Import Export Report

RHEA SHIPPING Import and Export:

WTO: World Trade Organization [ITC (Hs): Indian Trade classification Harmonized System]

a) Product coding system       

This is 8 digit code which is same for import and export Product This code is same in all the country who are the member of the WTO. The first 2 digit code of the product represent the chapter of the heading.

The next 2 digit code is represent the product categories The next 2 digit are the sub categories.

Last 2 digit is sub categories If the product of import and export are false in a specific categories but it is mention their exactly as the description such product the exporter or importer can of the option of “other”.

b) Policy of Exportability and Importability of product There are four categories specified has policy of exportability and importability of product It is generally check the whether the selected product can be export or import freely or not!!

1) Free When free is mention against a specific good and such product are freely Importable or exportable.

To import and export such product are only required is import export product code no.

2) Restricted In restricted categories some restriction must be imposed for export and import product without full fill make of such restriction it is not possible to clear the consignment for the custom.

Such restriction are specify in the policy.

3) Canalized Canalized goods can be only import and export trough nominated agencies by Government.

Ex. Arms and animation can only we import by ministry off difference many times some canalized is goods are declare free for specific period at that time any exporter and importer can export and import such goods.

Ex. Many time sugar are under canalized categories and when there is production are declare free for import and export by government.

4) Prohibited Prohibited product or goods are not allowed for import and export There is possibility that government may allowed the import and export such goods by specific categories by the notification.

c) INCORTERMS [International Commercial Terms] d) This terms are published by ICC (International chamber of commerce) This term are also known as a term of delivery This terms are specified the responsibilities for arrangement and expenses to made by importer or exporter for specific incoterms is utilized in contract the following expenses should be taken in to consideration while sending the quotation to importer as well as the arrangement should be undertaken by importer of exporter.

1) Ex works  Exporter:Manufacturing, purchase of export goods.

Packing of export.

General profit.

Labeling and art work.

Any additional formalities demanded by importer like fumigation of consignment third party examination any government certificate.  Importer:In ex works importer pick up the material of export from door step of exporter.

Transportation from exporter warehousing to port of loading.

Custom clearance at port of loading expenses of clearance and port charges.

Insurance for exporter warehouse to importer warehouse.

Freight charges from port or loading to port of discharge.

Arrangement of shipping agent or airline agent.

2) Free Carrier (FCA) Mostly used this incoterms [Similar to FOB (free on board)]  Exporter

All arrangement of ex works terms and transportation of goods from exporter warehouse to port of loading.

Custom clearance charge in the exporter country.

Port charges of exporter countries.  Importer Importer will arrange the shipping agent and will pay the freight.

Insurance on warehouse to warehouse basis.

All formalities in the country of importer.

3) Carriage paid to (CPT) [Similar to CFR (cost and freight)]  Exporter All arrangement and expenses free carriage and arrangement of logistic and arrange freight.  Importer Importer will arrange insurance to be warehouse to warehouse basis and all formalities in importing country

4) Carriage and insurance paid to (CIP) [Similar to CIF (cost insurance and freight)]  Exporter All the arrangement and expenses of CPT and insurance on warehouse to warehouse basis.  Importer All formalities in the country of importation.

5) Delivered at place (DAP)  Exporter All the arrangement of CIF terms and custom clearance in the country of importation and transportation in the country of the importer  Importer Importer warehouse and importer will pay the custom duties in the country of importation.

6) Delivered duty paid (DDP)  Exporter All arrangement of DAP and custom duties in importing country.  Importer No any responsibilities

7) Delivered at terminal (DAT) This terms is utilizes in chartering of Vessels in this exporter arrange transportation, custom clearance, loading of goods of Vessels in importing country at of terminal place.  Importer Will arrange the custom clearance at the importing country and transportation in importing country.

8) Free alongside ship (FAS) This terms also utilized the chartering of the Vessels.  Export Will arrange the transportation country of the exportation Custom clearance in exporting country and arrangement to transportation.  Importer Will arrange loading of export goods at port of loading and all the formalities in the country of the importation .

NOTE: In Both DAT and FAS the responsibilities of insurance is not specified there for who will arrange the insurance should be decided in mutual acceptation basis.

e) Bill of lading/Airway bill (B/L) This are the receipt issued by the shipping company and air lines to exporter again the receipt of export cargo in their position for transportation purpose.

The bill of lading issued by Vessels owner freight forward airway bill is issued by air lines or air freight forwarder.

There are various types of bill of lading  The B/L and airway bill issued in set of three original copies. This copy are also known as negotiable copies all three original should be sent to importer at a time of sending document to him.  If one copy is negotiable with carrier the rest of two copies are automatically nonnegotiable.

1) Mother and Master Bill of lading This is original bill issued by Vessels owner and negotiable with that carrier.

Types of mother bill of lading:  Shipp on board The shipping company on board ship on board stamp on bill which means the cargo is loaded on specific.

Importer many times demand this type of bill because the can calculate the tragic time of shipment.  Received for shipment B/L Such bill is issued by shipper immediately after receipt of the cargo but this bill indicate that the cargo is not get loaded the ship.

 Express bill In this B/L the name of consignee is not mention there for and body who passes can claim the imported.

This bill is mainly utilized by freight forwarder who issued there on house B/L to the exporter.

Freight forwarder collect the export and books the cargo which shipping company and get express bill.

This bill is sent to the counter part of the freight forwarder of the country of importation.

The counterpart approaches shipping company who has carriers the import cargo and present express Bill of lading.

Shipping company issued delivery order to the freight forwarder counterpart and when importer approaches counter pat with house bill he issued delivery order them for their cargo which is already on his position.  Clean bill When in the declaration in the B/L mention that the cargo received is “set to contain that is it was not damaged and the boxes and packet are such B/L is called clean bill.  Dirty bill When it is mentation in B/L that cargo received for shipment was damage or broken it’s called dirty bill of lading.  Switch B/L In this B/L the name of exporter and name of buyer can be changed but port of loading port of discharge and description of goods cannot be changed.

Ex. A is exporter from India B is Buyer from Dubai and C is Consignee at Singapore. C has placed the order with B for 1000 school bags and B has placed the same order with A in India and asked him to export the material directly to C at Singapore.

A has shift the material to C at Singapore and send the bill along with the B/L to B at Dubai. After receipt of document switching B/L in switched B/L the India exporter is named will be replace by B and B will become exporter and again B’s name who buyer the C will become the buyer. This means C will not know that the goods will exporter A. all the rest of thing the same.  To Order B/L It is utilized when document against payment system used by exporter through bank or goods are to be sold through a middle man who is switched in the country of importation.

Generally to order banks name or middle man’s name is written in the column of buyer and bill is sent to bank or middle man instead of direct buyer.

When buyer or importer pay the money to bank or middle man B/L is does the B/L and write the name of buyer after that only the buyer will set the delivery.

f) Delivery Order(D/O)  Import When import consignment arrives at importing country the carrier or freight forwarder who has transported the imported goods his build which is called do charges container washing charge.

Container fumigation charge and freight charges. And the cargo on FOB basis by payment of this use the carrier issued delivery of his consignment.

Even if the consignment is cleared be the custom the DO is required to be submitted to the port authority at a time of taking delivery.  Exporter When container is booked a supposed to be pickup from specific location shipping company issued DO for that against this DO the exporter or his agent can pick up the container and delivered to the point where the container will be stuffed.

If other case when a quotation of freight forwarder such quotation is a time limited because the freight are subject to change frequently.

If the exporter booked the container and takes the will get the same freight even after completion of time limit.  Import by Air When the goods are imported by Air transport mode goods reach is an immediately in the country of importation whereas documentary takes time to reach to exporter bank because there are delivered by courier after verification.

Dam rage at air cargo is very high and that is way it take immediately delivery exporter approaches his bank along with the set of duplicate document and acceptance to the bank for document and allowed exporter payment. Against which bank issued delivery order to importer and by submitted to DO custom allows import clearance.

g) Shipping Bill(S/B) While exporting the goods his compulsory that the good should be cleared from the custom station for this purpose the exporter is required to file a declaration in the custom containing the detail regarding the export. This declaration is to be field in a specific custom format which is called shipping bill.

The shipping bill is known welded function and exporter promotion scheme.

EX. EPCG shipping bill, DEEC shipping bill, export shipping bill, project export shipping bill Etc.

After the completion of the process of export in the custom the “let export remarks will be endostea (Stamp) by proper custom officer� and the exporter copy of shipping bill will be handed over to the exporter or his CHA. If the goods are exporters under promotion skills export promotion copy will be issued after the Vessels exporters copy of shipping bill is for the control copy is for bank are export promotion copy DGFT for claiming the benefits.

h) Bill of Entry(B/L) Similar to the shipping bill when are imported in India they are required clearance for this Purpose importer has to file bill of entry in the custom.

There are different type of bill of entry.

Bill of entry for home consumption (when duty is fully paid)bill of entry for export, bill of entry for warehousing, bill of entry for project imports.

After the clearance from the custom a custom issued exporter copy of bill of lading and exchange control copy of bill of entry.

i) Bill of Export(B/E) Similar to shipping bill when goods are export by road the bill of export is file.

j) FCL(fully Container Loaded) One unit of container is booked by single party it is call full container loaded. Respective of whether physically the container is fully stuffed or partial stuffed.

k) LCL(Less than Container load) When the cargo is in small quantity there is no need to book a full container for the same in this case freight forwarder collect cargo for more than one exporter and stuff a small container in the booked with shipping company.

The freight for LCL are charges on the basis of per metric ton or per cube meter whichever is higher.

The freight charges are also depend on the nature of cargo its weight and volume.

l) ICD (Inland Container depot) ICD are develop in various city of India to facility the local trade and reduce the congestion on major port.

The custom clearance formality of Import and export consignment can be conducted at ICD in state of main port.

ICD is bonded area were custom staff is debuted as well as warehousing staff is also deputed.

m)

CFS(Container freight station)

To reduce the load of cargo in the port the government has develop CFS which as connected to that particular port.

The export and import cargos are directed to such CFS in state of conducting the custom formality in the main port. In JNPT such CFS are Develop like dhronagiri CFS, Mulund CFS Dhaisar‌. n)

IGM(Import General Manifest) When Vessels/Air craft carryings imported goods enters in to importing port there count port in importing ports file IGM at the port.

The IGM is custom format in which the list of container the goods without containerization the name of consignee/buyer and the final destination of clearance is mention.

The custom allowed only those goods to be unloaded at a specific port which are written in IGM. Once IGM is file and published the owner of the goods not establish that is why if and importer file bill of entry before the IGM is file the bill of entry not process further to noting process.

More or such advance bill of entry becomes valid if the IGM is file within 30 days from the date of noting.

If the goods are to be cleared at specific ICD it should be mention in the IGM as final destination in such.

If final destination note mention and still importer wants to cleared the goods are ICD the main IGM get amended.

While carrying goods to ICD a separate sub IGM is prepared.

o) EGM(Export General Manifest) Apposite to IGM when the goods are export the shipping/airline company files EGM with custom which contain the list of export goods the name of consignee and buyer and port of discharge.

According to the list custom allowed the goods to be loaded in export Vessels.

p) BG(Bank Guarantee) In export and import the bank guarantee means bond issued by bank to the custom as assurance of payment for a specific reason if importer of exporter file to pay the due to custom in case of default.

In the follow situation the bank guarantee is comes in picture.

(1) When there is dispute between importers and custom regarding the payment of duty and valuation against which the custom is demand certain document and if importer provide such document the custom will allowed clearance at declare value.

If importer needs to time produce the demand document to the custom be can take the delivery of the goods by producing bank guarantee to the custom.

Once the importer submit the required document and if custom is satisfied they will return the bank guarantee to importer.

(2) When importer take benefit of scheme like: advance authorization or EPCG many time importer made in an advance and export obligation as a full feel after the import tax place in such cases custom demand the bank guarantee from such authorization holders.

When such exporter complete the export obligation submit the proof of export custom are return the bank guarantee.

q) NFE(Net Foreign Exchange) The meaning of this term is the net foreign exchange earn by an exporter to the country this term is comes to picture when an exporter opt to a vale the export benefit of chapter 4 or 5 for hand book of procedure.(HBP1).

When a specific amount of imported goods are allowed to import without payment import duty the export obligation is imposed on authorization holders.

The export an addition to value of import is called net foreign exchange earn for advance license the value addition is 15% were as EPCG value addition is 6 time or 8 time of the duty saved.

The calculation of value addition as follow‌ VA= A-B *100 B VA= value addition A= FOB value of the export realized FOR (free on Road) of supply received.

B= CIF value of the imported inputs covered by the authorization + any other imported material used on which benefit of duties drawback is being claim.

In case were special economic zone and export oriented units. Importer anything from abraded or buy any goods from India also they get all the buying without payment of duties. Which they are suppose the exporter and achieve the value addition (NFE) greater than 1.

r) Import Duties There are three types of imported duties are imposed on imported goods.

(1) Basic Duty ( custom duties) This duty is also called custom duty are after the payment of this duty is not refundable in order circumstance only in one situation when the imported goods are re-exported this duty can be claim as duty drawback.

(2) CVD(Counter vailing Duty) This duty is quailing to the central excise duty imposed in the country. After payment of this duty a manufacturer or importer can claim CEVAT (Central Excise Value Added Tax) on this paid duty.

Were as a merchant importer can forwarder the CEVAT credit to his buyer provided the buyer is manufacturer.

If the buyer is merchant the importer cannot forward the excise duty credit to buyer.

(3) SAD (Special Addition Duty) This duty is equitant to sales tax after payment of this duty the manufacturer importer take the CEVAT credit.

Were as merchant importer can claim the SAD refund from the custom provided that has not claim the credit.

s) FEIRC(foreign exchange inward realization certificate) When exporter payment is received in his account bank issued a certificate which is called FEIRC this certificate indicate the number and foreign exchange amount.

A status holders that is the exporter having export RS. 25cror or more in financial year and use this certificate for claiming the export benefit or closing the license.

For other exporter is to compulsory to provide BRC.

t) BRC(Bank Realization Certificate) Which is a format issued by DGFT and bank by supposed to stamp and signature all the export detail including shipping bill note, B/L no. , export scheme Etc. is mention in BRC. Nowadays bank are transferring a BRC online to DGFT at a time of claiming benefit the exporter is required to submit hard copy which can be printed from online data.

1. EO(Export Obligation) Export obligation is the obligation imposed on authorization holder or ailing to benefit scheme of export.

This is generally applicable of the imports without payment of duty before fulfillment of export obligation.

There is a fix time to complete the export obligation and this time it’s called export obligation period.

u) IEC(Import Export Code number) [Requirement and Exemption Categories] This code number is compulsory for all exporter and importer without this number the custom will not allowed to clear the goods. There is exempted categories whose list published in handbook of HBP1 such categories is required provide only fix number issued to them.

The goods like document gifts does not required IEC. This code is issued on the basis of categories visually manufacturer, merchant service provide and others.

The IEC code is issued on single PAN number basis. That means a PAN card holder can apply for IEC. A prop writer is required produce individual PAN number were has partnership form PVT and LTD Company should produce company PAN number.

The IEC is reflected online at custom website and exporter or importer should send a self-attached photocopy of IEC in the custom for clearance purpose.

v) RCMC(Registration cum membership certificate) [Mandatory, non-Mandatory and utilization while claiming benefit] This certificate issued by export promotion council when an exporter wants to claim export benefit.it is compulsory for him to obtain this certificate from concern export promotion council (EPC) otherwise this certificate is not compulsory to obtain. If not export benefit is claim still if exporter wish he can register with EPC on voluntary basis.

w) ICD ( Inland Container Depot) The ICD are develop the facilities the trade and to reduce the congestion of traffic at major port.

ICD is a bonded warehouse were custom clearance of import and export at taken palace similar main port.

Once goods are cleared at ICD there is no require to the open the container at main port.

ďƒ˜ ADVANTAGES OF ICD I. II. III. IV. V.

ICD are available at the door step of the importer or exporter so whenever there is requirement to be present before the custom.

The exporter or importer can visit their on the same day also if any additional document is demanded by custom it can be produce immediately.

The clearance time require at ICD is less compare to main port.

ICD storing space is available at ICD were it is very difficult to store the main port because of congestion.

A personal relation with the custom people can be develop at the ICD because of limited staff.

ďƒ˜ DISADVANTAGES OF ICD I. II. III.

IV. V.

Due to less utilization variety of cargoes does not cleared through ICD. That is why the equipment facility are develop at ICD according to the regular cargo moment.

If different types cargoes is taken to ICD the facilities is not available with them it will be difficulty to importer or exporter of the cargo. Sometime cargo may be damage.

The labor appointed in ICD are generally contract labor and they keep on changing. That is why a specialist for export or import cargo moment stuffing or dis stuffing is not develop among them altimetry damage a cargo no stuffing of container to its fuller strength.

The road transportation may cost delay due to less available of transport Vessels.

Shorten cargos like scrap, food product, livestock which required various type department not allowed to take ICD.

VI.

LCL import consignment are not clear at ICD.

x) MAJOR PORT ďƒ˜ ADVANTAGES I. II.

All type loading or unloading equipment are available at major port The custom staff as well as labor at main port as expert and handle almost all type of cargos.

ďƒ˜ DEADVANTAGES I.

II.

For import consignment if the consignment to be store at warehouse. Many time custom does not allow to do so. That is why the cargos should be kept in the container itself and importer pay a heavy amount of detain charges.

In case of personal present at custom or additional document as to be sent a demanded by custom there is wastage of two or three days for reaching port.

y) AGENCES INVOLVED IN EXIM PROCESS (A) Custom Custom is posted at entry an exit point of the country. The role of custom is to prevent smuggling activity collect duty for import or export goods an examine the goods whether this good are as per decryption and not provided for export and import as well as if any restriction in their it should be fulfill.

The different kind of office and staff is appointed for above purpose in which the following categories are there.

I. Noting Clerk As job is to note down entry of shipping bill and bill of entry. This is the first state and its establish that the entry for export and import is made and exchange rate applicable in that date is application to such export or import.

II. Inspector The inspector job is to check the entry in the shipping and bill of entry and find out whether alert or no alert remark is to be given such shipping bill of entry depending upon the past history of the party.

III. Superintended Superintended also the shipping bill and bill of entry apprised by the apprising officer. He also a company the inspector for examination of good whenever required.

IV. Apprising officer The job of AO is to value the goods for duty purpose also to check that the exporter is not claiming. The access export benefit than the entitlement.

V. Assistant Commissioner Commissioner is a final authority at custom station he power to settle any disputed or procedural problem arises on lower level.

If the problem related to the clearance is not settle by such assistant commissioner or commissioner (AC) the exporter and importer to right to go further to commissioner appel.

(B) Central Excise A central excise comes in picture various situation the export is exempted for all kind of duty but to the claim exemption an exporter an importer required to produce the proof of export. When a manufacturer exporter exports the goods he is expected for central excise duty. If duty are applicable in this case he can export in three ways.

I. Export without payment of ED. II. Export with payment of excise by and claim the CEVAT credit after completion of export.

III. Export by payment of excise duty and refund after completion of export.

In all three situation exporter send ARE-1 form to document when the export goods lives the country custom stamp and sing the ARE-1 and return them to the exporter by submitting of ARE-1 to central excise the exporter obligation is completed and one above beneficial.

When a merchant exporter buy goods of export from a manufacturer he is supposed to pay excise duty to that manufacture but there is option to merchant export for procurement exports goods without payment of excise range for CT-1 form equivalent to value of procurement by sending this CT-1 form to the manufacturer will supply the goods without charges of excise duty to the export.

In this case also ARE-1 form will be sent to the custom in which both manufacturer and merchant name will be written.

(C)

DGFT (Director General of foreign Trade)

DGFT works under ministry of commerce and trade the function of DGFT is to see that the policy of export and import should be implemented properly.

The head office of DGFT as in Delhi and branches are open in different city. Which are known as regional license authority. All type of licenses related to export promotion licenses for restricted item and import export code number should be applied with DGFT for IEC the application should be made to that RLA in which jurisdiction the head office of the company or restricted office is located were as for other licenses branch office can apply for the same at his own jurisdiction.

The application beyond the power limit of RLA should be made to head office Delhi and the application should be routed through RLA.

(D)

RBI (Reserve Bank Of India)

RBI works under the ministry of the finance department of revenue.

It play various role in different sector list foreign direct investment currency control and export import for payment and remittance.

The RBI gives directive for time limit of payment the major to be taken the case of payment at not acceptable etc. it is also maintain foreign exchange reserves.

Nowadays regarding import export payment the RBI has issued direct authority to take banks who are registered with them for dealership such bank are known as authorized dealers and having 14digit authorized declare code. Such bank are authorized to issue the bills to foreign bank or to foreign currency.

This procedure is to be done through foreign exchange department of the bank. That is why importer or exporter is required to EXIM to bank there he hold the on payment of EXIM deals.

So whenever Exporter of importer needs permission from RBI for any case of all they should be approach their bank provided the bank is authorized dealers.

(E)

Custom House Agent

There are two identities which can appear before the custom for clearance of import and export consignment.

(1) The exporter or importer himself or his employee this type clearance is called self-clearance.

(2) CHA : The CHA is a licensed agent and this license is to be acquired by giving regulation 9 examination as directed in custom act 1962. The notification regarding the examination his published by custom and ordinary written examination and then after wayva is conducted.

If the application pass to the exam hos allotted temporary CHA license for one year and during this year the license holder issued fulfill the target as allotted by custom after one year the license become permanent and CHA can operate from any port of India single or more than one port. The CHA duty is to privies the document office client for five year from the date of clearance of consignment and whenever custom demanded such document should be present to the custom also if any MAL function in importer and exporter office client he should reported to the custom authority.

An exporter or importer should find out the appropriate CHA for his consignment especially when a consignment need a special skill and treatment at a time of clearance. The reason is generally CHA start with a specific types of cargo he start receives the company who are dealing in similar types of cargos and due to he becomes especially on a specific type of cargo handling.

It is possible that exporter or importer have cargo might not have been handle by specific CHA and it will result in to waste of time and money so it is essential to check that the CHA which party is willing to give job should have done the same cargo earlier.

(F)

Freight Industry

There are two major sector who sales the freight for international transportation in different country.

(I) Shipping Company/Airlines Mainly shipping company established their office in different part of country such office conduct marketing activity and approaches to Custom House Agent and big company for settle their freight to the segment were their ship operating.

This company set freight for full container load that is 20feet or 40feet shipping company are having association with in their groups and agree to carry each other’s container. The freight are depend upon the nature of cargo.

(II)

Freight Forwarder Freight Forwarder are middle man between shipping company and Exporter or Importer.

Freight forwarder sales the freight to exporter and importer and booked the cargo with shipping company many times freight forwarder issued house B/L for booking with them.

Some freight forwarder next arrangement with shipping company assure them a quantum of the business with in a fix time against which shipping company offers them the good freight rate for a specific period of specific quantum that is why many time is seen that the freight forwarder is having shipping company who is actual carried.

Freight forwarder many times forward credit to their client which is not done by shipping company freight forwarder also undertake the delivery of LCL consignment the freight for LCL consignment are charged on the basis of per metric ton or per Quebec meter whichever is higher. The freight changes as per the nature of cargo any additional to freight shipping company charge Terminal Handling Charges(THC) which include loading un loading container for full container THC discharge on per container basis three is different charges Hazard cargo as well as house tuff cargo.

The THC charges on LCL are in the basis of per metric ton or per Quebec meter whichever is higher.

(G)

Pest Control Agencies

Many times importer demand the fumigation certificate for export consignment along with other document to get this certificate and exporter is required to contact pest control agencies for fumigation of export cargos in the cargo is FCL and container is stuffed at the door stage of exporter pest control agencies fumigate the cargo inside the container and then container is sealed.

If the container is not available cargo and the cargo is LCL cargo is covered by tarpaulin and fumes are spread inside it such cargo should be kept cover for 24 hours.

This procedure can also be done at port of loading. The pest control agencies issue the certificate after completion of procedure.

(H)

Government Inspection Agencies

Such agencies are known as export inspection agencies and there role is to inspect export goods and issue the certificate of origin (COO). There are different type of (COO).

(1) GSP ( General System of Preference) This certificate issue by inspect agencies develop country has given general preference to all developing or under developing country for duty congestion when such goods are exported by under develop or developing country to GSP country for this an exporter is required to apply with export inspect agencies with specific form and application fees again which a certificate GSP is issued to exporter. This certificate should be sent to the importer along with other document hos producing this certificate to the custom at GSP country.

The importer will get duty congestion there is no regular inspection process is conduct in GSP certificate. Sometime a random check is done by exporter inspect agencies so it is easy to acquire this certificate and can be get within one or two days.

(2) Specific Preference certificate India is having one or more agreement with various country like India Srilanka agreement, India Singapore agreement, India Bangkok agreement, sarc agreement etc.

Such agreement are made for tariff congestion. The country of agreement extend the duty congestion to case other for importer country. The list of such goods are published on which duty congestion is applicable. If an exporter an exporting the goods which is falling in the list to the country of agreement his required to get the certificate related to that specific agreement from export inspection agencies to get this certificate and exporter is required produce all the evidence related to goods to tally manufacturer initially for this certificate more random of inspection of goods is conduct.

NOTE: It is to be noted that the B/L date or airway bill date should be later then the date of certificate.

(3) Certificate of Origin Non Preferential This certificate is issued by federation or chamber of commerce this certificate is only useful and compulsory when antidumping or safeguard duty is imposed on a specific product from specific country.

When importer for India is importing goods from any country and if antidumping duty is imposed on that goods for importing from a specific country. It becomes essential to produce the certificate of origin to the custom acquired from the exporting country an absent of such certificate the antidumping duty is payable by the importer irrespective of the country of exportation.

If no antidumping duty is imposed on importing product there is not requirement of certificate of origin opposite to this a time of export if importer of foreign country demand such certificate then only exporter from only India should sent this certificate.

For application of this certificate exporter should apply chamber of commerce after completion of export he should provide copy if invoice copy of B/L and a declaration on 20RS stamp paper. (Application fees applicable)

(I) Commodity Boards This board are also known as export promotion council (EPC). There are basis function is to promote the Indian product in the international market for this undertake the promotional activity like industrial fair and different marketing mode on Board.

There are different board establish for different commodity. This board also under take the problem solution of exporter and importer by register with this board the exporter get different benefit for activity conduct by this board also this board issued registration cum membership certificate which is essential to claim export benefit. The board are like EEPC (Emergency export promotion council), PEPC (plastic export promotion council), and APEDA (Agricultural and f process food development authority).

(J)

Third Party Examination Agencies

This examination is to be required to be done in two situation.

(1) When importer does not have trust in exporter that he will delivered the same goods to him as decided between them he importer demand third party examination of export goods before such goods are ship at country of exportation. In this case importer appoint agencies which conduct such types of examination such agencies passes expert staff like infrastructure, laboratory etc. for such examination this third party visit the exporter warehouse or premises examine the goods of necessary take the sample for laboratory testing and then certify the goods are same as per agreement between exporter and importer. After words the goods are shield are loaded in present of the third party examination agencies. Generally agencies fees for such examination is paid by importer.

(2) In some cases at a time of importer custom demand third party examination certificate from importer the requirement of such certificate is there published in policy or by a notification.

EX. While importing scarp in India a third party examination certificate is required to taken staking that there is no Radioactive material ,in the scrap as well there are no empty or live categories and bomb sell in the scrap. In such cases while appointing third party examination agencies. The agencies should be selected from the list of agencies which are register with director general of foreign trade.

(G) ECGC (Export Credit Government Corporation) This is an only authority develop by government of India to facilitate the exporter ECGC covers the risk factor of non-payment of export proceeding. It is a insurance agencies which covers the export payment and if an exporter does not received the payment for is export made the ECGC will pay that money to all before the export take place exporter should take the adequate insurance covers from ECGC. There are various plan like small exporter, large exporter, reshipment coverage and annual coverage.

PART 2  TYPES OF IMPORT & EXPORT 

Re-Export Any goods which are imported in to the India and subsequently exported back in same or subsequently same form it’s called different reason for why the goods are Re-exported the few of them are as follows.

(1) Re-Export of rejected goods when goods are imported and found defective or not suitable or not as per specification such goods are sent back to the exporter.

(2) Re-export of rejected goods imported on lease - such goods are to be sent back when lease time is over.

(3) Goods imported for job work re-conditioning or repairing – such imported goods are to be sent back at the completion of the job for which they are imported.

(4) Goods re-exported against replacement – when it is founded that the imported goods are defective or not feet for the purpose the exporter agrees to replace such goods again the proper goods.

In all above cases the importer is required to file the re-export shipping bill and the purpose of re-export should be mention in the shipping bill.

If the goods are imported are against the payment of foreign exchange to the exporter. If goods are re-exported the paid money the exporter should be paid back to the importer if the replacement of the goods is to be made then there is no requirement of paying back the money.

When the goods are imported on higher or lease basis first of all importer should take permission of RBI so that after the completion of lease period when the goods are re- exported RBI will not demand the payment back of such goods.

If the imported goods are re-exported and no replacement goods will be sent against it also the duty is paid at the time of their importation such duty can be claim as a refund from custom under duty draw back scheme of section 74 of custom act 1962.

When the goods are re-exported the important factor is such goods should be identify by a proper officer of custom that the re-export goods are the same which were imported previously in to the Indian when importer already exported ( in the case like goods imported for job work on higher and lease basis etc.)

In this case the importer should get goods mark from custom such marks and number are written on the import file of that of re-export the import file will be checked for identity of the goods.



Re-Import When goods are exported to out of country (Abroad) and subsequently import against the same goods it’s called Re-Import of goods.

In custom act one of the section say that anything which is imported in to the India is livable imported in India but to facilities the Exporter certain exemption notification are published in the behalf of the following is attract if such notification.

(1) Re-Import of goods sent to abroad for job work - at the time of re-importation duty payable only on process carried out for job work in abroad and cost of material used in process /repairs plush insurance and freight charge on both ways.

If job is done free of change the custom will consider the fair cost for the same. The imported goods should be identify by the custom that same goods were exported previously.

(2) Goods should be Re-import within one year from the date of export additional six month will be allowed if commissioner of custom permitted.

The goods should not be exported under any benefit of export.

(3) Re-import of goods manufacturing in India and parts (India or Imported) for repairs, reconditioning and subsequently re-export. Re-import of goods should be within 3year of export.

Re-export of goods should be within 6 month from date of re-import plush additional 6 month can be allowed commissioner of feels of fit. The re-import is subject of bond equal to duty amount and bank guarantee of 25%.

(4) Re-Import of goods not manufactured in India the duty way paid at the time of importation and the goods were exported for project abroad.

No duty on Re-importation is to be paid the re-export and re-import is subject to RBI permission.

No duty drawback under section 74 custom act should be claim at a time of re-export of goods.

The ownership should be bot change during the re-export or re-import of goods.

(5) Re-Import of exported goods under duty drawback, refund without payment of excise duty – duty livable only up to benefit claim. The import should be within 3 year from the date of export plush 2year will be allowed with permission of commissioner of custom. There should be not change of identity of goods.

(6) Re-Import of exported goods under EPCG scheme – the import should be within one year from the date of export. The details of re-importation should be intimated the deputy commissioner of excise and DGFT and their acknowledgement should not be expire at time of Re-importation.

(7) Re-Import of goods exported under advance authorization scheme at a time of re-importation the license should not be finally closed. Company registered with central excise may take the material to the factory without payment of central excise duty under central excise supervision for rest the duty is pay.

 CARGO CARRIYING TOOLS AND SYSTEM  CONTAINERS The container are used to carry the export goods in suffer way by using container there is less chance of goods getting damage. All though the transport is container is more expensive them transporting without container also there are limitation of size for such transport. The total traffic in international trade of container is 8% of total transportation.

The concept of containerization was introduce in India for the first time 1968 in early 1970 shipping corporation of India acquired the first semi container ship with three holds to carry container along with two holds for general cargo on 1975 American president line schedule there cellular container ship to Bombay and brought the necessary handling equipment with them. However India started seriously to adopt containerization only in 1978.



TYPES OF CONTAINERS The highest number of container available for stuffing are 20’ and 40’ standard containers. The 20’ container are used to carry heavy weight cargo were as 40’ container are used for cargo which is having less weight and more volume. The inner dimension and carrying capacity is below.

[20’ containers L- 19’4’’ W- 7’8’’ H- 7’10’’ Capacity: 32.18 CBM or 21727kg.]

[40’ containers L- 39’5’’ W- 7’8’’ H- 7’10’’ Capacity: 67.67 CBM or 26727kg.]

(1) Open Top Containers This container are used to carry the cargo which is difficulty to load from side doors.

EX. Cargo like machinery, having more length or scrap.

It is open from the top of the containers there are two type of open top containers.

I. Soft Top The container are covered by trampoline after stuffing and then they are sealed by wire.

II. Hard Top This container has a separate hard top and arrangement up celling containers open top can be open from to top as well as from side door.

Dimension: [20’ containers L- 19’4’’ W- 7’7’’ H- 7’8’’ Capacity: 32.16 CBM or 21670kg.]

[40’ containers L- 39’5’’ W- 7’8’’ H- 7’8’’ Capacity: 66.66 CBM or 26630kg.]

(2) High quip Container This container are used when the goods are more in height and cannot be fit in normal container.

This container are 1’ more in height and are available only in 40’ size.

Dimension: [40’ containers L- 39’5’’ W- 7’8’’ H- 8’10’’ Capacity: 76.28 CBM or 26512kg.]

(3) Referred Containers This container are used carry by perishable goods which needs a specific temperature control.

EX. Fish, vegetable, sweets etc.

This container has is built motor which can keep the container cools for few days without plugging in track at port and on the vessels.

Dimension: [20’ containers L- 17’8’’ W- 7’5’’ H- 7’5’’ Capacity: 28.31 CBM or 20756kg.]

[40’ containers L- 37’8’’ W- 7’5’’ H- 7’2’’ Capacity: 57.76 CBM or 25756kg.]

NOTE: Refers containers as available in temperature control from -25 and +25 degree.

(4) Flat Rack Containers Flat rack container are used to carry of goods which are over dimension or odd dimension at cannot be accommodate in regular container as well as cannot be ship in less from. Flat rack container have not available it is also attract very high freight.

There are two types of containers.

1) Collapsible 2) No collapsible Dimension: [20’ containers L- 18’5’’ W- 7’3’’ H- 7’4’’ Capacity: 21469kg.]

[40’ containers L- 39’7’’ W- 6’10’’ H- 6’5’’ Capacity: 38918kg.]

(5) ISO Tank Iso container are used to carry in liquid and powder form generally chemical. The liquid form the cargo is stuff directly in the tank here as in powder form first of all is inserted inside the tank and after that powder chemical is stuffed inside the outer part of iso tank is structured similar to regular container so that is can stake proper with other container.

Dimension: [20’ containers L- 5.90 meters Breath- 2.30 meter H- 2.5 meter Capacity: 31 CBM or 8140kg.]

[40’ containers L- 12.0 meter Breathe - 2.35 meter H- 2.25 meter Capacity: 26652kg.]

 Bulk Cargo Bulk Cargo are those which are in the nature this means ii individual goods a not be identify separately with other goods.

EX. Wheat, Rise, cement etc.

Such cargo are called solid bulk cargo at a time of export of quantity is small this type cargo are transported in the containers but when quantity is large this cargo are transported in specialized chartered vessels in bag form or loos.

The cargo like petrol, crude oil, chemical, wines, fruit and cold liquid bulk cargo. Such cargo are transported in a specialized vessels like tanker, parcel vessels and when the cargo in small quantity there are transported in tank.  Break Bulk Cargo This cargo are which identity separately from each other they are packed in a boxes or mounted on palates but while transporting they are not transported in the containers. The vessels has specific allotted space where break bulk cargo are accommodated generally the cargo which do not have threat of damage containerization or humidity problem such cargo are loaded in break bulk system.

The break bulk freight are much less in comparison to containerize cargo.  Major Dry Bulk Cargo A) Salt Salt is corrosive in nature so hold on the ship have to be white washed after discharge of cargo or before the loading.

B) Cement The cement is available in either clinker or finished powder form the cargo is loaded in bag used are paper bag or jumbo one matric bags. This cargo is not loaded during rains but the clinker on which jip Sam is not added cab be loaded in the rains.

C) Sugar Sugar is obtain from sugar can, sugar beet and dates raw sugar ship in bag from and molasses ship in tankers generally refine sugar is avoided to be transported due to threat of container.

D) Grains Grains needs ventilation should also be kept in dry condition otherwise grain will get perished.  Cranes And Forklift This installment are utilized to stuff the consignment in the containers and loading the consignment from trucks or trailer for export import purpose.

Forklift and cranes are available in various capacity and types and also higher charges of this installment are depending upon their load carrying capacity. So an exporter or importer it is required to check to thinks.

(1) Weather a required cranes or forklift is available or not at a port and ICD from were ha will be moving his consignment.

(2) The charges of utilization of this that is per ship or half ship because he might have to use this installment for loading or unloading for factory premises by knowing charges import export can add this charge to his quotation.  Road Transportation The transportation port to warehouse and warehouse to port is done through most (1) Rail (2) Road transport When quantity is very large or cargo is heavy it is chipper to transport by rail but there is limitation for availability of rail transport. The container are transported through rail transported are

having dedicated goods train. This container rail transportation is handling by CONCOR (Container Corporation of India) but most if the transportation is carrying by road transportation for container.

Transportation trailer are used and for other than container various transport vehicle are available.

This transportation vehicle has different future different type, different weight carrying capacity etc. so first of all it is understand the proper transportation requirement for our consignment and this depend upon the nature of consignment.  Packing Material The packing is one of the most important job of export is should be appropriate the nature of cargo otherwise the cargo get damage.

Different kind of packing material.

I) Wooden boxes II) Thermo coal III) Cargo boxes If the boxes weight cannot handle manually that is if the cargo is heavy the pallets are used for the boxes so that is can be lifted by forklift or cranes. If cargo is threat of moisture. Moisture attracting the bag and kept inside cargo as well as shrinking plastic is used to cover the box. Different types of labeled are also used for safe handling like glass with care.

Ii is mandatory to put marks and number on the boxes such marks and number must be stencil marking than such marking should be made in a fabric and it should be stich in the boxes on such packing. 

LCL & FCL Stuffing  Container Stuffing System When a full container is higher by an exporter there are two method of stuffing a container after an examination.

(1) Dock Stuffing In this Case exporter delivered the export goods to the port of loading were after completion of custom procedure the goods are stuff in to the container after words the container was shield by custom as well as shipping company 60% of the consignment are stuff at docks the reason is all type of loading equipment labor force is available at docks also on cases of missing the vessels the other shipping company container can be taken to avoid deals.

(2) Factory stuffing In this system first of all exporter is requirement to take factory stuffing permission from the custom from were exporter wants to load export cargo for this permission an application is to be made in a specific format an as detail like excise range and jurisdiction the exporter office falls, description of export goods reason for factory stuffing etc. is to be provided. If the custom satisfied with a detail in will issued the factory stuffing permission not required to apply for again. After receipt of factory stuffing permission the export should submit it to the concern excise jurisdiction. when the container is to be called the factory stuffing excise authority should be animate 48 hours in arrives to the factory the factory the excise superintended will visit the factory an examine the export goods if necessary to will draw the sample.

After the examination the examination report will be written on reverse site of export invoice. This report and sample will be shield in cover be excise superintended and will hand over to the exporter. After the completion of stuffing the container the excise will seal the container. This container will not be open again for examination purpose unless there is

special intelligent report the seal container will be sent to the port of loading along with seal document and samples at a port this document and sample is handed over to the customhouse agent will submit to them custom. At the same custom house agent an on the ground of the excise examination report the container will be allowed to load on the ship for export.

The factory stuffing little expensive then dock stuffing also required certain facility at warehouse so generally when the cargo is decline or freight and exporter want to stuff the container in his procedure in with his equipment and labor people prefer to go for factory stuffing. ďƒ˜ LCL And FCL Containerization LCL is consideration freight forwarder because are container is concern shipping company takes charge or full container load at a time of LCL consolidation generally 40ft high quip container is utilize.

Nowadays hub and spoke system is develop due to which the LCL moment becomes as fast as full container load. In this system the shipping company has develop the hub port like Singapore, Dubai etc. so now an LCL consolidation read not weight to greater full 40ft container load cargo for a specific port he can stuff spoke cargo in same container after completely stuff such container is to has port at hub port this kind of container arrives from all over the world all is container revert and single. This procedure takes two to three days. That is why LCL reaching three to four days late has then full container load.

There is different situation in ICD because ICD is many time do not have even one full container loaded LCL cargo in the container such container is should by custom and sent to port of loading were ii is reopen against and which is booked at main port of loading.

PART-3 ď ś

Schemes To promote the export from India government has declare various incentive scheme in a form of authorization. This scheme are mainly dived into three form (1) Duty remission scheme (2) Duty Exemption (3) Cash back scheme Different techniques aspect are to be consider by exporter while availing this scheme duty remission scheme are available for both manufacture and merchant exporter following are the duty remission scheme .

(A) DEPB(DUTY ENTITLEMENT PASS BOOK SCHEME) Currently this scheme this in a force but it is essential to understand techniques of the scheme because all rest of chapter 3 benefit are similar to DEPB scheme. This was the first scheme introduce his type that is why it was called passbook scheme. This license this scheme can be apply with DGFT after the completion of export and receipt of export payment in the bank. It is essential that the export product should be published on the DEPB schedule. If export product is not publish in schedule export may apply with DGFT for fixation of DEPB rates such rates are depend upon the deemed import duty of inputs utilized in the export product so this scheme is to help exporter to import inputs without payment of duty scrip issued to him. At a time of export it is necessary to file the shipping bill in the DEPB Scheme.

Was the export is over an application made with DGFT. DGFT will issued a duty scrip equivalent to the percentage describe in the shipping bill and on the basis of export payment \.

This license will issued on transferable basis and port of registration (port of importation) will be port of export. The exporter has further option to change the port of registration by relies advise procedure more than on shipping bill of same port of export can be club to gather and exporter can apply for a single duty scrip. The duty scrip issued by freely transferable can be sold an importer who want to utilize him for selling such scrip there is only requirement of single transfer letter. One of the basis of this scrip and scrip holder can import any freely importable goods.

If the amount of the scrip more and import duty is less this scrip can be utilize partial, and remaining duty credit can be used for next import or can be transferred to same other importer that is why his called passbook scheme.

The importer has option to refund only basis duty and pay rest of duty in cash or cab refund the all duty and take credit letter on.

Once the license is fully used the custom deposited with them and there is no separate closing procedure is required to remain.

(B) Focus Market Scheme This is similar scheme like DEPB comes under chapter3 of FTP (Foreign Trade Policy) in which transferable duty scrip equivalent of 3% of FOB value of export is allotted. This scheme is introduce to help exporter to reduce the freight cost for exporting the goods those country is published in Appendix 37C of ANF.

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This scheme is not available to following categories and product.

Supply goods to special economic zone and EOU. Service provider Gems and jewelry, gold and silver Ores and consult rate All type of cereals Sugar Crude oil, petroleum Milk, milk product For application of this license document required are export promotion copy of shipping bill, BRC, and landing proof one of the following document should be produced.

I. Bill of entry in the importing country II. Delivery order issued by port authority III. Arrival notice issued by carrier IV. Tracking report of shipping company V. Airline arrival in importing country

(C) Focus Product The focus product scheme falls under chapter3 of FTP. This scheme is also duty free transferable scrip avoided against the FOB value of export which is 2% of FOB and for table 2 or 5% of FOB value for table 7 additional 2% scrip or and above existence rate. This scheme is declare to support various product for export purpose supply of such product to special economic Zone and 100% EOU is not eligible.

The list of eligible product is published in appendix 37D of ANF. (D) VKGUY (Vishesh Krushi Gram Udyog Yojana) This scheme is introduced to promote the export of agriculture product and their value added product minor first product and their value product and gram udyog product forest based product Etc. The scheme also falls under chapter3 also foreign trade policy and transferable duty scrip his allotted equivalent to 5% to 7%. If duty draw back claim along with scheme the scheme is allotted scrip on reduce rate.

The list of eligible product is published on appendix 37A application for this scrip for the export during April to September should will made from 15th January till a5th February for export made from October to March. The application to be made with DGFT from 1st may till 31st may. The application submitted after last date will be rejected.

NOTE: All above scheme falls in champter3 and freely transferable an exporter can opt only one scheme from chapter3 at a time of export exporter should be declare in the shipping bill and invoice that he will be availing the benefit under chapter3 of foreign trade facility do that after completion of export he may opt any one scheme suitable to him.

(E) Served form India This is Also chapter3 scheme available from service provider but the scrip allotted this scheme is nontransferable. The export can import only those goods which are connected to the main line of

business of service provider. The scrip allotted is 10% of FOB value of current year export. If the service provider have earn rupees 10lakh in last financial year application for scrip an file monthly, partly, half or annually.

The list of service for scheme his published in appendix 10 of ANF. NOTE: The list of import of goods which are not allowed under any promotional scheme of chapter3 his published in appendix 37b of ANF. (F) Duty Drawback Scheme Duty drawback is export benefit scheme in which import duty is refunded to the exporter in case two section 74 and 75 deals with duty drawback.

SECTION 74: Section 74 deals with re-export of imported goods in same or substantially same for provide the duty was paid on the goods when they are imported in to the India. The refund of duty his made on the basis of goods used after importation and re-exported goods not used. After importation up to 98% duty drawback is allow at time of re-exportation of goods were as of goods are used after importation the refund rate his calculate on depreciation method depend upon the month for the goods were used at a time of must be identify as this which have been.

Imported in to India and duty has been paid there on such identify must be done to the satisfaction of the assistance commissioner of the custom. Entry for re-exporter must be made within two Year from the date of payment of import duty must be made within two years from the date of payment of import duty. This period of 2year can be extended if commissioner of system gives permission under section 74 the drawback is allow on the case to case basis and there is no schedule published for such drawback. The exporter is required to produce to the copy of bill of entry and other import document at the time of re-exportation of imported goods.

If the goods are used after their importation the duty will refunded on following manners not more than.

Schedule: Note more than 6 month 85% 6 to 12 month 70% 12 to 18 month 60% 18 to 24 month 50% 24 to 30 month 40% 30 to 36 month 30% More than 36 month null.

Section 75: This drawback is paid for duty pay on imported inputs utilizes in the export product. It is not compulsory for an exporter to actually import the inputs and utilize them in the export product. It is assume that an exporter has imported such inputs. How much duty would have been paid and such duty refund to him after exporter on case back basis which is directly deposit to the exporter account.

For duty drawback schedule is published by the custom which is known as AIR (All Industrial Rates). The rates published in this schedule are applicable to the all exporter whose tariff code published in the schedule. The schedule is divided in to two parts. (1) the rate of drawback to be allow when an exporter does not avail the CENVAT credit for duty pay at a time of procurement of inputs either indizinisally or imported to claim this rate an manufacture exporter required to

produced known sell avail certificate from center excise and should be submitted to the custom at a time of claiming duty drawback.

The second part of schedule indicate the drawback rate when CENVAT credit facility is avail be exporter to claim this rate he excise certificate is required.

When the rate indicate first part and second part of schedule are same that is if without CENVAT facility the rate is 1% and with CENVAT credit the rate is also 1% in this case. The drawback with avail of CENVAT credit.

The drawback can be claim by manufacture as well as merchant exporter. If merchant exporter wants to claim the rates without CENVAT credit his required to procedure certificate of non-avail of CENVAT credit from the manufacture with whom he has bought the export goods.

If merchant as procedure the export goods from upon market he will only rate after avail of CENVAT credit.

If any export product rates are not published in all industrial rate schedule he has option to apply for fixation of board rate for this purpose at a time of export exporter as mention in shipping that he is exporting under fixation of board rate after completion of export the exporter should apply to jurisdiction excise commissioner or brand rate commissioner along with necessary document and him prescribe form on the basis of the application the commissioner will fix the drawback rate of application which can be used only be the application such rates are fixed for a period of 3month, 6month or year. After completion of this period if the brand rates are not published in AIR the exporter required to re-apply or extension of brand rates.

SPECIAL BRAND RATES When an exporter as actual importing inputs for as export product but the rate published an AIR is refunding duty amount which is less than 80% of actual duty paid. In this case the exporter can apply for special brand rates.

NOTE: Along with duty drawback the exporter can avail the benefit of EPCG and one of the benefit of chapter3 in foreign trade policy of such benefit available too.

NOTE2: Also refer the duty drawback rules published by custom.

(G) EPCG ( Export promotion Capital Goods) This scheme is introduced for the technological up gradation by importation of capital goods in the country in concessional duty scheme, for boosting the export by goods produced from such capital goods.

The license holder will pay 3% or zero duty on custom basic duty at the time of importation such capital goods and has option to pay CVD in cash or do not pay CVD. If CVD is paid at the time of import such amount of duty will not be calculate in export obligation, but the license holder can bot take CENVAT benefit on paid CVD. If CVD is not paid, it will be added to export obligation as per policy.

Eligibility: The eligible categories are manufacture exporter with or without supporting manufacture / vendor, merchant tide to supporting manufacture, and service provides.

Obligation: In case of zero duty EPCG scheme the EO is 6time of duty saved and should be fulfill within 8years from the date of authorization issued.

In case of 3% EPCG scheme the EO is 8 times of duty saved and should be fulfill within 8years from the date of authorization issued.

(F) Advance Authorization Scheme This scheme is popularly known as “Advance License” scheme and previously known as DEEC (Duty Exemption Entitlement Certificate) Scheme.

“Advance Authorization scheme” is an export promotional scheme and it allow import of input required for export production, free of custom duty. In addition of import of inputs which are physically incorporated in the export product.

Eligibility: Advance authorization can be issued to a manufacture exporter or a merchant exporter tied to supporting manufacture. However advance authorization under para4.7 of HBP 1 shall be issued to manufacturer exporter only.

PART-4 

LETTER OF CREDIT Introduction LC is a document issued by importer bank prepaid on the basis of request of importer an importer furnish terms and condition as mutual agreed between importer and exporter. This is the only instrumental which gives security to both the exporter and importer LC is also known a documentary credit. The reason is LC is a guarantee of document and not guarantee of document and not guarantee of performance.

Eg. The bank will check the detail written in document send by the exporter against the terms and condition are written in LC but it is not duty of bank to ensure the performance like the goods should be function for the sad years or they should be new and having at list life of so an so years. Bank will not consider such kind of performance related terms written by importers. The guidelines related to LC published in uniform custom practice of document credit by international chamber of commerce which is a part of WTO. The latest version is UCPDC 600 in this publication different article provide guidelines to the bank of the world regarding the LC matters and all WTO member country follow this rules.

Following are the parties involving LC transaction.

(1) (2) (3) (4) (5) (6)

Importer is also called opener Exporter is also called beneficial Importer bank is called opening Exporter as or issuing bank Exporter bank is called advising bank Negotiation bank when there is a type agreement between opening bank and other bank for the purpose of negotiation of document against LC. Such act behalf of opening bank for negotiation the exporter document against LC and payment of such exporter letter on negotiation bank claims this money from opening bank is located in the

country of importer were as negotiation importer were as negotiating bank is located on the country of exporter.

PROCEDURE When negotiation between exporter and importer get complete and in exporter demand LC importer request his bank to open the LC equivalent to the amount of transaction be feeling a specific format for LC of that practical bank. The basis of require of importer the banks open LC, in which different condition as directed by importer are detail consist of value of LC list of document required and number of document opening date on expiry date of LC, last date of shipment allowance for part shipment own transshipment or not, types of credit and additional condition importer may want to be fulfill in the term if document and the detail written in that document.

Such open LC is send to the exporter bank and exporter bank delivery original LC to the exporter in accordance with the terms of LC exporter start preparing the exporter shipment. If anything or any term and condition is found in LC which is in consistence or not possible to fulfill the exporter can required importer to amount such condition rather then it is advisable to get amend mate such condition because if exporter is not able to fulfill it and if he still made the shipment the importer is in a position to refuses the payment on the basis of non-fulfillment of the condition.

If the all condition are all exporter will ship the material of exporter to the importer and after receipt of all the document exporter will submit this document to his bank. The exporter’s bank will check the document and will send them to importer bank or negotiating bank. After receipt of document by the importers bank importers bank will make of the document and he found all the document are in accordance with the LC importer banks will reals the payments to the exporter banks as per terms and condition of LC after the receipt of exporters payment on exporters banks will be deposit balance to exporters account in the exporters has option to maintaining the export payment to foreign also.

Types of Letter of Credit (1) Revocable or Irrevocable L/C The revocable LC is of such type which can be cancelled at any stage before the shipment is made by exporter. That is why generally this types of LC is not acceptable by the exporter. According to UPC 600 if in importer open to the revocable LC the Clause. Revocable credit should be specifically mention in LC. If revocable clause is not written in the LC the LC becomes automatically non revocable even if such non revocable close is not written in the LC. Irrevocable LC cannot cancel at any stage till the expiry date of LC which is mention in the LC most of the LC are open as non-revocable.

(2) Confirm L/C Generally the system is after completion of export procedure when the document are received by opening banks that is importer bank. Release the payment of exporter as agreed in the LC but when exporter is doubtful regarding the credit worthiness of importers banks or any threats like war etc. are there in importing country there is a scope that they importers bank fails the exporters money. In such cases exporter request importer to confirm LC the importer request his banks regarding information and importer banks send this request to exporter bank for

confirmation. If exporter bank agree to confirm the LC in cases of importer bank failure for payment of exporter the confirmation of LC it is said that the exporter bank its fit in to the shoes of the importer banks for confirm the LC. Exporter bank take charges depend upon the risk and importing country situation it is totally in the description of exporting bank whether to confirm or not confirm the LC. (3) Transferable L/C There is role that only importer can make changes in the letter of credit that is also with request of exporter and such changes should be intimates to the exporter banks as well as negotiation bank if any within specific period. There for when a regular LC is received by exporter it is him to exporter document will be name of an exporter on who behalf the LC is open. The exporter can other party for export purpose. When exporter wants to transfer such credit to third party who will be directly exporting the transferable LC utilize.

We have seen that exporter cannot make changes on the LC that is why for transferable LC exporter should request to the importer to open transferable LC exporter can transfer full credit or partial credit to a third party. When third party complete the export procedure submit to the document to the banks. The payment will be release by importer banks. After receipt of payment the exporter banks will transfer the money to the third party as per credit transfer. It is to be noted that the LC should contain the clause that the third party document are acceptable. If the exporter wants to transfer the credit to more than one party divisible clause should be incorporated in LC. (4) Revolving L/C In big contract where the volume of export is more and long term export is plan it becomes difficult to handle if every time new LC is open for every shipment. This type of dealing are kind of goods 1lakh metric ton rice to be supply within one year period the minimum shipment per month is 9000matric ton. Such type of contract are depend upon the mutual contract of exporter and importer of opening new LC every time the revolving LC is open in such cases.

In revolving LC when one credit is utilize after shipment that is the decided payment is received by exporter after shipment. The next credit becomes due at the place of utilize credit by this way there is not requirement of new LC again and again. But the important thing is to be noted that if exporter fails to full fill the decided volume to ship in a specific period the LC gets cancel automatically and if importers agree to against new LC to be open.

(5) Back to Back L/C In transferable is the original/credit is transfer to third party were as in back to back LC a new LC is open on the basis of original LC received by exporters. In transferable LC the last date of shipment cannot be change on also many times full credit is transfer to third party.

In back to back LC when exporter received original LC he approaches to bank to open back to back LC to the suppliers of exporter it can be one suppliers for more than one suppliers, the last date of shipment and the value of back to back LC while always less than the value and last date of shipment of original LC. When back to back given in same country it is called back to back credit.

Such credit is generally open when exporter wants to produce raw material or finished goods from is cannot from other suppliers and exporter do not want to pay the money in case to such parties to ensure such party for that payment this types of credit is open. When suppliers supply the material to the exporter they submit their document to the bank. The document like truck receipt, railway receipt, invoice etc. against such document bank pays the money to those suppliers were as exporter will gets this payment only after export tax place and the document which is to importer banks.

NOTE: To open back to back LC and to pay the suppliers bank will take the charges.

(6) Sight Credit The meaning of sight is to see. In his type of credit the exporter get this payment immediately as soon as the importer bank sight the document by the exporter are in orders.

(7) Differed Credit In differed credit exporter allow importer to pay his gives full or partially after certain period this period is mention in the LC from the date of the B/L or air way bill or from the date of invoice in following manners.

Ex. Payment should be made within 60days or 60th days from the date of B/L airway bill or payment should be made within 30days from the date from the date of invoice so in this case the exporter his payment after the due date written in LC. (8) Usenet Period The meaning of this word are the time period which importer is enjoying to pay the credit amount to exporter or bank. In differed credit Usenet period word is used in to the contract with the time period for payment offered by exporter to the importers.

In sight credit sometimes is happen that the exporter to not have fund to pay immediately to the exporter and importer required his bank to pay the exporter immediately and allow him sometime to pay the credit amount to the bank. Banks takes charges for such period and the period is also called Usenet period.

Sometimes its becomes confusing to the exporter because the LC when sight credit is close and importer is permitted for usenet time the close is written in the LC as the usenet period.

(9) Anticipation credit In this credit the payment is made in anticipation of delivery of goods. The payment can be partial or full as mutually agreed between importer and exporter. Such credit is open when large or bog shipment takes place so to prepare the shipment or purchase the necessary export goods by exporter to help in monetary to such are open. There are two types of anticipation credit.

(1) Red clause anticipation This credit is called red clause because when first time credit is written in red ink. In red clause credit the advance in provide to the exporter to purchase the goods and prepare for the shipment.

(2) Green clause anticipation credit This credit is not provided to exporter for purchase or preparation of shipment. It is provided for loading the goods in the vessels, loading arrangement and there payment and vessels freight.

There for the exporter gets money only when he submit the receipt of warehousing of goods of exporter to the dockyard.

(10) Standby Credit In big dealing like project export or big supply constriction work and such contract is abroad. The written agreement is prepared between exporter and importer in such agreement the procedure for legal procedure is also mention in case of failure of the part of export or import to full fill his commitment as per contract. In case if exporter want to security he deemed for stand by letter of credit this credit is different from other regular LC. Because the exporter proceeding are going smooth only and there is no failure of the part of importer in payment after completion of jobs from exporter standby credit will remain in activated and will not be utilized. It is an extra security to the

exporter but if importer for his supply of completion of jobs, the standby credit will be made by importer back to the exporter banks.

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Documentation ďƒ˜ EXPORT

ďƒź Documentation to be sent to custom house agent for clearance of export consignment from the custom.

(1) Invoice ( Six copies originally sign and stamp ) Invoice is bill raised by exporter equivalent to the amount which is agreed between importer and exporter as a selling price of the goods for export. The value of invoice includes the costing as decided as per terms of delivery visually CIF, FOB etc. the value raised in invoice is considered by custom department or purpose of valuation and charging duty.

The export invoice is always prepared in freely convertible foreign currency which is payable by the importer. So for export is concern in India it is compulsory to prepare invoice in specific format published by custom authority in this format all the details are cover like exporter and importer names and address, port of loading port of discharge term of delivery, final destination so for invoice is for the purpose of showing the value of export goods. It is to be prepared preciously as per the unit of megerment (kg, liter etc.) and the charges charged. The additional detail like mark and number can also been written in invoice. In short any additional detail can be written in the column.

While preparing invoice and packing list the maximum detail is provided includes marks, number, diagram draws. So that in case of rejection or any other reason if the goods are reimported in to the India. The custom should identify such goods that are the some goods which were exported earlier. Because invoice and packing list remains as a record in the custom files.

(2) Pacing list(6 copies original signs and stamp) Similar to invoice for export it is compulsory to prepared packing list on type custom format packing list shows how to goods are pack, in which number box what type of goods are packed.

The net weight and gross weight of export goods. It is important to preparing packing list properly because at time of physical examination of the custom can select the package which they want to examine.

If copies are not such marks and number and their details in the packing list custom may ask to open 100% cargo which will cost, time, labor, money and chances of damage.

(3) Copy of IEC number A photocopy of import export code number attach should be sent to the document.

(4) Bank letter from the first time export When first time export from any port tax place it is a procedure of custom that the compulsory should be register in the EDI system for this purpose a letter is required from the bank on the banks letter head. Contain following details.

The company is maintain account with bank and company IEC number also the authorization dealer code of the bank letter should be address to commissioner of ADI system of specific system. This letter is giving only one times of export.

(5) Request letter to assistance commissioner EDI for registering the company in the system on company letter head(first time)

A request letter to assistance commissioner is to be given requesting that kindly register own company in EDI system. This letter is required the first time in the specific port.

(6) Authority Letter to CHA (custom) Any authority letter on company letter head is to be given to the CHA starting authority XYZ Company to clear export/import consignment on our behalf and do the need full on this matters.

This letter is to be given for one time but if CHA is change for new CHA is to be given again.

(7) N-Form N form is given to claim exemption from Octroi duty so at a places were port is located from where the export goods are to be cleared. If octroi duty is applicable the N form declaration in duplicate stamp and sign should be sent to the CHA. (8) Copy of letter of Credit If the export is against LC the copy of letter of credit by highlight the details for which the CHA supposed to take care should be sent.

(9) Detail of export benefit The detail of export benefit to be claim should be intimated in written visually focus market, focus product, EPCG, advance authorization, Duty drawback etc. the copy of license should be sent along with the document.

(10) Any government certificate regarding to the product required as per policy.

If any restriction applied on export product by the policy and any such certificate is required like NOC form additional drug certificate, certificate of APEDA etc. such certificate should sent with along document otherwise clearance not be allowed by custom.

(11) Exporter Declaration The exporter declaration to be sent on the duplicate due stamp and sign by the exporter in a specific format of published by customs.

(12) MSDS (Material Safety data sheet) In case of chemical and hazard product MSDS to be sent to CHA to under Stand to handling are to be taken. The MSDS required by the shipping company who will be transporting the export consignment.

(13) Self-declaration form The SDF in triplicate should be sign and stamp.

(14) Brief writer, brushers, technical detail, diagram etc.

The brief writer regarding export product should be sent to CHA so that be understanding the product properly and the same will be explain in the custom along with writer brushers and technical details should be attach if it is available with exporters.

(15) ARE-1 The two copies of ARE-1 should be sent CHA. If the goods are cleared by manufacturer without pay of central excise duty under claim of refund against of CENVAT credit. If merchant exporter

of the goods are procured against CT-1 from that is without payment of excise duty the ARE-1 should be sent to the custom.

(16) Form 402 This form is not to be sent CHA in case of export but it should be sent along with the transporter vehicle which is carrying exporter goods to the port of loading. The transporter arrival submit the form of the check post of the sales tax to claim sales tax exemption on export goods.  After of completion of export procedure and custom allows let export the export consignment the following document to be sent by CHA to the exporter.

(1) Custom Attested copy of invoice and packing list ( for exporter record) (2) Exporter copy of shipping bill ( for exporter record) (3) Exchange control copy of Shipping bill (for bank) (4) Export promotion copy of shipping bill If export on any benefit or promotion scheme export promotion copy sent by custom which contain all detail regarding the beneficial EP copy comes a little late. It is signed by custom after goods are lives the Indian Territory.

(5) SDF form (for bank) (6) ARE-1 form to be submitted to the central excise department a proof of export.

(7) Bill of lading/ airway bill in three original negotiable sent and non-negotiable copies.  Document to be submitted to the bank within 21 days from the date off export.

(1) Exchange control copy of shipping bill (2) SDF form original (3) Photo copy of invoice, B/L, packing list etc.  Document to be sent to the Importers (1) Invoice Stamp and sign as many copies as demanded by importers.

(2) Packing list Stamp and sign as many copies as demanded by importers.

(3) Bill of lading (Three original) (4) Certificate of origin Non preferential if demanded by importer. Preferential certificate of origin if there critic of India and importing country for giving preferential to each other and also provided that such certificate is demanded by the importers.

(5) Fumigation certificate if demanded (6) Third part examination certificate (7) Any testing certificate or senator certificate.

(8) MSDS certificate (9) Catalog, brushers, chemical analysis, drawing anything whichever or demanded by the importer.

NOTE: In case of export against LC the complete set of document mention in LC should be submitted to the exporter banks along with original LC. If export is not against LC such document sent directly.

NOTE: When export is against any benefit scheme specifically when export in under chapter3 benefit exporter can approaches DGFT for applying the benefit once the EP copy of shipping bill is received as well as the payment if export is received exporter banks.

(10) In case of Advance license and EPCG If the export obligation is complete payment received in bank and EP copy received exporter can approaches to DGFT regional office for redemption (closing) or for EODC.

 IMPORT  Document will be received from exporter to the importer (1) Invoice( one or more copies) Unlike export from India it is not compulsory that the invoice of import should be in specific format.

Also it is not compulsory invoice should stamp and sign. In the custom a single copy of invoice is also adequate to carry out the import clearance procedure.

(2) Packing list Similar to imports invoice there is not fix format packing list of imports many times is happen that the cargo is small containing one box or more boxes are containing the same cargo the exporter may not sent a separate packing list to the importers. In India custom also do not take the objection in such cases but if variety of cargo containing different boxes and carton and if packing list is not available or not gives correct information and detail about the packing. The custom will also importers to open all the boxes and get weight.

(3) B/L and Airway bill All three original copies.

(4) Certificate of origin if demanded by importer or any other such certificate which is required for custom clearance as directed by policy and procedure as well as per notification are circular public notice which are published time to time by the concern authority.

(5) Drawing, brushers, design, technical data, chemical analysis certificate whatever the applicable the cargo.

 Document to be sent to CHA for clearance of import consignment.

(1) Invoice ( one or more copies) (2) Packing list (one or more copies) (3) One original negotiable copies of B/L. (4) Importer declaration duplicate stamp and signed (Format will be provided by CHA) (5) Copy of IEC (6) Two copies of declaration 10 rules of valuation stamp and sign.

(7) Authority letter to CHA on importers letters head authority CHA to clear the import consignment on importer behalf.

(8) SDF in triplicate due stamp and sign (Format will be provided by CHA) (9) N-Form in triplicate and N-form declaration in triplicate if Octroi applicable.

(10) Form 403 (available on sales tax website) This form is required to claim sales tax exemption to the importers.

(11) Original license copy if import is to be cleared under government export benefit scheme.

(12) Any other license permission NOC if such case is prescribe by the policy as restriction on import goods.

(13) Fumigation certificate, certificate of origin etc. if required by custom as per position.

(14) Technical writer to brief description about the product and use of the product on importer letter head.

(15) DD or cash towards the payment of custom duty when demanded by CHA. (16) Bank guarantee and letter of under taking if import clearance is against benefit scheme and import is made to before the full fill imports is made before the full fill mate of export obligation. ďƒź First time import from any port As per public notice number 38/2009 date 9th June 2009 which is amended further page read the amended public notice. The following document are available should be present to the custom.

(1) Copy of weight, sales tax restriction certificate.

(2) Certificate from bank with whom the bank account is being maintain by the importer certificate the signature name address of the importer.

(3) Proof of payment, remittance of the importer account.

(4) Balance sheet of previous year (5) Copy of last income tax return/vet or sales tax return file. ďƒź After completion of import clearance CHA will send back the following document to the importer.

(1) Importer copy of bill of entry (2) Exchange control copy of bill of entry (3) SDF form (4) Original license copy in case of EPCG and advance authorization. Chapter3 license if duty is not utilize fully.

(5) Duty Chelan along with bill and other receipt of payment.

(6) Lori receipt in case transaction arrange be CHA. (7) Document to be submitted by imported to this bank with in 21days from the date of import.

- Original copy of bill of lading.

- Exchange control copy SDF form.

- Copy of Invoice.

- Packing list.

- Bill of lading/ airway bill self-attach.