves a number of steps.

The steps taken in import procedure are discussed as follows:

1) Trade Enquiry:

The first stage in an import transaction, like any other transaction of purchase and sale

relates to making trade enquiries. An enquiry is a written request from the intending buyer or his

agent for information regarding the price and the terms on which the exporter will be able to

supply goods. The importer should mention in the enquiry all the details such as the goods

required, their description, catalogue number or grade, size, weight and the quantity required.

Similarly, the time and method of delivery, method of packing, terms and conditions in regard to

payment should also be indicated. In reply to this enquiry, the importer will receive a quotation

from the exporter. The quotation contains the details as to the goods available, their quality etc.,

the price at which the goods will be supplied and the terms and conditions of the sale.

2) Procurement of Import Licence and Quota:

The import trade in India is controlled under the Imports and Exports (Control) Act,

1947. A person or a firm cannot import goods into India without a valid import licence. An

import licence may be either general licence or specific licence. Under a general licence goods

can be imported from any country, whereas a specific or individual licence authorises to import

only from specific countries.

The Government of India declares its import policy in the Import Trade Control Policy

Book called the Red Book. Every importer must first find out whether he can import the goods

he wants or not, and how much of a certain class of goods he can import during the period

covered by the relevant Red Book. For the purpose of issuing licence, the importers are divided

into three categories:

(a) Established importer,

(b) Actual users, and

(c) Registered exporters, i.e., those import under any of the export promotion schemes.

In order to obtain an import licence, the intending importer has to make an application in

the prescribed form to the licensing authority. If the person imported goods of the class in which

he is interested now during the basic period prescribed for such class, he is treated as an

established importer.

An established importer can make an application to secure a Quota Certificate. The

certificate specifies the quantity and value of goods which the importer can import. For this, he

furnishes details of the goods imported in any one year in basic period prescribed for the goods

together with documentary evidence for the same, including a certificate from a chartered

accountant in the prescribed form certifying the c.i.f. value of the goods imported in the selected

year.

The c.i.f. value includes the invoice price of the goods and the freight and insurance paid

for the goods in transit. The quota certificate entitles the established importer to import upto the

value indicated therein (called Quota) which is calculated on the basis of past imports. If the

importer is an actual user, that is, he wants to import goods for his own use in industrial

manufacturing process he has to obtain licence through the prescribed sponsoring authority.

The sponsoring authority certifies his requirements and recommends the grant of licence.

In case of small industries having a capital of less than Rs. 5 lakhs, they have to apply for

licences through the Director of Industries of the state where the industry is located or some

other authority expressly prescribed by the Government.

Registered exporter importing against exports made under a scheme of export promotion and

others have to obtain licence from the Chief Controller of Exports and Imports. The Government

issues from time to time a list of commodities and products which can be imported by obtaining

a general permission only. This is called as O.G.L. or Open General Licence list.

3) Obtaining Foreign Exchange:

After obtaining the licence (or quota, in case of an established importer), the importer has

to make arrangement for obtaining necessary foreign exchange since the importer has to make

payment for the imports in the currency of the exporting country.

The foreign exchange reserves in many countries are controlled by the Government and

are released through its central bank. In India, the Exchange Control Department of the Reserve

Bank of India deals with the foreign exchange. For this the importer has to submit an application

in the prescribed form along-with the import licence to any exchange bank as per the provisions

of Exchange Control Act.

The exchange bank endorses and forwards the applications to the Exchange Control

Department of the Reserve Bank of India. The Reserve Bank of India sanctions the release of

foreign exchange after scrutinizing the application on the basis of exchange policy of the

Government of India in force at the time of application.

The importer gets the necessary foreign exchange from the exchange bank concerned. It

is to be noted that whereas import licence is issued for a particular period, exchange is released

only for a specific transaction. With liberalisation of economy, most of the restrictions have been

removed as rupee has become convertible on current account.

4) Placing the Indent or Order:

After the initial formalities are over and the importer has obtained the licence quota and

the necessary amount of foreign exchange, the next step in the import of goods is that of placing

the order. This order is known as Indent. An indent is an order placed by an importer with an

exporter for the supply of certain goods. It contains the instructions from the importer as to the

quantity and quality of goods required, method of forwarding them, nature of packing, mode of

settling payment and the price etc. An indent is usually prepared in duplicate or triplicate. The

indent may be of several types like open indent, closed indent and Confirmatory indent. In open

indent, all the necessary particulars of goods, price, etc. are not mentioned in the indent, the

exporter has the discretion to complete the formalities, at his own end. On the other hand, if full

particulars of goods, the price, the brand, packing, shipping, insurance etc. are mentioned clearly,

it is called a closed indent. A confirmatory indent is one where an order is placed subject to the

confirmation by the importer’s agent.

5) Despatching a Letter of Credit:

Generally, foreign traders are not acquainted to each other and so the exporter before

shipping the goods wants to be sure about the creditworthiness of the importer. The exporter

wants to be sure that there is no risk of non-payment. Usually, for this purpose he asks the

importers to send a letter of credit to him.

A letter of credit, popularly known as ‘L/C or ‘L.C is an undertaking by its issuer (usually

importer’s bank) that the bills of exchange drawn by the foreign dealer, on the importer will be

honoured on presentation upto a specified amount.

6) Obtaining Necessary Documents:

After despatching a letter of credit, the importer has not to do much. On receipt of the

letter of credit, the exporter arranges for the shipment of goods and sends Advice Note to the

importer immediately after the shipment of goods. An Advice Note is a document sent to a

purchaser of goods to inform him that goods have been despatched. It may also indicate the

probable date on which the ship is expected to reach the port of destination.

The exporter then draws a bill of exchange on the importer for the invoice value of

goods. The shipping documents such as the bill of lading, invoice, insurance policy, certificate of

origin, consumer invoice etc., are also attached to the bill of exchange. Such bill of exchange

with all these attached documents is called Documentary Bill. Documentary bill of exchange is

forwarded to the importer through a foreign exchange bank which has a branch or an agent in the

importer’s country for collecting the payment of the bill.

There are two types of documentary bills:

(a) D/P, D.P. (or Documents against payment) bills.

(b) D/A, D.A. (or Document against acceptance) bills.

If the bill of exchange is a D/P bill, then the documents of title of goods are delivered to

the drawee (i.e., importer) only on the payment of the bill in full. D/P bill may be sight bill or

usance bill. In case of sight bill, the payment has to be made immediately on the presentation of

the bill. But usually a grace period of 24 hours is granted.

Usance bill is to be paid within a particular period after sight. If the bill is a D/A bill, then

the documents of title of goods are released to the drawee on his acceptance of the bill and it is

retained by the banker till the date of maturity. Usually 30 to 90 days are provided for the

payment of the bill.

7) Customs Formalities and Clearing of Goods:

After receiving the documents of title of the goods, the importer’s only concern is to take

delivery of the goods, when the ship arrives at the port and to bring them to his own place of

business. The importer has to comply with many formalities for taking delivery of goods. Unless

the following mentioned formalities are complied with, the goods lie in the custody of the

Custom House.

To obtain endorsement for delivery or delivery order:

When the ship carrying the goods arrives at the port, the importer, first of all, has to

obtain the endorsement on the back of the bill of lading by the shipping company. Sometimes the

shipping company, instead of endorsing the bill in his favour, issues a delivery order to him. This

endorsement of delivery order will entitle the importer to take the delivery of the goods.

The shipping company makes this endorsement or issues the delivery order only after the

payment of freight. If the exporter has not paid the freight, i.e., when the bill, of lading is marked

freight forward, the importer has to pay the freight in order to get green signal for the delivery of

goods.

To pay Dock dues and obtain Port Trust Dues Receipts:

The importer has to submit two copies of a form known as ‘Application to import’ duly

filled in to the ‘Lading and Shipping Dues Office’. This office levies a charge on all imported

goods for services rendered by the dock authorities in connection with lading of goods. After

paying the necessary charges, the importer receive back one copy of the application to import as

a receipt ‘Port Trust Dues Receipt’.

Bill of Entry:

The importer will then fill in form called Bill of Entry. This is a form supplied by the

custom office and is to be filled in triplicate. The bill of entry contains the particulars regarding

the name and address of the importer, the name of the ship, packages number, marks, quantity,

value, description of goods, the name of the country wherefrom goods have been imported and

custom duty payable.

The bill of entry forms are of three types and are printed in three colours-Black, Blue and

Violet. A black form is used for non-dutiable or free goods, the blue form is used for goods to be

sold within the country and the violet form is used for re-exportable goods, i.e., goods meant for

re-export. The importer has to submit three forms of bill of entry along-with Port Trust Dues

Receipt to the customs office.

Bill of Sight:

If the importer is not is a position to supply the detailed particulars of goods because of

insufficiency of information supplied to him by the exporter, he has to prepare a statement called

a bill of sight. The bill of sight contains only the information possessed by the importer along-

with a remark that he is not in a position to give complete information about the goods. The bill

of sight enables him to open the package and examine the goods in the presence of custom

officer so as to complete the bill of entry.

To pay Customs or Import Duty:

There are three types of imported goods:

(i) Non dutiable or free goods,

(ii) Goods which are to be sold within the country or which are for home consumption,

and

(iii) Re-exportable goods i.e. goods meant for re-export. If the goods are duty free, no

import duty is to be paid at the custom office.

Custom authorities will permit the delivery of such goods after usual examination of the

goods. But if the goods are liable for duty, the importer has to pay custom or import duty which

may be based on weight or measurement of goods, called Specific Duty or on the value of

imported goods Ad-valorem Ditty.

There are three types of import duties. On some goods quite low duties are levied and

they are called revenue duties. On some others, quite high duties are charged to give protection

to home industries against foreign competition. While goods imported from certain nations are

given preferential treatment for the levy of import duties and in their case full protective duties

are not charged.

Bonded and Duty paid Warehouses:

The port trust and custom authorities maintain two types of warehouses-Bonded and Duty

paid. These warehouses are situated near the dock and are very useful to importers who do not

have godown of their own to store the imported goods or who, for business reasons, do not wish

to carry them to their own godowns.

The goods on which the duty has already been paid by the importer can be kept in the

duty paid warehouses for which a receipt called ‘warehouse receipt’ is issued to him. This receipt

is a document of title and is transferable. The bonded warehouses are meant for goods on which

duty has been paid by the importer. If the importer cannot pay the duty, he may keep the goods

in Bonded warehouses for which he is issued a receipt, called ‘Dock Warrant’. Dock Warrant,

also like warehouses receipt, is a document of title and is transferable.

The bonded warehouses are used by the importer when:

(i) He has no godown of his own.

(ii) He cannot pay the duty immediately.

(iii) He wants to re-export the goods and thereby does not want to pay the duty.

(iv) He wants to pay the duty in installments.

A nominal rent is charged for the use of these warehouses. One special advantage of

these warehouses is that the importer can sell the goods and transfer the title of goods merely by

endorsing warehouse receipt or dock-warrant. This will save the importer from the trouble and

expenses of carrying the goods from the warehouses to his godown.

Appointment of clearing Agents:

By now we understand that the importer has to fulfill many legal formalities before he

can take delivery of goods. The importer may take the delivery of the goods himself at the port.

But it involves much of time, expenses and difficulty. Thus, to save himself from the botheration

of complying with all the complicated formalities, the importer may appoint clearing agents for

taking the delivery of the goods for him. Clearing agents are the specialised persons engaged in

the work of performing various formalities required for taking the delivery of goods on behalf of

others. They charge some remuneration on performing these valuable services.

8) Making the Payment:

The mode and time of making payment is determined according to the terms and

conditions as agreed to earlier between the importer and the exporter. In case of a D/P bill the

documents of title are released to the importer only on the payment of the bill in full. If the bill is

a D/A bill, the documents of title of the goods are released to the importer on his acceptance of

the bill. The bill is retained by the banker till the date of maturity. Usually, 30 to 90 days are

allowed to the importer for making the payment of such bills.

9) Closing the Transactions:

The last step in the import trade procedure is closing the transaction. If the goods are to

the satisfaction of the importer, the transaction is closed. But if he is not satisfied with the quality

of goods or if there is any shortage, he will write to the exporter and settle the matter. In case the

goods have been damaged in transit, he will claim compensation from the insurance company.

The insurance company will pay him the compensation under an advice to the exporter.

What are the Advantages of Indent Houses?

As the indent houses are specialized houses in import trade, their services are very useful

to the importer. Though importers are free to place order directly, most of them prefer to make

use of the services of the indent house. Indent houses provide many services to importers.

Some of the advantages of indent houses are given below:

(a) Many importers in India are not conversant with the complexities of foreign markets.

Moreover, the policy of the Government of India is to issue import licenses to actual users. In

this process, a large number of small manufacturers get import licenses who have neither any

knowledge of foreign suppliers nor are familiar with the procedure of import. They cannot

import goods independently without the help of indent houses because of their lack of

experience.

(b) Indent houses collect orders from a large number of small importers and places them

with foreign manufacturers. Thus the benefit of buying and transportation on a large scale is

made available to small importers.

(c) The indent houses, mostly, have their agents in foreign markets. Through these

agents, they collect latest information regarding the foreign markets. The developments and the

new articles placed in the market are made available to the importers.

(d) Many indent houses in India also help in exploring new markets for the Indian Goods.

(e) As the foreign agents of the indent houses are present on the spot, they can inspect the

quality of goods shipped and prompt shipment of goods is also made possible by them.

(f) Many importers find it very difficult to make necessary arrangements for direct credit

with the foreign exchange banks. The specialised import houses enjoy a better credit in the

foreign markets. They secure more favourable terms of trade including credit for the importers.

(g) Claims and complaints, if any, owing to breakage, inferior quality, defective packing

etc., become more effective through indent houses which have their agents in the foreign

markets.

(h) The exporters also find it advantageous to appoint indent houses as their agents in the

importing country as they are very much conversant with the local requirements and customs of

the trade. Thus indent houses serve as an integral link between the Indian importer and foreign

exporter.

GUIDE FOR ONLINE IEC APPLICATION FORM FOR IMPORT EXPORT LICENSE

IN INDIA

You need to apply for an Importer Exporter Code (IEC) if you want to import or export

anything to and from India to other countries. Technically speaking, IEC is a 10-digit number

granted by the Directorate General of Foreign Trade (DGFT) to any Indian entity seeking to do

international trade.

This code is better known in India simply as an export license, and is easy to apply for

and get from the zonal or regional office of DGFT which has jurisdiction over your location of

business. You can now also submit an online IEC application at dgft.gov.in with the required

documents and fee of Rs. 250.

HOW TO SETUP A BUSINESS IN INDIA WITH IMPORT-EXPORT LICENSE

Choose your products. The IEC will be granted only for the product category you apply

for. You can seek IEC for additional categories, but you will have to pay an additional fee for

each category. Decide your company name, if you have not registered a firm as yet. New firms

that are planning to do export-import business should consider names ending with Exports (eg:

Ramsay Exports).

Register your firm, if it’s not already registered. Apply online for IEC – Importer

Exporter Code with DGFT, and pay fee of Rs. 250 through electronic money transfer. EDC

Registration – Register your export company with nearest port ( Airport and/or Seaport) List of

Documents Required for IEC Application

The exact documents required vary slightly based on whether your business is a

proprietorship, partnership, LLP or company. Here’s the list of documents required for each one.

Proprietorship – Photograph (3×3); PAN card copy; ID proof (passport / voter id / driving

license / aadhar card); Address proof (sale deed for self-owned; or rental / lease agreement +

electricity bill or telephone bill); Bank certificate (see below) or cancelled cheque with printed

name of applicant and bank a/c number.

Partnership – Photograph (3×3) of managing partner; PAN card copy of partnership firm;

ID proof (passport / voter id / driving license / aadhar card / PAN of managing partner whose

signature is on application); Address proof (sale deed for self-owned; or rental / lease agreement

+ electricity bill or telephone bill); Bank certificate (see below) or cancelled cheque with printed

name of applicant firm and bank a/c number.

LLP and Company (both public and pvt ltd) – Photograph (3×3) of partner or director

who is signing the IEC application form; PAN card copy of applicant LLP or company; ID proof

(passport / voter id / driving license / aadhar card / PAN of partner or director whose signature is

on application); Certificate of incorporation; Address proof (sale deed for self-owned; or rental /

lease agreement + electricity bill or telephone bill); Bank certificate (see below) or cancelled

cheque with printed name of applicant firm and bank a/c number.

Bank Certificate for IEC Application Form

One very important requirement for IEC application is a bank certificate. This certificate

is required only if you cannot provide a cancelled cheque bearing the name of the applicant

entity and bank a/c number. In case you do need it, you can ask your bank to give you this

certificate. Download and print out this sample format of the bank certificate, and take it to your

bank to get it signed and stamped from them.

How to Submit Online IEC Application Form

This section will tell you everything you need to know to access, complete and submit an

online IEC application form with all the required documents.

First, keep digital copies of all the documents mentioned above. Then click on this link to

fill up and submit your online IEC application form on the DGFT portal. You will first need to

enter a valid PAN number to access the form. Once you do this, you will be prompted to either

create a new IEC application, or open an existing one. You can also close an application or check

the status of a pending application. Once you reach the IEC Master document, you will have to

fill in a lot of details such as location, bank a/c and PAN details, firm establishment date, etc. At

this point, you will be prompted to pay the fee of Rs. 250 through electronic funds transfer from

designated bank such as SBI, ICICI, HDFC, etc.

Next you will get a screen for ‘upload documents’ where you can select the ones that are

applicable to upload a digital copy of each document that your online IEC application for

requires. Once your application is complete in all respects, you will get the option to print the

complete IEC application form and submit it to the specific DGFT office that covers your

business location. Once you hit submit, you will get a final screen which tells you the Ecom Ref.

No, along with your company name, the DGFT office to which the application has been

submitted for processing.

This is all you need to do to complete your online IEC application form and get the 10-

digit code from DGFT. Note that processing of IEC applications is supposed to be completed in

two working days, which means you can get it in 3 days or a week at most.

78 marketing and sales terms that you should know.

1. A/B Testing

Testing two versions of a webpage, email subject line, landing page, CTA, etc. to see

which one performs better.

2. Advertising

Putting a spotlight on a product, service or business through paid broadcasting – print or

digital.

3. Analytics

Tracking data and creating meaningful patterns from it that inform future marketing

endeavors. The data can come from website traffic, conversions, social media, etc.

4. Blogging

Originally, the term was web log or weblog and eventually…blog. Individuals, small

business and even large corporations write articles, commentaries, and the like, publishing

regularly on their website. A primary component of the inbound marketing method, blogging

helps to drive website traffic, builds thought leadership and authority, and drives leads.

5. Bottom of the Funnel

A stage in the buying process, this happens last – when leads move through the top

of the funnel (identifying a problem), the middle (shopping for solutions), and finally, to the

bottom, where they’re ready to buy. At this stage, leads are interested in a demo, a call, or a

free consultation.

6. Bounce Rate

The number of people who land on a page of your website and leave without clicking

on anything before moving on to another page on your site.

7. Buyer Persona

A summary of your ideal buyer, based on market research, data and hypothesis. The

representation helps marketers define their ideal audience and it helps salespeople determine

lead quality.

8. Brand

Anything that brings about awareness of a specific product, service or business while

separating it from other establishments.

9. Business-to-Business (B2B)

Describing a business that markets – or sells – to other businesses.

10. Business-to-Consumer (B2C)

Describing a business that markets and sells to consumers (think Apple).

11. ClickThrough Rate (CTR)

This number shows the people that move through your website or marketing

campaigns. It’s actually the “clicks” or actions prospects take, divided by the total number of

actions people could take.

12. Cold Calling

Approaching prospective clients by phone or face-to-face without having ever had

any interaction with them before.

13. Comparative Advertising

The type of advertising in which a company makes a direct comparison to another

brand, firm or organization.

14. Content Management System (CMS)

A program that manages all of the aspects of creating content. These may include

editing, indexing, navigational elements, etc.

15. Conversion Path

The path, or course of actions, a prospect will go through to eventually become a

lead. These events can include a call to action, lead form, thank you page, downloadable

content, etc.

16. Conversion Rate

Percentage of people who take a desired action, such as filling out a form, registering,

signing up for a newsletter, or any activity other than just browsing a web page.

17. Corporate Identity

All symbols, colors, logos, etc., that make up the public image of an organization.

18. Cost Per lead (CPL)

The total cost marketing pays to acquire a lead. It is an important metric to keep track

of and it influences your Customer Acquisition Cost (CAC).

19. Cost-Based Pricing

A strategic form of pricing intended to cover the expenses of running your business.

20. Customer Acquisition Cost

A measurement that allows you to assess the cost of scaling up your business.

It can be calculated by dividing the time and money spent on customer acquisition for

a specific period of time by the number of new customers gained.

(Money + Time Spent)/Number of New Customers

21. Customer Loyalty

When a consumer is a repeat buyer of a product, service or brand.

22. Customer Relationship Management (CRM)

Software that helps you organize all of your marketing and sales activities, including

storing contact information, tracking emails, storing deals, and more.

23. Demographics

A specific profiling aspect that takes into consideration age, gender, income, family

life, social class, etc. It’s often used in segmentation or for focal points in marketing and

advertising strategies.

24. Digital Marketing (Online Marketing)

Marketing to a target audience solely via the internet. Could be email marketing,

content marketing, etc.

25. Direct Competition

Competitors that provide the exact same services as your establishment or firm.

26. Direct Mail

A means of advertising communication that reaches a consumer where they live or

their place of business, through the mail, often based on demographics and/or geographical

location.

27. Direct Marketing

Dealing Directly with the ‘end user’ rather than a third party or a middle man. Also

can be seen as directly communicating with your primary target audience. Can come in the

form of advertising, marketing or communications.

28. Ebook

Also referred to as a lead magnet, ebooks are generally a piece of longer content

designed to generate leads.

29. E-Commerce

The means of selling products digitally on the internet.

30. Email

A digital message you can send through the internet to contacts, leads and prospects.

Marketing through email takes businesses directly into a consumer’s inbox and provides the

ability to create a connection and build trust.

31. Engagement Rate

A measurement of likes, shares, comments or other interaction a particular piece of

content receives.

32. Evergreen Content

Content that is valuable to a reader today, in 5 years and in 10 years. This “evergreen”

content is timeless, offers the highest-quality information and offers huge SEO benefits.

33. Friction

Any aspect of your website that is hard to understand, distracting or causes visitors to

move on from your page.

34. Geographic Segmentation

Segmenting a group of audiences based on where they live or where they are located.

35. Hashtag

A keyword phrase, written without spaces, with a in front of it. It allows you and your

audience to interact and converse about specific topics on social media.

36. Inbound Marketing

Advertising your company via content marketing, podcasts, video, eBooks, email

broadcast, SEO, Social Marketing, etc., rather than paid advertising.

37. Infographic

A type of content that is visual in nature, making complex information easy to

understand and digest.

38. Internal Marketing

Efforts to offer a marketing plan to individuals and executives within your own firm

to gain their approval and/or support.

39. Keyword

It should always align with your target audience.

40. Key Performance Indicator (KPI)

A means to measure the performance of various factors, from employee functions to

marketing tactics. Tracking KPIs will help your organization achieve its goals.

41. Landing Page

A page on your website that houses a form that prospects will fill out and exchange

their personal information for a lead magnet or free offer (such as an ebook, demo or

consultation).

42. Lead

An individual or a company that has show interest in one of your products or services.

Could be either a MQL (Marketing Qualified Lead) or an SQL (Sales Qualified Lead).

43. Lifetime Customer Value

A prediction of the net profit attributed to the entire future relationship with a

customer.

44. Margin

The profit gained from a product or service after all expenses for selling that product

or service are covered.

45. Marketing Automation

This is the tool that lets you “automate” your marketing campaigns. Through lead

nurturing, behavior-based strategies and more, you can use marketing automation to send the

right marketing messages to the right people at the right time.

46. Marketing Qualified Lead

A lead that is ready to be handed over to the sales team. An MQL has had some

sort of positive interaction with the company such as a discussion, downloading marketing

products, etc., that deems them worthy to move to the next level of the sales funnel.

47. Market-Based Pricing

Similar to competitive based pricing in the sense that this type of pricing is based off

of the streamlined/current pricing for a specific product or service within the same industry.

48. Market Development

The act of taking an existing product or service to a new market.

49. Market Penetration

A strategy used to sell more of an existing product within the current markets it is

being sold.

50. Market Research

High-intelligence research and development of a specific industry for the betterment

of sound business decisions.

51. Marketing

The process of identifying, anticipating and satisfying customer requirements in a

profitable way.

52. Monthly Recurring Revenue

The amount of income produced each month from subscriptions to your products or

services.

53. Middle of the Funnel (MOFU)

The stage of the sales funnel which a buyer enters after they have identified a

problem.

This is the point at which you position your business as the solution to their problem.

54. New Product Development

The creation of a new product that involves research, development, product testing

and launching.

55. Niche Market/Business

A very specific segment of a market in which you are trying to meet the needs of

that market.

56. Offer

This is an asset that you’ll offer prospects on a landing page. The offer is designed to

help you generate leads, and they can include everything from a webinar, ebook, checklist,

template, demo and more.

57. Pay Per Click (PPC)

A method of advertising on the internet where you only pay when someone “clicks”

on your ad.

58. Personal Development Plan

Developed for individuals who are looking to evaluate their S.W.O.T. analysis to plan

their future achievement and success.

59. Portfolio

A series of case studies that provide proof of value to potential customers.

60. Public Relations

A series of media releases, conferences, social images, etc., that make up and

maintain the reputation of an organization and its brands.

61. Qualified Lead

A lead that is qualified meets your company’s criteria, or buyer persona attributes,

and is more likely to buy. A marketing qualified lead meets marketing objectives, while a

sales qualified lead meets sales objectives.

62. Research and Development

The process of discovering and developing new products and services.

63. Responsive Design

A website that changes based on the device the consumer uses. Mobile, laptop, and

desktop devices offer different views of a website, and responsive design accommodate for

each view, without having to build separate websites for each one.

64. Return On Investment (ROI)

A way to measure the profitability of the investment you make in marketing, sales,

etc. If the ROI on an investment is negative, it generally means you’re losing money on that

endeavor. Measuring the ROI on marketing efforts is a savvy way to ensure you’re putting

your money into the strategies that bring results.

65. Referral

A prospect or lead generated from someone who may be interested in what the

salesperson is selling.

66. Relationship Marketing

Establishing relationships with the intent of developing a long term association with a

prospect or potential customer. This strategy is much less expensive that gaining new

customers.

67. Sales Funnel

The entire sales process as a whole – from prospect to paying customer – and all

marketing, advertising and sales processes in between.

68. Search Engine Optimization (SEO)

A method to increase a webpage’s performance in web search results. By tweaking

elements on a webpage (there are on-page and off-page SEO factors), you can move a

webpage up on a search result “page.” Marketers generally want to get their website page to

appear on page 1 of a search results, ideally at the very top of the page. SEO elements

include keywords, title and image tags, links, and more.

69. Smarketing

The integration of sales and marketing. It improves the skill sets and knowledge of

both teams.

70. Social Media

Platforms like Facebook, Twitter, Instagram and Snapchat that help users connect.

Marketers use these networks to increase awareness, grow their customer base and achieve

business goals.

71. S.W.O.T. Analysis

An internal study often used by organizations to identify their strengths, weaknesses,

opportunities and threats.

72. Target Marketing

A group of customers toward which a business has decided to aim its marketing

efforts and merchandise.

73. Top of the Funnel (TOFU)

Whereas Bottom of the Funnel (BOFU) prospects are in the ready-to-buy stage,

TOFU customers are at the initial stages of the buying process. They are looking for answers

to a problem they just realized they are having. Marketers create TOFU content that help

prospects identify the problem and leads them to solutions.

74. Unique Selling Proposition

A factor that differentiates a product from its competitors, such as the low cost, the

quality, etc.

75. User Experience

The experience a user has with your brand/website, from the moment they discover

you, through the purchase and beyond – where customers become advocates.

76. Viral Marketing

A method of product promotion that relies on getting customers to market an idea,

product or service on their own.

77. Website

A series of webpages that are connected, beginning with a homepage and generally

includes other pages like “contact,” “about,” and “services.” Serving an individual or

organization, your website should be strategically designed to attract visitors, convert users

into leads and then turn leads into customers.

78. Workflow

A series of emails designed to nurture leads. A powerful marketing asset, you can use

workflows to engage leads, learn more about prospects, segment lists, and much more.

UNIT 5

Import Documentation Requirement for Customs Clearance

In effecting Imports as well as Exports, documentation plays a very important role.

Especially in case of imports, the availability of right documents, the correctness of the

information available in the documents as well as the timeliness in submitting the documents and

filing the necessary applications for the Customs Clearance determines the efficiency of the

Customs Clearance process. Any delay in filing or non availability of documents can delay the

process and thereby importer stands not only to incur demurrage on the imported cargo but also

stand to loose business opportunities.

Customs Clearance process requires set of documents to be submitted by the Importer,

By the airline, shipping line or concerned Freight Forwarder as well as the Customs

documentation prepared and submitted by Clearing Agent on behalf of the Importer.

Some of the documents required from Importer from his end are:

Commercial Invoice - This is the most important document that certifies the sale as well

as gives the description of the items as well as reflects the pricing or the value of the

cargo.

Customs valuation is based on the value reflected on the Commercial Invoice. Customs

also verifies the rates charged in the commercial invoice and can question the rates

applied incase it has sufficient cause to believe that the rates charged as not as per

international market rates or the invoice is under valued to avoid duties.

Packing List - It is mandatory to put the shipping marks on all the cargo covering each

and every individual piece or parcel. The details of the number of parcels in the

consignment, their dimension, the shipping marks, the gross and net weights of each of

the parcels along with the number of units contained in each parcel is catalogued in the

form of packing list.

Packing List is used to identify the parcels as belonging to the particular consignment

under the said Invoice.

Certificate of Origin - Certain bilateral agreements and multi lateral agreements would

enjoy favorable tariffs for import duties. In such cases when the consignments are

exported from such member countries, the designated Export Agency issues Certificate of

Origin to the importer for submission to Customs. Based on this certificate the Customs

Department of the Importing Country classifies the cargo under specific schedule.

Certificate of Origin also helps to avoid third party countries from routing imports

through member countries and effecting third party exports to avoid duty, quantity or

license restrictions.

Bill of Lading or Airway Bill - Bill of Lading is a negotiable multi modal transport

document issued by the Shipping Line certifying carriage of the said cargo under the

specific invoice on behalf of the exporter or importer depending upon the terms of sale.

An ‘On Board Bill of Lading’ is usually considered to be the apt Bill of Lading that

signifies that the cargo has been loaded ‘On Board’ the vessel or the ship. This is one of

the documents required for negotiations of payment from importer to the exporter.

Air way Bill is the negotiable transport document issued by an Airline or a Freight

Forwarder who consolidates the airfreight cargo.

In case of Road Carriage, the Transporter issues a negotiate Way Bill covering the

shipment.

Depending upon the mode of transport, one of these documents would be required to be

submitted along with the commercial invoice and packing list to the Customs for clearance.