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A Project Report On

EXPORT PROCEDURE OF G.J.EXPORTS At G.J.EXPORTS By Patel Kamal H. MBA 1st year Roll No. : 40

SUBMITTED TO

Guided By: Mr.Subhashkumar Jindal

Faculty Guide: Dr. Subhadra Ragothaman

Declaration

I declare that the project entitled _EXPORT PROCEDURE OF G.J.EXPORTS submitted for the partial fulfillment of the Semester 4 in Master of Business Economics [M.B.E.] in the subject of is my original work and carried it out at Department of Economics, Veer Narmad South Gujarat University- Surat.

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

Name of the Student along with signature

Date: Place:

(Sharma Prakashchandra Shyamlal )

CERTIFICATE
This is to certify that Mr. SHARMA PRAKASHCHANDRA S. has prepared the Project Report entitled on "EXPORT PROCEDURE OF G. J. EXPORTS" under my guidance & supervision.

This project embodies the result of his work and is of the standard expected of a candidate for the award of Master of Business Economics Degree.

Date: 11 June 2011. Place: Surat

Guided By:

(Mr. Subhashkumar Jindal)

Acknowledgement
In carrying out this study & preparing the project report, i have been received assistance from all the corners. In this respect we are indeed grateful to company head, Mr.Subhashkumar Jindal and all firm member of G.J.EXPORTS, SURAT who has given me such an opportunity for learning. I express my deep sense of gratitude and sincere thanks to Mr.Subhashkumar Jindal, owner of G.J.EXPORTS, SURAT My sincere thanks Mr. Vishal Jindal for all their cooperation & guidance throughout my training period. I am also thankful to all the employees at G.J.EXPORTS,SURAT for giving me all the guidance regarding training and for preparing project report. Finally, i would like to express our gratitude towards all colleagues, friends and others who have directly or indirectly helped during the course of training as well as in completion of the report.

Date:11 June 2011.

Sharma Prakashchandra S.

PREFACE
One Can Not Swim Only By Reading A Book On Swimming. It Must Require A Practice. Practice Makes A Man Perfect. So Theoretical Knowledge Is Only A Half Way In Study Network, And Therefore It Should Be Supplemented By Practical Experience. We Have Been Fortunate To Have My Project Training At G.J.EXPORTS, SURAT. This Training Has Really Made Us Aware About Practical Aspects Of Real Life Business Specifically In Competitive Environment. This Report Includes All The Relevant Information That I Have Collected During Training And Also The Analysis Of The Survey Conducted For The Research. I Am Very Glad To Present This Report. If Any Mistake Or Fault Has Occurred In The Report, It Is Purely Due To Oversight. Any Advice And/or Suggestion Regarding This Report Will Be Appreciated.

INDEX
SR NO. 1) 2) 3) (A) (B) (C) (D) 4) PARTICULAR INTRODUCTION EXPORT PROCEDURE STAGES STAGES REGISTRATION STAGE PRE- SHIPMENT STAGE SHIPMENT STAGE POST- SHIPMENT STAGE BIBLOGRAPHY 12 17 38 54 57 PAGE NO. 7 11

G.J. EXPORTS
Nature of Business:

Manufacturer, Exporter, Trader

Contact Person: Mr. Subhash Kumar Jindal

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

Mobile / Cell Phone: +(91)-9426118687

Address: Head Office 3012 to 3020, Golden Plaza Market, Ring Road,Surat Surat, Gujarat - 395 002 (India)

About
We, G.J Exports, introduce ourselves as suppliers of Fancy Ladies Dress materials like Punjabi Suit Dupatta, Printed fabrics, Crepe fabric, Georgett fabric, Fancy embroidery & sequence work etc. We have experience of 15 years into this business. Being in the field G.J Exports today has created a niche for itself by sticking to the core policy of providing Quality Products, Reasonable Pricing and Efficient Services.

We offer a wide collection of superior quality products at the most moderate price. Our products hold a unique place in the national and international market, owing to their quality, durability, reliability and above all, for their economical price. We have raised our standards of excellence by offering unique and creative designs that are in accordance with the taste and preferences of our clients. Our range of textiles are sourced from the most reliable manufacturer and can be made available to the customers exactly as per the given specification. In response to the global needs of our clients, we have designed this page. A series of Business Categories has been focused here. The information in this page include list of Manufacturers, Exporters, Importers, Suppliers and Service Providers doing business in the global marketplace. Tradebiz.com not only provide a biggest platform for B2B market but also one can learn here about successful international business tactics. As the economy is growing, the demand for resources is growing as well. Here Tradebiz.com plays a major role in coordinating all Business persons from worldwide. Below are listed continents and countries from where you can browse different Products and Suppliers and also other Business types. As a whole you can say that Tradebiz.com provide the best platform to all Business person to do their Business Globally.

Our Products
G.J Exports is continuously making sincere efforts for the betterment of its products to cater to the need of the end customer and to satisfy them through its regular research and development in the ever-changing taste and liking. Our unparalleled range of products include,

Fabrics

Polyester Fabrics Georgette Fabrics Crepe Fabrics Chiffon Fabrics Satin Fabrics 8

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

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

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

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

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

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

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

Export Procedure has consist of following stages


A. Registration stage B. Pre-shipment stage C. Shipment stage D. Post-shipment stage

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A) Registration Stage
1) Obtaining Pan Number Export income is the subject of exemptions and deductions under Different section of income tax act. For that exporter is required to Registered his organization with the income tax authorities and obtain the Permanent account number.

The following document is necessary if any person want to apply for pan card. Two passport size photos Residency proof (here it is important that address must be write in pan card application form what is mention in residency proof if is there any mistake in address in residency proof than we can not change at the time of filling application form) Living certificate

2) Opening Bank Account 11

The exporter is required to open current account in the name of firm or company with commercial bank which is regulated by Reserve Bank of India to deal in Foreign Exchange.

3) Obtaining Export- Import Code number (IEC No.) Prior to 1-1-1997, it is necessary for all export trade to obtain CNX number From RBI.

However since than CNX has been replaced by IEC number issued by the Director General for Foreign Trade. The application form for obtaining IEC number should be accomplished by fees of RS.1000. No import or export is possible by any person without obtaining IEC Code number. Therefore any person whether individual or firms or company who is engaged in export & import of goods from India will require to obtain Import-Export Code number.

IEC code number is obtain from following Address in Surat 6th Floors Resham Bhavan Near lal Darwaja, Surat

4) Obtaining Sales Tax number Whatever goods are export by Exporter is a exempted from the sales tax but for that exporter is require to register his organization with Sales Tax Authorities.

The following documents are required if any want to obtain Sales Tax number Copy of Pan Card Two passport Size photo Form number 101 Articles of Association / Memorandum of Association List of Partner & Director Last year purchase & sales Figure Copy of a first Purchase bill and Sales Bill NSC of RS.10000 25000 Rs Cash deposit if turnover is not more than Rs.5,00,000

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In Surat Sales tax office is situated near DAYALJI GARDEN, MAKKAI POOL where the firm can obtain their sales tax numbers.

5) Registration with export council & corporation of India The exporter should require registering with export credit and guaranteeing corporation of India in order to secure overseas payment against the political and commercial risks.

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

7) Registration with Director General of Foreign Trade (DGFT) For every first time exporter, it is necessary to get registered with the DGFT (Director General of Foreign Trade), Ministry of Commerce, Government of India. DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required for the purpose of export as well as import. No exporter is allowed to export his good abroad without IEC number. However, if the goods are exported to Nepal, or to Myanmar through Indo-Myanmar boarder or to China through Gunji, Namgaya, Shipkila or Nathula ports then it is not necessary to obtain IEC number provided the CIF value of a single consignment does not exceed Indian amount of Rs. 25, 000 /-. Application for IEC number can be submitted to the nearest regional authority of DGFT. Application form which is known as "Aayaat Niryaat Form - ANF2A" can also be submitted online at the DGFT web-site: http://dgft.gov.in. While submitting an application form for IEC number, an applicant is required to submit his PAN account number. Only one IEC is issued against a single PAN number. Apart from PAN number, an applicant is also required to submit his Current Bank Account number and Bankers Certificate. A amount of Rs 1000/- is required to submit with the application fee. This amount can be submitted in the form of a Demand Draft or payment through EFT (Electronic Fund Transfer by Nominated Bank by DGFT.

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8) Registration with Export Promotion Council It is obligatory for every exporter to register with export promotion Council and obtain Registration-Cum-Membership Certificate (RCMC) The following documents are required in order to obtain RCMC Certificate Application Form Copy of a IEC no certificate Copy of a PAN Card Bank Receipt List of Partner/ Directors Bank certificate in order to know Financial Position of a applicants Partnership Deed Postal cover with Rs.25 stamps

In Surat RCMC Certificate is issued by 6th Floor Resham Bhavan Near lal Darwaja Surat.

Registered under the Indian Company Act, Export Promotion Councils or EPC is a nonprofit organisation for the promotion of various goods exported from India in international market. EPC works in close association with the Ministry of Commerce and Industry, Government of India and act as a platform for interaction between the exporting community and the government. So, it becomes important for an exporter to obtain a registration cum membership certificate (RCMC) from the EPC. An application for registration should be accompanied by a self certified copy of the IEC number. Membership fee should be paid in the form of cheque or draft after ascertaining the amount from the concerned EPC. The RCMC certificate is valid from 1st April of the licensing year in which it was issued

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and shall be valid for five years ending 31st March of the licensing year, unless otherwise specified. 9) Registration with Commodity Boards Commodity Board is registered agency designated by the Ministry of Commerce, Government of India for purposes of export-promotion and has offices in India and abroad. At present, there are five statutory Commodity Boards under the Department of Commerce. These Boards are responsible for production, development and export of tea, coffee, rubber, spices and tobacco. Registration with Income Tax Authorities Goods exported out of the country are eligible for exemption from both Value Added Tax and Central Sales Tax. So, to get the benefit of tax exemption it is important for an exporter to get registered with the Tax Authorities.

10) Registration with the other organization

Federation of Indian export organization (FIEO) Indian Trade Promotion Organization (ITPO) Chamber of Commerce (COC), Productivity council etc..

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B) Pre-Shipment Stage
1) Obtaining the foreign buyers It is getting very difficult these days for new units to find buyers of their own in handicraft products. Besides whatever efforts you have been putting on yourself, try: - through established export houses, - your overseas contacts, if any - involve some agents/intermediaries abroad - search through internet, yellow pages, classifieds - Participate in exhibitions, fairs abroad and introduce ur products 2) Inquiry and offer An inquiry is a request from the prospective importer about description of a goods, their standers or grade, size, weight or quality, terms of payment etc, After getting an inquiry exporter must proceed forward by making an offer in the form of Performa invoice. 3) Confirmation of order Once a negotiation is completed and terms and condition are finalized, exporter send three copies of Performa invoice to the importer for the confirmation of order.The importer sign this copy and send back two copies to exporter. 4) Quotation you can build a quotation for companies with whom you do business. These quotations can use company information and product information you've already entered into Shipment Wizard, so you can rapidly create these quotation documents to quickly respond to your customer requests. 5) Proforma Invoice Using the Global Wizard Shipment Wizard module, you can build proforma invoices, sometimes called pro forma invoices. These proforma invoices can use company information and product information you've already entered into Shipment Wizard, so you can rapidly create proforma invoice documents to rapidly respond to your customer requests. Global Wizard can produce the proforma invoices in either portrait or landscape format in easy-to-print Portable Document 6) Purchase Order Using the Global Wizard Shipment Wizard module, you can build a purchase order, also known as a PO, for companies with whom you do business. These purchase orders can use company information and product information you've already entered into Shipment 16

Wizard, so you can rapidly create these documents to quickly respond to your customer requests. 7) Order Confirmation Using the Global Wizard Shipment Wizard module, you can build an order confirmation if your company provides this document. Order confirmations can use company information and product information you've already entered into Shipment Wizard, so you can rapidly create these documents to quickly respond to your customer orders. 8) Order Acknowledgement Using the Global Wizard Shipment Wizard module, you can build an order acknowledgement if your company provides this document. Order acknowledgements can use company information and product information you've already entered into Shipment Wizard, so you can rapidly create these documents to quickly respond to your customer orders.

9)

Opening a letter of credit

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

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Letter Of Credit Types

There are several types of letters of credit.

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The differences are found in the wording.

Revocable versus Irrevocable o You should always insist and carefully check that a letter of credit is irrevocable. Once an irrevocable letter of credit is open it cannot be changed without the written consent of all parties including the beneficiary. A revocable letter of credit can be change or withdrawn without notifying the beneficiary. Confirmed versus Advised o Confirmed is preferred, as the Confirming Bank promises to pay. o Advised does not guarantee the creditworthiness of the Opening Bank. Straight versus Negotiation o A negotiation letter of credit can be presented to any bank. o A straight letter of credit can only be paid in the country of the Paying Bank. Sight versus Usance o At sight means the Beneficiary is paid as soon as the Paying Bank has determined that all necessary documents are in order. o Usance time can be between 30 and 180 days after the bill of lading date. This is a form of delayed payment, and should be avoided.

Requesting A Letter Of Credit

Once you have sent a pro forma invoice or an order acknowledgement to your buyer, you should request a letter of credit. o Details on what such a request should contain are available from banks that handle letters of credit. Here is a list of items that you should ask your buyer to provide when preparing a letter of credit. 19

o o o o o o o o o

That the letter of credit be confirmed, irrevocable, and at sight. Suggest a Paying Bank that is convenient to you. Quantity of items being shipped. Value of items being shipped. Specify the currency. Specify the latest shipping and expiration date. Specify the appropriate Incoterm. State whether partial shipments are allowed. Specify which documents that are required for payment.

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

Sample Form For Requesting A Letter Of Credit

Dear International Buyer: We are providing the following instructions as a guideline to be used when opening a letter of credit to us. Because a letter of credit is a very critical document, please verify that the information is accurate and complete, without any mistakes which can create a discrepancy and lead to our subsequent request for an amendment, and delay the shipment. Regarding your purchase order number dated , please ask your bank to open an irrevocable, at sight, commercial letter of credit according to the following terms and conditions.

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Beneficiary Name Beneficiary Address Requested Advising Bank Name Requested Advising Bank Address Telephone Fax Swift

In the amount of US$ The letter of credit must be payable at the counters of negotiable and payable at the counters of a bank in
name of bank

or it must be

city near the s

The letter of credit must be in the possession of the Advising Bank and received by us days before the agreed upon shipment date.

Shipment will occur days after an acceptable letter of credit is in the possession of the Advising Bank. Shipment terms are:
destination EXW - EX WORKS

Incoterms 2000

Partial shipments are permitted. Latest shipment date is Documentary requirements are: 1. Signed commercial invoice 2. Packing list 3. 4. Documents are to be presented within days from the shipping date. originals and originals and copies copies . Latest expiration date is .

All bank charges will be paid by the Applicant.

Receiving A Letter Of Credit

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Here is a partial list of questions you need to ask once you have received a letter of credit. o Is the letter of credit irrevocable? o Is the letter of credit at sight? o Do you trust the Paying Bank? o Can you convert the currency to your currency? o Are the value and quantities correct? o Are the shipping terms correct? o Can you provide the required documents? o Are the letter of credit fees as you had agreed? o Is the merchandise correctly described? o Is there sufficient time to meet the shipping date and expiration date? o Are the shipping terms correct? o Specify which documents that are required for payment. Do not ship the goods if you are unable or unwilling to meet all the conditions stated in the letter of credit. o Request an amendment to the letter of credit.

Presenting A Letter Of Credit

Once a letter of credit has been received, it needs to presented to the bank for payment along with other documents which may include: o Commercial invoice o Consular invoice o Insurance documents o Bill of lading o Certificate of origin o Packing list o Inspection certificates o Import permits

The bank will not pay if there are discrepancies and the documentation is not in order. Presenting A Letter Of Credit

Once a letter of credit has been received, it needs to presented to the bank for payment along with other documents which may include: o Commercial invoice o Consular invoice o Insurance documents

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o o o o o

Bill of lading Certificate of origin Packing list Inspection certificates Import permits

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

Documentary Collection Against Payment

Documentary collection against payment is the closest international equivalent to cash on delivery. o It is not as expensive as a letter of credit. o The seller must ship before getting paid. o The buyer does not receive the goods until payment is made The buyer receives the goods after signing a note promising to pay. This promisory note may be negotiable. There is risk with this form of payment. o The buyer may not contact the collecting bank to acknowledge acceptance. o The collecting bank is under no obligation to force such an acknowledgement.

Open Account

An open account is an unsecured credit extended to the buyer. o It should only be used with well-established customers with excellent credit ratings. o Payment terms should be clearly state when payment is due. Net 30. Because an open account is the perferred term from the buyer's perspective it is easy to negotiate. 23

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

Minimum Guarantee

A minimum guarantee works when the buyer pays a certain minimum. o This may only cover the cost of carriage, freight and insurance. o It should only be used with well established customers with excellent credit ratings. o A minimum guarantee works well when the price of the product fluctuates due to market demand. o The seller has the right to inspect the buyer's records to verify all sales. The advantange of a minimum guarantee is that the exporter has a firm order to sell. o The price may be very low, but at least there is a minimum guarantee. o The minimum guarantee may be assured through a letter of credit.

Consignment

Consignment means the exporter is paid when the importer resells the product. o It should only be used with well established customers with excellent credit ratings. o The exporter is entrusting its money to the sales abilities of the overseas reseller.

Which Payment Term

Economic Stability Type of Order

Unstable Custom

Stable Regular Production

Very Stable In Stock

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Transaction Size Cash Flow

Large Always

Moderate Never

Small Never

Financing Exports Through Your Bank Here is a simple table listing factors to consider when offering payment terms. Require Letter Credit Of Consider Documentary Against Payment Acceptable Established Consider Open Account Excellent Established

Factor

of

Collection

Type Customer Relationship

Undetermined New

Banks like export collections because: o There is evidence of the movement of goods. o There is the likelihood of the buyer paying for the goods. Proceeds can be used to pay the bank in advance. o There is a strong probability the transactions will be monitored independently of the exporter. o Financing may be provided on a transaction-by-transaction basis. Banks are more eager to lend when there is credit insurance. o Credit insurance can be obtained from government agencies established to promote exports. International Banks Make sure your bank abides by the International Banking Standard Practice (IBSP) for Uniform Customs and Practice for Documentary Credits (UCP600).

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9)

Arrangement of a pre-shipment Finance

On securing letter of credit, the exporter procures a pre-shipment finance from his bank for procuring raw materials and other components, processing and packaging of goods and transfer of a goods to the port of shipment.

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

1. Who is eligible for pre-shipment credit? An exporter who holds an export order or Letter of Credit (LC) in his own name to perform an export contract can avail of pre-shipment credit. Banks may also grant pre-shipment advances without insisting on prior lodgment of LCs or purchase orders. This is known as the "Running Account Facility". 2. What is the purpose of this finance? Pre-shipment finance can be availed of only for the specific purpose of procuring raw materials / purchasing / manufacturing / processing / transporting / warehousing / packing and shipping the goods meant for export. 3. How much financing can I as an exporter get? This is need based financing, - which means that banks will lend an amount to you after factoring in a particular margin (this margin is calculated as a percentage of the value of the order). The margin differs from bank to bank. Margins are stipulated for the following reasons :

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

The banking practice is that the exporter can obtain 90% of the FOB value of the order or 75% of the CIF value of the order.

1. What is the tenor of this funding? The RBI has allowed banks to grant this funding at a concession for a maximum period of 180 days. This period can be extended by the bank without referring to RBI for a further period of 90 days. Banks grant this extension in cases where the exporter faces genuine hardships in completing his order. If an extension is required beyond 270 days (i.e. 180+90 days), the RBI has the discretion to grant another (maximum) extension of 90 days. However, if the exports do not take place at the end of this period, the bank will charge interest from day one, at a rate left to the banks discretion.

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2. In what currency's can the exporter obtain pre-shipment credit? Most often the pre-shipment borrowable is in the domestic currency, in the case of an exporter based in India, the Indian Rupee. However in some cases, the exporter may want to borrow in foreign currency because his product has a large import component or he finds the cost of borrowing in foreign currency lower than borrowing in the local currency. Borrowing in foreign currency is feasible when the cost of Rupee borrowing (less the currency premium) is greater than the cost of borrowing in the foreign currency. This is discussed in greater detail in " when does foreign currency risk arise?" This will be easier to understand with the help of an example. Let us assume that an exporters exports and imports are both payable in US Dollars. Let us also assume that the import component is significant at, say, 70%. In this case, the exporter is open to the effects of currency movements both at the time of import, and then at the time of export. Borrowing in USD can hence partially hedge his currency risk on the export side, since his exports are also going to be in the same currency. The above facility, allowed to exporters to avail of pre-shipment credit in foreign currency, is termed as Pre-Shipment Credit in Foreign Currency or PCFC.

3. What is the cost of pre-shipment finance ? Pre-shipment credit : Up to 180 days - 10% Between 180 270 days - 13% Over 270 days - Commercial rates which are likely to be higher than the rate applicable up to 270 days. USD Lending (PCFC) - Maximum of Libor + 1.5 pct 4. What are the ways in which I can liquidate the pre-shipment finance? The pre-shipment facility can be liquidated by proceeds of export bills negotiated, purchased or discounted. As far as possible, banks don't encourage liquidation by debit to cash credit account. 28

Another interesting thing is that, once the goods are shipped out and documents tendered to the bank, the pre-shipment advance is converted to post-shipment advance. In the case of PCFC credit, pre-shipment finance is liquidated by discounting bills under the Rediscounting of Export Bills Abroad scheme. PCFC can be liquidated by discounting of export bills, or by grant of foreign currency loans by a bank. Once the exporter avails of PCFC, he will not be eligible for post-shipment credit in rupees; he will have to avail of post-shipment funding in the same currency in which he availed of the pre-shipment funding. 9) Production or procurement of goods On securing the pre-shipment finance from the bank, the exporter either arranges production of required goods or procures them from the domestic markets as per the specification of the importer.

10) Packing and marking Then after the good should be properly packed and mark with necessary details like port of shipment, destination, country of origin, gross and net weight etc. Packing and marking is an essential part of delivering goods from one place to another. Its of great importance to pack and mark your goods proper way to have them in the right conditions in the right place. Packing goods for export is a highly specialized job. If the goods are improper packed and marked, the carrier will refuse to accept them, or will make qualifications about the unsatisfactory condition of packing in the Bill of Lading. Packing can be: external (crate, bag) internal (box, packet, flask, etc.) in which the goods are sold.

In case of consumer goods packing has a double function: protection advertising of a product (to attract customers)

The main conditions of the packing usually mentioned in contract are the follows: The equipment and spare parts are to be shipped in export sea packing meeting the requirement of each particular type of equipment. The packing is to secure full safety of the goods from any kinds of damage and corrosion during transportation by sea, rail way and combined transport. The packing shall be suitable for loading by crane, by autocrats, by tracks or manually. The seller shall be responsible for any damage to or breakage of the

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goods that may be caused by poor packing or for corrosion which may appear due to improper or insufficient coating. Marking should be in indelible paint with recognized kind of marks. Often there are instructions to the crane driver: e.g. use no hooks, stow away from boilers, fragile, this way up. The shipping marks are important for loading because the cargo, which is going to be unloaded in the last port of call, has to be loaded first and vice versa. The main conditions of the marking usually mentioned in contract are the follows: The cases in which the equipment is packed are to be marked on three sides: on the top of the case and two non-opposite sides. The marking shall be clearly made with indelible paint in English and language of origin All cases which need special handling must have an additional marking (handle with care, top, do not turn over) as well as other indications if specific handling of a particular case is required. Usually, when we talk of packaging, we mean the wrapping of products for display in shops such as packets of biscuits, boxes of matches and jars of jam. The term packing refers to larger quantities packed for transport such as tea chest, crates of machinery and barrels of wine. Nowadays more and more goods in foreign trade are carried in large containers. But there are still many ports and ships, which use the old kind of packing. That means that goods are packed separately (break-bulk) and not in bulk quantities. Inspite the fact of the automatization being so advantageous, old stile loading is still often used. Many goods re palletized .. The sacks or cartons re stacked on pallets which re than lifted by crane or folk-lift trucks. I also cant but mention the way the Exporter calculates the freight costs. The price of sending goods by sea, the freight charges, is measured either by volume or weight. If the goods re made by heavy materials the freight is calculated according to weight, if the goods are made of light according to volume. The measurement ton for sea freight is 40 cubic feet (over 1 cubic meter). If one ton of the goods takes up less space than 40 cubic feet the freight is charged according to the weight, if more according to volume. When u export goods & want to know the cost of freight, u need to know the stowage factor of the goods. The stowage factor is the weight of 40 cubic feet of the goods. Big ports have changed completely in the last twenty years. Docks and ships look quite different nowadays. Instead of forests of tall thin cranes lifting pallets, we see a few huge heavily built transporter cranes lifting big steel boxes. Instead of hundreds of stevedores working in the holds and on the quayside we see no men at all; we just see huge machines . Instead of long warehouses at the dockside, we see open spaces with stacks of boxes. Lines of goods trains with the same boxes stand nearby. The ships themselves look like huge steel tanks with lots of smaller tans stacked in them. The capital cost of containerizing ports is enormous. So the majority of ports still use traditional methods. Containers are steel boxes of different sizes but usually 8 by 8 by 20 or 40 feet (2.4 by 5.9 or.12 meters). This size is limited by the width of roads. But all containers are same width and height. This is a revolution in transport.

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The advantages are: Handling at docks can be done mostly by machines. Ships specially designed can receive the containers. Very few stevedores are needed. A traditional ship took one hundred men, three to four weeks to unload. A container ship of the same size takes twelve to fifteen men, three to four days. Unloading and loading a container ship is very fast. Fewer ships can deliver goods more quickly. Packing can be done in suppliers factories. Containers neednt be opened except for Customs inspection until they reach the customers. Warehouses are unnecessary. Containers are waterproof and can be stacked by straddle carriers outside in the rain. During Ro/or transportation, containers can be handled in two ways: can be off-loaded from lorries belonging to traders onto slave trailers & parked to speed handling operations. Containers can also be double-stacked & than towed on board; or they can be stacked in the marshalling areas & carried on board by folk-lift trucks. Trailers too can be parked in the marshalling areas & then towered on board temperature controlled trailers can be connected to the electrical plant in the ship. Small-unit containers are pre-loaded onto slave-trailers & protected by tarpaulins if necessary these can be folk-lifted on board. Wheeled or self propelled cargo such as cars, can be driven on board & stowed in the lower hold. Ro/or ships have lifts to take containers to upper & lower decks& can often carry as many as 3 hundred containers & a hundred 30 foot trailers.

11) Pre-shipment inspection Before exporting finalize goods it is necessary for the exporter should contact export inspection agency (EIA) for obtaining an inspect certificate.

Pre Shipment Inspection The Government of India had enacted export (quality control and inspection) act, 1963, which came into force from January 1, 1964. The Government of India had set up export inspection councils (EIC) to provide the sound development of the export trade through quality control and pre shipment inspection. The Government has prescribed standard of quality and inspection of various commodities meant for export. The Government of India notified 1057 items under the compulsory quality control and pre shipment inspection. These items related to the product group of * Engineering products * Chemical and allied products * Food and agricultural products

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

System of inspection There are three systems of inspection. These are * Consignment inspection * In - process quality control * self- certification scheme. Consignment inspection Under the Consignment wise inspection system, each export consignment is inspected and tested by the recognized inspection agencies. The selection of the items is made on the basis of statistical plan to satisfy conformity of the product with the prescribed standard. After inspection, the recognizes inspection agency issue the pre shipment inspection certificate to the exporter. The exporter giving the detail of the shipment to the inspection agency along with the following documents at least 7 days in advance of the expected date of shipment/dispatch should make application for pre shipment inspection. * Copy of contact * Detail of packing specification * Commercial invoice giving evidence of the FOB valve * Fee of inspection by check/Demand draft. The inspection fee is generally 0.4% of FOB value of shipment. the inspection agency will depute an inspector to conduct the pre shipment inspection at the expoter factory or warehouse. After the satisfactory completion of the inspection a certificate of inspection is issued to the exporter, which he has to submit to the export department of custom, for the clearance of export cargo.

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

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In - self- certification scheme The manufacturing units which have proven record of maintenance of quality are given have record of maintenance of quality are given of self-certification so that they can issue pre shipment inspection certificate themselves. The unit will be well equipped with testing facilities. The unit indenting to avail of this facility should apply to the director (inspection and quality control). The director, while considering the application, will inspect the manufacturing unit for proper maintenance and testing facilities provided in the units, these units are required to pay a fee at the rate of 0.1% of FOB value subject to a minimum of Rs 2500 and maximum of Rs 1 lacks in 1 year and the recognition may be extended if the manufacturing unit continues to fulfill the recognized norms.

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

ISI/AGMARK Units ISI/AGMARK are invariable recognized as a mark of adequate quality foe export purpose. Products manufactured by the units, which are allowed to use ISI/AGMARK, are not required to be inspected by any inspection agency. The custom authorities will allow the export of product of purpose marked ISI or AGMARK without any pre shipment inspection certificate.

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

Exemption from pre shipment inspection *Export house, star export house, trading house, star trading house, premier trading house have been exempted from the preview of compulsory pre shipment inspection. * 100% EOUs and units set up in EPZ/FTZ/SEZ are exempt from pre shipment inspection 12) Central Excise clearance The exporters are totally exempted from the payment of central excise duty. However, exemption should be claimed in one of the following ways: a. Export under Rebate b. Export under bond

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13)

Obtaining insurance cover The exporter must take an appropriate policy in order to insure Risk. c. ECGC policy in order to cover credit risk d. Marine Policy, if price quotation agreed upon is CIF.

What is ECGC? Export Credit Guarantee Corporation of India Limited, was established in the year 1957 by the Government of India to strengthen the export promotion drive by covering the risk of exporting on credit. Being essentially an export promotion organization, it functions under the administrative control of the Ministry of Commerce & Industry, Department of Commerce, Government of India. It is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community. ECGC is the fifth largest credit insurer of the world in terms of coverage of national exports. The present paid-up capital of the company is Rs.800 crores and authorized capital Rs.1000 crores. 14) Appointment of C&F Agents

Exporting is a complex and time consuming process; the exporter is required to appoint a clearing and forwarding agent for the smooth clearance of goods from the customs and preparation and submission of various export documents. 1.C&Fs (Customs Clearing and Forwarding Agent) grew out of the need to provide businesses with smart shipping resources and provide up-to-date knowledge to get through customs quickly and easily. One of the primary jobs of a C&F is to keep your shipping costs low, by providing a range of available transportation modes with services related to shipping, like packaging, and acting as experts in clearing customs. The best service they can provide for you is tailoring shipping needs particularly suited for your business according to the goods that you ship and where they are sourced. For importing clients, they work to get the best mode of transportation from the manufacturer or wholesaler to the local customs office upon arrival. For exporting, they choose the best method to take goods from your doorstep to the destinations customs office. A C&F can greatly reduce shipping expenses and the time you spend on customs forms, etc.

3.

Shipment Stages

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Export cargo can be exported to the various ways like Air, Ship, and Land. However, Shipment by sea is a more popular and cheapest way of export.

a. Reservation of shipping space Once the export order is finalized, the export reserve required space in the vessel for the shipment. On accepting exporter request, shipping company issues a shipping order. b. Arrangement shipment The exporter makes necessary arrangement for transportation of goods to the port either by road or railway. c. Preparation and processing of shipping documents i. Letter of credit along with export contract or export order ii. Commercial invoice iii. Packing list or packing note iv. Certificate of origin v. GR form vi. ARE-1 form vii. Certificate of inspection where necessary viii. Marine insurance policy of internal transportation up to the port of

d. Customs Clearance The cargo must be clear from the customs before it is loaded on the ship Procedure for Clearance of Imported and Export Goods I. Import: Bill of Entry Cargo Declaration: Goods imported in a vessel/aircraft attract customs duty and unless these are not meant for customs clearance at the port/airport of arrival by particular vessel/aircraft and are intended for transit by the same vessel/aircraft or transhipment to another customs station or to any place outside India, detailed customs clearance formalities of the landed goods have to be followed by the importers. In regard to the transit goods, so long as these are mentioned in import report/IGM for transit to any place outside India, Customs allows transit without payment of duty. Similarly for goods brought in by particular vessel/aircraft for transshipment to another customs station detailed customs clearance formalities at the port/airport of landing are not prescribed and simple transshipment

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procedure has to be followed by the carrier and the concerned agencies. The customs clearance formalities have to be complied with by the importer after arrival of the goods at the other customs station. There could also be cases of transshipment of the goods after unloading to a port outside India. Here also simpler procedure for transshipment has been prescribed by regulations, and no duty is required to be paid. (Sections 52 to 56 of the Customs are relevant in this regard) 2. For other goods which are offloaded importers have the option to clear the goods for home consumption after payment of the duties leviable or to clear them for warehousing without immediate discharge of the duties leviable in terms of the warehousing provisions built in the Customs Act. Every importer is required to file in terms of the Section 46 an entry (which is called Bill of entry) for home consumption or warehousing in the form, as prescribed by regulations. 3. If the goods are cleared through the EDI system no formal Bill of Entry is filed as it is generated in the computer system, but the importer is required to file a cargo declaration having prescribed particulars required for processing of the entry for customs clearance. 4. The Bill of entry, where filed, is to be submitted in a set, different copies meant for different purposes and also given different colour scheme, and on the body of the bill of entry the purpose for which it will be used is generally mentioned in the non-EDI declaration. 5. The importer clearing the goods for domestic consumption has to file bill of entry in four copies; original and duplicate are meant for customs, third copy for the importer and the fourth copy is meant for the bank for making remittances. 6. In the non-EDI system along with the bill of entry filed by the importer or his representative the following documents are also generally required:

Signed invoice Packing list Bill of Lading or Delivery Order/Airway Bill GATT declaration form duly filled in Importers/CHAs declaration License wherever necessary Letter of Credit/Bank Draft/wherever necessary Insurance document Import license Industrial License, if required Test report in case of chemicals Adhoc exemption order DEEC Book/DEPB in original Catalogue, Technical write up, Literature in case of machineries, spares or chemicals as may be applicable Separately split up value of spares, components machineries Certificate of Origin, if preferential rate of duty is claimed No Commission declaration

7. While filing the bill of entry and giving various particulars as prescribed therein the correctness of the information given has also to be certified by the importer in the form a declaration at the foot of the bill of entry and any mis-declaration/incorrect declaration has

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legal consequences, and due precautions should be taken by importer while signing these declarations. 8. Under the EDI system, the importer does not submit documents as such for assessment but submits declarations in electronic format containing all the relevant information to the Service Centre. A signed paper copy of the declaration is taken by the service centre operator for non-reputability of the declaration. A checklist is generated for verification of data by the importer/CHA. After verification, the data is submitted to the system by the Service Centre Operator and system then generates a B/E Number, which is endorsed on the printed checklist and returned to the importer/CHA. No original documents are taken at this stage. Original documents are taken at the time of examination. The importer/CHA also need to sign on the final document after Customs clearance. 9. The first stage for processing a bill of entry is what is termed the noting of the bill of entry, vis--vis, the IGM filed by the carrier. In the non-EDI system the importer has to get the bill of entry noted in the concerned unit which checks the consignment sought to be cleared having been manifested in the particular vessel and a bill of entry number is generated and indicated on all copies. After noting the bill of entry gets sent to the appraising section of the Custom House for assessment functions, payment of duty etc. In the EDI system, the Steamer Agents get the manifest filed through EDI or by using the service centre of the Custom House and the noting aspect is checked by the system itself which also generates bill of entry number. 10. After noting/registration of the Bill of entry, it is forwarded manually or electronically to the concerned Appraising Group in the Custom House dealing with the commodity sought to be cleared. Appraising Wing of the Custom House has a number of Groups dealing with earmarked commodities falling under different Chapter Headings of the Customs Tariff and they take up further scrutiny for assessment, import permissibility etc. angle.

Assessment: 11. The basic function of the assessing officer in the appraising groups is to determine the duty liability taking due note of any exemptions or benefits claimed under different export promotion schemes. They have also to check whether there are any restrictions or prohibitions on the goods imported and if they require any permission/license/permit etc., and if so whether these are forthcoming. Assessment of duty essentially involves proper classification of the goods imported in the customs tariff having due regard to the rules of interpretations, chapter and sections notes etc., and determining the duty liability. It also involves correct determination of value where the goods are assessable on ad valorem basis. The assessing officer has to take note of the invoice and other declarations submitted along with the bill of entry to support the valuation claim, and adjudge whether the transaction value method and the invoice value claimed for the basis of assessment is acceptable, or value needs to be predetermined having due regard to the provisions of Section 14 and the valuation rules issued there under, the case law and various instructions on the subject. He also takes note of the contemporaneous values and other information on valuation available with the Custom House.

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12. Where the appraising officer is not very clear about the description of the goods from the document or as some doubts about the proper classification which may be possible only to determine after detailed examination of the nature of the goods or testing of its samples, he may give an examination order in advance of finalization of assessment including order for drawing of representative sample. This is done generally on the reverse of the original copy of the bill of entry which is presented by the authorized agent of the importer to the appraising staff posted in the Docks/Air Cargo Complexes where the goods are got examined in the presence of the importers representative. 13. On receipt of the examination report the appraising officers in the group assesses the bill of entry. He indicates the final classification and valuation in the bill of entry indicating separately the various duties such as basic, countervailing, anti-dumping, safeguard duties etc., that may be livable. Thereafter the bill of entry goes to Assistant Commissioner/Deputy Commissioner for confirmation depending upon certain value limits and sent to copyist who calculates the duty amount taking into account the rate of exchange at the relevant date as provided under Section 14 of the Customs Act. 14. After the assessment and calculation of the duty liability the importers representative has to deposit the duty calculated with the treasury or the nominated banks, where after he can go and seek delivery of the goods from the custodians. 15. Where the goods have already been examined for finalization of classification or valuation no further examination/checking by the dock appraising staff is required at the time of giving delivery and the goods can be taken delivery after taking appropriate orders and payment of dues to the custodians, if any. 16. In most cases, the appraising officer assesses the goods on the basis of information and details furnished to the importer in the bill of entry, invoice and other related documents including catalogue, write-up etc. He also determines whether the goods are permissible for import or there are any restriction/prohibition. He may allow payment of duty and delivery of the goods on what is called second check/appraising basis in case there are no restriction/prohibition. In this method, the duties as determined and calculated are paid in the Custom House and appropriate order is given on the reverse of the duplicate copy of the bill of entry and the importer or his agent after paying the duty submits the goods for examination in the import sheds in the docks etc., to the examining staff. If the goods are found to be as declared and no other discrepancies/mis-declarations etc., are detected, the importer or his agent can clear the goods after the shed appraiser gives out of charge order. 17. Wherever the importer is not satisfied with the classification, rate of duty or valuation as may be determined by the appraising officer, he can seek an assessment order. An appeal against the assessment order can be made to appropriate appellate authority within the time limits and in the manner prescribed. EDI Assessment: 18. In the EDI system of handling of the documents/declarations for taking import clearances as mentioned earlier the cargo declaration is transferred to the assessing officer in the groups electronically. 19. The assessing officer processes the cargo declaration on screen with regard to all the parameters as given above for manual process. However in EDI system, all the

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calculations are done by the system itself. In addition, the system also supplies useful information for calculation of duty, for example, when a particular exemption notification is accepted, the system itself gives the extent of exemption under that notification and calculates the duty accordingly. Similarly, it automatically applies relevant rate of exchange in force while calculating. Thus no copyist is required in EDI system. If assessing officer needs any clarification from the importer, he may raise a query. The query is printed at the service centre and the party replies to the query through the service centre. 20. After assessment, a copy of the assessed bill of entry is printed in the service centre. Under EDI, documents are normally examined at the time of examination of the goods. Final bill of entry is printed after out of charge is given by the Custom Officer. 21. In EDI system, in certain cases, the facility of system appraisal is available. Under this process, the declaration of importer is taken as correct and the system itself calculates duty which is paid by the importer. In such case, no assessing officer is involved.

22. Also, a facility of tele-enquiry is provided in certain major Customs stations through which the status of documents filed through EDI systems could be ascertained through the telephone. If nay query is raised, the same may be got printed through fax in the office of importer/exporter/CHA. Examination of Goods: 23. All imported goods are required to be examined for verification of correctness of description given in the bill of entry. However, a part of the consignment is selected on random selection basis and is examined. In case the importer does not have complete information with him at the time of import, he may request for examination of the goods before assessing the duty liability or, if the Customs Appraiser/Assistant Commissioner feels the goods are required to be examined before assessment, the goods are examined prior to assessment. This is called First Appraisement. The importer has to request for first check examination at the time of filing the bill of entry or at data entry stage. The reason for seeking First Appraisement is also required to be given. On original copy of the bill of entry, the Customs Appraiser records the examination order and returns the bill of entry to the importer/CHA with the direction for examination, who is to take it to the import shed for examination of the goods in the shed. Shed Appraiser/Dock examiner examines the goods as per examination order and records his findings. In case group has called for samples, he forwards sealed samples to the group. The importer is to bring back the said bill of entry to the assessing officer for assessing the duty. Appraiser assesses the bill of entry. It is countersigned by Assistant/Deputy Commissioner if the value is more than Rs. 1 lakh. 24. The goods can also be examined subsequent to assessment and payment of duty. This is called Second Appraisement. Most of the consignments are cleared on second appraisement basis. It is to be noted that whole of the consignment is not examined. Only those packages which are selected on random selection basis are examined in the shed. 25. Under the EDI system, the bill of entry, after assessment by the group or first appraisement, as the case may be, need to be presented at the counter for registration for examination in the import shed. A declaration for correctness of entries and genuineness

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of the original documents needs to be made at this stage. After registration, the B/E is passed on to the shed Appraiser for examination of the goods. Along-with the B/E, the CHA is to present all the necessary documents. After completing examination of the goods, the Shed Appraiser enters the report in System and transfers first appraisement B/E to the group and gives 'out of charge' in case of already assessed Bs/E. Thereupon, the system prints Bill of Entry and order of clearance (in triplicate). All these copies carry the examination report, order of clearance number and name of Shed Appraiser. The two copies each of B/E and the order are to be returned to the CHA/Importer, after the Appraiser signs them. One copy of the order is attached to the Customs copy of B/E and retained by the Shed Appraiser.

Green Channel facility: 26. Some major importers have been given the green channel clearance facility. It means clearance of goods is done without routine examination of the goods. They have to make a declaration in the declaration form at the time of filing of bill of entry. The appraisement is done as per normal procedure except that there would be no physical examination of the goods. Only marks and number are to be checked in such cases. However, in rare cases, if there are specific doubts regarding description or quantity of the goods, physical examination may be ordered by the senior officers/investigation wing like SIIB. Execution of Bonds: 27. Wherever necessary, for availing duty free assessment or concessional assessment under different schemes and notifications, execution of end use bonds with Bank Guarantee or other surety is required to be furnished. These have to be executed in prescribed forms before the assessing Appraiser. Payment of Duty: 28. The duty can be paid in the designated banks or through TR-6 challans. Different Custom Houses have authorized different banks for payment of duty. It is necessary to check the name of the bank and the branch before depositing the duty. Bank endorses the payment particulars in challan which is submitted to the Customs. Amendment of Bill of Entry: 29. Whenever mistakes are noticed after submission of documents, amendments to the of entry is carried out with the approval of Deputy/Assistant Commissioner. The request for amendment may be submitted with the supporting documents. For example, if the amendment of container number is required, a letter from shipping agent is required. Amendment in document may be permitted after the goods have been given out of charge i.e. goods have been cleared on sufficient proof being shown to the Deputy/Assistant Commissioner.

Prior Entry for Bill of Entry:

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

31. The importer is to file 5 copies of the bill of entry and the fifth copy is called Advance Noting copy. The importer has to declare that the vessel/aircraft is due within 30 days and they have to present the bill of entry for final noting as soon as the IGM is filed. Advance noting is available to all imports except for into bond bill of entry and also during the special period. Mother Vessel/Feeder vessel: 32. Often in case of goods coming by container ships they are transferred at an intermediate ports (like Ceylon) from mother vessel to smaller vessels called feeder vessels. At the time of filing of advance noting B/E, the importer does not know as to which vessel will finally bring the goods to Indian port. In such cases, the name of mother vessel may be filled in on the basis of the bill of lading. On arrival of the feeder vessel, the bill of entry may be amended to mention names of both mother vessel and feeder vessel. Specialized Schemes: 33. The import of goods are made under specialized schemes like DEEC or EOU etc. The importer in such cases is required to execute bonds with the Customs authorities for fulfillment of conditions of respective notifications. If the importer fails to fulfill the conditions, he has to pay the duty livable on those goods. The amount of bond would be equal to the amount of duty livable on the imported goods. The bank guarantee is also required along with the bond. However, the amount of bank guarantee depends upon the status of the importer like Super Star Trading House/Trading House etc. Bill of Entry for Bond/Warehousing: 34. A separate form of bill of entry is used for clearance of goods for warehousing. All documents as required to be attached with a Bill of Entry for home consumption are also required to be filed with bill of entry for warehousing. The bill of entry is assessed in the same manner and duty payable is determined. However, since duty is not required to be paid at the time of warehousing of the goods, the purpose of assessing the goods at this stage is to secure the duty in case the goods do not reach the warehouse. The duty is paid at the time of ex-bond clearance of goods for which an ex-bond bill of entry is filed. The rate of duty applicable to imported goods cleared from a warehouse is the rate in-force on the date on which the goods are actually removed from the warehouse. (References: Bill of Entry (Forms) Regulations, 1976, ATA carnet (Form Bill of Entry and Shipping Bill) Regulations, 1990 ,Uncleared goods (Bill of entry) regulation, 1972, , CBEC Circulars No. 22/97, dated 4/7/1997, 63/97, dated 21/11/1997).

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II. Export : For clearance of export goods, the export or his agents have to undertake the following formalities:

(a)

Registration:

35. The exporters have to obtain PAN based Business Identification Number(BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance of export goods. Under the EDI System, PAN based BIN is received by the Customs System from the DGFT online. The exporters are also required to register authorized foreign exchange dealer code (through which export proceeds are expected to be realized) and open a current account in the designated bank for credit of any drawback incentive. 36. Whenever a new Airline, Shipping Line, Steamer Agent, port or airport comes into operation, they are required to be registered into the Customs System. Whenever, electronic processing of shipping bill etc. is held up on account of non-registration of these entities, the same is to be brought to the notice of Assistant/Deputy Commissioner incharge of EDI System for registering the new entity in the system. (b) Registration in the case of export under export promotion schemes:

37. All the exporters intending to export under the export promotion scheme need to get their licenses/DEEC book etc. registered at the Customs Station. For such registration, original documents are required. (c) Processing of Shipping Bill - Non-EDI:

38. Under manual system, shipping bills or, as the case may be, bills of export are required to be filed in format as prescribed in the Shipping Bill and Bill of Export (Form) regulations, 1991. The bills of export are being used if clearance of export goods is taken at the Land Customs Stations. Different forms of shipping bill/bill of export have been prescribed for export of duty free goods, export of dutiable goods and export under drawback etc. 39. Shipping Bills are required to be filed along with all original documents such as invoice, AR-4, packing list etc. The assessing officer in the Export Department checks the value of the goods, classification under Drawback schedule in case of Drawback Shipping Bills, rate of duty/cess where applicable, exportability of goods under EXIM policy and other laws enforce. The DEEC/DEPB Shipping bills are processed in the DEEC group. In case of DEEC Shipping bills, the assessing officer verifies that the description of the goods declared in the shipping bill and invoice match with the description of the resultant product as given in the DEEC book. If the assessing officer has any doubts regarding value, description of goods, he may call for samples of the goods from the docks. He may also call for any other information required by him for processing of shipping bill. He may assess the shipping bill after visual inspection of the sample or may send it for test and pass the shipping bill provisionally.

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40. Once, the shipping bill is passed by the Export Department, the exporter or his agent present the goods to the shed appraiser (export) in docks for examination. The shed appraiser may mark the document to a Custom officer (usually an examiner) for examining the goods. The examination is carried out under the supervision of the shed appraiser (export). If the description and other particulars of the goods are found to be as declared, the shed appraiser gives a let export order, after which the exporter may contact the preventive superintendent for supervising the loading of goods on to the vessel. 41. In case the examining staff in the docks finds some discrepancy in the goods, they may mark the shipping bill back to export department/DEEC group with their observations as well as sample of goods, if needed. The export department re-considers the case and decide whether export can be allowed, or amendment in description, value etc. is required before export and whether any other action is required to be taken under the Customs Act, 1962 for mis-declaration of description of value etc. (d) Processing of Shipping Bill - EDI:

42. Under EDI System, declarations in prescribed format are to be filed through the Service Centers of Customs. A checklist is generated for verification of data by the exporter/CHA. After verification, the data is submitted to the System by the Service Center operator and the System generates a Shipping Bill Number, which is endorsed on the printed checklist and returned to the exporter/CHA. For export items which are subject to export cess, the TR-6 challans for cess is printed and given by the Service Center to the exporter/CHA immediately after submission of shipping bill. The cess can be paid on the strength of the challan at the designated bank. No copy of shipping bill is made available to exporter/CHA at this stage. (e) Octroi procedure, Quota Allocation and Other certification for Export Goods: 43. The quota allocation label is required to be pasted on the export invoice. The allocation number of AEPC is to be entered in the system at the time of shipping bill entry. The quota certification of export invoice needs to be submitted to Customs alongwith other original documents at the time of examination of the export cargo. For determining the validity date of the quota, the relevant date needs to be the date on which the full consignment is presented to the Customs for examination and duly recorded in the Computer System. In EDI System at Delhi Air cargo, the quota information is automatically verified from the AEPC/TEXPROCIL system. 44. Since the shipping bill is generated only after the 'let export order' is given by Customs, the exporter may make use of export invoice or such other document as required by the Octroi authorities for the purpose of Octroi exemption.

(f)

Arrival of Goods at Docks:

45. The goods brought for the purpose of examination and subsequent 'let export' is allowed entry to the Dock on the strength of the checklist and other declarations filed by the exporter in the Service Center. The Port authorities have to endorse the quantity of goods actually received on the reverse of the Check List.

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(g)

System Appraisal of Shipping Bills:

46. In many cases the Shipping Bill is processed by the system on the basis of declarations made by the exporters without any human intervention. In other cases where the Shipping Bill is processed on screen by the Customs Officer, he may call for the samples, if required for confirming the declared value or for checking classification under the Drawback Schedule. He may also give any special instructions for examination of goods, if felt necessary. (h) Status of Shipping Bill:

47. The exporter/CHA can check up with the query counter at the Service Center whether the Shipping Bill submitted by them in the system has been cleared or not, before the goods are brought into the Docks for examination and export. In case any query is raised, the same is required to be replied through the service center or in case of CHAs having EDI connectivity through their respective terminals. The Customs officer may pass the Shipping Bill after all the queries have been satisfactorily replied to. (i) Customs Examination of Export Cargo:

48. After the receipt of the goods in the dock, the exporter/CHA may contact the Customs Officer designated for the purpose present the check list with the endorsement of Port Authority and other declarations as aforesaid along with all original documents such as, Invoice and Packing list, AR-4, etc. Customs Officer may verify the quantity of the goods actually received and enter into the system and thereafter mark the Electronic Shipping Bill and also hand over all original documents to the Dock Appraiser of the Dock who many assign a Customs Officer for the examination and intimate the officers name and the packages to be examined, if any, on the check list and return it to the exporter or his agent. 49. The Customs Officer may inspect/examine the shipment along with the Dock Appraiser. The Customs Officer enters the examination report in the system. He then marks the Electronic Bill along with all original documents and check list to the Dock Appraiser. If the Dock Appraiser is satisfied that the particulars entered in the system conform to the description given in the original documents and as seen in the physical examination, he may proceed to allow "let export" for the shipment and inform the exporter or his agent. (j) Variation Between the Declaration & Physical Examination:

50. The check list and the declaration along with all original documents is retained by the Appraiser concerned. In case of any variation between the declaration in the Shipping Bill and physical documents/examination report, the Appraiser may mark the Electronic Shipping Bill to the Assistant Commissioner/Deputy Commissioner of Customs (Exports). He may also forward the physical documents to Assistant Commissioner/Deputy Commissioner of Customs (Exports) and instruct the exporter or his agent to meet the Assistant Commissioner/Deputy Commissioner of Customs (Exports) for settlement of dispute. In case the exporter agrees with the views of the Department, the Shipping Bill needs to be processed accordingly. Where, however, the exporter disputes the view of the

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Department principles of natural justice is required to be followed before finalization of the issue. (k) Stuffing / Loading of Goods in Containers

51. The exporter or his agent should hand over the exporter copy of the shipping bill duly signed by the Appraiser permitting "Let Export" to the steamer agent who may then approach the proper officer (Preventive Officer) for allowing the shipment. In case of container cargo the stuffing of container at Dock is dome under Preventive Supervision. Loading of both containerized and bulk cargo is done under Preventive Supervision. The Customs Preventive Superintendent (Docks) may enter the particulars of packages actually stuffed in to the container, the bottle seal number particulars of loading of cargo container on board into the system and endorse these details on the exporter copy of the shipping bill presented to him by the steamer agent. If there is a difference in the quantity/number of packages stuffed in the containers/goods loaded on vessel the Superintendent (Docks) may put a remark on the shipping bill in the system and that shipping bill requires amendment or changed quantity. Such shipping bill also may not be taken up for the purpose of sanction of Drawback/DEEC logging, till the shipping bill is suitably amended for the changed quantity. The Customs Preventive Officer supervising the loading of container and general cargo in to the vessel may give "Shipped on Board" endorsement on the exporters copy of the shipping bill.

(l)

Drawal of Samples:

52. Where the Appraiser Dock (export) orders for samples to be drawn and tested, the Customs Officer may proceed to draw two samples from the consignment and enter the particulars thereof along with details of the testing agency in the ICES/E system. There is no separate register for recording dates of samples drawn. Three copies of the test memo are prepared by the Customs Officer and are signed by the Customs Officer and Appraising Officer on behalf of Customs and the exporter or his agent. The disposal of the three copies of the test memo are as follows:i) Original to be sent along with the sample to the test agency. ii) Duplicate Customs copy to be retained with the 2nd sample. iii) Triplicate Exporters copy. 53. The Assistant Commissioner/Deputy Commissioner if he considers necessary, may also order for sample to be drawn for purpose other than testing such as visual inspection and verification of description, market value inquiry, etc. (m) Amendments:

54. Any correction/amendments in the check list generated after filing of declaration can be made at the service center, provided, the documents have not yet been submitted in the system and the shipping bill number has not been generated. Where corrections are required to be made after the generation of the shipping bill No. or after the goods have been brought into the Export Dock, amendments is carried out in the following manners. i) by If the goods have not yet been allowed "let export" amendments may be permitted the Assistant Commissioner (Exports).

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ii) Where the "Let Export" order has already been given, amendments may be permitted only by the Additional/Joint Commissioner, Custom House, in charge of export section. 55. In both the cases, after the permission for amendments has been granted, the Assistant Commissioner/Deputy Commissioner (Export) may approve the amendments on the system on behalf of the Additional /Joint Commissioner. Where the print out of the Shipping Bill has already been generated, the exporter may first surrender all copies of the shipping bill to the Dock Appraiser for cancellation before amendment is approved on the system. (n) Export of Goods Under Claim for Drawback:

56. After actual export of the goods, the Drawback claim is processed through EDI system by the officers of Drawback Branch on first come first served basis. There is no need for filing separate drawback claims. The status of the shipping bills and sanction of DBK claim can be ascertained from the query counter set up at the service center. If any query has been raised or deficiency noticed, the same is shown on the terminal. A print out of the query/deficiency may be obtained by the authorized person of the exporter from the service center. The exporters are required to reply to such queries through the service center. The claim will come in queue of the EDI system only after reply to queries/deficiencies are entered by the Service Center. 57. All the claims sanctioned on a particular day are enumerated in a scroll and transferred to the Bank through the system. The bank credits the drawback amount in the respective accounts of the exporters. Bank may send a fortnightly statement to the exporters of such credits made in their accounts. 58. The Steamer Agent/Shipping Line may transfer electronically the EGM to the Customs EDI system so that the physical export of the goods is confirmed, to enable the Customs to sanction the drawback claims. (o) Generation of Shipping Bills:

59. After the "let export" order is given on the system by the Appraiser, the Shipping Bill is generated by the system in two copies i.e., one Customs copy, one exporters copy (E.P. copy is generated after submission of EGM). After obtaining the print out the appraiser obtains the signatures of the Customs Officer on the examination report and the representative of the CHA on both copies of the shipping bill and examination report. The Appraiser thereafter signs & stamps both the copies of the shipping bill at the specified place. 60. The Appraiser also signs and stamps the original & duplicate copy of SDF. Customs copy of shipping bill and original copy of the SDF is retained along with the original declarations by the Appraiser and forwarded to Export Department of the Custom House. He may return the exporter copy and the second copy of the SDF to the exporter or his agent. 61. As regards the AEPC quota and other certifications, these are retained along with the shipping bill in the dock after the shipping bill is generated by the system. At the time of examination, apart from checking that the goods are covered by the quota certifications, the details of the quota entered into the system needs to be checked.

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(p)

Export General Manifest:

62. All the shipping lines/agents need to furnish the Export General Manifests, Shipping Bill wise, to the Customs electronically within 7 days from the date of sailing of the vessel. 63. Apart from lodging the EGM electronically the shipping lines need to continue to file manual EGMs along with the exporter copy of the shipping bills as per the present practice in the export department. The manual EGMs need to be entered in the register at the Export Department and the Shipping lines may obtain acknowledgements indicating the date and time at which the EGMs were received by the Export Department. 64. The above is the general procedure for export under EDI Systems. However special procedures exist for specified schemes, details of which may be obtained from the Public Notice/Standing Orders issued by the respective Commission rates. e. Obtaining carting order from the port trust authority The C&F agent, then approaches the superintend of the concerned port trust for obtaining the carting order for moving the cargo inside the dock.

f. Customs examination and issue of Let export order Customs examination at the port of shipment physically examines the goods and sales the packaging in his preference. If customs examiner satisfied, issue a formal permission for loading of cargo on ship in the form of let export cargo. The Shipping bill so filed with the Customs is assigned with a serial number with date by the noting clerk and then the Shipping Bill is scrutinized by the Appraiser/Superintendent and after assessment it is countersigned by the Assistant/Deputy Commissioner. The original copy of the Shipping Bill is detached by the noting clerk when no export duty is payable. If any export; duty is payable original copy of shipping bill is detached by cash department after collecting duty and making suitable endorsement on all the copies of shipping bill. The other copies are then returned to the Exporter/CHA. Thereafter the Exporter/CHA presents the duplicate and triplicate copies of shipping bill with

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other documents and the goods to the Appraiser/Superintendent in charge of examination. The Appraiser/Superintendent examines a percentage of the consignment with reference to the documents and gives an order called LET EXPORT order on duplicate and triplicate copies of Shipping Bill. The goods thereafter remain in the Customs area till they are loaded into the conveyance (Ship/Aircraft/Container) under Customs supervision.

Triplicate, Quadruplicate, Export Promotion copy of the Shipping bill and duplicate copy of G.R. form are returned to the Exporter/CHA. The Preventive Officer/Inspector supervises the loading of export goods into the conveyance and makes an endorsement to that effect on the Shipping Bill and G.R. form. Original G.R. form is detached by the Preventive Officer/Inspector for onward transmission to the Reserve Bank of India (R.B.I.) Now the procedure of filing Documents for Export has been brought under the EDI system introduced in all Major Custom Houses to facilitate speedier clearance of documents. 11) Obtaining let ship order from the customs preventive officer Let export order must be supplemented by let ship order issued by the customs preventive officers. The C&F agent submitted duplicate copies of shipping bill, duly endorsement by customer, to the customs preventive officer who endorses it with the let ship order 12) Obtaining mates receipt and bill of lading At last obtaining mates receipt and bill of lading issued by Mates receipt to the port super dents. Document signed by an officer of a vessel evidencing receipt of a shipment onboard the vessel. It is not a document of title and is issued as an interim measure until a proper bill of lading can be issued.

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4.

Post-shipment stages

1) Submission of all document by C&F agent to exporter It is essential for C&F agent to submit all requirement documents to exporter. The list of documents is as following. A copy of a invoice fully attested by the customs Drawback copy of the shipping bill Export promotion copy of the shipping bill A full set of negotiable or non-negotiable copies of bill of lading The original copy of L/C, export order or contract Duplicate copy of an ARE-form

2) Shipment advice to importer Then after shipment advice to importer about date of shipment, name of vessel, the destination etc. He also sends one copy of non-negotiable bill to the exporter.

3) Presentation of documents to banks for negotiable Then after, exporter will present all necessary documents to bank in order to receive money for exportable goods its called Negotiable of the Documents The list of documents is as following Bills of exchange, Usance Draft, Full sets of bill of lading or airway bill, original letter of credit, customs invoice, commercial invoice, packing list, Marine insurance 4) Dispatch of documents Here, exporter bank will dispatch all the documents to importer banks in such manner specified in L/C. 49

5) Acceptance of bills of exchange Bills of exchange accomplish with the help of above documents is known as Documentary bills of Exchange It is two types. a) Documents against the payments b) Documents against the Acceptance. An unconditional order issued by a person or business which directs the recipient to pay a fixed sum of money to a third party at a future date. The future date may be either fixed or negotiable. A bill of exchange must be in writing and signed and dated. also called draft 6) Letter of Indemnity The exporter can get immediately payment from his bank with the help of submitting requested document by signing of letter of indemnity.

7) Realization of export procedure Exporter banks receive the payment from the importers banks and is credited in exporters accounts

8) Processing of GR forms RBI verifies duplicate copy of GR FORM with the original copy of GR FORM receives from the customers. If the details are as per the contract than transaction is treated to be completed.

BIBLOGRAPHY
www.hitechexport.com www.fita.org

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