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Title: export import document
Description: it will provide great knowledge for export import documentation,cha etc
Description: it will provide great knowledge for export import documentation,cha etc
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EXECUTIVE SUMMARY
The importing and exporting of goods is big business in today's global economy
...
It is so
common to find items produced worldwide that people rarely even think about it
...
As
transportation has become increasingly less expensive and telecommunications have
improved, international trade has flourished
...
it‘s a
documentations ,how its procedures roles of customs house agent
...
custom procedure for export and EDI method of
helping clients and how its work
...
And how supply chain role for shipping line and incoterms
for shipment what all the role and responsibility of export and import
...
Seventy-five percent of internationally traded
goods are transported via ocean going vessels
...
India has a mission to capture 5% of the global share of
trade by 2020, up from the present level of less than 3%
...
The government also provides various promotional schemes
to the exporters for earning valuable foreign exchange for the country and for meeting
their requirements for importing modern technology and essential inputs
...
There is no Sales Tax on products meant
for exports
...
Detailed list of services are given in the Foreign Trade Policy
covering more than 160 items e
...
Insurance, Hospital, Postal and Telecommunication
etc
...
1
TWO CLASSES OF EXPORTS:
Physical Exports: If the goods physically go out of the country or services are rendered
outside the country then it is called as physical export
...
This will
be subject to certain conditions as prescribed by the DGFT
...
E
...
Supply of fabrics to the garment exporter who exports the garments made out of the said
fabric
...
The Foreign Trade Policy gives the list of supplies
considered under the Deemed Export Category
...
In a nutshell,
Deemed Exports do not enjoy all the benefits that are available under Physical Export
...
Although the act does not term them as ―Physical Exports‖, we have to put phrase to
distinguish it from ―Deemed Exports‖ which is sales in India but considered as exports
for limited purpose
...
Merchant Exporter: An exporter who does not have the facility to manufacture
an item
...
3
Chapter 02
HOW TO SET UP AN EXPORT ORGANISATION
The proper selection of organization depends upon
Ability to raise finance
...
Desire to exercise control over the business
...
It can be set up easily without much expenses and legal
formalities
...
However, the biggest
disadvantage of sole proprietorship business is limited ability to raise funds which
restricts the growth
...
In order to
avoid this disadvantage, it is advisable to form a partnership firm
...
Business can take benefit
of the varied experiences and expertise of the partners
...
The major disadvantage of
partnership firm of business organization is that conflict amongst the partners is a
potential threat to the business
...
Company is another form of business
organization, which has the advantage of distinct legal identity and limited liability to the
share holders
...
A private limited can be
formed by just two persons subscribing to its share capital
...
...
e
...
Manufacturer Exporter i
...
manufacturing the goods yourself for export
...
e
...
Buying Agent i
...
acting on behalf of the buyer and charging Commission
...
e
...
NAMING THE BUSINESS
Whatever form of business organization has been finally decided, naming the business is
an essential task for every exporter
...
Open a current account in the name of the organisation in whose name
you intend to export
...
STRUCTURE OF AN EXPORT ORGANISATION
marketing manager for generating sales
Commercial manager for looking activities of the execution of the orders
...
o
Co-ordinating with clearing agents on the progress of the shipment to be made
...
excise department regarding packing and
clearance of the goods for export
...
o
Follow-up with the bank on dispatch of documents, receipt of payment, availment
of bank loans etc
...
5
Chapter 2
...
The Customs Authorities will now allow the exporter to export or import goods into or
from India unless he holds a valid IEC number
...
The duly signed application form should be
supported by the following documents
...
1000/
Certificate from the banker of the applicant firm as per Annexure 1 to the form
given
...
One copy of Passport Size photographs of the applicant duly attested by the
banker to the applicant
...
Where the applicant declares that
they are associated as proprietor/partners/directors in any other firm, which has been
caution, listed by the RBI, they will be allotted IEC No
...
Each importer/exporter shall be required to file importer/exporter profile once
with the licensing authority shall enter the information furnished in Appendix 2 in their
database so as to dispense with changes in the information given in Appendix-2,
importer/exporter shall intimate the same to the licensing authority
...
The following importer exporter is exempted from the requirement of IEC code number
...
Person importing or exporting goods for their personal use not connected with
trade or manufacture or agriculture
...
25000\-
...
The registered
office or the head office may apply for allotment of IEC No
...
, such change should be intimated within 30 days to the concern authorities
...
A copy of IEC No
...
VALIDITY :
The IEC No allotted to a firm/company will be valid for all its branches/divisions
units/factories as indicated in the IEC No
...
There being no date of expiry, the IEC once allotted is valid till it is
revoked
...
However, this can be made operative by a formal request to the
DGFT
...
There is a provision of issuance of identity cards to the
proprietors/partners/directors and their authorized representatives
...
In case of loss
of an identity card a duplicate card may be issued on the basis of an FIR & affidavit
...
the exporter is also required to obtain Business
Identification No(BIN)
...
7
The licensing authority issues BIN in coordination with customs authorities
...
RCMC (Registration-Cum-Membership Certificate) – REGISTRATION WITH
EXPORT PROMOTION COUNCILS –
In order to enable the exporter to obtain benefits/concessions under the Foreign Trade
Policy, the exporter is required to register himself with an appropriate export promotion
agency by obtaining registration-cum-membership certificate
...
If the export
product is that it is not covered by any EPC, RCMC in respect thereof may be issued by
FIEO
...
REGISTRATION WITH SALES TAX AUTHORITIES:
Goods that are to be shipped out of the country for export are eligible for exemptions
from both Sales Tax and Central Sales Tax
...
8
Chapter 03
HOW ONE BEGINS TO DO EXPORT
Before entering into the venture of exports, one must look for the product to be exported
and the market where he intends to export
...
However, in case of
a merchant exporter or a trader, one has to identity the product to export
...
Before selecting a product, one must simultaneously made a study and find out the
prospective market
...
Get statistical information as to imports of the product by various countries and their
growth prospects in the respective countries
Approach the chamber of commerce for their guidance to find out the market
...
9
The Preliminary
Once you are ready with the product you wish to export and have found the market for
the same, you are ready to proceed further
...
This can be obtained by making a formal application to the office of
the Regional Directorate General of Foreign Trade (DGFT)
...
Also arrange to obtain Registration-Cum-Membership Certificate (RCMC)
from the council
...
o
Being a member, you will have access to all the information relating to the
product that could be made available by the council
o
Many foreign buyers send their enquiries for the imports to the Export Promotion
Council
...
If you are a manufacturer, find out the provisions under the EXIM Policy of
getting the raw materials duty free
...
Excise duty on the finished product subject to compliance of
certain formalities
...
Get information of the government‘s regulations of the importing country as to
restrictions on the quantity, product specification, packing regulations, customs
regulations, requirement of specific documents/information etc
...
,
To look for a Custom House Agent (CHA) (also know as freight forwarders or
clearing agents) for handling the documents/cargo in the customs
...
FINDING A CUSTOMS
Once you have selected the market, the next step is to find a prospective customer
...
By these processes one can only
have the list of customers
...
to ultimately select the
customer with whom to deal with
...
NEGOTIATING CONTRACT
...
The
following aspects may be considered before entering into a final contract with the buyer
...
Availability of the Steamer/Airlines and the frequency
The freight charges
The full product specification
The quantity, Price
Terms of Payment
Type of packing and markings on the packages
Mode of shipment & Shipment schedule
Tolerance of quantity to be shipped
Documentation requirement for the customer
Documentation requirement of the government of importing country
11
Chapter 04
EXPORT SALES & CONTRACT TERMS & CONDITIONS
Very often exporters do not enter into any formal contract and finalize the trade deal
through the exchange of letters, cable, telex etc
...
Export contract may be sent in duplicate along with the Proforma Invoice to
the overseas buyer
...
There are certain, peculiar characteristics of international trade contract which are not
present in those for sales of goods in the domestic market
Whereas the parties to a domestic trace contract normally needs only agree on the
elements which are necessary for their particular trade transactions like price, description,
quality and quantity of goods, delivery terms etc the situation will be quite different when
the buyer and the seller to sale/purchase contract belong to different countries
...
The traders are normally reluctant to leave the determination of the rights
and obligations by implications under the legal system of either‘s country
...
EXPORT OF SAMPLES\GIFTS
...
Goods including edible items of value not exceeding Rs
...
However items mentioned as
restricted for exports in
12
STANDARD CONTRACT FOMS:
Notwithstanding the efforts made by various national/international organizations like the
United Nations Commission on the International Trade Law, there is still no perfection or
a device which would give the parties an accurate and complete idea of each others
understanding of various trade terms, the commercial practices and the rights and the
obligations vis-à-vis each other so that the misunderstandings are practically eliminated
...
It was
revised and reprinted in 1969 and 1977
...
ENTERING INTO AN EXPORT CONTRACT
In order to avoid disputes, it is necessary to enter into an export contract with the
overseas buyer
...
There should not be any ambiguity regarding the exact specifications of goods and terms
of sale including export price, mode of payment, storage and distribution methods, type
of packaging, port of shipment, delivery schedule etc
...
On the
other hand, arbitration provides an economic, expeditious and informal remedy for
settlement of commercial disputes
...
The Arbitrator is usually an expert in the subject matter
of the dispute
...
Thus, arbitration is the most suitable way for settlements of commercial
disputes and it may invariably be used by businessmen in their commercial dealings
...
14
chapter 05
TERMS OF SHIPMENTS – INCOTERMS
The INCOTERMS (International Commercial Terms) is a universally recognized set of
definition of international trade terms, such as FOB, CFR & CIF, developed by the
International Chamber of Commerce(ICC) in Paris, France
...
It is invaluable and a cost-saving
tool
...
Once they have agreed on a commercial terms like FOB,
they can sell and buy at FOB without discussing who will be responsible for the freight,
cargo insurance and other costs and risks
...
The complete
definition of each term is available from the current publication --- INCOTERMS 2000
...
E
...
EXW—exworks comes under grouped ‗E‘
...
Thus, the uncertainties of different
interpretations of such terms in different countries can be avoided or at least reduced to a
considerable degree
...
Incoterms deal with the number of identified obligations imposed on the parties and the
distribution of risk between the parties
...
1
MORE CLARIFICATION ON INCOTERMS
EXW {+the named place}
Ex Works: Ex means from
...
EXW applies to goods available only at the seller‘s premises
...
In practice, it is not uncommon that the seller loads sthe
goods on truck or container at the sellers pre4mises without charging loading fee
...
The term EXW is commonly used between the manufacturer (seller) and exporttrader(buyer), and the export-trader resells on other trade terms to the foreign buyers
...
FCA {+the named point of departure}
Free Carrier: The delivery of goods on truck, rail car or container at the specified
point(depot) of departure, which is usually the sellers premises, or a named railroad
station or a named cargo terminal or into the custody of the carrier, at sellers expense
...
Buyer is
responsible for the main carriage/freight, cargo insurance and other costs and risks
...
In practice, many importers and exporters still
use the term FOB in the air shipment
...
Some manufacturers may use the former
terms FOT (Free on Trucks) and FOR (Free on Rail) in selling to export-traders
...
Buyer is responsible for the loading fee, main
16
carriage/freight, cargo insurance, and other costs and risks In the export quotation,
indicate the port of origin(loading)after the acronym FAS, for example FAS New York
and FAS Bremen
...
FOB {+the named port of origin)
Free on Board: The delivery of goods on the board the vessel at the named port of origin
(Loading) at seller‘s expense
...
In the export quotation, indicate the port of origin
(loading) after the acronym FOB, for example FOB Vancouver and FOB Shanghai
...
However, in practice, many importers and exporters still use the term FOB in the air
freight
...
Many buyers and sellers
in Canada and the USA dealing on the open account and consignment basis are
accustomed to using the shipping terms FOB Origin and FOB destination
...
FOB
Destination means the seller is responsible for the freight and other costs and risks until
the goods are delivered to the buyer‘s premises which may include the import custom
clearance and payment of import customs duties and taxes at the buyer‘s country,
depending on the agreement between the buyer and seller
...
CFR {+the named port of destination}
Cost and Freight: The delivery of goods to the named port of destination (discharge) at
the sellers expenses
...
The term CFR was formerly written as C&F
...
In the export quotation, indicate the port of destination (discharge) after the acronym
CFR, for example CFR Karachi and CFR Alexandria
...
However,
in practice, the term Cost and Freight (C&F) is still commonly used in the air freight
...
Buyer is responsible for the import
customs clearance and other costs and risks
...
Under the rules of the INCOTERMS 1990,
the term CIFI is used for ocean freight only
...
CPT {+the named place of destination}
Carriage Paid To: The delivery of goods to the named port of destination (discharge) at
the sellers expenses
...
In the export quotation,
indicate the port of destination (discharge) after the acronym CPT, for example CPT Los
Angeles and CPT Osaka
...
Buyer assumes the importer
customs clearance, payment of customs duties and texes, and other costs and risks
...
DAF {+ the names point at frontier}
Delivered At Frontier: The delivery of goods to the specified point at the frontier at
sellers expense
...
In the export quotation, indicate the point at frontier (discharge) after the acronym DAF,
for example DAF Buffalo and DAF Welland
...
Buyer assumes the unloading free, import
18
customs clearance, payment of customs duties and taxes, cargo insurance, and other costs
and risks
...
Seller is responsible for the importer customs clearance, payment of
customs duties and taxes, at the buyers end
...
In the export quotation, indicate the Port of destination (discharge) after
the acronym DEQ, for example DEQ Libreville and DEQ Maputo
...
Buyer
assumes the import customs clearance, payment of customs duties and taxes
...
In the export quotation, indicate the point of destination (discharge) after the acronym
DDU for example DDU La Paz and DDU N‘djamena
...
The seller may opt not to insure the goods at his/her
own risk
...
“E”-term,”F”-term, “C”-term &”D”-term: Incoterms 2000, like its immediate
predecessor, groups the term in four categories denoted by the first letter in the threeletter abbreviation
...
It is the only one of that category
...
Under the “C”-TERM (CFR, CIF, CPT, & CIP), the seller has to contract for
carriage, but without assuming the risk of loss or damage to the goods or additional cost
due to events occurring after shipment or discharge
...
19
Chapter 06
PROCESSING AN EXPORT ORDER
You should not be happy merely on receiving an export order
...
If you are satisfied on these aspects, a formal confirmation should be sent to the buyer,
otherwise clarification should be sought from the buyer before confirming the order
...
In the meanwhile, you should proceed to
enter into a formal export contract with the overseas buyer
...
t
...
It would be in the interest of the exporter to
look into entering into forward contract to safeguard against exchange rate fluctuations
...
In case of shipment against letter of
credit, the buyer should be advised to open the credit well in advance before effecting the
shipment
...
The
major risks which you have to undergo are as follows:
Credit Risk
Currency Risk
Carriage Risk
Country Risk
You can protect yourself against the above risks by initiating appropriate steps
...
Alternatively one can avail of the facility offered by
various credit risk agencies
...
Currency Risks:
As regards covering the currency risk, due to the exchange rate fluctuations, you can
request your banker to book a forward contract
...
Country Risk:
ECGC provides cover to protect the exporter from country risks
...
21
Chapter 08
EXPORT DOCUMENTS
Any export shipment involved various documents required by various authorities such as
customs, excise, RBI, Inspection and according depending upon the requirements, there
are categorized into 2 categories, namely commercial documents and regulatory
documents
...
Commercial Documents
...
Out of the 16 commercial documents in the export
documentation framework as many as 14 have been standardised and aligned to one
another
...
However,
shipping order and bill of exchange could not be brought within the fold of the Aligned
Documentation System,
1
...
It is also known as a 'Document of Contents' as it contains all the information
required for the preparation of other documents
...
It is prepared by the exporter after the execution of export order giving
details about the goods shipped
...
It is a prima facie evidence of
the contract of sale or purchase and therefore, must be prepared strictly in accordance
with the contract of sale
...
Name and address of the consignee
...
Name of the port of loading
...
Invoice number and date
...
Buyer's reference number and date
...
Name of the country of final destination
...
Marks and container number
...
Description of goods giving details of quantity, rate and total amount in terms of
internationally accepted price quotation
...
Significance of Commercial Invoice
It is the basic document useful in preparation of various other shipping
documents
...
It is also useful in negotiation of documents for collection and claim of incentives
...
2
Inspection Certificate: The certificate is issued by the inspection authority such
as the export inspection agency
...
3
Marine insurance policy: Goods in transit are subject to risk of loss of goods
arising due to fire on ship, perils of sea, theft etc
...
Marine insurance policy is one of the
most important document used as collateral security because it protects the interest of all
those who have insurable interest at the time of loss
...
There are different types of policies such as
23
SPECIFIC POLICY: This policy is taken to cover different risks for a single
shipment
...
Floating Policy: This is taken to cover all shipments for some months
...
Open Policy: This policy remains in force until cancelled by either party i
...
insurance company or the exporter
...
The open cover may specify the maximum value
of consignment that may be sent per ship and if the value exceeded, the insurance
company must be informed by the exporter
...
Premium for air
consignments are lowered as compared to consignments by sea
...
Consular Invoice: Consular invoice is a document required mainly by the Latin
American countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Myanmar,
Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Guinea, Zanzibar, etc
...
The main purpose of the consular invoice is to
enable the authorities of the importing country to collect accurate information about the
volume, value, quality, grade, source, etc
...
In order to obtain consular
invoice, the exporter is required to submit three copies of invoice to the Consulate of the
importing country concerned
...
One copy of the invoice is given to the exporter while the other two are
dispatched to the customs office of the importer's country for the calculation of the
import duty
...
Significance of Consular Invoice for the Exporter
It facilitates quick clearance of goods from the customs in exporter's as well as
importer's country
...
It also assures the exporter of the payment from the importing country
...
The importer is assured that the goods imported are not banned for imported in his
country
...
It facilitates quick calculation of duties as the value of goods as determine by the
Consulate is considered for the purpose
...
Certificate of Origin: The importers in several countries require a certificate of
origin without which clearance to import is refused
...
Certificate of origin is required when:
The goods produced in a particular country are subject to‘ preferential tariff rates
in the foreign market at the time importation
...
Types of the Certificate of Origin
(a) Non-preferential Certificate, of Origin: - Non-preferential certificate of origin is
required in general by all countries for clearance of goods by the importer, on which no
preferential tariff is given
...
Trade Association
...
(b) Certificate of Origin for availing Concessions under GSP :- Certificate of origin
required for availing of concessions under Generalised System of Preferences (GSP)
extended by certain, countries such as France, Germany, Italy, BENELUX countries, UK,
Australia; Japan, USA, etc
...
Jt
...
Commodity Boards and their regional offices
...
Textile Committees for textile products
...
Development Commissioners of EPZs
(c) Certificate for availing Concessions under Commonwealth Preferences (CWP):
Certificate of origin for the purpose of Commonwealth Preference is also known as
'Combined Certificate of Origin and Value'
...
e
...
For concession under Commonwealth
preferences, the certificates or origin have to be submitted in special forms obtainable,
from the High Commission of the country concerned
...
under the Global System of
Trade Preferences (GSTP), Bangkok Agreement(BA) and SAARC Preferential Trading
Arrangement (SAPTA) under which India grants and receives tariff concessions On
imports and exports
...
Contents of Certificate of Origin
Name and logo of chamber of commerce
...
Name and address of the consignee
...
Name of the port of discharge and place of delivery
...
Packing and container description
...
Description of goods in terms of quantity
...
Seal of the issuing authority
...
It is to be submitted to the customs for the assessment of duty clearance of
goods with concessional duty
...
It helps the buyer in adhering to the import regulations of the country
...
6
...
It is also a document of title to the goods and as such, is freely transferable by
endorsement and delivery
...
Types of Bill of Lading
Clean Bill of Lading: - A bill of lading acknowledging receipt of the goods
apparently in good order and condition and without any qualification is termed as a clean
bill of lading
...
Transhipment or Through Bill of Lading: - When the carrier uses other
transport facilities, such as rail, road, or another steamship company in addition to his
own, the carrier issues a through or transhipment bill of lading
...
Freight Paid Bill of Lading: - When freight is paid at the time of shipment or in
advance, the bill of landing is marked, freight paid
...
Freight Collect Bill of lading :- When the freight is not paid and is to be
collected from the consignee on the arrival of the goods, the bill of lading is marked,
freight collect and is known as freight collect bill of lading
Contents of Bill of Lading
Name and logo of the shipping line
...
Name and the number of vessel
...
Name of the port of discharge and place of delivery
...
Packing and container description
...
Container status and seal number
...
and volume in terms of cubic meters
...
Shipping bill number and date
...
27
Significance of Bill of Lading for Exporters
It is a contract between the shipper and the shipping company for carriage of the
goods to the port of destination
...
A clean bill of lading certifies that the goods received on board the ship are in
order and good condition
...
Significance of Bill of Lading for Importers
It acts as a document of title to goods, which is transferable endorsement and
delivery
...
The exporter can give an advance intimation to the foreign buyer about the
shipment of goods by sending him a non-negotiable copy of bill of lading
Significance of Bill of Lading for Shipping Company
It is useful to the shipping company for collection of transport charges from the
importer, if not collected from the exporter
...
Airway Bill: An airway bill, also called an air consignment note, is a receipt issued by
an airline for the carriage of goods
...
Airway Bill or Air Consignment Note is not
treated as a document of title and is not issued in negotiable form
...
The names and addresses of the consignor, consignee and the first carrier
...
Packing and container description
...
Description of goods in terms of quantity
...
Amount of freight paid or payable
...
Importance of Airway Bill: It is a contract between the airlines or his agent to carry
goods to the destination
...
It
acts as a customs declaration form
...
7
...
He should also send one copy of
non-negotiable bill of lading to the importer
...
Packing List: The exporter prepares the packing list to facilitate the buyer to
check the shipment
...
The difference between a packing note and a packing list
is that the packing note contains the particulars of the contents of an individual pack,
while the packing list is a consolidated statement of the contents of a number of cases or
packs
...
Bill of Exchange: The instrument is used in receiving payment from the importer
...
A bill of exchange is drawn by the exporter on the importer, to make payment on demand
at sight or after a certain period of time
...
B/E is a means to demand payment
...
B/E is a means to promise the payment
...
Financial documents perform the function of obtaining the finance collection of
payment etc
...
Each one bearing the exclusion clause making the other part of the draft
invalid
...
Usance B/E
...
Immediate payment – Sight draft
...
Each one bears reference to the other part A&B
...
29
Parties to bill of exchange
...
The drawer: The exporter / person who draws the bill
...
The drawee: The importer / person on whom the bill is drawn for payment
...
The payee: The person to whom payment is made, generally, the exporter /
supplier of the goods
...
These
documents also do not have any fixed formats and the number of such documents will
wary according to individual requirements
...
Proforma Invoice: The starting point of the export contract is in the form of offer
made by the exporter to the foreign customer
...
It is a quotation given as a reply to an inquiry
...
Contents of Proforma Invoice
Name and address of the exporter
...
Mode of transportation, such as Sea or Air or Multimodal transport
...
Name of the port of discharge and final destination
...
Exporter's reference number
...
Name of the country of origin of goods
...
Marks and container number
...
Description of goods giving details of quantity, rate and total amount in terms of
internationally accepted price quotation
...
30
Importance of Proforma Invoice
It forms the basis of all trade transactions
...
2
...
3
...
The detailed declaration will cover:
Name of the shipper \ exporter
...
Details of goods such as packages, quantity, value in foreign currency
as well as in Indian Rs
...
Name of the Vessel \ Aircraft
...
4
...
While the simple invoice copy will do for
getting C\O from the chamber of commerce, in respect of obtained the same from the
office of the Textile Committee or Export Promotion Council, the documents requirement
are different
...
Mate's Receipt: Mate's receipt is a receipt issued by the Commanding Officer of
the ship when the cargo is loaded on the ship
...
The mate's receipt is first handed over to the Port
Trust Authorities
...
The mate's receipt is freely
transferable
...
Bill of lading is prepared on the basis of the mate's receipt
...
31
Qualified Mate's Receipt: - The Commanding Officer of the ship issues
qualified mate's receipt, when the goods are not packed properly and the shipping
company does not take any responsibility of damage
...
Contents of Mate's Receipt
Name and logo of the shipping line
...
Name and the number of vessel
...
Name of the port of discharge and place of delivery
...
Packing and container description
...
Description of goods in terms of quantity
...
Gross weight in kg
...
Shipping bill number and date
...
Significance of Mate's Receipt
It is an acknowledgement of goods received for export on board the ship
...
It must be handed over to the shipping company in
order to get the bill of lading
...
It enables the exporter to clear port trust dues to the Port Trust Authorities
...
6
...
Details of the vessel, poet of the shipment, and the date on which the goods are to
be shipped are mentioned
...
7
...
Name of the specific vessel on which the goods are to be loaded
...
32
If freight amount are to be paid / collected
...
R
...
-1 procedure
...
8
...
The
bank letter is the set of instruction for the bank as to how to handle the documents by
them and by the bank at the buyer‘s country which may include
Name and address of the buyer
...
Name and address of the buyer‘s bank if available
...
If the proceeds are to adjusted against any pre-shipment packing credit loan
...
In case of credit bill who has to bear the interest, either exporter or if the same is to be
collected from the buyer
...
C
...
Out of 9 regulatory
documents four have been standardised and aligned
...
1
...
The cargo is moved inside
the dock area only after the shipping bill is duly stamped, i
...
certified by the customs
...
Drawback copy
...
Port trust copy
...
Types of Shipping Bill
Based on the incentives offered by the government, customs authorities have introduced
three types of shipping bills:33
Drawback Shipping Bill: - Drawback shipping bill is useful for claiming the
customs drawback against goods exported
...
Duty-free Shipping Bill: - Duty-free shipping bill is useful for exporting goods
on which there is no export duty
...
Name and address of the importer
...
Name of the port at which goods are to be discharged
...
Details about packages, description of goods, marks and numbers, quantity and
details of each case
...
Whether Indian or foreign merchandise to be re-exported
Total number of packages with total weight and value
...
b)
The cargo is moved inside the dock area only after the shipping bill is duly
stamped, i
...
certified by the customs
...
d)
It is useful to the Customs Appraiser while determining the actual value of goods
exported
...
A
...
E
...
In case goods meant for export are cleared directly from the
premises of a manufacturer, the exporter can avail the facility of exemption from
payment of terminal excise duty
...
In both the events the
goods are to be cleared under form A
...
E-1 which will show the details of the goods
being exported, the relevant duty involved and if the duty is paid or goods being cleared
under bond, details of goods being sealed either by the exporter or Central Excise
officials etc
...
Exchange Control declaration Form (GR/PP/SOFTEX): under the exchange control
regulations all exporters must declare the details of shipment for monitoring by the
Reserve Bank of India
...
These declaration forms must be presented to
the customs officials at the time of passing of export documentation
...
4
...
The prescribed form of the application is the Shipping Bill/Bill of
Export
...
5
...
: before the goods are being taken inside
the port for loading, necessary permission has to be obtained for moving the vehicle into
the customs area
...
This document
will contain the detail of the export cargo, name and address of the shippers, lorry
number, marks and number of the packages, driver‘s licence details etc
...
Bank Certificate of Realisation: this is the form prescribed under the Foreign Trade
Policy, wherein the negotiating bank declares the fob value of exports and for the date of
realisation of the export proceeds
...
D
...
This is required by certain nations who have strained political and
economical relations with the so called ―Black Listed Countries‖
...
09
...
Three copies are handed
over to the exporter
...
Freight Payment Certificate: in most of the cases, the B/L or AWB will
mention the transportation and other related charges
...
This document showing the freight payment is called the freight
certificate
...
This certificate is required by the bank for arriving at the fob value of the goods to be
declared in the bank certificate of realisation
...
This certificate is printed in a special way by the
Commonwealth Countries
...
All other details are
generally the same as that of Commercial Invoice, such as name of the exporter and the
importer, quality and quantity of the goods etc
...
Legalized Invoice: this is required by the certain Latin American Countries
like Mexico
...
Special Provision under Uniform Customs and practice for Documentary Credit
UCP-500, for Commercial Invoice
...
Must appear on their face to be issued by the beneficiary named in the
o
Must be made out in the name of the applicant
...
The description of the goods in the commercial invoice must correspond with
the description of the credit
...
In all documents
goods may be described in general terms not inconsistent with the Description of the
goods in the credit
...
Export order/Sales contract/Purchase order
...
Packing list
...
Guaranteed Remittance (G
...
Certificate of Inspection
...
Exchange Control Declaration Form: all exports to which the requirement of
declaration apply must be declared on appropriate forms as indicated below unless the
consignment is of samples and of ‗No Commercial Value‘
GR FORM: to be completed in duplicate for exports otherwise than by post
including export of software in physical form i
...
magnetic tape/discs and paper media
...
PP FORM: to be completed in duplicate for export by post
...
e
...
37
These forms are available for sale in Reserve Bank of India
Export declaration forms have utmost importance and are binding on the exporters
...
Name and address of the authorised dealer through whom proceeds of exports
have been or will be realized should be specified in the relevant column of the form
...
It should be clearly indicated in the form whether the export is on ‗outright
sale basis‘ or ‗on consignment basis‘ and irrelevant clauses must be stuck out
Under the term ‗analysis of full export value‘ a break up of full export value of
goods under F
...
B value, freight and insurance should be furnished in all cases,
irrespective of the terms of contract
...
Disposal of Copies of Export Documentation Form
GR forms covering export of goods other than jewellery should be completed
by the exporter in duplicate and both the copies should be submitted to customs at the
port of Shipment
...
The value declared by the exporter will also be verified by the customs and they will also
record the assessed value
...
Duplicate
form of the GR form will again be presented to the customs at the time of actual
shipment
...
However, an exception to submission of GR forms to the Customs authorities have been
made in case of deep sea fishing
...
The form will be countersigned by the authorised dealer only if the post
parcel is addressed to his branch or correspondent bank in the country or import
...
38
(b)
For post parcel addressed directly to the consignee, the authorised dealer will
countersign the form, provided —
(i)
an irrevocable letter of credit for the full value of export has been opened in
favour of exporter and has been advised through authorised dealer concerned; or
(ii)
the full value of shipment has been received in advance by the exporter
through an authorised dealer; or
(iii)
On receipt of full value of shipment declared on this form the authorised
dealer will forward to RBI the duplicate copy along with the certified copy of shipper‘s
invoice
...
If the authorised dealer is not satisfied about standing etc
...
No reference is entertained by the Reserve Bank in such cases
...
Original PP form should then
be submitted to the post office along with the parcel
...
The export of computer software may be undertaken in physical form i
...
software
prepared on magnetic tape and paper media as well as in non-physical form by direct data
transmission through dedicated earth stations/satellite links
...
However, export of nonphysical form should be declared on SOFTEX Form
...
V
...
Since export of software is fraught with many risks
and special guidelines have been framed for handling such exports
...
at present, the export items that are subjected to
compulsory inspection includes food and agricultural products, chemicals, engineering,
coir, jute and footwear
...
Products
Steel ;Products
Jute Products
Coir & Coir Products
Exemption from compulsory Pre-shipment Inspection:
Status Houses
Certification by Units IPQC – approved by EIA
EUO/EPZ/SEZ
Firm Letter from the overseas buyer
Specified products such as Eng/Fishery average level of Rs
...
5 Cr
...
40
Systems of Quality Control:
For the purpose of pre-shipment inspection, EIC has recognized three systems of
inspection namely:
Self-Certification
In-Process Quality Control
Consignment Wise Inspection
Self-Certification:
Under this system, complete authority is given to the manufacturing units to certify their
own products and issue certificates for export
...
1% of
FOB price subject to minimum of Rs
...
1 lakh in a year to the
concerned EIA
In-Process Quality Control (IPQC):
In this system, companies/units adjusted as having adequate level of quality control right
from raw material stage to the finished product stage including packaging are eligible to
get the inspection certificate on a formal request by the exporter
...
Constant vigil and surveillance are kept on units approved under IPQC and selfcertification system
...
41
Consignment wise Inspection:
Under this system, each and every consignment is subject to compulsory inspection
...
The EIA deputes inspector to inspect the goods
After the inspection, the goods are repacked with EIA seal
The inspector then makes a report to Deputy Director of EIA
The Dy
...
o
It is to be noted that goods marked with ISI/AGMARK/BIS14000/ISO 9000 are
not required to be inspected by any agency
o
Overseas buyer may depute his own inspection team to inspect the goods
o
Inspection of textile goods is conducted by Textile Committee in respect of those
exporters who are registered with the textile committee
...
Independent Quality Audit & Houses
...
The fumigation is carried out in
the port of shipment
...
e
...
The goods cannot be loaded on board the ship
unless a formal permission is obtained from the custom authorities
...
The custom procedure can be briefly explained as follows:
Submission of Documents: The exporter or his agent submits the necessary
documents along with the shipping bill to the Custom House
...
He then makes an endorsement of ―Examination Order‖ on
the duplicate copy of shipping bill regarding the extent of physical examination of the
goods at the docks
...
Carting Order is the permission to bring the goods inside the docks
...
Carting Order is issued
only after verifying the endorsement on the duplicate copy of shipping bill
...
Storing the Goods in the Sheds: After securing the carting order, the goods are
moved inside the docks
...
Examination of Goods: The exporter‘s agent then approaches the customs
examiner to examine the goods
...
The customs examiner then sings the
―Let Export Order‖
Let Export Order: The Let Export Order is then shown to the Customs
Preventive Officer, along with other documents
...
If CPO finds everything in order, he endorses the
duplicate copy of shipping bill with the ―Let Ship Order‖ This order helps the
exporter/shipper to load the goods on the ship
...
The CPO supervises the
loading operations
...
The Mate‘s Receipt is sent to the Port Trust Office
...
The C&F agent then
approaches the CPO and gets the certification of shipment of goods on AR Forms and
other documents
Obtaining Bill of Lading: The Mate‘s Receipt is then handed over to the
shipping company (on whose vessel the goods are loaded)
...
The Bill of Lading is issued in:
o
o
3 negotiable copies of Bill of Lading
10 to 12 Non-negotiable copies of Bill of Lading
...
PROCEDURE OF EXCISE CLEARANCE:
The common procedure of excise clearance under ―bond‖ and under ―rebate‖ is discussed
as follows:
Preparing of Invoice: The export goods have to be cleared from the factory
under invoice
...
The invoice is to be prepared in triplicate
...
In addition to the invoice, a prescribed for ARE 1 has to be filed in by exporter
...
A fifth (Optional) may be filled in by the exporter, which can be used at the
time of claiming other export incentives
...
Application to Assistant Commissioner of Central Excise (ACCE): The
exporter has to make an application to ACCE regarding the removal of goods from the
factory/warehouse for export purpose
...
Processing of ARE-1 Form: The Excise Officer/Inspector will make
endorsement on all copies of ARE-1
...
This
copy can also be handed over to the exporter in a tamper proof sealed cover to be
submitted to ACCE/MCCE
...
o
The 5th copy is also handed over to the exporter
...
The customs officer will examine these copies and then
export will be allowed
...
He will cite shipping bill number and date and other particulars of export on
ARE-1
...
The duplicate copy will be sent directly to the ACCE\MCCE i
...
excise officer
with whom bond was executed will get 2 copies, one from RSCE (or excise inspector)
when goods are cleared from factory and other Custom Officer after export
...
In case of export after payment of duty,
under claim of rebate, the basic procedure is same as above, except that the triplicate
copy (by excise inspector) and duplicate copy(by customs officer)will be sent to the
officer to whom rebate claim is filed
...
Refund or Release of Bond: The exporter should make an application to the
excise officer for refund or release of bond
...
The excise officer crosschecks the original copy of ARE-1
form and the duplicate and triplicate copies of ARE-1 form, which he had received
earlier
...
FACTORY STUFFING OF CARGO
Clearance of goods to docks: If the goods meant for export is of a small quantity which
may not be sufficient to make one full container, the cargo is said to be less than
container load (LCL) cargo
...
Here the examination of the cargo is
done at the docks
...
An exporter gets the benefit on the freight amount for a full
container
...
The goods meant for exports can be stuffed into the container under the
supervision of the regional Central Excise Authority
...
Excise Authorities at least 24 hours before bringing the container for
loading
...
Excise Authority will supervise the loading, seal the container and certify the
invoice as directed in the permission given by the custom authorities
...
Samples from the goods will be drawn, if
necessary, as required under the customs permission
...
The examiner in the docks may arrange to send the
sample for testing
...
Generally, such
containerized goods are not subject to further examination in the customs
...
46
Chapter 11
SALES TAX EXEMPTION PROCEDURE
Export good are exempted from the payment of sales tax
...
If the exporter is not registered with the
sales tax department, he cannot utilize the facility of sales tax exemption
...
I Registration Procedure
Application: The exporter must apply to the Sales Tax Officer (STO) under
whose jurisdiction the head/ registered office of the exporter is located
...
o
Partnership Deed or Memorandum and Articles of Association along with
Incorporation Certificate
...
Inspection: The inspector visits the office of the exporter and inspects the necessary
books and other documents
...
The STO verifies the inspector report
...
Number may cal the exporter for necessary clarifications, if
required
...
Granting of Sales Tax Reg
...
Number to the exporter
...
Exemption Procedure
Obtaining Form ‗H‘: the registered exporters need to apply to the concerned STO
for obtaining Form ‘H‘
...
47
o
o
Copy of the Invoice , where goods are already purchased for export purchase
...
The exporter has to affix the prescribed court fee stamp on each of the Form ‗H‘ issued
...
Filling the details in Form ‘H’: After export of goods, the exporter fills the
relevant details in ‗Form H‘
...
The exporter retains one copy, and other two copies are sent to the seller from whom the
exporter purchased the goods for export purpose
...
The other copy is retained by seller
...
48
Chapter 12
METHODS OF RECEIVING PAYMENT AGAINST EXPORTS
Before we proceed to understand the concept of Letter of Credit, let us understand the
various types of payment methods available against export
...
The methods are:
Payment in advance
Documentary Bills
Letter of Credit
Open Account
Counter Trade
A
...
At times, a certain per cent is paid in advance, say 50% and the rest
on delivery
...
The economic/ political conditions in the buyer‘s country are unstable
...
However, this is the most unpopular methods as a foreign buyer would not be willing to
pay advance of shipment unless:
The goods are specifically designed for the customer, and
There is heavy demand for the goods (a seller‘s market situation)
...
DOCUMENTARY BILLS:
Under this method, the exporter agrees to submit the documents to his bank along with
the bill of exchange
...
There are two main types of documentary bills:
Documents against Payment,
Documents against Acceptance
...
This method indicates that the payment is made against Sight Draft
...
The risk involved that the importer may refuse to accept the documents and to pay
against them
...
In
India, ECGC covers losses arising out of such risks
...
Documents Against acceptance (D/A): The document are released against acceptance
of the Time Draft i
...
credit allowed for a certain period, say 90 days
...
In case of D/A as compared to D/P bills, the risk involved is much grater, as the
importer has already taken possession of goods which may or may not be in his custody
on the maturity date of the bill
...
The
risk involved can be insured with ECGC
...
LETTER OF CREDIT (L/C):
This method of payment has become the most popular form in recent times, it is more
secured as company to other methods of payment (other than advance payment)
...
50
Chapter 13
THE LETTER OF CREIDT
Introduction
The cycle of a business transaction can be said to be complete prima facie when the buyer
has received the product he desires to buy and the seller gets his payment in due
consideration of the product supplied
...
Tough there are many merit and demerits in each of the different mode of payments we
have discussed earlier, in relation either to the buyer or to the seller, we shall now deal in
detail about the mode of payment under the Documentary Credit
...
If one does not understand the implications of the terms and condition of a letter of credit,
the provisions under UCP 500, how co-operative are the exporter‘s bank and how good
are the L/C opening bank and the reimbursement bank, he is sure to land in trouble at
once stage or another
...
This
document is known as Documentary Credit
...
51
CONTENTS OF A LETTER OF CREDIT
A letter of credit is an important instrument in realizing the payment against exports
...
Let us see shat a letter of credit should contain in the interest of the exporter
...
name and address of the bank establishing the letter of credit
letter of credit number and date
The letter of credit is irrevocable
Date of expiry and place of expiry
Value of the credit
Product details to be shipped
Port of loading and discharge
Mode of transport
Final date of shipment
Details of goods to be exported like description of the product, quantity, unit rate,
terms of shipment like CIF, FOB etc
...
LC is the most secured form of payment in foreign trade
...
He
May either pay the amount of credit in his current account with the bank
...
The
issuing bank may also request the advising bank to add its confirmation to the L/C, if so
required by the beneficiary
...
He should see it that
the L/C is confirmed
...
Scrutiny of Documents: The negotiating bank then scrutinizes the documents and
if they are in order makes the payment to the exporter
...
Realization of payment: The issuing bank will reimburse the amount (which is
paid to the exporter) to the negotiating bank
...
In order to have uniformity and to avoid disputes, the ICC Paris has evolved uniform
customs and practices of documentary credit (UCPDC), in short known as UCP 500
effective from 1-1-96
...
They provide the comprehensive and practical working aid to banker, lawyer, importers,
exporters, Exporters, transporters, executives involved in international trade
...
Meaning that
the genuineness of the L/C is certified by the Advising Bank by an endorsement with the
marking ‗AUTHENTICATED‘ OR ELSE THE L/C IS OF NO USE
...
There are various types of Documentary Credit opened by a bank in favour of it‘s
customer depending upon the requirement
...
Revocable / Irrevocable Documentary Credit :A Revocable Documentary Credit
can be revoked (cancelled) by the buyer at his own discretion and this does not require
the consent of the seller
...
Hence, a revocable L/C is as goods as no L/C
...
Contrary to this, an Irrevocable Documentary Credit
once established and advised to the beneficiary, cannot be revoked or cancelled
unilaterally by the buyer without the consent of the beneficiary (Seller)
...
Restricted/ Unrestricted Documentary Credit: A Documentary Credit stipulates
the name of the bank who is authorized to negotiate the document for claming the
reimbursement
...
e
...
On the contrary if no specific bank is nominated for negotiation, it may say
‗Negotiation by any bank‘ which means the beneficiary is free no negotiate the document
through the bank of his choice
...
Since the bank is not alien to him,
he will not face any practical/procedural difficulty in negotiating the document
...
Confirmed/Unconfirmed Documentary Credit: Confirmed Documentary Credit is
one in which the beneficiary has the option to have the L/C confirmed by a bank in the
beneficiary country i
...
the bank who confirms the L/C takes the responsibility of making
the final payment to the beneficiary upon negotiation of the document in strict
compliance with the terms and conditions of the Letter of Credit
...
The beneficiary do not stand the risk of
waiting for the document to reach the opening bank who will have the final say so to the
compliance under the L/C before making the payment
...
e
...
Moreover, if the importing
country‘s regulation changes and the money is not allowed to be repatriated, this will
eliminate the risk
...
e
...
The beneficiary is fully at the mercy of the opening bank for
payment
...
With Resource and Without (Sans) Resource Letter of Credit: The revocable or
irrevocable LC can further be classified as with resource and without resource LC
...
The negotiating bank can make the exporter to pay the amount along with the
interest, which it has already paid to the beneficiary
...
Normally, the negotiating bank makes advance payment to the exporter in
resource of letter of credit either by discounting bills against letter of credit or by
purchasing the bills of exchange
...
However, in the case of with
resource letter of credit, the negotiating bank can ask the exporter to pay back the money
along with certain other expenses
...
54
Transferable/Non-transferable Documentary Credit: In a transferable L/C, the
beneficiary can transfer the L/C opened in his name in favor of a third party who may
effect the shipment and negotiate the documents and claim payment under the said L/C
...
The salient feature of this L/C is that the buyer opens an L/C which can take care of
shipments, say, may be for a period of one year on a monthly basis
...
g
...
US
...
The buyer can open an L/C for a value
of US
...
75000/-and by adding a clause to make 12 shipment of like value the L/C stands
replenished for the full value of the L/C after each shipment is made the documents are
negotiated for which payment are also made immediately for the value of the shipment
...
A revolving Documentary Credit may have cumulative effect i
...
if
a particular shipment is not made, then the value is added to the value for future
utilization
...
In automatic Revolving Credit the value of the credit is
automatically replenished by an amendment
...
Assignable Documentary Credit: In this type of L/C the benefit is shared between
the first beneficiary and the parties whose names are assigned on the L/C
...
this is
more beneficial to the assignee because he receives his part of the money once the
documents are negotiated by the first beneficiary in whose name the L/C is opened
...
Stand by Letter of Credit: This is aimed at providing a security to a seller in case
the buyer fails to perform his part
...
Such credits are
paying on first presentation and the only document required therein is a simple
declaration of non-performance along with the statement of claim
...
S
...
A standby Documentary Credit is generally common on open account trading where the
seller may expect some security for getting his payment
...
Red Clause LC: The red clause LC is the usual irrevocable LC with further
authorities the negotiating bank to make advance to the beneficiary for the purpose of
55
processing the export goods
...
It is called a red-cause LC because
it is generally printed/ typed in red ink
...
Green LCs is extensively
used in Australian wool creditors
...
It is a ancillary
credit created by a bank based on a confirmed export LC received by the direct exporters
...
Through this route the domestic supplier gains direct access to a
pre-shipment loan based on the receipt of domestic or back-to-back LC
...
Payment is being made
by the bank against delivery of the full set of documents as laid down by the terms of
credit
...
A letter of credit may call for some or most of the above documents and may also call for
some other documents specific to the shipment
...
The correspondent/ agent of the bank honors all the cheques drawn on
this credit by its holder up to the amount mentioned in LC
...
In case of cheque, the holder can withdraw
up to the amount of the cheque
...
In case of
traveler‘s LC, the holder can draw any amount up to the limit mentioned in the LC, and
he need to carry only one paper of LC
...
56
Payment under a documentary credit can be of the following types:
payment at Sight: In this mode, the payment is made by the L/C opening bank or
its nominated bank or by a confirming bank on presentation of the documents in full
conformity with the L/C
...
Deferred Payment Scheme: In this case the payment is to be made at a future date
as stipulated in the L/C
...
In case of a confirmed L/C, the final payment is made by the
confirmed bank on due date and by the issuing bank or its nominated bank if the L/C is
not confirmed
...
The payment is made by the nominated/accepting bank on
the due date as per instructions of the negotiating bank
...
Negotiation Credit: Here the payment is made by the negotiating bank upon
negotiation of the documents if it prepares to take the risk and will recourse to the
beneficiary
...
Expect in the case of confirmed L/C there is always a time lag between the date of
negotiation of the document and the date of receipt of the payment
...
If
the bank acts swiftly and without prejudice, one gets payment within a week‘s time
...
Very rarely, on persistent approach by the exporter/their banker, does a
defaulting bank comes forward to compensate for the delayed payment
...
It is no surprise
many exporter suffer this loss silently
...
Documentary Credit must stipulate the Type of Credit as detailed
above and inter alia will also stipulate the
Following details :
the name of the Bank issuing the Documentary Credit
...
(The
Applicant)
the name and address of a bank in the country of the seller the credit through
Whom the L/C is to be advised to the seller
...
57
The date of issue of the credit
...
The Details of the product to be shipped
...
The name and address of the bank authorized to negotiate the documents
...
As soon as an L/C is received ensure that the L/C is authenticated
...
In case of telex/swift the
bank should endorse on the document authenticated and then only the L/C is a valid
document
...
The guidelines for the interpretation and usage of Letter of Credit are governed by the
UCP 500 (Uniform Customs Practice for Documentary Credit) published by the
International Chamber of Commerce (ICC)
...
There are many ifs and buts
before the documents are submitted to the bank against the letter of credit for realization
of proceeds from the opening bank
...
The letter of credit has been opened in accordance with the terms of the contract
...
The details of product description, quality, and value are in order
...
The documents that are required can be submitted
...
The unit price and the terms of contract are correct
...
That the credit is available for negotiation without restriction
...
Last but not the least; the credit has a reimbursing clause enabling the negotiation
bank to get reimbursement of the money paid to the exporter against the documents
...
Any oral and written agreement by the importer about change in the credit directly to the
exporter should not be accepted as it is not valid under the credit
...
DOCUMENTARY CREDIT IN GENERAL
Of all the various type of payments, the most safest as far as the exporter is concerned is
to get an advance payment in full for the value of shipment to be effected
...
Hence, of the rest of the modes of
payment, the best is calling for a Documentary Credit for any shipment
...
It is suggested that the exporter gives the full details as to the various requirements to the
buyer for incorporation in the L/C
...
Bear in mind every amendment costs
you badly
...
A discrepancy is a discrepancy
and there is nothing like minor discrepancy or major discrepancy as far as the bank is
concerned
...
Ensure that the Validity for
shipment and for negotiation of documents can be complied with
...
Unless the L/C specifies the tolerance for the quantity and value, the exporter should
follow the quantity and value as stipulated in the L/C
...
However, the value of documents, on no account, could exceed the limits of the L/C
...
Ask for amendment where you cannot copy with the terms
...
The last but not the least is the Reimbursement clause (Getting the funds for the shipment
made)
...
if there is no provision as to from where the
59
exporter is going to get paid for, the whole exercise of the L/C is futile
...
The negotiating bank can claim reimbursement directly from a nominated bank
(say ABC Bank, New York) either upon negotiation of documents or after a period of ¾
days of negotiation subject to the documents being submitted by the beneficiary is strictly
in conformity with terms and condition of the letter of credit
...
These are some of the aspects one should take care to ensure that the L/C established in
his favor is in order and that he can comply with all the provision thereof
...
PARTIES TO LETTER OF CREDIT
Applicant: the buyer or importer of goods
...
Beneficiary: the party to whom the L/C is addressed
...
Advising Bank: issuing bank‘s branch or correspondent bank in the exporter‘s
country to which the L/C is sent for onward transmission to the beneficiary
...
(Many a times the advising bank and confirming bank
are one and the same)
...
Reimbursing Bank: the bank which will reimburse the negotiating bank for the
value of the credit
...
60
TOTAL OPERATION UNDER THE LETTER OF CREDIT
...
The Buyer makes an application to his bank to open an L/C
...
Opening bank advises the L/C through his associate or through the bank
...
The Bank in the beneficiary country which receives the L/C sends the Original
L/C to the customer either directly or through the bank Specified in the L/C
...
To the bank for claiming reimbursement
...
Meantime pays the beneficiary
...
Once the credit is received, the nominated bank advises the negotiating bank of
the credit
...
61
chapter 14
PREPARATION AND SUBMISSION OF DOCUMENTS FOR BANK
NEGOTTIATION /PURCHASE
Document against exports should normally be realized through an authorized dealer
foreign exchange
...
Without any monetary limit
provided the exporter‘s track record is good, he is a customer of the authorized dealers
through whom documents are to be negotiated and prima facie the instrument of payment
represents export proceeds realization
...
Apply to the Reserve Bank for extension
of time in case you feel there is likely to be a delay in realizing export proceeds
...
It is obligatory to submit the shipping documents to
an authorized dealer within 21 days of the date of shipment (subject to certain
exceptions)
...
Where it is not possible to realize the sale proceeds within the prescribed period,
the exporter should apply for extension in prescribed form ETX (in duplicate) to RBI
...
62
Verification of Documents: The bank will verify the documents to find
o
o
Whether the required documents are in order
...
Letter of Indemnity: If the exporter wants immediate payment from his bankers,
then his bankers may provide advance payment only when the exporter signs an
indemnity letter
...
Common Document Discrepancies
o
Credit Expired
o
Late shipment
o
Presented after permitted time from date of issue of shipping documents
o
Short Shipment
o
Credit Amount Exceeded
o
Underinsured
o
Description of goods on invoice differ from that of credit
o
Mark and numbers differ between documents
o
Bill of lading, Insurance documents, Bill of Exchange not endorsed correctly
o
Absence of Documents called for under credit
...
o
Weight in different document differs
...
o
Insurance cover expressed in currency other than that of credit
...
o
Bill of exchange not drawn as per tenor stated in credit
...
o
Insurance risks covered not being those specified in credit
...
o
Bill of lading doses not carry shipped on broad stamp
...
o
Shipment not make to port specified
...
Discounting of bills: the bank may discount or negotiate the
bills drawn against LC, and make immediate payment to the exporter, if so required
...
Letter of credit and the laws relating to foreign
exchange control
...
These regulations shall apply for clearance of goods carried by authorized courier on
outgoing flights on behalf of exports
...
Export Terms & conditions:
Export of any item can be affected by courier, except the following
...
Goods proposed to be exported with claim of duly drawback
...
25,0000/Goods where weight of individual packet is more than 32 kg
...
e
...
1`5-09-2004
...
DATA ENTRY FOR SHIPPING BILLS
2
...
(for credit of Drawback amount) in the Customs Computer Systems
before an EDI Shipping Bill is filed
...
2
Exporters/CHAs would be required to submit at the SERVICE CENTRE the
following documents
...
, as applicable
2
...
Forms, which are incomplete or unsigned will not be
accepted for data entry
65
2
...
After the exporters/CHAs become conversant with the EDI procedures,
the option of Remote EDI System would also be made available
...
2
...
Rs
...
Rs
...
Rs
...
Rs
...
6
The Service Centre operators shall carefully enter the data on the basis of
declarations made by the CHAs/Exporters
...
Thereafter, the CHA/Exporters will
make corrections, if any, in the checklist and return the same to the operator duly signed
...
The operator shall not make any amendment after generation of the
checklist and before submission in the system unless the corrections made by the
CHAs/Exporters are clearly indicated on the checklist against the respective fields and
duly authenticated by CHA/Exporters signature
...
7
The system automatically generates the S/Bill Number
...
It should be noted that no
copy of the S/Bill would be available at this stage
...
8
The declarations would be accepted at the service centre from 10
...
30
hrs
...
30 hrs will be entered in the computer system on the
same day
...
9
The validity of the S/Bill in EDI System is fifteen days only
...
3
PROCEDURE FOR GR-1
3
...
Exporters(including CHAs) would be required to file a declaration in the form SDF
...
The second copy would be attached to the duplicate S/B (the exchange control
copy) and surrendered by the exporter to the authorized dealer for collection/negotiations
...
2
The exporters are required to obtain a certificate from the bank through which
they would be realizing the export proceeds
...
The certificates would be submitted to customs and registered in the system
...
3
...
The customs will verify the
details in the declaration with the information captured in the system through the
certificates registered earlier
...
4
In the case of S/Bs processed manually, the existing arrangement of filing GR-1
forms would continue
...
QUOTA
ALLOCATION
AND
OTHER
1
...
The quota allocation label will be pasted on the export invoice instead of S/B
...
The quota certification on export invoice should be submitted to Customs along with
other original documents at the time of examination of export cargo
...
2
As a transitional measure, AEPC certification even on S/B form would be
accepted
...
This transitional facilitation measure will be
available for a period of two months i
...
, upto 30th November 2004
...
3
For determining the validity date of the quota, the relevant date would be the date
on which the full consignment is presented for examination and the date to recorded in
the system
...
4
The certificate of other agencies, such as, the Cotton Textiles Export Promotion
Council; the Wildlife Inspection Agency under CITES; the Engineering Export
Promotion Council; the Agricultural Produce Export Development Agency (APEDA), the
Central Silk Board and the All India Handicraft Board should also be obtained on the
invoice
...
Drug Controller and of the
Archaeological of Survey India would be obtained on the Invoice
...
1
...
2
...
1
The existing procedure of permitting entry of goods, brought for the purpose of
examination (and subsequent: ―Let export‖ Order) in the CFS on the strength of S/B shall
be discontinued
...
The CONCOR would endorse the
quantity of goods entering the CFS on the reverse of the checklist
2
...
In case of delay, a fresh declaration would need to be filed
67
2
...
3
...
1
The S/B shall be processed by the system on the basis of declaration made by the
exporter
...
Commissioner (AC/DC Exports):
Duty free S/B for FOB value above Rs
...
25,000
Drawback S/B where the drawback exceeds Rs
...
2
Subject to the provisions of para 20
...
Commissioner:
DEEC
DEPB
DFRC
EOU
EPCG
3
...
, He may
also give special instruction for examination of goods
...
4
If the S/B falls in the categories indicted in para 6
...
Commissioner /Dy
...
In case
AC / DC raises any query, it should be replied through the Service Centre or, in case of
EDI connectivity, through terminals of the Exporter / CHA
...
CUSTOMS EXAMINATION OF EXPORT CARGO
4
...
He will also present additional particulars in the prescribed form
...
2
SEO will verify the quantity of the goods actually received against that entered in
the system
...
The system would identify the
Examining Officer (if more than one are available)who would be carrying out physical
examination of goods
...
SEO would write this information on the
checklist and hand it over to the exporter
...
No examination order shall be given unless the goods have been
68
physically received in the Export Shed
...
4
...
There will be no written examination report
...
in
Charge
...
is satisfied that the particulars entered in the system
conform to the description given in the original documents (including AEPC quota and
other certifications) and the ;physical examination, he will proceed to give ―:Let Export‖
order for the shipment and inform the exporter
...
would retain the
checklist, the declaration and all original documents with him
...
GENERATION OF SHIPPING BILLS
5
...
gives ―Let Export‖ order, the system would
print 6 copies of the S/B in case of Free and scheme S/B
...
If the S/B (DEPB) is assessed provisionally, then EP copy will be generated only
after AC/DC finalises the assessment
...
will sign
...
, Examination Offer as well as
exporter‘s representative/CHA will sign
...
5
...
2
...
4
...
1
...
3
...
5
...
Exporter‘s copy
Custom‘s Copy
Exchange Control Copy
Scheme Bill Copy
E
...
Copy
TR-1, TR-2 Copies
Exporters copy
Customs copy
ExchangeControl Copy
E
...
Copy
TR-1
...
3
The original AEPC quota and other certificates will be retained with the S/Bills
and recorded in the Export Shed
...
PAYMENT OF MERCHANT OVERTIME (MOT)
6
...
6
...
No
charges would be required to be paid on normal working days when the examination
itself is being done for ―Let Export‖ upto 05
...
In addition, no charges would be
required to be paid if the exporter wants the goods to be entered in CONCOR (CFS) only
for meeting the quota deadlines
...
DRAWAL OF SAMPLES
7
...
No registers
will be maintained for recording dates of samples drawn
...
The
disposal of the three copies would be as follows:
Original to be sent along with the sample to the testing agency
Duplicate copy to be retained with the second sample
Triplicate to be handed over to the exporter
...
2
AC/DC may, if he deems necessary, order for sample to be drawn for purposes
other than testing such as visual inspection and verification of description, market value
enquiry etc
...
1 With the discontinuation of the assessment of S/B in the Export Department, there
should not be any queries
...
In
case where the need arises for the detailed answer from the exporter, a query can be
raised in the system buy the Appraiser, but would need prior approval of AC/DC
(Exports) The S/B will remain pending and cannot be printed till the exporter replies to
the query to the satisfaction of the Assistant Commissioner/Dy
...
1 Corrections/amendments in the checklist can be made at the service centre
provided the system has not generated the S/B number
...
or, after the goods have been brought in the
docks/CFS, amendments will be carried out in the following manner
...
Commissioner may allow the amendment
...
/Joint Commissioner
(Exports) would allow the amendments
12
...
/Dy
...
Where
the print out of the S/B has already been granted, the exporter will surrender all copies of
the S/Bill to the Appraiser for cancellation before amendment is approved in the system
...
SHORT SHIPMENTS, SHUT OUT, CANCELLATION AND BACK TO
TOWN PERMISSIONS
...
1 AC/DE (Export) will give permission for issue of short shipment certificate, shut
out or cancellation of S/B, on the basis of an application made by the exporter
...
AC/DC should check the status of the goods, before granting permission
...
AMENDMENT OF FREIGHT AMOUNT
14
...
But if the change has taken place after the ―Let Exports‖ Order,
approval of Additional/Jt
...
Non-intimation of such
changes would amount to mis-declaration and may attract penal action under Customs
Act 1962
...
RECONSTRUCTION OF LOST DOCUMENTS:
15
...
However, a certificate can be
issued by the Customs stating that ―Let Exports‖ order has been passed in the system to
enable the goods to be accepted by the Shipping Line, for export
...
16
RE-PRINT OF SHIPPING BILL:
16
...
Permission of AC/DC (exports) would be necessary for the purpose
...
1 For export items, which are subject to export cess the corresponding serial
number of the Cess Schedule should be clearly mentioned
...
The cess amount indicated should be
paid in the Bank of India, Extension Branch of CFS, under a receipt
...
EXPORT OF GOODS UNDER CLAIM FOR DRAWBACK
18
...
71
18
...
The declaration in the form would also be required to be filed
when the export goods are presented at the Export Shed for examination & ―Let Export‖
18
...
This is required to be done to enable direct credit of the drawback amount
to the exporters account, obviating the need for issue of separate cheque by post
...
It would not be possible to accept any shipment for export under
claim for drawback in case the account number of the exporter in the bank is not
indicated in the declaration form
...
4 The exporters are also required to give their account number along with the
details of the bank through which the export proceeds are to be realized
...
5 Export declarations involving a drawback amount of more than rupees one lakh
will be processed on screen by the AC/DC before the goods can be brought for
examination and for allowing ―Let Export‖:
18
...
4
...
18
...
There is no
need for filing separate drawback claim
...
The status of the S/Bill and sanction
of drawback claim can be ascertained from the ―query counter‖ set up at the service
centre
...
The exporters are advised to reply to such queries
expeditiously and such replies shall be got entered in the EDI system at the service centre
...
18
...
Commissioner (Export) and is entered in the system
...
of drawback as 98
...
18
...
The bank will credit the drawback amount in the
Account of the exporter on the next day and will handle accounts of the exporters as per
their instructions
...
19
...
1 While filing information as per the format, exporters are required to ensure that
correct Group Code No
...
of relevant Group
72
is clearly mentioned (item-wise details)
...
19
...
of group code
No
...
For proper calculations of DEPB rate, exporters/CHAs are advised to claim export under
the specific Sl
...
if they are exporting injections and thereafter mention Sl
...
of Group
Code 62 of the bulk drug of which such injections have been made
...
19
...
5 lakhs and/or DEPB rates
less than 20% will be assessed by Appraiser/Supdt
...
5 lakhs and/or credit rate 20% or more will be assessed
by AC/DC (Export)
...
19
...
, Item No
...
/Dy
...
The examining officer will feed the examination
report and ―Let Export‖ order will be given by Appraiser/Supdt
...
Seven copies of S/Bill will be printed for the purposes mentioned against each as under :
Customs Copy
For record of Customs
Exporter‘s copy
For record of Exporters
E
...
Copy
For office of DGFT
DPB copy
For use in the import cell of ICD Bangalore for registration of
licence
...
5 There is a provision for changing the Group Code No
...
/Value for DEPB
credit purposes and such changes will be reflected in the print out of the S/Bill
...
(DEPB Cell) AC/DC(Export) as well as by
Appraiser/Supdt
...
) The credit will be allowed by the DGFT at the rate/value (for
credit purposes only) as approved by Customs
...
19
...
Exporters are required to apply for
the DEPB Licence at the B value accepted by Customs and not the value declared by
them
...
43 of EXIM Policy 2003 edition)
19
...
The
words ―NOT VALID FOR DEPB‖ will be printed on all the copies of S/Bill and the
73
exporters will be not be eligible for DEPB licence against provisionally assessed S/Bills
...
However, market enquiries about value will be conducted in such cases and either after
issue of the Show Cause Notice the market value will be determined or may be accepted
by the Exporters on his own
...
of Customs
...
and credit not to exceed 50% of the market
value‖
Sample may also be drawn for the other purposes such as Chemical test,
...
The procedure of Provisional Assessment shall be applicable mutates
mutandis to above cases as well and the cases will be finalized after necessary reports etc
...
20
...
1 The exporters can get the export goods examined by Central Excise/Customs
Officer at the factory even prior to filling of S/Bill
...
He shall obtain the examination report in the form to this Public Notice duty signed and
stamped by the examining officer and supervision officer at the factory
...
Thereafter the
goods shall be brought to the concerned customs warehouse for the purpose of
clearance and subsequent ―Let Export‖
...
, to the examiner in
the concerned shed
...
If seal is found intact the S/Bill will be
recommended for LEO, which will be given by the shed appraiser
...
21
...
1 All the exporters intending to file shipping bills under the EPCG scheme should
first get their EPCG licence registered with the Export section
...
A printout of the relevant particulars entered will be given to the
exporter/CHA for his confirmation
...
Thereafter, the original EPCG
74
licence along with the attested copy of the licence and the signed printout of the
particulars shall be presented to the Appraiser/Supt (EPCG Cell)The Appraiser/Supdt
...
The registration number of the EPCG Licence
would be furnished to the exporters/CHA, who shall note the same carefully for future
reference
...
1 Only shipping bills pertaining to DEEC books issued on or after 1
...
95 will be
processed on the EDI system
...
2 All the exporters intending to file s/bills under the DEEC scheme including those
under the claim for drawback should first get their DEEC Book registered with the CFS
Mulund
...
The original DEEC book would need to be produced at the service centre for data entry
...
The
DEEC Book would need to be presented to the Appraiser/Supdt
...
The registration No
...
3 Each book will be allotted a Registration No
...
22
...
The declaration should be supported
by necessary certificates (ARE-1 or for non-availment of MODVAT) issued by the
jurisdiction Central Excise authorities
...
The fact that the
prescribed DEEC declaration is being made should be clearly stated at the appropriate
place in the declaration being filled in the service centre or through RES-Mode
...
5 All the export declarations for DEEC would be processed on screen by the
Appraiser/Supdt
...
The said processing
would be akin to the processing of Bill of Entry on the EDI System with provisions for
query/reply
...
6 Further, exporters availing of DEEC benefits in terms of various notifications
should file the relevant declarations
...
7 It is further clarified as follows:
75
While giving details relating to DEEC operations in the form the exporters/CHAs
should indicate the S
...
of the goods being exported in the column titled ―ITEM
S
...
IN DEEC BOOK PART E‖
If inputs mentioned in DEEC Import book only have been used in the manufacture of
the goods under export, in column titled ―Item Sr
...
in DEEC Book Part C‖ the
exporters/CHAs are required to give S
...
of inputs in Part-C of the DEEC Book and
Exporters need not fill up column titled ―DESCRIPTION OF RAW MATERIALS‖
If some inputs which are not in Part-C of the DEEC Book have been used in the
manufacture of the goods under export and the exporter wants to declare such inputs, he
shall give the description of such inputs in column titled ―DESCRIPTION OF RAW
MATERIALS‖
In the Col
...
if the inputs used are imported
...
No
...
No
...
23
...
e
...
24
...
1 All the steamer agents shall furnish the Export General Manifest, House Bill of
Landing wise, t the Customs electronically
...
(In due course, arrangements will be made for
the electronic delivery of Export General Manifest through EDI Service Providers
...
)
76
Chapter 17
THE ECGC COVER
The abbreviated form for Export Credit and Guarantee Corporation is ECGC
...
Let us now
see what this is all about
...
This he may be able to do either through the local agent
who is in a better position to know about the customer or through a bank or through any
of the exporter‘s associates if happens to be in the area of the customer etc
...
The financial status of a customer may take drastic turn and
an established customer may go bankrupt within a short period of time
...
For e
...
, there could be break out of war, the balance of payment position of the country
may become unfavourable, there may be some coup of the government etc
...
These are the risk factors for the exporters
...
of India set up the Export
Risk Insurance Corporation (ERIC) in 1957
...
in 1964
...
, in
1983
...
of India and functions under the
administrative control of the Ministry of Commerce and managed by the Board of
Directors representing Government, Banking, Insurance, Trade, Industry etc
...
Except getting an advance payment for the full value of
the supplies, any other mode of payment will have some risk
...
The litigation procedure might be time
consuming and the exporter can never be sure of getting his full payment
...
An exporter can either agree for sight payment or can made shipment on credit terms for
say 60 days, 90 days etc
WHAT ECGC OFFERS FOR PROTECTION OF EXPORTER’S INTEREST ?
ECGC offers various types of insurance cover to protect the exporter‘s interest
...
The
Policy that is most commonly taken by the exporters is the Standard Policy or otherwise
called the Shipments (Comprehensive Risks) Policy
...
50 lakhs, the Shipments
(Comprehensive Risks) Policy is the one intended for covering shipments on cash basis
or on short-term credit basis
...
:
Commercial Risks
Insolvency of the buyer
Failure of the buyer to make payment within a specified period
...
Political Risks
Imposition of restrictions by the Govt
...
War, civil war, revolution or civil disturbances in the buyer‘s country
New import restrictions or cancellation of a valid import licence
Interruption or diversion of voyage outside India resulting in payment of additional
freight or insurance charges which cannot be recovered from the buyer
...
Risks not covered under the Policy
The Standard Policy does not cover losses on account of following risks:
78
Commercial disputes including quality disputes raised by the buyer unless the exporter
obtains a decree from a competent court of law in the buyer‘s country in his favour
Causes inherent in the nature of the goods
Buyer‘s failure to obtain necessary import or exchange control clearance from
authorities concerned
Insolvency or default of the agent of the exporter or of the collecting bank
Loss or damage to goods which can be covered by general insurers
...
Shipments Covered
The Standard Policy is meant to cover all the shipments that may be made by an exporter
during a period of 24 months ahead
...
For specific requirements an exporter can opt for
different policy from the various services offered by the corporation
Exclusions:
Shipments made against advance payments received or shipments against confirmed
letters of credit which has the confirmation from the bank in India may be excluded
...
The
premium for cover under political risks will be less than that under the comprehensive
policy
...
Shipments to Associates:
Shipments to buyers i
...
the foreign buyers in whose business the exporter has financial
interest, are normally excluded from the Policy
...
Shipments on Consignment basis:
Shipments on consignment basis can be covered only against political risks
...
However, the exporter
may cover such shipments for payments under open terms
...
79
HOW TO GET ECGC COVER
Step 1
...
He must make his home work and be clear as to what will be his total
turnover during a year ad what will be the maximum amount he expects to be outstanding
from various buyers at a given point of time
...
Suppose, he expects that at any given time his outstanding will be say Rs
...
After verification of the details of the
exporter, the ECGC may issue a open policy for Rs
...
This is the first step
...
- Credit Limit on Individual Buyer
Once the open policy is taken, as a next step the exporter must make out the list of the
customers to whom he expects to make shipment
...
That is to say, he has to declare the
maximum amount of bills he expects to be outstanding from each customer at a given
point of time
...
10 lakhs
...
On receipt of the
application, ECGC will check for the credit worthiness of the customer either through
their own net work of offices globally, or through the customer‘s bank or through some
reputed independent agency
...
If it feels that a limit of Rs
...
Similarly, the exporter can have the limit fixed to all his
customers
...
If shipment for any customer is made before getting the limit fixed by
ECGC, no risk will be covered for that shipment
...
This is calculated as per the table to be supplied by ECGC which shows the
premium per Rs
...
This table which gives the premium amount payable is framed based on the following
...
The countries are grouped according to
their economic standard
...
g
...
Canada, UK are grouped in category A
...
The premium for group D countries will be more because they are all economically
weaker countries and payment risks are high
Again the premium table is based on the period of credit
...
Longer the credit period greater is the premium
...
The exporter has to work out the total premium applicable on the shipment effected
and make payment to the ECGC
The exporter is also expected to file a Monthly Return in a separate form listing all the
Bills which are not paid on due date, if any, so that ECGC is periodically aware of the
defaulters
...
The policy that is issued for shipment not covered under L/C is called Comprehensive
Policy meaning that the policy will cover both the commercial and political risks
...
All the above relates to shipments not covered under L/C
...
Here the exporter will have the policy
covering only the political risk since under L/C, the bank stands as a guarantor and there
is no commercial risk
...
He cannot be selective to certain countries or certain buyer
...
For all shipments under L/C, the buyer may take a separate policy to cover the political
risks
...
Note: ECGC cover is not for non-payment on account of dispute on quality, damages to
the goods, theft, pilferage etc
...
VARIOUS POLICIES OFFERED BY ECGC:
1
...
50 lakhs is eligible for this
policy
Period of the Policy:
24 Months
Exclusions permitted:
Export to Associates
Letters of Credit
Consignment Exports
Risk Covered:
Commercial Risks
Political Risks
LC Opening Bank Risks
Percentage of Cover:
90%
Minimum Premium:
Rs
...
SMALL EXPORTERS POLICY
Period of the Policy:
12 Months
Exclusions Permitted:
Exports to Associates
Letters of Credit
Consignment Exports
Risk Covered:
Commercial Risks
Political Risks
LC Opening Bank Risks
Percentage of Cover:
95% for commercial risks
100% for political risks
Minimum Premium :
Rs
...
Declaration of payment overdue by more than 30 days
Filing of claim within 24 months
Sharing of recovery
...
Discrepancy cover for LC
Automatic approval for resale/shipment upto 25% of GIV
Increased discretionary limit
SPECIFIC SHIPMENT POLICIES – SHORT TERM (SSP-ST)
These policies can be availed of by exporters who do not hold our Standard Policy or by
exporters having standard policy, in respect of shipment permitted to be excluded from
the purview of the standard policy
...
Period of Policy
:
The policy would be valid for shipment(s) made from the date of the policy upto last date
allowed under the relevant contract for shipment
...
4
...
An exporter not holding the standard policy can avail of this to cover their
84
shipments to one or more buyers
...
Period of the Policy:
12 Months
Risk Covered:
Commercial Risks
Political Risks
Insolvency or default of LC Opening Bank
Percentage of Cover:
80%
Important Obligation of the Exporters:
1
...
3
...
5
...
EXPORTS TURNOVER POLICY
Turnover Policy is for the benefit of large exporters who contribute not less than Rs
...
The policy envisages projection of the export
turnover of the policyholder for a year and the initial determination on the premium
payable on that basis, subject to adjustment at the end of the year based on actual
...
2
...
4
...
Premium will be payable in four equal quarterly installments in advance
Submission of quarterly statement of shipments
Declaration of overdue payments
Filling of claim within 24 months from due date
Sharing of recovery
Highlights:
1
...
3
...
Simplified procedure for payment of premium
10% of projected premium is waived when exports increase beyond projection
Increased discretionary limit
BUYER EXPOSURE POLICY :
The Buyer Exposure Policy is to insure the exporters having large number of shipments
with simplified procedure and rationalized premium
...
The cover would be cover against
commercial and political risk
...
If the
exporter has opted for commercial and political risks cover, failure of LC opening bank
with World Rank up to 25,000 as per latest Bankers Almanac is available
...
MULTI-BUYER EXPOSURE POLICY
Some exporters export to large number of buyers
...
In order to meet the needs of such exporters, Multi buyer
exposure policy is introduced
...
ecgcindia
...
If
the transaction is on LC terms, failure of the LC opening bank in respect of exports
against LC will also covered, For banks with World Rank upto 25000 as per Latest
Bankers Almanac Cover in respect of exports to restricted over countries would not be
available under this policy
Period of Policy:
Risk Covered:
12 Months
Buyer Risks
Political Risks
LC Opening Bank Risks
Percentage of Cover:
80%
Important Obligations of the Exporters:
1
...
3
...
5
...
7
...
2
...
4
...
6
...
8
...
A method increasingly adopted by Indian exporters is
consignment exports where goods are shipped and held in stock overseas ready for sale to
overseas buyers, as and when orders are received
...
Thus separate credit insurance policy is introduce to cover exclusively
shipments by the exporters to their branches overseas on consignment basis taking into
account their special features, providing adequate incentives and simplifying the
procedures considerably
...
SERVICES POLICIES
Services Policies offer protection to Indian firms against payments risks involved in
rendering services to foreign parties
...
The exporters can opt for whole Turnover Services Policy
or for Specific Services Policy depending on the nature of services provided
...
To standard policy will be applied for whole turnover services
policy and specific shipment policy (SSP-ST) premium rates will be applied for Specific
Service Policy
...
90
8
...
The changes devised are
intended to give the clients the benefits of full factoring services through the maturity
factoring scheme, thus effectively addressing the needs of exporters to avail of prefinance (advance) on the receivable, for their working capital requirements
...
Benefits:
100% credit guarantee protection against had debts
Sales register maintenance in respects of factored transaction
Regular monitoring of outstanding credits, facilitating collection of receivable
on due date, recovery, at its own cost, of all recoverable had debts
Setting up Charges and Factoring Charges
The factoring application fee payable initially is Rs
...
05% of the permitted limit sought subject to minimum of
Rs
...
Exporters Obligations:
Registration and obtaining permitted limit on the buyer
Payment of factoring charges with statement of exports mad
91
chapter 18
DATA COLLECTION
There are two type of method of data collection primary and secondary METHOD
...
In Primary method:
Unstructured Observation
Non Participant Observation
INTERVIEW
Secondary method:
trade journals
Magazines
Internet
...
The project sample area parties which are related to industry shipping line and
logistics ltd employees common people
...
DO YO KNOW ABOUT LOGISTICS AND
SUPPLY CHAIN ABOUT
...
DO YOU KNOW ABOUT INTERNATIONAL
TRADE
YES
10%
NO
90%
93
There are some people only which do export and import directly and remaining are done
by with help of shipping line players
...
DID YOU EVER DONE EXPORT OR
IMPORT OF GOODS
yes
no
20%
80%
DID YOU DONE EVER ONLINE SHOPPING
filpkart
3
...
site like filpkart, snapdeal,amazon etc
...
100%
50%
FUTURE
PRESENT
0%
20/6/2015
20/6/2020
95
How the documentation for exim will moving to less paper work in future till 2020
...
The export procedure of the firm has been seen clearly and other
related aspect has been known
...
Her research growth of EDI and
importance of custom house agent
...
That all about
project report we get knowledge
...
Do you know about logistics and supply chain about?
2
...
Did you ever done export or import of goods ?
4
...
How often did you do online shopping?
6
...
Do you know any document
...
Do you thing that eixm have future?
9
...
EDI increase the effectiveness of supply chain?
11
...
Do know about custom house agent and its work?
98
Chapter 21
WEBLIOGRAPHY
http://www
...
com
https://www
...
com
http://worldmaritimenews
...
lloydslist
...
newsvend
...
icegate
...
in
99
100
Title: export import document
Description: it will provide great knowledge for export import documentation,cha etc
Description: it will provide great knowledge for export import documentation,cha etc