Export Procedure

EXPORT PROCEDURE
Before entering into the venture of exports, one must look for the product to be exported and the market
where he intends to export.

In case of a manufacturer, obviously he would like to export the product he manufactures as is or with
possible modification as may be required by the market. However, in case of a merchant exporter or a trader,
one has to identity the product to export. If the exporter is already in the trade in the domestic market and is
familiar with the product it would be an advantage to export the said product of which he has reasonable
knowledge.

Before selecting a product, one must simultaneously made a study and find out the prospective market. For
finding out the market for the selected product, the following methods will help.
 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.
 Approach the Export Promotion Council dealing in the product of selection to get more
information.
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. Following sequences can be followed:
 Any one, who wishes to export, must first of all get an Importer Exporter Code Number (IE
Code).This can be obtained by making a formal application to the office of the Regional
Directorate General of Foreign Trade (DGFT).
 Get yourself registered with the related Export Promotion Council and become a member.
Also arrange to obtain Registration-Cum-Membership Certificate (RCMC) from the
council. This has twin objectives:
o Under the Foreign Trade Policy, it is mandatory that an exporter gets him registered with the
Export Promotion Council to avail of various export facilities.
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.
Hence you will have few customers interested in your product.
 If you are a manufacturer, find out the provisions under the EXIM Policy of getting the raw materials
duty free.
 Get familiar with the excise formalities as goods meant for export can be cleared without payment of
C. Excise duty on the finished product subject to compliance of certain formalities.
 Understand the local government regulations in relations to the export of the product.
 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.
 Availability of Vessels/Airlines, the transport charges, frequency of operation 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.
 If the product is covered under any quota regulation, find out the agency/council who are handling
the quota distribution for the product and the availability of quota for exports.

FI NDI NG A CUSTOMS
Once you have selected the market, the next step is to find a prospective customer. This you can get
 From the directory of importers of the country
 By writing to the Embassy of India in that country for assistance
 By writing to the chamber of commerce of that country
 By means of participation in a Fair/Exhibition abroad either directly or through the Export Promotion
Council
 By participating in international fair if organized locally
 Through the personal contacts in that country. By these processes one can only have the list of
customers. One has to dialogue or correspond with these customers by sending samples, getting
feedback from the customers etc. to ultimately select the customer with whom to deal with. It is
necessary to know the financial standing of the company which can be obtained through the bank
channel or through the office of ECGC.

NEGOTI ATI NG CONTRACT.
Once the prospective customer is found, the business deal has to be concluded. The following aspects
may be considered before entering into a final contract with the buyer.
 Credit Worthiness of the Customer.
 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
 Compliance of the local governmental rules and regulations
Before entering into contract one should take note of the above factors. While these are indicative, the
requirements will vary from country to country, product to product and buyer to buyer.


Delivered
DAF {+ the names point at frontier}
Delivered At Frontier: The delivery of goods to the specified point at the frontier at sellers expense. Buyer
is responsible for the import custom clearance, payment of custom duties and taxes, and other costs and
risks.
In the export quotation, indicate the point at frontier (discharge) after the acronym DAF, for example DAF
Buffalo and DAF Welland.
DES {+named port of destination}
Delivered Ex Ship: The delivery of goods on board the vessel at the named port of destination (discharge)
at sellers expense. Buyer assumes the unloading free, import customs clearance, payment of customs duties
and taxes, cargo insurance, and other costs and risks.
In the export quotation, indicate the Port of destination (discharge) after the acronym DES, for example DES
Helsinki and DES Stockholm.
DEQ {+ the named port of destination
Delivered Ex Quay: The delivery of goods to the Quay (the port) at the destination at buyers expense.
Seller is responsible for the importer customs clearance, payment of customs duties and taxes, at the buyers
end. Buyer assumes the cargo insurance and other costs and risks. In the export quotation, indicate the Port
of destination (discharge) after the acronym DEQ, for example DEQ Libreville and DEQ Maputo.
DDU {+ the named point of destination}
Delivered Duty Unpaid: The delivery of goods and the cargo insurance to the final point at destination,
which is often the project site or buyers premises at sellers expense. Buyer assumes the import customs
clearance, payment of customs duties and taxes. The seller may opt not to insure the goods at his/her own
risks.
In the export quotation, indicate the point of destination (discharge) after the acronym DDU for example
DDU La Paz and DDU N‘djamena.
DDP {+ the named point of destination)
Delivered Duty Paid: The seller is responsible for most of the expenses which include the cargo insurance,
import custom clearance, and payment of custom duties, and taxes at the buyers end, and the delivery of
goods to the final point of destination, which is often the project site or buyers premise. The seller may opt
not to insure the goods at his/her own risk. In the export quotation, indicate the point of destination
(discharge) after the acronym DDP, for example DDP Bujumbura and DDP Mbabane.

“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 three-letter abbreviation.
 Under the “E”-TERM (EXW), the seller only makes the goods available to the buyer at the seller‘s
own premises. It is the only one of that category.
 Under the “F”-TERM (FCA, FAS, &FOB), the seller is called upon to deliver the goods to a carrier
appointed by the buyer.
 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.
 Under the “D”-TERM (DAF, DEQ, DES, DDU & DDP), the seller has to bear all costs and risks
needed to bring the goods to the place of destination.
All terms list the seller‘s and buyer‘s obligations. The respective obligations of both parties have been
grouped under up to 10 headings where each heading on the seller‘s side ―mirrors‖ the equivalent position of
the buyer. Examples are Delivery, Transfer of risks, and Division of costs. This layout helps the user to
compare the parties respective obligations under each Incoterms.

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.
A. Commercial Documents. : - Commercial documents are required for effecting physical transfer of
goods and their title from the exporter to the importer and the realisation of export sale proceeds. Out
of the 16 commercial documents in the export documentation framework as many as 14 have been
standardised and aligned to one another. These are proforma invoice, commercial invoice, packing
list, shipping instructions, intimation for inspection, certificate, of inspection of quality control,
insurance declaration, certificate' of insurance, mate's receipt, bill of lading or combined transport
document, application for certificate origin, certificate of origin, shipment advice and letter to the
bank for collection or negotiation of documents. However, shipping order and bill of exchange could
not be brought within the fold of the Aligned Documentation System,
1. Commercial I nvoice: Commercial invoice is an important and basic export document. It is also
known as a 'Document of Contents' as it contains all the information required for the preparation of
other documents. It is actually a seller's bill of merchandise. It is prepared by the exporter after the
execution of export order giving details about the goods shipped. It is essential that the invoice is
prepared in the name of the buyer or the consignee mentioned in the letter of credit. 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.
Contents of Commercial I nvoice
 Name and address of the exporter.
 Name and address of the consignee.
 Name and the number of Vessel or Flight.
 Name of the port of loading.
 Name of the port of discharge and final destination.
 Invoice number and date.
 Exporter's reference number.
 Buyer's reference number and date.
 Name of the country of origin of goods.
 Name of the country of final destination.
 Terms of delivery and payment.
 Marks and container number.
 Number and packing description.
 Description of goods giving details of quantity, rate and total amount in terms of internationally
accepted price quotation.
 Signature of the exporter with date.
Significance of Commercial I nvoice
 It is the basic document useful in preparation of various other shipping documents.
 It is used in various export formalities such as quality and pre-Shipment inspection excise and
customs procedures etc.
 It is also useful in negotiation of documents for collection and claim of incentives.
 It is useful for accounting purposes to both exporters as well as importers.
2 Inspection Certificate: The certificate is issued by the inspection authority such as the export
inspection agency. This certificate states that the goods have been inspected before shipment, and that
they confirm to accepted quality standards.
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 protects losses incidental to voyages and in land
transportation. 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. The
exporter is bound to insure the goods in case of CIF quotation, but he can also insure the goods in case
of FOB contract, at the request of the importer, but the premium payment will be made by the exporter.
There are different types of policies such as
 SPECIFIC POLICY: This policy is taken to cover different risks for a single shipment. For
a regular exporter, this policy is not advisable as he will have to take a separate policy every
time a shipment is made, so this policy is taken when exports are in frequent.
 Floating Policy: This is taken to cover all shipments for some months. There is no time limit,
but there is a limit on the value of goods and once this value is crossed by several shipments,
then it has to be renewed.
 Open Policy: This policy remains in force until cancelled by either party i.e. insurance
company or the exporter.
 Open Cover Policy: This policy is generally issued for 12 months period, for all shipments
to one or more destinations. 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.
 Insurance Premium: Differs upon product to product and a number of such other factors,
such as, distance of voyage, type and condition of packing, etc. Premium for air
consignments are lowered as compared to consignments by sea.
4. Consular I nvoice: 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. This invoice is the most important document, which
needs to be submitted for certification to the Embassy of the importing country concerned. 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., of the goods imported for the purpose
of assessing import duties and also for statistical purposes. In order to obtain consular invoice, the
exporter is required to submit three copies of invoice to the Consulate of the importing country
concerned. The Consulate of the importing country certifies them in return for fees. 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. The exporter negotiates a copy of the consular
invoice to the importer along with other shipping documents.
Significance of Consular I nvoice for the Exporter
 It facilitates quick clearance of goods from the customs in exporter's as well as importer's
country.
 Certification' of goods by the Consulate of the importing country indicarer that the importer has
fulfilled all procedural and licensing formalities for import of goods.
 It also assures the exporter of the payment from the importing country.
Significance of Consular I nvoice for the I mporter
 It facilitates quick clearance of goods from the customs at the port destination and therefore,
the importer gets quick delivery of goods.
 The importer is assured that the goods imported are not banned for imported in his country.
Significance of Consular I nvoice for the Customs Office
 It makes the task of the customs authorities easy.
 It facilitates quick calculation of duties as the value of goods as determine by the Consulate is
considered for the purpose.
5. Certificate of Origin: The importers in several countries require a certificate of origin without
which clearance to import is refused. The certificate of origin states that the goods exported are
originally manufactured in the country whose name is mentioned in the certificate. 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.
 The goods produced in a particular country are banned for import in the foreign market.
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. It is issued
by: ¬
 The authorised Chamber of Commerce of the exporting country.
 Trade Association. Of the exporting country.
(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. This certificate can be
obtained from specialised agencies, namely;
 Export Inspection Agencies.
 Jt. Director General of Foreign Trade..
 Commodity Boards and their regional offices.
 Development Commissioner, Handicrafts.
 Textile Committees for textile products.
 Marine Products Export Development Authority for marine 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'. It is required by two member countries, i.e. Canada and New Zealand of the
Commonwealth. 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.
(d) Certificate for availing Concessions under other Systems of Preference:- Certificate of origin is also
required for tariff concessions. 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. Export Inspection Council (EIC) is the sole
authority to print blank Certificates of Origin under BA, SAARC and SAPTA which can be issued by
such agencies as EPCs, DCs of EPZs, EIC, APEDA, MPEDA, FIEO, etc...
Contents of Certificate of Origin
 Name and logo of chamber of commerce.
 Name and address of the exporter.
 Name and address of the consignee.
 Name and the number of Vessel of Flight
 Name of the port of loading.
 Name of the port of discharge and place of delivery.
 Marks and container number.
 Packing and container description.
 Total number of containers and packages.
 Description of goods in terms of quantity.
 Signature and initials of the concerned officer of the issuing authority.
 Seal of the issuing authority.
Significance of the Certificate of Origin
 Certificate of origin is required for availing of concessions under Generalised System of Preferences
(GSP) as well as under Commonwealth Preferences (CWP).
 It is to be submitted to the customs for the assessment of duty clearance of goods with concessional
duty.
 It is required when the goods produced in a particular country are banned for import in the foreign
market.
 It helps the buyer in adhering to the import regulations of the country.
 Sometimes, in order to ensures that goods bought from some other country have not been reshipped
by a seller, a certificate of origin IS required.
6. Bill of Lading: The bill of lading is a document issued by the shipping company or its agent
acknowledging the receipt of goods on board the vessel, and undertaking to deliver the goods in the
like order and condition as received, to the consignee or his order, provided the freight and other
charges as specified in the bill have been duly paid. It is also a document of title to the goods and as
such, is freely transferable by endorsement and delivery.
Bill of Lading serves three main purposes:
 As a document of title to the goods;
 As a receipt from the shipping company; and
 As a contract for the transportation of goods.
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.
 Claused Bill of Lading: - A bill of lading qualified with certain adversere marks such as, "goods
insufficiently packed in accordance with the Carriage of Goods by Sea Act," is termed as a claused
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.
 Stale Bill of Lading: - A bill of lading that has been held too long before it is passed on to a bank for
negotiation or to the consignee is called a stale 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. Such bill of lading is known as freight bill of lading.
 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 address of the shipper.
 Name and the number of vessel.
 Name of the port of loading.
 Name of the port of discharge and place of delivery.
 Marks and container number.
 Packing and container description.
 Total number of containers and packages,
 Description of goods in terms of quantity.
 Container status and seal number.
 Gross weight in kg. and volume in terms of cubic meters.
 Amount of freight paid or payable.
 Shipping bill number and date.
 Signature and initials of the Chief Officer. .
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.
 It is an acknowledgement indicating that the goods mentioned in the document have been received
on board for the Purpose of shipment.
 A clean bill of lading certifies that the goods received on board the ship are in order and good
condition.
 It is useful for claiming incentives offered by the government to exporters
 The exporter can claim damages from the shipping company if the goods are lost or damaged after
the issue of a clean bill of lading.
Significance of Bill of Lading for Importers
 It acts as a document of title to goods, which is transferable endorsement and delivery.
 The exporter sends the bill of lading to the bank of the importer so as to enable him to take the
delivery of goods.
 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.
7. Airway Bill: An airway bill, also called an air consignment note, is a receipt issued by an airline
for the carriage of goods. As each shipping company has its own bill of lading, so each airline has its own
airway bill. Airway Bill or Air Consignment Note is not treated as a document of title and is not issued in
negotiable form.
Contents of Airway Bill
 Name of the airport of departure and destination.
 The names and addresses of the consignor, consignee and the first carrier.
 Marks and container number.
 Packing and container description.
 Total number of containers and packages.
 Description of goods in terms of quantity.
 Container status and seal number.
 Amount of freight paid or payable.
 Signature and initials of the issuing carrier or his agent.
I mportance of Airway Bill: It is a contract between the airlines or his agent to carry goods to the
destination. It is the document of instructions for the airline handling staff. It acts as a customs
declaration form. Since, it contains details about freight it also represents freight bill.
7. Shipment Advice to Importer:- After the shipment of goods, the exporter intimates the importer
about the shipment of goods giving him details about the date of shipment, the name of the vessel, the
destination, etc. He should also send one copy of non-negotiable bill of lading to the importer.
8. Packing List: The exporter prepares the packing list to facilitate the buyer to check the shipment. It
contains the detailed description of the goods packed in each case, their gross and net weight, etc. 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.
9. Bill of Exchange: The instrument is used in receiving payment from the importer. The importer may
prefer Bill of Exchange to LC as it does not involve blocking of funds. 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 collect payment.
 B/E is a means to demand payment.
 B/E is a means to extent the credit.
 B/E is a means to promise the payment.
 B/E is an official acknowledgement of receipt of payment.
 Financial documents perform the function of obtaining the finance collection of payment etc.
 2 sets. Each one bearing the exclusion clause making the other part of the draft invalid.
 Sight B/E.
 Usance B/E.
 It is known as draft.
 Immediate payment – Sight draft.
 There are two copies of draft. Each one bears reference to the other part A&B. when any one
of the draft is paid, the second draft becomes null and void.
Parties to bill of exchange.
1. The drawer: The exporter / person who draws the bill.
2. The drawee: The importer / person on whom the bill is drawn for payment.
3. The payee: The person to whom payment is made, generally, the exporter / supplier of the
goods.
B Auxiliary Documents: These documents generally form the basic documents based on which the
commercial and or regulatory documents are prepared. These documents also do not have any fixed formats
and the number of such documents will wary according to individual requirements.
1. Proforma I nvoice: The starting point of the export contract is in the form of offer made by the
exporter to the foreign customer. The offer made by the exporter is in the form of a proforma
invoice. It is a quotation given as a reply to an inquiry. It normally forms the basis of all trade
transactions.
Contents of Proforma Invoice
 Name and address of the exporter.
 Name and address of the importer.
 Mode of transportation, such as Sea or Air or Multimodal transport.
 Name of the port of loading.
 Name of the port of discharge and final destination.
 Provisional invoice number and date.
 Exporter's reference number.
 Buyer's reference number and date.
 Name of the country of origin of goods.
 Name of the country of final destination.
 Marks and container number. .
 Number and packing description.
 Description of goods giving details of quantity, rate and total amount in terms of
internationally accepted price quotation.
 Signature of the exporter with date.
I mportance of Proforma Invoice
 It forms the basis of all trade transactions.
 It may be useful for the importer in obtaining import licence or foreign exchange.
2. I ntimation for I nspection: Whenever the consignment requires the pre-shipment inspection,
necessary application is to be made to the concerned inspection agency for conducting the inspection
and issue of certificate thereof.
3. Declaration of I nsurance: Where the contract terms require that the insurance to be covered by the
exporter, the shipper has to give details of the shipment to the insurance company for necessary
insurance cover. The detailed declaration will cover:
 Name of the shipper \ exporter.
 Name & address of buyer.
 Details of goods such as packages, quantity, value in foreign currency as well as in
Indian Rs. Etc.
 Name of the Vessel \ Aircraft.
 Value for which insurance to be covered.
4. Application of the Certificate Origin: In case the exporter has to obtain Certificate of Origin from
the concerned authorities, an application has to be made to the concerned authority with required
documents. 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.
5. 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 a prima facie evidence that goods are loaded in the
vessel. The mate's receipt is first handed over to the Port Trust Authorities. After making payment of
all port dues, the exporter or his agent collects the mate's receipt from the Port Trust Authorities. The
mate's receipt is freely transferable. It must be handed over to the shipping company in order to get
the bill of lading. Bill of lading is prepared on the basis of the mate's receipt.
Types of Mate's Receipts
 Clean Mate's Receipt: - The Commanding Officer of the ship issues a clean mate's receipt, if he
is satisfied that the goods are packed properly and there is no defect in the packing of the cargo
or package.
 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. to the goods during transit.
Contents of Mate's Receipt
 Name and logo of the shipping line.
 Name and address of the shipper.
 Name and the number of vessel.
 Name of the port of loading.
 Name of the port of discharge and place of delivery.
 Marks and container number.
 Packing and container description.
 Total number of containers and packages.
 Description of goods in terms of quantity.
 Container status and seal number.
 Gross weight in kg. and volume in terms of cubic meters.
 Shipping bill number and date.
 Signature and initials of the Chief Officer.
Significance of Mate's Receipt
 It is an acknowledgement of goods received for export on board the ship.
 It is a transferable document. It must be handed over to the shipping company in order to get the
bill of lading.
 Bill of lading, which is the title of goods, is prepared on the basis of the mate's receipt.
 It enables the exporter to clear port trust dues to the Port Trust Authorities.
Obtaining Mate's Receipt
The goods are then loaded on board the ship for which the Mate or the Captain of the ship issues
Mate's Receipt to the Port Superintendent.
6. Shipping order: it is issued by the Shipping/Conference Line intimating the exporter about the
reservation of space for shipment of cargo which the exporter intends to ship. Details of the vessel,
poet of the shipment, and the date on which the goods are to be shipped are mentioned. This order
enables the exporter to make necessary arrangements for customs clearance and loading of the
goods.
7. Shipping I nstructions: at the pre-shipment stage, when the documents are to sent to the CHA for
customs clearance, necessary instructions are to be give with relevance to
 The export promotion scheme under which goods are to be exported.
 Name of the specific vessel on which the goods are to be loaded.
 If goods are to be FCL or LCL.
 If freight amount are to be paid / collected.
 If shipment are covered under A.R.E.-1 procedure.
 Instructions for obtaining Bill of Lading etc.
8. Bank letter for negotiation of documents: at the post shipment stage, the exporter has to submit the
documents to a bank for negotiation or discounting or collection for forwarding the same to the
customer and also for realization of export proceeds. 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.
 Details of various documents being sent and the number of the copies thereof.
 Name and address of the buyer‘s bank if available.
 If the documents are sent L/C or on open terms.
 If the proceeds are to adjusted against any pre-shipment packing credit loan.
 If the bill amount is to be adjusted against any forward exchange cover.
 In case of credit bill who has to bear the interest, either exporter or if the same is to
be collected from the buyer.
 Instructions in case non-acceptance/non-payment by the buyer.
C. Regulatory Document: Regulatory pre-shipment export documents are prescribed by the different
government departments and bodies in order to comply with various rules and regulations under the
relevant laws governing export trade such as export inspection, foreign exchange regulation, ex port
trade control, customs, etc. Out of 9 regulatory documents four have been standardised and aligned.
These are shipping bill or bill of export, exchange control declaration (GR from), export application
dock challan or port trust copy of shipping bill and receipt for payment of port charges.
1. Shipping Bill: Shipping bill is the main customs document, required by the customs authorities
for granting permission for the shipment of goods. The cargo is moved inside the dock area only
after the shipping bill is duly stamped, i.e. certified by the customs. Shipping bill is normally
prepared in five copies :-
 Customs copy.
 Drawback copy.
 Export promotion copy.
 Port trust copy.
 Exporter's copy.

Types of Shipping Bill
Based on the incentives offered by the government, customs authorities have introduced three types of
shipping bills:-
 Drawback Shipping Bill: - Drawback shipping bill is useful for claiming the customs drawback
against goods exported.
 Dutiable Shipping Bill: - Dutiable shipping bill is required for goods which are subject to export
duty.
 Duty-free Shipping Bill: - Duty-free shipping bill is useful for exporting goods on which there is no
export duty.
In order to facilitate easy recognition and quick processing, following colours have been provided to
different kinds of shipping bills :
Types of goods By Sea By Air
Drawback shipping bill Green Green
Dutiable shipping bill Yellow Pink
Duty-Free shipping bill White Pink
Contents of Shipping Bill
 Name and address of the exporter.
 Name and address of the importer.
 Name of the vessel, master or agents and flag.
 Name of the port at which goods are to be discharged.
 Country of final destination.
 Details about packages, description of goods, marks and numbers, quantity and details of each case.
 FOB price and real value of goods as defined in the Sea Customs Act.
 Whether Indian or foreign merchandise to be re-exported
 Total number of packages with total weight and value.
Significance of Shipping Bill
a) Shipping bill is the main customs document, required by the customs authorities for granting
permission for the shipment of goods.
b) The cargo is moved inside the dock area only after the shipping bill is duly stamped, i.e.
certified by the customs.
c) Duly endorsed shipping bill is also necessary for the collection of export incentives offered
by the government.
d) It is useful to the Customs Appraiser while determining the actual value of goods exported.
2. A.R.E. 1 form (Central excise): this form ARE-1 is prescribed under Central Excise rules for
export of goods. 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. The goods may be cleared for export either under claim for rebate of duty paid or under
bond without payment of duty. In both the events the goods are to be cleared under form A.R.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.
3. 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. For this purpose, RBI has prescribed different forms for different types of shipments
like GRI, PP forms etc. These declaration forms must be presented to the customs officials at the
time of passing of export documentation. Under the EDI processing of shipping bill in the
customs, these forms have been dispensed with and a new form SDF has to be submitted to the
customs in the place of above forms.
4. Export Application: this is the application to be made to the customs officials before shipment of
goods. The prescribed form of the application is the Shipping Bill/Bill of Export. Different types
are required for shipment like ex-bond, duty free goods, and dutiable goods and for export under
different export promotion schemes such as claims for duty drawback etc.
5. Vehicle Ticket/Cart Ticket/Gate Pass etc.: 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 permission is granted by the Port Trust Authority. 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.
6. 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. This certificate is required fore obtaining the benefit under various schemes
and this value of fob is reckoned as fob value of exports.
D. Other Document:
 Black List Certificate: it certifies that the ship/aircraft carrying the cargo has not touched
the particular country on its journey or that the goods are not from the particular country.
This is required by certain nations who have strained political and economical relations
with the so called ―Black Listed Countries‖.
 Language Certificate: Importers in the European Community require a language
certificate along with the GSP certificate in respect of handloom cotton fabrics classifiable
under NAMEX code 55.09. Generally four copies of language certificate are prepared by
the concerned authority who issues GSP certificate. Three copies are handed over to the
exporter. A copy is sent along with the other documents for realisation of export proceeds.
 Freight Payment Certificate: in most of the cases, the B/L or AWB will mention the
transportation and other related charges. However if the exporter does not want these
details to be disclosed to the buyer, the shipping company may issue a separate certificate
for payment of the freight charges instead of declaring on the main transport documents.
This document showing the freight payment is called the freight certificate.
 I nsurance Premium Certificate: this is the certificate issued by the Insurance Company
as acknowledgement of the amount of premium paid for the insurance cover. 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.
 Combined Certificate of Origin and Value: this certificate is required by the
Commonwealth Countries. This certificate is printed in a special way by the
Commonwealth Countries. This certificate should contain special details as to the origin
and value of goods, which are useful for determining import duty. 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.
 Customs I nvoice: this is required by the countries like Canada, USA for imposing
preferential tariff rates.
 Legalized I nvoice: this is required by the certain Latin American Countries like Mexico. It
is just like consular invoice, which requires certification from Consulate or authorised
mission, stationed in the exporter‘s country.
Special Provision under Uniform Customs and practice for Documentary Credit UCP-500, for
Commercial I nvoice.
 Article-37: Commercial Invoice
o Must appear on their face to be issued by the beneficiary named in the credit.
o Must be made out in the name of the applicant.
o Need not be signed
 Banks may refuse Commercial Invoice issued for amounts in excess of the amount
permitted by the credit except otherwise stated.
 The description of the goods in the commercial invoice must correspond with the
description of the credit. In all other documents the goods may be described in the General
in general terms not inconsistent with description in the credit. In all documents goods
may be described in general terms not inconsistent with the Description of the goods in the
credit.
Pre-Shipment Documents:
 Shipping bill.
 Export order/Sales contract/Purchase order.
 Letter of Credit
 Commercial invoice.
 Packing list.
 Certificate of origin.
 Guaranteed Remittance (G.R/SDF/PP/SOFTEX),or SDF.
 Certificate of Inspection.
 Various declarations required as per custom procedure.
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.e. magnetic tape/discs and paper media.
 SDF FORM: to be completed in duplicate and appended to the Shipping Bill for export
declare to the customs offices notified by the Central Government which have introduced
EDI system for processing Shipping Bill.
 PP FORM: to be completed in duplicate for export by post.
 SOFTX: to be completed in triplicate for export of software otherwise than in the physical
form i.e. magnetic tapes/discs and paper media.
These forms are available for sale in Reserve Bank of I ndia
Export declaration forms have utmost importance and are binding on the exporters. It is, therefore, necessary
that enough care is taken while declaring exports on these forms, with special reference on the following
points.
 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.
 Details of commission and discount due to foreign agent or buyer should be correctly
declared otherwise difficulties may arise at the time of remittance of such commission.
 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.O.B value, freight and insurance should be furnished in all cases, irrespective of
the terms of contract.
 All documents relating to the export of goods from India must pass through the medium of
an authorised dealer in foreign exchange in India within 21 days of shipment.
 The amount representing the full export value of goods must be realized within six months
from date of shipment.
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. Customs will give their running serial number on both the copies of the GR
forms after verifying the particulars and admitting the corresponding shipping bill. The
value declared by the exporter will also be verified by the customs and they will also
record the assessed value. Duplicate copy will be returned to the exporter and the original
will be remained by the customs for onward submission to the Reserve Bank. Duplicate
form of the GR form will again be presented to the customs at the time of actual shipment.
After examination of goods and certifying the quantity passed for shipment the duplicate
copy will again be returned to exporter for submission to an authorised dealer. However,
an exception to submission of GR forms to the Customs authorities have been made in
case of deep sea fishing.
 (a) PP forms are to be first presented to an authorised dealer for countersignature. 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. The concerned overseas branch
or correspondent is to be instructed to deliver the post parcel against payment or
acceptance of relevant bill, as the case may be.
(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.
(iv) The authorised is satisfied on the basis of standing and track record of the
exporter and arrangements made for realisation of the export proceed that he cold
do so. If the authorised dealer is not satisfied about standing etc. of the exporter,
the application is rejected. No reference is entertained by the Reserve Bank in
such cases.
(c) The original PP form countersignature will be returned to the exporter by the
authorised dealer and the duplicate will be retained by him. Original PP form should
then be submitted to the post office along with the parcel. The post office through the
goods have been dispatched will forward the original to RBI.
The export of computer software may be undertaken in physical form i.e. 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. The export of computer software in physical form is subject to normal declaration on
GR/PP form and regulations applicable there to will also be applicable to such exports. However, export of
non-physical form should be declared on SOFTEX Form. Besides computer software, export of video / T.V.
Software and all other types of software products / packages should also be declared on the SOFTEX forms.
Since export of software is fraught with many risks and special guidelines have been framed for handling
such exports.

PREPARATI ON AND SUBMI SSI ON OF DOCUMENTS FOR BANK
NEGOTTI ATI ON /PURCHASE
Document against exports should normally be realized through an authorized dealer foreign exchange.
However payment of export can be received directly from the overseas buyer in the form of bank draft, pay
order, banker‘s cheque, personal cheque foreign currency notes, foreign currency traveler‘s cheque, etc.
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. Take care to submit various documents in a proper manner and within the
prescribed time schedule. Apply to the Reserve Bank for extension of time in case you feel there is likely to
be a delay in realizing export proceeds.
The following are the steps in realizing export proceeds:
 Approaching a Bank: After dispatch of the goods, either by sea, or by air, the exporter should
approach his bank (authorized dealer) with a formal request to realize sale proceeds from the foreign
buyer. It is obligatory to submit the shipping documents to an authorized dealer within 21 days of the
date of shipment (subject to certain exceptions). In India, the exporters have to realize the full value
of exports within 180 days from the date of shipment, (unless the payment terms offered are
―deferred payment terms‖). 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.
 Submission of Documents to the Bank: The exporter should submit the following documents
o Bill of Exchange
o Full set of Bill of Lading
o Commercial Invoice Copies
o Certificate of Origin
o Insurance Policy
o Inspection Certificate
o Packing List
o GR (duplicate copy to forward it to RBI)
o Bank Certificate
o Other relevant documents.
The above documents need to be submitted in two complete sets, because it is customary to dispatch
two sets of documents, one after the other. This is because, if one set is misplaced or delayed in
transit, the importer can get at least the other set and clear the goods.
 Verification of Documents: The bank will verify the documents to find
o Whether the required documents are in order.
o Whether the required documents are attested by customs and other authorities.
 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. The implications of
an indemnity letter is that in the event of refusal of payment by the issuing bank in respect of LC,
then the negotiating bank can ask the exporter to pay back the money advanced along with necessary
charges.
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 Insurance certificate submitted instead of policy.
o Weight in different document differs.
o Class of Bill of lading no acceptable-charter party or House B/L.
o Insurance cover expressed in currency other than that of credit.
o Absence of signature, where required on documents.
o Bill of exchange not drawn as per tenor stated in credit.
o Bill of exchange drawn on wrong party.
o Insurance risks covered not being those specified in credit.
o Absence of freight paid statement on B/L in CFR of CIF shipment.
o Bill of lading doses not carry shipped on broad stamp.
o Amount shown on invoice and bill of exchange differ.
o Shipment not make to port specified.
o Transshipment/part shipment undertaken where expressly forbidden.
 Discounting of bills: the bank may discount or negotiate the bills drawn against LC, and make
immediate payment to the exporter, if so required.
 Dispatch of documents: before the submission of documents for negotiation/collection, the bank
examines them thoroughly with reference to the terms and conditions of the buyer‘s order. Letter of
credit and the laws relating to foreign exchange control. If any scrutiny, the documents are in order,
the bank dispatches them to its overseas branch/correspondent branch as early as possible. The
overseas branch of the bank then submits the document to the importer‘s bank, and the importer‘s
bank hands it over to the importer.


Standby Letter of Credit, Irrevocable Standby
Letter of Credit
A standby Letter of Credit includes a guarantee of payment. However, a standby Letter of Credit serves a
somewhat different function than a Documentary Letter of Credit. A commercial or Documentary L/C
serves as the primary payment mechanism for a transaction. A standby L/C is a secondary payment
mechanism. A bank will issue a standby Letter of Credit on behalf of a customer to provide assurances of its
ability to pay a creditor. Normally, neither the seller nor the buyer expects that a standby Letter of Credit
will be drawn upon.

A standby L/C includes a promise by a bank or financial institution to pay the debt owed to the buyer in the
event that the customer / buyer defaults on payment. The seller/beneficiary is able to draw under a standby
L/C by presenting a draft, and other documentation indicating that the customer has not performed its
obligation. Standby L/Cs are issued to:
 Stand behind monetary obligations,
 To insure the refund of advance payment Funds given by the buyer of goods to the seller prior to
shipment, often just a percentage of the value of the goods with the remainder paid after shipment,
 To support performance and bid obligations, and
 To insure the completion of a sales contract.
A standby letter of credit is often used to guarantee payment performance of a customer. If payment is made
in accordance with the suppliers' terms, the letter of credit would not be drawn on. Under these provisions,
the bank is given until the close of the third banking day after receipt of the documents to honor the draft.
One final comment: Letters of Credit of any kind are not used frequently in domestic sales transactions for
one basic reason: A customer can usually find a less expensive and less complicated alternative such as
open account terms rather than having to deal with the complexities associated with arranging for a Letter of
Credit to be issued.

Executive Summary


It is said that practice makes a man perfect. In order to achieve excellence and success theoretical knowledge
supplement with practical knowledge and practical work.

Among numerous interesting things concerned with enhancing the understanding of the management student
this practical training for 2 months plays an important role in development of management student.
Moreover in today‘s competitive age practical knowledge is more significant the theoretical knowledge.

The main objective of this is to find out who the export process is done by Cargosol Cargo Solution, the
student by imparting knowledge about freight forwarding services as per International Business Practical‘s.

I want through a vocational training in Cargosol Cargo Solution and I got nice experience about freight
forwarding services and business practices.

ANNEXURE I to Form TCS 1
(Item 1 of Form TCS 1)

Information on the Exporter

(a) Name
(b) Registered Office
(c) Branch Offices
(d) Constitution
(i) Public Limited Company
(ii) Private Limited Company
(iii) Partnership firm
(iv) Proprietory concern

(e) Code No.
(f) Location of factories, if any
(g) Name/s of the Proprietor/Partners/Directors
(h) Year of establishment/incorporation and
commencement of operation
(i) Main line of activities (give details of range of
activities, fields of range of activities, fields of
specialization)
(j) Details of operations for the last three years :

(i) No. of consultancy/technical jobs executed
(ii) Sales turnover
(iii) Of which export turnover
(iv) Of which consultancy turnover

(k) No. and value of consultancy/technical etc. services
job on hand

(i) Overseas
(ii) Domestic

(l) Financial Position (for 3 years)
(a)
(b)
(c)
(d)
(i)
(ii)
(iii)
(iv)

(e)
(f)
(g)
(h)

(i)

Years
(j)

(i)
(ii)
(iii)
(iv)


(k)


(i)
(ii)

(l)
Financial Results
(As of )
Paid-up
Capital
Tangible
Networth
Turnover Profit
Before Tax
Profit After Tax
(years)
(i)
(ii)
(iii)

(m) Please furnish the following
(i) Particulars of consultancy/technical service jobs
completed and under execution both in India and
abroad. The particulars should, inter alia, show
date of contract, value of contract, name and
address of the buyer, description and scope of
work, date or expected date of completion,
percentage of work completed, whether contract
ended/will end in profit/loss, amount of foreign
exchange repatriated to India (year-wise), profit
generated in India, extent of loss, if any, and the
amount of remittance allowed from India to meet
the loss.
(ii) Particulars of outstanding tenders/offers, relating
to consultancy/technical services contract.
(m)
(i)












(ii)





ANNEXURE II to Form TCS 1
(Item XIII and XXIII (f)(i) of Form TCS 1)

Cost and Profitability Statement

Details Rupee
Costs
Foreign
Currency
Costs
Local
Currency
Costs
Total
1. Materials
(a) Indigenous
(b) Imported into India (including
canalized items)
(c) Direct into importing country (CIF
Value)
2. Know-How/Technical Assistance
3. Salary and Wages of Technical and Other
Personnel
4. Description of Equipment at Site
5. Overheads (Accommodation etc.)
6. Air Travel
7. Taxes and Duties (%)
(a) Excise Duties
(b) Import Duties
(c) Taxes (please specify)
8. Royalty on Exports
9. Agent‘s Commission/Fee (%)
10. Finance Charges (Including pre/post
shipment interest, guarantee commission
etc.)
11. ECGC Premium
12. Miscellaneous Costs (Please specify)
13. Contingencies and Provisions
(a) Cost escalation @
(b) Negotiating Margin %
(c) Contingency %
(d) Others (please specify ) %
14. Freight Outwards
15. Insurance
16. Total Cost
17. Contract Receipts (Currency wise)
18. Profit (17-16)
19. Export Incentives
(a) Duty Drawback
(b) Others
20. Net Profit (18 + 19) %


1
(a)
(b)

(c)
2
3

4
5
6
7
(a)
(b)
(c)
8
9
10


11
12
13
(a)
(b)
(c)
(d)
14
15
16
17
18
19
(a)
(b)

20




@ as % of Contract Value Conversion Rates : US $ = Rs. £ = Rs. DM = Rs.
ANNEXURE III toForm TCS 1
( Item No.XIV and Item No. XXIII(g) of Form TCS 1)

Details of Foreign Contractor

To be completed where the Indian exporter is a sub-supplier to/joint bidder with a foreign
prime contractor. (Please furnish the details on the foreign prime contractor, joint bidder/s or a
consortium members, as applicable)


(a) Name and address

(b) Nature of goods and services relating to each member

(c) Approximate value of offer by each member

(d) Whether payment terms are on back-to-back basis (Yes/No)

(e) Mode of receipt of payment

(f) Details of banking arrangements made for the offer

(g) Past experience of foreign prime contractor/consortium
member/joint bidder

(h) Whether banker‘s report furnished on each member (Yes/No)

(i) Details of past dealings of exporter with each consortium
member/joint bidder

(j) Details of inter se arrangements among consortium members






Annexure IV to Form TCS 1
(Item XVI and XXIII(h) of Form TCS 1)

Details of Main Sub-contractors for Services


Brief Description/
Specification of
Services
Contractor‘s
Name
Approx.
Value of Sub-
contract
Firm Offer
(Yes/No)
Date till
which valid
Details of
Warranty/Bank
Guarantee
(if any)

A. Indian
Sub-total (A)



B. Local
Sub-total (B)



C. Third Country
Sub-total (C)











TCS 2
(Paragraph C.5 (iii) of PEM)

Banker’s comments on the application in Form TCS 1
Submitted by the exporter for export of Managerial /
Technical / Consultancy services contract

(To be furnished to Exim Bank in 6 copies)

I. Comments on the Exporter :

(1) Management

(2) Export Performance

(3) Financial Position
(Operational/Financial indicators based on
past three years’ financial statements to be
furnished, with brief comments thereon)

(4) Past experience, if any, relating to consultancy/technical
services exports



(1)

(2)

(3)




(4)

II. Comments on the Contract:

(1) The Buyer (Status reports to be obtained on non-
Government buyers)

(2) Brief comments (qualitative) may be furnished covering,
inter alia, the following aspects

(a) Scope of work
(b) Payment terms
(c) Currency of payment
(d) Whether any surplus is envisaged out of local
currency component

(e) Security for payments

(f) Foreign exchange outgo/cash inflow comparison
(for deferred payment offers)

(g) Exchange Risk

(h) Provision for cost escalation, arbitration, liquidated
damages, etc.

(i) Restrictions, if any regarding repatriation of profit
and salaries.


(1)

(2)

(a)
(b)
(c)
(d)

(e)

(f)


(g)

(h)

(i)

I. Sub-Suppliers :

Brief comments to be given on the major sub- suppliers
covering their past experience, standing and value and
scope of work of each sub-contract.


IV. Profitability of the Export Contract (comments on the
cost and profitability computation to be furnished)


V. Banking Facilities Required :

(i) Comments on the requirements of credit / guarantee
facilities stated in form TCS 1
(ii) Participation arrangements :
Whether participation of Exim Bank/other commercial
banks in the various facilities is required, and if so, the
extent thereof. The major terms and conditions which
the bank would like to stipulate may also be indicated.


(i)


(ii)
VI. Any other relevant information




We recommend the proposal for approval and agree to extend the facilities sought by the exporter in form
TCS 1.



STAMP
………………………………………..
(Signature of Authorised Official)
Name :………………………….……
Designation :………………………..
Name and Address :……………….
Of Authorised Dealer :……………..


Date : …………………….