CH 09 EXPORT IMPORT PROCEDURES Steps in Export

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CH. 09 EXPORT IMPORT PROCEDURES

CH. 09 EXPORT IMPORT PROCEDURES

Steps in Export Procedure • Export is a process in which products are shipped

Steps in Export Procedure • Export is a process in which products are shipped or sent from one country to another country for the purpose of trade or sale. • If any industry from India wants to export the finished goods to any part of the world, it should follow a procedure called as export procedure. • It consists of several commercial & regulatory formalities which an exporter is required to complete during the course of export trade transactions.

 • These formalities are complex & time consuming & involve lot of documentation.

• These formalities are complex & time consuming & involve lot of documentation. • Exporter is not only required to gain knowledge of procedures & formalities of his own country, but also the importing country. • He should ensure that all the required documents are prepared & filed with the appropriate authorities in the prescribed format on time. • Export procedure can be studied under the following three heads: Pre-shipment Stage, Shipment Stage & Post-Shipment Stage.

Pre-Shipment Stage • Having an Export Order – It means, there should be an

Pre-Shipment Stage • Having an Export Order – It means, there should be an agreement in the form of a document, between the exporter & the importer before the exporter actually starts producing the goods for shipment. • Examination & Confirmation of Order – After receiving an export order, the exporter should examine it with reference to the terms & conditions of the contract. The examination includes, product description, terms of payment, terms of shipment, inspection & insurance requirement etc. After being satisfied, the export order is confirmed by the exporter & the company can start for the order completion

 • Manufacturing or Procuring Goods – The RBI, under the export credit scheme,

• Manufacturing or Procuring Goods – The RBI, under the export credit scheme, extends pre-shipment credit to exporter to finance working capital needs for purchase of raw materials, processing them & converting them into finished goods. The exporter approaches the bank on the basis of laid down procedures for the pre-shipment credit. After receiving that, the exporter starts to manufacture or procure & pack the goods for shipmen overseas.

 • Clearance from Central Excise – Soon after the goods are manufactured or

• Clearance from Central Excise – Soon after the goods are manufactured or procured, the process of obtaining clearance starts. The Central Excise & Sales Act of India provide refund of excise duty paid. There are 2 schemes where 100% rebate on duty is given after submitting the proof. In the first scheme, excise duty is paid when the goods are removed from the factory & after the goods are exports, claim is filed for rebate of duty. In the second scheme, the goods are removed from the factory or warehouse without any payment, but under an appropriate bond with excise authorities. From A is filed when goods are to be cleared after examination by the excise inspector.

 • Pre-Shipment Inspection – Export of goods requires quality certification as a mandatory

• Pre-Shipment Inspection – Export of goods requires quality certification as a mandatory requirement as per the Government of India’s notification & the rules laid by concerned authorities of the country to which export is planned. The Indian custom authorities have to submit inspection certificate issued by the authority before permitting the shipment of goods. Three copies of inspection certificate should be issued, original copy to be submitted for customs verification, one copy to be sent to the importer & the other copy will remain with the exporter for future reference.

 • Appointment of Clearing & Forwarding Agents – After obtaining inspection certificate from

• Appointment of Clearing & Forwarding Agents – After obtaining inspection certificate from the custom agencies, the exporter appoints Clearing & Forwarding agents who perform number of functions on behalf of the exporter. It includes, packing, marking & labeling of consignment, arrangement for transport to the port, arrangement for shipment overseas, customs clearance of cargo, procurement of transport & other documents. For this, the following documents should be submitted to the agent:

 • • • 8 -10 copies of Commercial Invoice 3 copies of Customs

• • • 8 -10 copies of Commercial Invoice 3 copies of Customs Declaration From Packing List Original Letter of Credit Original Inspection Certificate Original & duplicate GR Form Original & duplicate AR 4/ AR 4 A Forms Original GP-1 / GP-2 Railway Receipt / Lorry Way Bill as the case may be

 • Goods to Port of Shipment – After all the above formalities are

• Goods to Port of Shipment – After all the above formalities are completed, the goods to be exported are packed, marked & labeled. It helps in quick & safe transportation of goods. Space is reserved on the ship through which goods are to be imported. Once the space is reserved, the shipping company issues Shipping Order. This order serves as a proof of space reservation. If goods are sent through a road carrier, no specific formality is involved. In case, the goods are sent by rail, allotment of wagon should be obtained from the railway board. Once wagons have been allotted, goods are loaded & Railway Receipt is issued. This receipt & other documents are sent to clearing & forwarding agents

 • Port Formalities & Customs Clearance – After the receipt of documents from

• Port Formalities & Customs Clearance – After the receipt of documents from the export department, the clearing & forwarding agent takes delivery of cargo from the railway station or the road transport company & stores it in the warehouse. He also obtains customs clearance & permission from the port authorities to get the cargo in the shipment shed. After that, physical verification of the goods is done. The clearance for exports is given on Shipping Bill. The following documents are submitted by the agent to obtain customs clearance & permission:

ü Shipping Bill ü Contract Form ü Letter of Credit, if applicable ü Commercial

ü Shipping Bill ü Contract Form ü Letter of Credit, if applicable ü Commercial Invoice ü GR Form ü Inspection Certificate ü AR 4/AR 4 A Form ü Packing List, if required

After receiving the documents, the agent presents the Port Trust Document to the Shed

After receiving the documents, the agent presents the Port Trust Document to the Shed Superintendent. The cargo is then brought to the transit shed for physical examination by the Dock Appraiser. After examination, the Dock Appraiser makes ‘Let Export’ approval on the duplicate copy of the shipping bill & hands over to the Forwarding Agent. Then the agent presents the documents to the Preventive Officer, who then gives the order of ‘Let Ship’. The Preventive Officer supervises the loading of cargo on the vessel.

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

After the goods are loaded on board, the captain of the ship issues a receipt called as ‘Mate’s Receipt’ to the Shed Superintendent of the port. The forwarding agent after paying port charges, takes the delivery of the Mate’s Receipt. He submits to Shipping Company & requests it to issue the Bill of Lading.

 • Dispatch of Documents by Forwarding Agent to the Exporter – after obtaining

• Dispatch of Documents by Forwarding Agent to the Exporter – after obtaining the Bill of Lading from the shipping Company, the clearing agent dispatches all the documents to the Exporter. The documents include: ü Commercial Invoice ü Export Promotion Copy ü Drawback Copy ü Clean On Board Bill of Lading ü Letter of Credit ü AR 4/AR 4 A & GR Forms ü Gate Pass

 • Certificate of Origin – on receipt of the above documents, the exporter

• Certificate of Origin – on receipt of the above documents, the exporter applies to the Chamber of Commerce for the Certificate of Origin & obtains it. If the goods are exported to countries offering GSP concessions, the exporter needs to procure the GSP Certificate of Origin from the concerned authority like Export Inspection Agency.

 • Dispatch of Shipment – at last, the exporter sends ‘Shipment Advice’ to

• Dispatch of Shipment – at last, the exporter sends ‘Shipment Advice’ to the importer intimating the date of shipment to the consignment by the vessel & its expected time of arrival at the destination port of the importer. The following documents are sent to the importer: ü Bill of Lading ü Commercial Invoice ü Customs Invoice

 • Submission of Documents to Bank – at the end of the process,

• Submission of Documents to Bank – at the end of the process, the exporter presents the following documents to his bank for realization of his amount due to the importer: ü Commercial Invoice ü Certificate of Origin ü Packing List ü Letter of Credit ü Marine Insurance Policy ü GR Form ü Bill of Lading & Bill of Exchange ü Bank Certification

 • Claiming Export Incentives – on completion of the processing of an export

• Claiming Export Incentives – on completion of the processing of an export order at the three levels of shipment i. e. pre-shipment, shipment & postshipment, the exporter claims for export incentives admissible to her/him.

Export Finance • It is provided to the organizations to meet its working capital

Export Finance • It is provided to the organizations to meet its working capital requirements in foreign markets. • it also enables to expand the business aboard & become a MNC. • There can be financial risks in this business, so its important to fully understand the risks & the government regulations before entering the international market. • There are several advantages of export finance for both exporters & importers

Advantages for Exporter: • Gains competitive edge by offering finance to prospective buyers •

Advantages for Exporter: • Gains competitive edge by offering finance to prospective buyers • Receives cash payment upon shipment or commissioning • Avoids credit, currency & interest rate risks in the settlement period • No need to use administrative resources to collect the debt

Advantages to the Importer • Helps to make cash flow efficient by balancing revenues

Advantages to the Importer • Helps to make cash flow efficient by balancing revenues & expenditures • Obtain finance that is less expensive • Can obtain fixed rate financing for future payments

Types of Export Finance 1. Pre-Shipment Finance: the exporter is provided finance even for

Types of Export Finance 1. Pre-Shipment Finance: the exporter is provided finance even for the purchase of raw materials & processing them into finished products. It can be provided only when the exporter has order from the importer & the importer has submitted the letter of credit from his bank. Against the export order received from the importer, the exporter is given finance by his bank which is called preshipment export finance.

2. Post-Shipment Export Finance: After dispatching the goods to the importer, the exporter draws

2. Post-Shipment Export Finance: After dispatching the goods to the importer, the exporter draws a bill, against which the importer makes the payment. This may take a period of 3 -6 months. The time gap will affect the production continuity. Thus, the export bill is presented to the bank by the exporter. The bank then discounts the bill. 3. Export Finance against Collection of Bills: When export is made, loan can be obtained from the bank against the bill sent for collection. As there are institutions like Export Credit Guarantee Corporation, banks will come forward to provide finance to exporters

4. Deferred Export Finance: To enable the importer to purchase valuable goods, hire purchase

4. Deferred Export Finance: To enable the importer to purchase valuable goods, hire purchase financing or lease finance may be arranged. There are 2 types of deferred export finance – 1. Supplier’s Finance – in this, exporter’s bank will finance the exporter so that he will sell the goods on installment basis. The exporter will receive full amount made in installments by the exporter’s bank 2. Buyer’s Finance – in this, the buyer is given credit under line of credit by the exporter’s bank & the exporter will make his exports.

5. Export Finance against Allowances & Subsidies: Exporters are given subsidies by the government

5. Export Finance against Allowances & Subsidies: Exporters are given subsidies by the government so that they can sell the goods on reduced price to importer. There also allowances like duty drawback given for increasing exports. When the exporter is faced with a sudden increase in expenditure which are beyond his control, the government provides cash compensatory support at a certain percentage of the cost of the product. Pass book facility is also made available to the exporter for continuous finance from the bank.

Pre-Shipment Inspection • There are various goods whose export requires quality certification as per

Pre-Shipment Inspection • There are various goods whose export requires quality certification as per the notification of the Government • The Indian custom authorities will require the submission of an inspection certificate issued by the competent & designated authority before permitting the shipment of goods. • This certificate is issued in 3 copies, original copy for custom verification, second copy to the importer & third copy with the exporter for reference.

Methods of Pre-shipment Inspection 1. Consignment –Wise Inspection: In this method, a detailed inspection

Methods of Pre-shipment Inspection 1. Consignment –Wise Inspection: In this method, a detailed inspection of the consignment in packed condition is made by the Export Inspection Agency. It is done on the basis of sampling plan. If the goods are upto the stipulated quality, inspection certificate is issued. It carries a validity period, before which the consignment should be shipped. This is applicable to those small scale manufacturers who cannot afford to have their own facilities & personnel

2. In-Process Quality Control: Certain commodities like paints & allied products, linoleum, ceramics, printing

2. In-Process Quality Control: Certain commodities like paints & allied products, linoleum, ceramics, printing ink, sanitary wares etc. come under this category. In case of continuous process industries, an option is given to become approved “export worthy” unit, as they process the requisite infrastructure for manufacturing the products of standard quality. This status enables them to conduct inspection & give declaration & based on their declaration, they get inspection certificate.

3. Self-Certification: With the experience gained in operating the compulsory Quality Control & Pre-Shipment

3. Self-Certification: With the experience gained in operating the compulsory Quality Control & Pre-Shipment Inspection Scheme in India, there has been a qualitative change in the inspection system. Recently, a self-certification system has been introduced. This is based on the concept that the manufacturing unit that has an in-built responsibility for quality control should have the freedom to certify its own product for export.

Role of Clearing & Forwarding Agents • Export – Import procedures are very complex

Role of Clearing & Forwarding Agents • Export – Import procedures are very complex & time consuming. • Therefore, every exporter should avail the services of Clearing & Forwarding (C&F) Agents who are expert & well versed with the customs & shipment procedures. • For smooth & timely shipment of goods, the exporter must appoint a competent C&F agent who is able to provide the following services:

Essential Services: • Transportation of goods to dock & arrangement of warehousing at port.

Essential Services: • Transportation of goods to dock & arrangement of warehousing at port. • Warehousing facilities before the goods are transported to docks. • Booking of shipping space or air freighting & advice on relative cost of sending goods by sea & air. • Arrangement for loading of goods on board. • Equipped with information on shipping lines & freight to different destinations, & various charges payable by exporters

 • Obtaining marine insurance policies • Preparation & processing of shipping documents, bills

• Obtaining marine insurance policies • Preparation & processing of shipping documents, bills of lading, dock receipt, export declarations, consular invoice, certificate of origin, etc. • Forwarding of banking collection papers

Desirable Services • Storage facilities abroad, specially in major international markets, to warehouse the

Desirable Services • Storage facilities abroad, specially in major international markets, to warehouse the goods in case importer refuses to take delivery on any account. • Can trace the goods, if shipment goes off track, through his international connections. • Arrangement for assessing the damage to shipment enroute.

Shipping & Custom Formalities • According to section 40 of the Customs Act, the

Shipping & Custom Formalities • According to section 40 of the Customs Act, the person in charge of the conveyance vessel, vehicle, aircraft etc, cannot permit loading of export cargo at the Customs Station unless a formal permission is given by the authorized Customs Officer. • Before granting permission, the Customs Officer makes sure that the goods are as per the guidelines in terms of the following:

 • The exported goods are of same type, sort & value as declared

• The exported goods are of same type, sort & value as declared by the exporter. • The duty or cess leviable has been properly determined & paid. • Provisions of Export (Control) Order, Export (Quality Control & Inspection) Act & Foreign Exchange (Regulation) Act are complied with.

The procedure for shipping & customs clearance is as under: 1. Preparation & Submission

The procedure for shipping & customs clearance is as under: 1. Preparation & Submission of Export Documents: The exporter or his agent has to submit the following documents along with copies to the customs appraiser at the customs house – ü Letter of Credit along with export contract or export order ü Commercial Invoice & Marine Insurance Policy ü Packing List or Packing Note ü Certificate of Origin & Certificate of Inspection ü GR Form, ARE – I Form

2. Verification of Documents: The Customs Appraiser verifies the details listed in each documents

2. Verification of Documents: The Customs Appraiser verifies the details listed in each documents & makes sure that all the formalities are complied with by the exporter. If satisfied, he issues a “Shipping Bill Number”. 3. Valuation of Goods: The Customs Appraiser assesses the shipping bill & values the goods for future transactions. All the documents are returned to the exporter or his agent, except: Original copy of GR which is forwarded to RBI, Original copy of shipping bill & one copy of Commercial Invoice. The validity of shipping bill is for one month only, if exporter fails to deliver the goods in that period, he have to undergo the above procedure again.

4. Obtaining “Carting Order” from Port Trust Authorities: The C&F Agent approaches the Superintendent

4. Obtaining “Carting Order” from Port Trust Authorities: The C&F Agent approaches the Superintendent of the Port Trust Authorities for obtaining the Carting Order in order to move the cargo inside the dock. After obtaining the order, the cargo is physically moved into the port area & stored in the appropriate shed. 5. Customs Examination & Issue of “Let Export Order”: The Customs Examiner, then physically examines the goods & seals the packages in his presence. If satisfied, he then issues a formal permission of ‘Let Export Order’. This system is now processed through EDI system.

6. Obtaining ‘Let Ship Order’ from the Customs Preventive Officer: After obtaining the permission

6. Obtaining ‘Let Ship Order’ from the Customs Preventive Officer: After obtaining the permission of export, the C&F agent submits the duplicate copy of shipping bill, endorsed by the Customs Examiner, to the Customs Preventive Officer, who then gives permission to ship the goods in the form of ‘Let Ship Order’. 7. Obtaining Mate’s Receipt & Bill of Lading: The goods are then loaded on the ship & the captain of the ship issues Mate’s Receipt to the Port Superintendent who then hand over this receipt to C&F Agent. The Agent, then submits this receipt to the shipping company to get Bill of Lading.

Pre-Import Procedure • Import refers to the purchase of goods from a foreign country.

Pre-Import Procedure • Import refers to the purchase of goods from a foreign country. • The procedure for imports differ from country to country depending upon the import policy, statutory requirements & customs policies. • The imports of goods have to follow a procedure that involves various steps. • This procedure is as follows:

1. Trade Enquiry: It’s the first step in import procedure. It is a written

1. Trade Enquiry: It’s the first step in import procedure. It is a written request from the buyer regarding information of the goods. The importer should mention in the enquiry all the details like goods required, their description, catalogue number, size, weight, quantity, time & method of delivery, method of payment, method of packing, terms & conditions etc. In this reply, the exporter will provide with the quotation mentioning all the above details.

2. Obtaining Import License & Quota: Goods cannot be imported without a proper import

2. Obtaining Import License & Quota: Goods cannot be imported without a proper import license. An import license may be either general or specific. With general license, goods can be imported from any country, but specific license authorizes to import goods only from specific countries. For the purpose of issuing license, the importers are divided into 3 categories: Established Importer, Actual User & Registered Exporters.

3. Obtaining Foreign Exchange: Once the import license is obtained, the importer has to

3. Obtaining Foreign Exchange: Once the import license is obtained, the importer has to make arrangement foreign exchange in order to make the payment to the exporter in the currency of the exporting country. 4. Placing the Order: The next step is to place the order. It is also called as indent. It contains the instructions regarding quality & quantity of goods required, method of transport, nature of packing, mode of settlement, price etc. it can be prepared in duplicate or triplicate.

5. Dispatching Letter of Credit: Foreign traders are not familiar to each other &

5. Dispatching Letter of Credit: Foreign traders are not familiar to each other & so the exporter before shipping the goods wants to be sure about the creditworthiness of the importer. The exporter wants to be sure that there is no risk of nonpayment. For this purpose, Letter of Credit is issued. It is an undertaking that gives guarantee to the exporter that the payment will be done to him after submitting the bill of exchange.

6. Obtaining Necessary Documents: After the receipt of Letter of Credit, the exporter arranges

6. Obtaining Necessary Documents: After the receipt of Letter of Credit, the exporter arranges for the shipment of goods & sends Advice Note immediately to the importer. An Advice Note is sent to the exporter to inform him that the goods are being dispatched. The exporter then draws the Bill of Exchange. This Bill of Exchange along with other documents like bill of lading, invoice, insurance policy, certificate of origin, consumer invoice etc. are forwarded to the bank of importer's country for collecting the payment.

7. Customs Formalities & Clearance of Goods: After receiving the documents, the importer takes

7. Customs Formalities & Clearance of Goods: After receiving the documents, the importer takes the delivery of goods. When the ship arrives the port, he gets the goods to his own place of business. The importer has to comply with certain formalities before getting the goods to his place. If the formalities are not completed, the goods lies with the Customs House. The following are the formalities to be completed: ü To obtain endorsement for delivery – when the ship arrives at the port, the importer has to obtain the endorsement on the back of the bill of lading. It is issued only after the payment of freight.

ü To pay Dock Dues & obtain Port Trust Dues Receipt – the importer

ü To pay Dock Dues & obtain Port Trust Dues Receipt – the importer has to submit 2 copies of “Application to Import” duly filled to Lading & Shipping Dues Office. This office levies a charge on all imported goods for service rendered by the dock authorities in connection with lading of goods. After paying the necessary charges, the importer receive back one copy of the application to import as a “Port Trust Dues Receipt”. ü To fill Bill of Entry Form – the importer fills bill of entry supplied by the customs office. It contains the name & address of the importer, name of ship, description of goods, country of origin etc.

ü To fill Bill of Sight – if the importer does not provide the

ü To fill Bill of Sight – if the importer does not provide the detailed particulars of the goods, he has to fill the form called Bill of Sight. It contains the information possessed by the importer along with a remark that he is not able to provide complete information about the goods. The Bill of Sight enables him to open the package & examine the goods in the presence of customs officer so as to complete the bill of entry. ü To pay Customs or Import Duty – Custom authorities will permit the delivery of goods after examining the goods. But if the goods are liable for duty, the importer has to pay the customs duty.

8. Bonded Warehouse & Duty Paid Warehouse: The port trust & custom authorities maintain

8. Bonded Warehouse & Duty Paid Warehouse: The port trust & custom authorities maintain 2 types of warehouses – Bonded & Duty Paid. The goods on which the duty has already been paid by the importer are kept in the Duty Paid warehouse for which a receipt called “Warehouse Receipt "is issued to him. If the importer cannot pay the duty, the goods are kept in Bonded warehouse, for which “Dock Warrant” is issued.

9. Appointment of Clearing Agents: The importer may take the delivery of goods by

9. Appointment of Clearing Agents: The importer may take the delivery of goods by himself, but it takes lot of time. Thus, he appoints clearing agents to work for his behalf, which may save time & he can focus on his other responsibilities. Clearing Agents are the specialized persons engaged in performing various duties relating to delivery of goods on behalf of the importer & exporter. They charge remuneration for the services rendered.

10. Making the Payment: The mode & time of making the payment is decided

10. Making the Payment: The mode & time of making the payment is decided well in advance by the importer & exporter. In case of document against payment, the goods are released only after making the payment. In case of document against acceptance, the goods are released after the bill is accepted. The bill is retained with the bank till the date of maturity. Usually, 30 -90 days are allowed to the importer for making the payment.

11. Closing the Transactions: The last step in the import trade procedure is closing

11. Closing the Transactions: The last step in the import trade procedure is closing the transaction. If the goods are to the satisfaction of the importer, the transaction is closed. But, if he is not satisfied with the quality of goods or if there is any shortage, he will write to exporter & settle the matter. In case the goods have been damaged in transit, he will claim compensation from the insurance company. The insurance company will pay him the compensation.

Legal Dimensions of Import Procedure 1. Finalizing the Terms of the Contract – The

Legal Dimensions of Import Procedure 1. Finalizing the Terms of the Contract – The import contract should be carefully drafted. There should not be any ambiguity regarding the specification of goods & terms of purchase including import price, mode of payment, type of packaging, port of shipment, deliver schedule, license & permits, discounts & commission, insurance, arbitration, etc.

2. Mode of Pricing – While finalizing the terms of import contract, the importer

2. Mode of Pricing – While finalizing the terms of import contract, the importer should be fully familiar with the mode of pricing & the manner of payment for the imports. With regards to the mode of pricing, the overseas supplier should quote the terms prevailing as per International Chamber of Commerce. 3. Mode of Settlement of Payment – There are three modes of settling international transactions depending upon the creditworthiness of the importer & exporter – demand for the commodity, exchange control regulations & other factors.

4. Obtaining IEC Number – It is compulsory for every exporter & importer to

4. Obtaining IEC Number – It is compulsory for every exporter & importer to register themselves with the DGFT & obtain Import-Export Code Number. The application form should be filled by paying a fee of Rs. 250/- & 2 copies of passport size photographs duly attested by the banker along with other relevant documents. 5. Obtaining Import License – If the item to be imported falls under prohibited list, it cannot be imported. If it falls under restricted list, necessary clearance must be obtained. And if it is to be canalized, then required formalities are to be completed for the same.

6. Obtaining Foreign Exchange – Every importer is required to make an application to

6. Obtaining Foreign Exchange – Every importer is required to make an application to RBI for getting sanction to make overseas payment. The Exchange Control Department verifies the application & sanctions the necessary foreign exchange for the import transactions. 7. Arranging Finance – The financial planning should be done well in advance. Banks normally do not extend any fund assistance to the importers, but they enable industrial units & others to have access to imported goods by establishing letters of credit.

8. Obtaining Import L/C Limit – Import L/C limits are sanctioned by the banks

8. Obtaining Import L/C Limit – Import L/C limits are sanctioned by the banks only after submitting complete loan proposal. Any delay in the payment of bill, not only spoils the relation of the importer with the bank, but also incurs additional cost like extra commission, penalty, additional interest etc. 9. Dispatching Letter of Credit – If the importer & exporter has agreed to pay through the letter of credit, then the importer should obtain the same through is bank & forward it to the exporter within the time agreed. The importer should see to it that it has been prepared in confirmation with the import contract.

Customs Formalities for Imports • Different countries have their own policies in terms of

Customs Formalities for Imports • Different countries have their own policies in terms of procedures & formalities for customs clearance. • Each product under importer & export is provided with a code number which is globally accepted called as ITC number. • Import & exports from such countries may have exemptions on documentations. • However, there are few documents that are required to be submitted for customs clearance, which are as follows:

1. Bill of Entry – It is one of the major import documents required

1. Bill of Entry – It is one of the major import documents required for customs clearance. It had to be filled by customs authority or importer duly signed. It is regulated by RBI & customs department. It must be filed within 30 days of arrival of goods at customs location. Once the bill of entry is filed with other documents, the goods are examined & verified by the customs officials & ‘pass out order’ is issued. The imported goods then can be moved out of the customs. After paying necessary import charges, if any, the goods are then taken out to the importer’s place.

2. Commercial Invoice – Invoice is required for import customs clearance for value appraisal

2. Commercial Invoice – Invoice is required for import customs clearance for value appraisal by the concerned customs official. Assessable value is calculated on the basis of terms of delivery of goods mentioned in this invoice. The concerned officer verifies the value in the invoice & matches it with the actual market value of the same goods. This method prevents fraudulent activities of the importer or exporter by over invoicing or under invoicing.

3. Bill of Lading / Airway Bill – Bill of lading is required in

3. Bill of Lading / Airway Bill – Bill of lading is required in case of sea shipment & Airway bill for air shipment. It is required to be submitted with the customs for clearance purpose. It gives details of cargo with terms of delivery. 4. Import License – Import license may be required as one of the documents for import custom clearance procedures. It is compulsory for importing specific goods as per guidelines provided by the government. So the government insists an import license as one of the documents required for import customs clearance to get the goods from foreign countries.

5. Insurance Certificate – It is a supporting document against importer’s declaration on terms

5. Insurance Certificate – It is a supporting document against importer’s declaration on terms of delivery. Insurance certificate helps customs authorities to verify, whether selling price includes insurance or not. This is required to find assessable value which determines import duty amount. 6. Purchase Order/Letter of Credit – A purchase order reflects almost all terms & conditions of sale contract which enables the customs official to confirm on value assessment. If an import consignment is under letter of credit, the importer can submit a copy of letter of credit along with other documents for customs clearance

7. Technical write-up, Literature for Specific Goods – It is required only in case

7. Technical write-up, Literature for Specific Goods – It is required only in case of specific goods. This document explains the functions of those specific goods & is attached with other import documents. This document helps customs official to derive the exact market value of those goods. 8. Industrial License if any – If importer claims any import benefit as per guidelines of government, such Industrial License can be produces to avail the benefit. In such case, industrial license copy can be submitted with customs authorities.

9. Registration Cum Membership Certificate, (RCMC) if any – For the purpose of availing

9. Registration Cum Membership Certificate, (RCMC) if any – For the purpose of availing import duty exemption from government agencies under specific goods, production of RCMC with customs authorities is required. For this, the importer needs to submit RCMC along with other customs clearance documents. 10. Test Report, if any – The customs officials may not be able to identify the quality of goods imported. In order to assess the value of such goods, customs official may draw a sample & send for testing in government laboratories. The concerned customs officer can complete the appraisement by obtaining the test report.

11. DEEC/DEPB/ECGC for Duty Benefit – If importer avails any duty exemptions against imported

11. DEEC/DEPB/ECGC for Duty Benefit – If importer avails any duty exemptions against imported goods under different schemes like Duty Exemption Entitlement Certificate (DEEC), Duty Entitlement Pass Book (DEPB), Export Credit Guarantee Certificate (ECGC) etc. such license is produced along with other import clearance documents. 12. Central Excise Document, if any – If importer avails any central excise benefit under imported goods, the documents pertaining to the same need to be produced along with other import customs clearance documents.

13. GATT/DGFT Declaration – As per the guidelines of the government, every importer needs

13. GATT/DGFT Declaration – As per the guidelines of the government, every importer needs to file GATT declaration along with other import customs clearance documents with customs. GATT declaration has to be filed by importer as per the terms of GATT.

Exchange Control Provisions for Imports The following guidelines have to be followed while negotiating

Exchange Control Provisions for Imports The following guidelines have to be followed while negotiating the documents by banks as well as importers in drawing the documents: 1. Documents through Authorized Dealers – All documents relating to imports have to be routed through the authorized dealer. The documents are allowed to be sent to the buyer, directly only with the approval of RB, provided advance payment has been received for full value of the consignment.

2. Realization through Authorized Dealer – Payment against imports should be realized through authorized

2. Realization through Authorized Dealer – Payment against imports should be realized through authorized dealer of foreign exchange. Importer is not allowed to receive the payment directly from the buyer in the form of cheque, draft, foreign currency, traveler's cheque unless permitted by RBI. 3. Payment within 6 months – Usance bills should not be drawn for more than 6 months. Importer should obtain prior approval of RBI to extend credit for more than 6 months. 4. Obtaining Invoice & Bills of Exchange – Invoice & B/E should be drawn for the amount of shipment declare in GR/SDF/PP forms.

5. Change of Buyer – The importer can change the buyer. In such circumstances,

5. Change of Buyer – The importer can change the buyer. In such circumstances, fresh bill of exchange has to be drawn on the new buyer even for a reduced value of invoice. 6. Presentation of Shipping Documents – Shipping documents should be presented to the banker for negotiation within 21 days from the date of shipment. If there is delay in presenting the documents, importer has to produce necessary documentary evidence as proof for delay. If the evidence is satisfactory, then only the bank negotiates the documents.

7. Import of Jewellery – In case of import of jewellery, GR form is

7. Import of Jewellery – In case of import of jewellery, GR form is to be countersigned, in advance, by the authorized dealer. In such case, documents are to be negotiated within 5 days from the date of countersignature.