CHAPTER 2

Export-Import:
Documentation and
Steps

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 Getting Started

Step 1
Those who are interested in Export-Import business need to
apply to the Director General Foreign Trade regional office for
getting Importer-Exporter Code Number. This is true for any
individual or company willing to undertake export or import
from India.

Step 2
One has to register with the concerned export promotion
council. For example, in case of garments, it is essential to
obtain registration-cum-membership certificate (RCMC) from
the Apparel Export Promotion Council. Registration is
essential for obtaining various permissible benefits given by
the government.
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Step 3
With the completion of these formalities, the exporters can go
in for procuring their export orders.

Step 4
With export orders in hand they start manufacturing or buy
the goods from manufacturers.

Step 5
Once manufacturing is over, the exporters make arrangements
for quality control and obtain a certificate from the inspector
of quality control confirming their quality.

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Step 6
Exportables are then dispatched to ports/airports for transit

Step 7
With dispatch of goods, the export firm has to apply to an
insurance company for marine/air insurance cover.

Step 8
After completion of these formalities, the exporters contact
the clearing and forwarding agent for storing the goods in
warehouses. The forwarding agent comes out with a
document called shipping bill, required for allowing shipment
by the Custom Authority.

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Step 9
The clearing and forwarding (C and F) agent submits the
shipping bill in the custom house for verification. The custom
carry out appraisal.

Step 10
The C and F agent also submits a copy of the `verified’
shipping bill to the shed superintendent and obtains carting
order for exports.

Step 11
Thereafter, for loading exports into ships or aircraft, the C and
F agent presents the shipping bill to the preventive officers,
who oversee the transit procedure.

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Step 12
After loading goods in to the ship, captain of the ship issues a
receipt known as `mate’s receipt’ to the ship superintendent of
the port. The shed superintendent calculates port charges and
bills the C and F agents for it.

Step 13
When port payments are made, the C and F agent takes
delivery of mate’s receipt and requests port or airport authority
to prepare bill of lading or airway bill.
Step 14
On receipt of the documents, the exporter makes an application
to the relevant chamber of commerce for getting certificates of
origin, stating that the goods originated from India.

Step 15
Exporters also send shipping documents to the importers stating
date of shipment, name of vessel, etc. Moreover, it is essential to
send certain other documents like bill of lading, custom invoice
and packing list, to their foreign counterparts.

Step 16
The exporter now presents all important documents at his bank
(This has to be done within 21 days). The bank scrutinizes these
documents against the original letter of credit/purchase order.
Bank has to follow UCPDC/URC Guidelines.
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Step 18
The exporters bank send all important documents to the foreign
importer’s bank, which presents the documents to the importer.
Then importer accepts the bill, if it is a usance bill, and pay
before the due date.

Step 19
After receiving the requisite documents, the importer makes the
payment through the bank. The money then gets credited in the
name of the exporter here. Simultaneously, a document called
the GR form is sent to Reserve Bank of India, as evidence of
realization of export proceeds. SDF is used instead of GR Form,
if the exporter has used Electronic Data Interchange System.

Step 20
As a last step, exporters apply for benefit from various duty
drawback schemes which subsequently get credited in their
account.

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 BASICS OF EXPORTS

i. Merchant Exporters
ii. Manufacturer Exporters
Declaration Forms: GR/SDF for exports made
otherwise than by post
PP Form: Used for exports by post parcel where
realisation is not through post channel.
VP: Export and realisation through postal channel on
Value Payable basis.
Softex: For export of software in non-physical form.

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 BASICS OF IMPORTS

(a) Types of Duties

 Basic Duty
 Addl. Duty/Countervailing Duty
 Special Addl. Duty, if any

(b) Is equivalent to the central excise duty leviable on like

goods manufactured.

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 COMPUTATION OF IMPORT DUTY
Assessable Value : Rs.1,00,000/-

Rate of Duty Applicable : 30% of basic + 16% of Addl.

Duty + 4% of SAD

Calculation : 30% of Rs.1,00,000 = Rs. 30,000/-

16% of Rs.1,30,000 = Rs. 20,800/-
4% of Rs.1,50,800 = Rs. 6,032/-
---------------
Total Rs. 56,832/-
=========

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 EXIM DOCUMENTATION

Proforma Invoice/Purchase Order

Exporter proposes and send proforma of invoice to give an

idea to an importer that `if you place the order with me,
and when I export, your invoice will look like this’. But many
importers, especially in Europe and US, do not wait for
proforma invoice to be received than exporter. They issue a
`purchase order’ for the goods, they propose to import.

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 EXIM DOCUMENTATION contd.
Sales contract
Prepared by either of the parties, but has to be signed by
either of the parties, with all terms and conditions agreed
between the parties.

Invoice
Fundamental document to be prepared and signed by
exporter with description of goods and normally prepared
first.
Consular Invoice: Invoice signed by consular of importing
country located in country of export (only in some countries).
It helps the importer to get goods cleared by customs
without delay.

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 EXIM DOCUMENTATION contd.
Packing List
Consolidated statement in a prescribed format. Useful for
customs and warehouse keeper to maintain records.
Certificate of Origin
Indicates that goods are manufactured in the country.
GSP Certificate of Origin
To take advantage of preferential duty between countries.
Shipping Bill
Document required to seek permission of customs to export
goods by Sea/Air, to be prepared by exporter. Under
computerised processing, it is generated, no need for
preparing it.

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 EXIM DOCUMENTATION contd.
ARE 1
Form used for removal of goods from the factory premises
for export purposes.
GR/SDF Forms
Export declaration forms for Exchange Control purpose (Ref:
Chap 21, International Business, Justin Paul)
PP Form
To be filled for export to be made by post parcel, except
when made on `value payable.’
VP Form
To be filled for exports by post where payment is `value
payable’ basis.

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 BILL OF EXCHANGE

Known as `draft’. Negotiable instrument as per NI Act.

Sight Draft: When exporter exports the importer to make

payment immediately upon the presentation of draft.
Import can’t take delivery of goods/documents without
making payment. Corresponding terms of payment: D/P.

Payment Terms: Delivery Against Payment/Delivery Against

Acceptance

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 BILL OF EXCHANGE contd.

Usance Draft: When exporter has agreed to give credit to the

foreign buyer, he draws `Usance’ bill for payment at a later
date than the date of presentation. E.g., 30/60 days after
presentation. Importer will accept the bill and make payment
on due date.

In case, if full payment is received in advance, no Bill of

Exchange is required to be drawn.

BILL OF LADING/AIR WAY BILL

LETTER OF CREDIT

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 BILL OF LADING
Document issued by shipping company or its agent. Receipt
of the goods and an undertaking to deliver the goods in the
like order.
Types

a. Through Bill of Lading

b. Combined transport Bill of Lading
c. Conference vessels Bill of Lading
d. Tramp vessel Bill of Lading
e. Charter party Bill of Lading
f. Offshore Bill of Lading

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 THROUGH AND
COMBINED BILL OF LADING
• Bill of Lading covering entire voyage of goods
from the port of loading to the port of ultimate
destination which involves trans-shipment (could
be more than one vessel) is termed as Through
Bill of Lading.
• Bill of Lading covering entire voyage including
overland journey of the goods are Combined
Transport Bill of Lading. Shipping companies
undertake such transactions to deliver goods to
an interior place necessitating transport by rail or
road.

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CONFERENCE VESSEL/ TRAMP VESSEL BILL
OF LADING

Bill of Lading covering goods shipped on a vessel

that belongs to a conference line or having a regular
voyage route is referred as Conference Vessel Bill of
Lading. Schedule of `calling at ports’ of such vessel is
fixed. Bill of Lading covering shipment which does
not have a regular schedule/route are termed Tramp
Vessel Bill of Lading.

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 CHARTER PARTY AND
OFFSHORE BILL OF LADING
• Bill of Lading issued by parties who charter (hire)
the vessels are called Charter Party Bill of Lading.
Shipping company does not accept any liability
for non-delivery of merchandise by charter party.
It has to be mentioned in LC. Otherwise, banks
won’t accept for purchase/discount.
• Offshore Bill of Lading: Bill of Lading covering
shipment to be unloaded at a place other than
the regular ports. Such types of shipment are
due to port congestion. Consignee will arrange
the place for unloading.

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 AIRWAY BILL

Receipt issued by Airline company or its agent for

carriage of goods. Bill should indicate freight prepaid
or freight to collect.

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 INSPECTION CERTIFICATE

Exporter should know whether his item is subject to

compulsory inspection or not.

Type of Inspection: (a) Consignment basis (b) Self

Certification by companies with `House’ status.

Exemption: (a) If company is holder of ISO 9000/if

export product has ISI mark by BIS. (b) If importer
issues a waiver letter.

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