INTRODUCTION India has a mission to capture 2% of the global share of trade by 20010, up from the present level of less

than 1%. Export is one of the lucrative business activities in India. The government also provides various promotional schemes to the exporters for earning valuable foreign exchange for the country and for meeting their re uirements for importing modern technology and essential inputs. !esides, the income from export business is also exempted to the specified extent under the Income Tax "ct, 1#$1, %efund of &entral Excise and &ustom 'uty on export is also made under the 'uty 'ra(bac) *cheme of the +overnment. There is no *ales Tax on products meant for exports. Exports can be of goods (hich can be moved physically from one country to another or can be of service rendered. 'etailed list of services are given in the ,oreign Trade -olicy covering more than 1$0 items e.g. Insurance, .ospital, -ostal and Telecommunication etc. TWO CLASSES OF EXPORTS: -hysical Exports/ If the goods physically go out of the country or services are rendered outside the country then it is called as physical export. 'eemed Exports/ 0here the goods do not go out of the country physically they can be termed as deemed exports. This (ill be sub1ect to certain conditions as prescribed by the '+,T. 2nder 'eemed Exports, the goods may be supplied to the manufacturer exporter (ho ultimately export a finished product of (hich this supply forms a part and ultimately go out of the country. E.g. *upply of fabrics to the garment exporter (ho exports the garments made out of the said fabric. The government may announce from time to time the types of supplies that may be considered as deemed export. The ,oreign Trade -olicy gives the list of supplies considered under the 'eemed Export &ategory. The policies and procedures are different for -hysical Exports and 'eemed Exports as also the benefits available. In a nutshell, 'eemed Exports do not en1oy all the benefits that are available under -hysical Export. The ,oreign Trade defines exports as ta)ing out of India any goods by land, sea, air. "lthough

Export Documentation

Page 1

the act does not term them as 3-hysical Exports4, (e have to put phrase to distinguish it from 3'eemed Exports4 (hich is sales in India but considered as exports for limited purpose. TYPES OF EXPORTERS/ Exporters can be basically classified into t(o groups Manufacturer Exporter: "s the exporter has the facility to manufacturer the product he intends to export and hence he exports the products manufactured by him. Merc ant Exporter: "n exporter (ho does not have the facility to manufacture an item. !ut, he procures the same from other manufacturers or from the mar)et and exports the same. "n exporter can be both a manufacturer exporter as (ell as a merchant exporter, he can export product manufactured by him or he can export items bought from the mar)et. 5nce it is decided to export, it is mandatory on your part to follo( certain procedures, rules and regulations as prescribed by various regulatory authorities such as '+,T, %!I, and &ustoms. These procedures, rules and regulations are laid do(n in the Exim -olicy 200670#, Exchange &ontrol 8anual, &ustoms "ct etc. "ccordingly Export documents are re uired to be prepared )eeping in vie( of the re uirement of the foreign buyers and our regulatory authorities.

Export Documentation

Page 2

0hy is Export 'ocumentation necessary9 Export documentation is used to :)eep shipment and delivery on schedule

:to describe cargo

:for customs clearance

:to indicate the o(nership of goods for collection purposes or in the event of dispute

:to obtain payment.

Export Documentation

Page ;

TERMS OF S!IPMENTS " INCOTERMS The I<&5TE%8* =International &ommercial Terms> is a universally recogni?ed set of definition of international trade terms, such as ,5!, &,% @ &I,, developed by the International &hamber of &ommerce=I&&> in -aris, ,rance. It defines the trade contract responsibilities and liabilities bet(een buyer and seller. It is invaluable and a cost7saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. 5nce they have agreed on a commercial terms li)e ,5!, they can sell and buy at ,5! (ithout discussing (ho (ill be responsible for the freight, cargo insurance and other costs and ris)s. The I<&5TE%8* (as first published in 1#;$ 777 I<&5TE%8* 1#;$ 777 and it is revised periodically to )eep (ith changes in the international trade needs. The complete definition of each term is available from the current publication 777 I<&5TE%8* 2000. 2nder I<&5TE%8* 2000, the international commercial terms are grouped into E, ,, & and ', designated by the first letter of the term, relating to the final letter of the term. E.g. EA0Bex(or)s comes under grouped CED. The purpose of Incoterms is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree. The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale (ith respect to the delivery of goods. Incoterms deal (ith the number of identified obligations imposed on the parties and the distribution of ris) bet(een the parties. In international trade, it (ould be best for exporters to refrain, (herever possible, from dealing in trade terms that (ould hold the seller responsible for the import customs clearance andEor payment of import customs duties and taxes andEor other costs and ris)s at the buyerDs end, for example the trade terms 'E5 ='elivery Ex Fuay> and ''- ='elivered 'uty -aid> Fuite often, the charges and expenses at the buyerDs end may cost more to the seller than anticipated. To overcome losses, hire a reliable customs bro)er or freight for(arder in the importing country to handle the import routines.

Export Documentation

Page 6

*imilarly, it (ould be best for importers not to deal in EA0 =Ex 0or)s> (hich (ould hold the buyer responsible for the export customs clearance, payment of export customs charges and taxes, and other costs and ris)s at the sellerDs end MORE CLARIFICATION ON INCOTERMS EXW #$t e na%e& p'ace( Ex Wor)*: Ex means from. 0or)s means factory, mill or (arehouse, (hich are the sellerDs premises. EA0 applies to goods available only at the sellerDs premises. !uyer is responsible for loading the goods on truc) or container at the sellers premises and for the subse uent costs and ris)s. In practice, it is not uncommon that the seller loads sthe goods on truc) or container at the sellers pre6mises (ithout charging loading fee. < the uotation, indicate the named place =sellers premises> after the acronym EA0 for example EA0 Gobe and EA0 *an "ntonio. The term EA0 is commonly used bet(een the manufacturer =seller> and export7trader=buyer>, and the export7trader resells on other trade terms to the foreign buyers. *ome manufacturers may use the term Ex ,actory, (hich means the same as Ex 0or)s. FCA #$t e na%e& po+nt of &eparture( Free Carr+er: The delivery of goods on truc), rail car or container at the specified point=depot> of departure, (hich is usually the sellers premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at sellers expense. The point=depot> at origin may or may not be a customs clearance centre. !uyer is responsible for the main carriageEfreight, cargo insurance and other costs and ris)s. In the air shipment, technically spea)ing, goods placed in the custody of an air carrier are considered as delivery on board the plane. In practice, many importers and exporters still use the term ,5! in the air shipment. The term ,&" is also used in the %5E%5 =roll onEroll off> services In the export uotation, indicate the point of departure =loading> after the acronym ,&", for example ,&" .ong Gong and ,&" *eattle. *ome manufacturers may use the former terms ,5T =,ree on Truc)s> and ,5% =,ree on %ail> in selling to export7traders. Export Documentation Page H

FAS #$t e na%e& port of or+,+n( Free A'on,*+&e S +p: +oods are placed in the doc) shed or at the side of the ship, on the doc) or lighter, (ithin reach of its loading e uipment so that they can be loaded aboard the ship, at sellerDs expense. !uyer is responsible for the loading fee, main carriageEfreight, cargo insurance, and other costs and ris)s In the export uotation, indicate the port of origin=loading>after the acronym ,"*, for example ,"* <e( Ior) and ,"* !remen. The ,"* term is popular in the brea)7bul) shipments and (ith the importing countries using their o(n vessels. FO- #$t e na%e& port of or+,+n. Free on -oar&: The delivery of goods on the board the vessel at the named port of origin =Joading> at sellerDs expense. !uyer is responsible for the main carriageEfreight, cargo insurance and other costs and ris)s. In the export uotation, indicate the port of origin =loading> after the acronym ,5!, for example ,5! Kancouver and ,5! *hanghai. 2nder the rules of the I<&5TE%8* 1##0, the term ,5! is used for ocean freight only. .o(ever, in practice, many importers and exporters still use the term ,5! in the air freight. In <orth "merica, the term ,5! has other applications. 8any buyers and sellers in &anada and the 2*" dealing on the open account and consignment basis are accustomed to using the shipping terms ,5! 5rigin and ,5! destination. ,5! 5rigin means the buyer is responsible for the freight and other costs and ris)s. ,5! 'estination means the seller is responsible for the freight and other costs and ris)s until the goods are delivered to the buyerDs premises (hich may include the import custom clearance and payment of import customs duties and taxes at the buyerDs country, depending on the agreement bet(een the buyer and seller. In international trade, avoid using the shipping terms ,5! 5rigin and ,5! 'estination, (hich are not part of the I<&5TE%8* =International &ommercial Terms>. CFR #$t e na%e& port of &e*t+nat+on(

Export Documentation

Page $

Co*t an& Fre+, t: The delivery of goods to the named port of destination =discharge> at the sellers expenses. !uyer is responsible for the cargo insurance and other costs and ris)s. The term &,% (as formerly (ritten as &@,. 8any importers and exporters (orld(ide still use the term &@,. In the export uotation, indicate the port of destination =discharge> after the acronym &,%, for example &,% Garachi and &,% "lexandria. 2nder the rules of the I<&5TE%8* 1##0, the term &ost and ,reight is used for ocean freight only. .o(ever, in practice, the term &ost and ,reight =&@,> is still commonly used in the air freight. CIF #$na%e& port of &e*t+nat+on( Co*t/ In*urance an& Fre+, t: The cargo insurance and delivery of goods to the named port of destination =discharge> at the sellerDs expense. !uyer is responsible for the import customs clearance and other costs and ris)s. In the export uotation, indicate the port of destination =discharge> after the acronym &I,, for example &I, -usan and &I, *ingapore. 2nder the rules of the I<&5TE%8* 1##0, the term &I,I is used for ocean freight only. .o(ever, in practice, many importers and exporters still use the term &I, in the air freight. CPT #$t e na%e& p'ace of &e*t+nat+on( Carr+a,e Pa+& To: The delivery of goods to the named port of destination =discharge> at the sellers expenses. !uyer assumes the cargo insurance, import custom clearance, payment of custom duties and taxes, and other costs and ris)s. In the export uotation, indicate the port of destination =discharge> after the acronym &-T, for example &-T Jos "ngeles and &-T 5sa)a. CIP #$ t e na%e& p'ace of &e*t+nat+on. Carr+a,e an& In*urance Pa+& To: The delivery of goods and the cargo insurance to the named place of destination =discharge> at sellerDs expense. !uyer assumes the importer customs clearance, payment of customs duties and texes, and other costs and ris)s.In the export uotation, indicate the place of destination =discharge> after the acronym &I-, for example &I- -aris and &I- "thens.

Export Documentation

Page L

DAF #$ t e na%e* po+nt at front+er( De'+0ere& At Front+er: The delivery of goods to the specified point at the frontier at sellers expense. !uyer is responsible for the import custom clearance, payment of custom duties and taxes, and other costs and ris)s. In the export uotation, indicate the point at frontier =discharge> after the acronym '",, for example '", !uffalo and '", 0elland. DES #$na%e& port of &e*t+nat+on( De'+0ere& Ex S +p: The delivery of goods on board the vessel at the named port of destination =discharge> at sellers expense. !uyer assumes the unloading free, import customs clearance, payment of customs duties and taxes, cargo insurance, and other costs and ris)s. In the export uotation, indicate the -ort of destination =discharge> after the acronym 'E*, for example 'E* .elsin)i and 'E* *toc)holm. DE1 #$ t e na%e& port of &e*t+nat+on De'+0ere& Ex 1ua2: The delivery of goods to the Fuay =the port> at the destination at buyers expense. *eller is responsible for the importer customs clearance, payment of customs duties and taxes, at the buyers end. !uyer assumes the cargo insurance and other costs and ris)s. In the export uotation, indicate the -ort of destination =discharge> after the acronym 'EF, for example 'EF Jibreville and 'EF 8aputo. DDU #$ t e na%e& po+nt of &e*t+nat+on( De'+0ere& Dut2 Unpa+&: The delivery of goods and the cargo insurance to the final point at destination, (hich is often the pro1ect site or buyers premises at sellers expense. !uyer assumes the import customs clearance, payment of customs duties and taxes. The seller may opt not to insure the goods at hisEher o(n ris)s.

Export Documentation

Page M

In the export uotation, indicate the point of destination =discharge> after the acronym ''2 for example ''2 Ja -a? and ''2 <Dd1amena. DDP #$ t e na%e& po+nt of &e*t+nat+on. De'+0ere& Dut2 Pa+&: The seller is responsible for most of the expenses (hich 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, (hich is often the pro1ect site or buyers premise. The seller may opt not to insure the goods at hisEher o(n ris). In the export uotation, indicate the point of destination =discharge> after the acronym ''-, for example ''- !u1umbura and ''8babane.

3E45ter%/4F45ter%/ 3C45ter% 64D45ter%: Incoterms 2000, li)e its immediate predecessor, groups the term in four categories denoted by the first letter in the three7letter abbreviation. 2nder the 3E45TERM 7EXW., the seller only ma)es the goods available to the buyer at the sellerDs o(n premises. It is the only one of that category. 2nder the 3F45TERM =,&", ,"*, @,5!>, the seller is called upon to deliver the goods to a carrier appointed by the buyer. 2nder the 3C45TERM =&,%, &I,, &-T, @ &I->, the seller has to contract for carriage, but (ithout assuming the ris) of loss or damage to the goods or additional cost due to events occurring after shipment or discharge. 2nder the 3D45TERM ='",, 'EF, 'E*, ''2 @ ''->, the seller has to bear all costs and ris)s needed to bring the goods to the place of destination. "ll terms list the sellerDs and buyerDs obligations. The respective obligations of both parties have been grouped under up to 10 headings (here each heading on the sellerDs side 3mirrors4 the e uivalent position of the buyer. Examples are 'elivery, Transfer of ris)s, and 'ivision of costs. This layout helps the user to compare the parties respective obligations under each Incoterms.

Export Documentation

Page #

EXPORT DOCUMENTS

"ny export shipment involved various documents re uired by various authorities such as customs, excise, %!I, Inspection and according depending upon the re uirements, there are categori?ed into 2 categories, namely commercial documents and regulatory documents. A8 Co%%erc+a' Docu%ent*8 : 5 &ommercial documents are re uired for effecting physical transfer of goods and their title from the exporter to the importer and the realisation of export sale proceeds. 5ut of the 1$ commercial documents in the export documentation frame(or) as many as 16 have been standardised and aligned to one another. These are proforma invoice, commercial invoice, pac)ing list, shipping instructions, intimation for inspection, certificate, of inspection of uality control, insurance declaration, certificateN of insurance, mateNs receipt, bill of lading or combined transport document, application for certificate origin, certificate of origin, shipment advice and letter to the ban) for collection or negotiation of documents. .o(ever, shipping order and bill of exchange could not be brought (ithin the fold of the "ligned 'ocumentation *ystem, 98 Co%%erc+a' In0o+ce: &ommercial invoice is an important and basic export document. It is also )no(n as a N'ocument of &ontentsN as it contains all the information re uired for the preparation of other documents. It is actually a sellerNs 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 (ith the contract of sale. Content* of Co%%erc+a' In0o+ce <ame and address of the exporter. <ame and address of the consignee. <ame and the number of Kessel or ,light. <ame of the port of loading.

Export Documentation

Page 10

<ame of the port of discharge and final destination. Invoice number and date. ExporterNs reference number. !uyerNs reference number and date. <ame of the country of origin of goods. <ame of the country of final destination. Terms of delivery and payment. 8ar)s and container number. <umber and pac)ing description. 'escription of goods giving details of internationally accepted price uotation. *ignature of the exporter (ith date. S+,n+f+cance of Co%%erc+a' In0o+ce uantity, rate and total amount in terms of

It is the basic document useful in preparation of various other shipping documents. It is used in various export formalities such as uality and pre7*hipment 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 (ell as importers. In*pect+on Cert+f+cate: 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 uality standards.

Mar+ne +n*urance po'+c2: +oods in transit are sub1ect to ris) 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. 8arine insurance policy is one of the most important document used as collateral security because it protects the interest of all those (ho have insurable interest at the time of loss. The exporter is bound to insure the goods in case of &I, uotation, but he can also insure the

Export Documentation

Page 11

goods in case of ,5! contract, at the re uest of the importer, but the premium payment (ill be made by the exporter. There are different types of policies such as SPECIFIC POLICY: This policy is ta)en to cover different ris)s for a single shipment. ,or a regular exporter, this policy is not advisable as he (ill have to ta)e a separate policy every time a shipment is made, so this policy is ta)en (hen exports are in fre uent. F'oat+n, Po'+c2: This is ta)en 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 rene(ed. Open Po'+c2: This policy remains in force until cancelled by either party i.e. insurance company or the exporter. Open Co0er Po'+c2: 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. In*urance Pre%+u%: 'iffers upon product to product and a number of such other factors, such as, distance of voyage, type and condition of pac)ing, etc. -remium for air consignments are lo(ered as compared to consignments by sea. <8 Con*u'ar In0o+ce: &onsular invoice is a document re uired mainly by the Jatin "merican countries li)e Genya, 2ganda, Tan?ania, 8auritius, <e( Oealand, 8yanmar, Ira , "ustralia, ,i1i, &yprus, <igeria, +hana, +uinea, Oan?ibar, etc. This invoice is the most important document, (hich 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, uality, 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 re uired to submit three copies of invoice to the &onsulate of the importing country concerned. The &onsulate of the importing country certifies them in return for fees. 5ne copy of the invoice is given to the exporter (hile the other t(o are dispatched to the customs office of the importerNs country for the calculation of the import duty.

Export Documentation

Page 12

The exporter negotiates a copy of the consular invoice to the importer along (ith other shipping documents.

S+,n+f+cance of Con*u'ar In0o+ce for t e Exporter It facilitates uic) clearance of goods from the customs in exporterNs as (ell as importerNs country. &ertificationN of goods by the &onsulate 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.

S+,n+f+cance of Con*u'ar In0o+ce for t e I%porter It facilitates uic) clearance of goods from the customs at the port destination and

therefore, the importer gets uic) delivery of goods. The importer is assured that the goods imported are not banned for imported in his country. S+,n+f+cance of Con*u'ar In0o+ce for t e Cu*to%* Off+ce It ma)es the tas) of the customs authorities easy. It facilitates uic) calculation of duties as the value of goods as determine by the

&onsulate is considered for the purpose. =8 Cert+f+cate of Or+,+n: The importers in several countries re uire a certificate of origin (ithout (hich clearance to import is refused. The certificate of origin states that the goods exported are originally manufactured in the country (hose name is mentioned in the certificate. &ertificate of origin is re uired (hen/7 The goods produced in a particular country are sub1ect toD preferential tariff rates in the foreign mar)et at the time importation.

Export Documentation

Page 1;

The goods produced in a particular country are banned for import in the foreign mar)et.

T2pe* of t e Cert+f+cate of Or+,+n 7a. Non5preferent+a' Cert+f+cate/ of Or+,+n/ 7 <on7preferential certificate of origin is re uired in general by all countries for clearance of goods by the importer, on (hich no preferential tariff is given. It is issued by/ P The authorised &hamber of &ommerce of the exporting country. Trade "ssociation. 5f the exporting country.

7>. Cert+f+cate of Or+,+n for a0a+'+n, Conce**+on* un&er ?SP /7 &ertificate of origin re uired for availing of concessions under +eneralised *ystem of -references =+*-> extended by certain, countries such as ,rance, +ermany, Italy, !E<EJ2A countries, 2G, "ustraliaQ Rapan, 2*", etc. This certificate can be obtained from specialised agencies, namelyQ 7c. Export Inspection "gencies. Rt. 'irector +eneral of ,oreign Trade.. &ommodity !oards and their regional offices. 'evelopment &ommissioner, .andicrafts. Textile &ommittees for textile products. 8arine -roducts Export 'evelopment "uthority for marine products. 'evelopment &ommissioners of E-Os Cert+f+cate for a0a+'+n, Conce**+on* un&er Co%%on@ea't Preference* 7CWP.: &ertificate of origin for the purpose of &ommon(ealth -reference is also )no(n as N&ombined &ertificate of 5rigin and KalueN. It is re uired by t(o member countries, i.e. &anada and <e( Oealand of the &ommon(ealth. ,or concession under &ommon(ealth preferences, the certificates or origin

Export Documentation

Page 16

have to be submitted in special forms obtainable, from the .igh &ommission of the country concerned. 7&. Cert+f+cate for a0a+'+n, Conce**+on* un&er ot er S2*te%* of Preference:5 &ertificate of origin is also re uired for tariff concessions. under the +lobal *ystem of Trade -references =+*T->, !ang)o) "greement=!"> and *""%& -referential Trading "rrangement =*"-T"> under (hich India grants and receives tariff concessions 5n imports and exports. Export Inspection &ouncil =EI&> is the sole authority to print blan) &ertificates of 5rigin under !", *""%& and *"-T" (hich can be issued by such agencies as E-&s, '&s of E-Os, EI&, "-E'", 8-E'", ,IE5, etc... Content* of Cert+f+cate of Or+,+n <ame and logo of chamber of commerce. <ame and address of the exporter. <ame and address of the consignee. <ame and the number of Kessel of ,light <ame of the port of loading. <ame of the port of discharge and place of delivery. 8ar)s and container number. -ac)ing and container description. Total number of containers and pac)ages. 'escription of goods in terms of uantity. *ignature and initials of the concerned officer of the issuing authority. *eal of the issuing authority.

S+,n+f+cance of t e Cert+f+cate of Or+,+n &ertificate of origin is re uired for availing of concessions under +eneralised *ystem of -references =+*-> as (ell as under &ommon(ealth -references =&0->.

Export Documentation

Page 1H

It is to be submitted to the customs for the assessment of duty clearance of goods (ith concessional duty. It is re uired (hen the goods produced in a particular country are banned for import in the foreign mar)et. It helps the buyer in adhering to the import regulations of the country. *ometimes, in order to ensures that goods bought from some other country have not been reshipped by a seller, a certificate of origin I* re uired.

A8

-+'' of La&+n,: The bill of lading is a document issued by the shipping company or its agent ac)no(ledging the receipt of goods on board the vessel, and underta)ing to deliver the goods in the li)e 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.

-+'' of La&+n, *er0e* t ree %a+n purpo*e*: "s a document of title to the goodsQ "s a receipt from the shipping companyQ and "s a contract for the transportation of goods.

T2pe* of -+'' of La&+n, C'ean -+'' of La&+n,: 5 " bill of lading ac)no(ledging receipt of the goods apparently in good order and condition and (ithout any ualification is termed as a clean bill of lading. C'au*e& -+'' of La&+n,: 5 " bill of lading ualified (ith certain adversere mar)s such as, Sgoods insufficiently pac)ed in accordance (ith the &arriage of +oods by *ea "ct,S is termed as a claused bill of lading. Tran* +p%ent or T rou, -+'' of La&+n,: 5 0hen the carrier uses other transport facilities, such as rail, road, or another steamship company in addition to his o(n, the carrier issues a through or transhipment bill of lading. Sta'e -+'' of La&+n,: 5 " bill of lading that has been held too long before it is passed on to a ban) for negotiation or to the consignee is called a stale bill of lading. Export Documentation Page 1$

Fre+, t Pa+& -+'' of La&+n,: 5 0hen freight is paid at the time of shipment or in advance, the bill of landing is mar)ed, freight paid. *uch bill of lading is )no(n as freight bill of lading. Fre+, t Co''ect -+'' of 'a&+n, :5 0hen the freight is not paid and is to be collected from the consignee on the arrival of the goods, the bill of lading is mar)ed, freight collect and is )no(n as freight collect bill of lading

Content* of -+'' of La&+n, <ame and logo of the shipping line. <ame and address of the shipper. <ame and the number of vessel. <ame of the port of loading. <ame of the port of discharge and place of delivery. 8ar)s and container number. -ac)ing and container description. Total number of containers and pac)ages, 'escription of goods in terms of uantity. &ontainer status and seal number. +ross (eight in )g. and volume in terms of cubic meters. "mount of freight paid or payable. *hipping bill number and date. *ignature and initials of the &hief 5fficer. .

S+,n+f+cance of -+'' of La&+n, for Exporter* It is a contract bet(een the shipper and the shipping company for carriage of the goods to the port of destination.

Export Documentation

Page 1L

It is an ac)no(ledgement indicating that the goods mentioned in the document have been received on board for the -urpose of shipment. " 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.

S+,n+f+cance of -+'' of La&+n, for I%porter* It acts as a document of title to goods, (hich is transferable endorsement and delivery. The exporter sends the bill of lading to the ban) of the importer so as to enable him to ta)e the delivery of goods. The exporter can give an advance intimation to the foreign buyer about the shipment of goods by sending him a non7negotiable copy of bill of lading S+,n+f+cance of -+'' of La&+n, for S +pp+n, Co%pan2 It is useful to the shipping company for collection of transport charges from the importer, if not collected from the exporter. B8 A+r@a2 -+'': "n air(ay bill, also called an air consignment note, is a receipt issued by an airline for the carriage of goods. "s each shipping company has its o(n bill of lading, so each airline has its o(n air(ay bill. "ir(ay !ill or "ir &onsignment <ote is not treated as a document of title and is not issued in negotiable form. Content* of A+r@a2 -+'' <ame of the airport of departure and destination.

Export Documentation

Page 1M

The names and addresses of the consignor, consignee and the first carrier. 8ar)s and container number. -ac)ing and container description. Total number of containers and pac)ages. 'escription of goods in terms of uantity. &ontainer status and seal number. "mount of freight paid or payable. *ignature and initials of the issuing carrier or his agent. I%portance of A+r@a2 -+'': It is a contract bet(een 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. *ince, it contains details about freight it also represents freight bill.

B8

S +p%ent A&0+ce to I%porter:5 "fter 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. .e should also send one copy of non7negotiable bill of lading to the importer.

C8

Pac)+n, L+*t: The exporter prepares the pac)ing list to facilitate the buyer to chec) the shipment. It contains the detailed description of the goods pac)ed in each case, their gross and net (eight, etc. The difference bet(een a pac)ing note and a pac)ing list is that the pac)ing note contains the particulars of the contents of an individual pac), (hile the pac)ing list is a consolidated statement of the contents of a number of cases or pac)s.

D8

-+'' of Exc an,e/ The instrument is used in receiving payment from the importer. The importer may prefer !ill of Exchange to J& as it does not involve bloc)ing of funds. " bill of exchange is dra(n by the exporter on the importer, to ma)e payment on demand at sight or after a certain period of time. !EE is a means to collect payment. !EE is a means to demand payment. !EE is a means to extent the credit. !EE is a means to promise the payment.

Export Documentation

Page 1#

!EE is an official ac)no(ledgement of receipt of payment. ,inancial documents perform the function of obtaining the finance collection of payment etc. 2 sets. Each one bearing the exclusion clause ma)ing the other part of the draft invalid. *ight !EE. 2sance !EE. It is )no(n as draft. Immediate payment T *ight draft. There are t(o copies of draft. Each one bears reference to the other part "@!. (hen any one of the draft is paid, the second draft becomes null and void.

Part+e* to >+'' of exc an,e8 98 The dra(er/ The exporter E person (ho dra(s the bill. :8 The dra(ee/ The importer E person on (hom the bill is dra(n for payment. ;8 The payee/ The person to (hom payment is made, generally, the exporter E supplier of the goods. ! Aux+'+ar2 Docu%ent*: These documents generally form the basic documents based on (hich the commercial and or regulatory documents are prepared. These documents also do not have any fixed formats and the number of such documents (ill (ary according to individual re uirements. 98 Profor%a In0o+ce: 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 uotation given as a reply to an in uiry. It normally forms the basis of all trade transactions. Content* of Profor%a In0o+ce

Export Documentation

Page 20

<ame and address of the exporter. <ame and address of the importer. 8ode of transportation, such as *ea or "ir or 8ultimodal transport. <ame of the port of loading. <ame of the port of discharge and final destination. -rovisional invoice number and date. ExporterNs reference number. !uyerNs reference number and date. <ame of the country of origin of goods. <ame of the country of final destination. 8ar)s and container number. . <umber and pac)ing description. 'escription of goods giving details of uantity, rate and total amount in terms of internationally accepted price uotation. *ignature of the exporter (ith date.

I%portance of Profor%a In0o+ce :8 It forms the basis of all trade transactions. It may be useful for the importer in obtaining import licence or foreign exchange.

Int+%at+on for In*pect+on: 0henever the consignment re uires the pre7shipment inspection, necessary application is to be made to the concerned inspection agency for conducting the inspection and issue of certificate thereof.

;8

Dec'arat+on of In*urance: 0here the contract terms re uire 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 (ill cover/ <ame of the shipper U exporter. <ame @ address of buyer.

Export Documentation

Page 21

'etails of goods such as pac)ages, uantity, value in foreign currency as (ell as in Indian %s. Etc. <ame of the Kessel U "ircraft. Kalue for (hich insurance to be covered.

<8 App'+cat+on of t e Cert+f+cate Or+,+n: In case the exporter has to obtain &ertificate of 5rigin from the concerned authorities, an application has to be made to the concerned authority (ith re uired documents. 0hile the simple invoice copy (ill do for getting &U5 from the chamber of commerce, in respect of obtained the same from the office of the Textile &ommittee or Export -romotion &ouncil, the documents re uirement are different. =8 MateE* Rece+pt/ 8ateNs receipt is a receipt issued by the &ommanding 5fficer of the ship (hen the cargo is loaded on the ship. The mateNs receipt is a prima facie evidence that goods are loaded in the vessel. The mateNs receipt is first handed over to the -ort Trust "uthorities. "fter ma)ing payment of all port dues, the exporter or his agent collects the mateNs receipt from the -ort Trust "uthorities. The mateNs receipt is freely transferable. It must be handed over to the shipping company in order to get the bill of lading. !ill of lading is prepared on the basis of the mateNs receipt. T2pe* of MateE* Rece+pt* C'ean MateE* Rece+pt: 5 The &ommanding 5fficer of the ship issues a clean mateNs receipt, if he is satisfied that the goods are pac)ed properly and there is no defect in the pac)ing of the cargo or pac)age. 1ua'+f+e& MateE* Rece+pt: 5 The &ommanding 5fficer of the ship issues ualified mateNs receipt, (hen the goods are not pac)ed properly and the shipping company does not ta)e any responsibility of damage. to the goods during transit. Content* of MateE* Rece+pt <ame and logo of the shipping line. <ame and address of the shipper. <ame and the number of vessel.

Export Documentation

Page 22

<ame of the port of loading. <ame of the port of discharge and place of delivery. 8ar)s and container number. -ac)ing and container description. Total number of containers and pac)ages. 'escription of goods in terms of uantity. &ontainer status and seal number. +ross (eight in )g. and volume in terms of cubic meters. *hipping bill number and date. *ignature and initials of the &hief 5fficer.

S+,n+f+cance of MateE* Rece+pt It is an ac)no(ledgement 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. !ill of lading, (hich is the title of goods, is prepared on the basis of the mateNs receipt. It enables the exporter to clear port trust dues to the -ort Trust "uthorities.

O>ta+n+n, MateE* Rece+pt The goods are then loaded on board the ship for (hich the 8ate or the &aptain of the ship issues 8ateNs %eceipt to the -ort *uperintendent. A8 S +pp+n, or&er: it is issued by the *hippingE&onference Jine intimating the exporter about the reservation of space for shipment of cargo (hich the exporter intends to ship. 'etails of the vessel, poet of the shipment, and the date on (hich the goods are to be shipped are mentioned. This order enables the exporter to ma)e necessary arrangements for customs clearance and loading of the goods. B8 S +pp+n, In*truct+on*: at the pre7shipment stage, (hen the documents are to sent to the &." for customs clearance, necessary instructions are to be give (ith relevance to

Export Documentation

Page 2;

The export promotion scheme under (hich goods are to be exported. <ame of the specific vessel on (hich the goods are to be loaded. If goods are to be ,&J or J&J. If freight amount are to be paid E collected. If shipment are covered under ".%.E.71 procedure. Instructions for obtaining !ill of Jading etc.

C8 -an) 'etter for ne,ot+at+on of &ocu%ent*: at the post shipment stage, the exporter has to submit the documents to a ban) for negotiation or discounting or collection for for(arding the same to the customer and also for reali?ation of export proceeds. The ban) letter is the set of instruction for the ban) as to ho( to handle the documents by them and by the ban) at the buyerDs country (hich may include <ame and address of the buyer. 'etails of various documents being sent and the number of the copies thereof. <ame and address of the buyerDs ban) if available. If the documents are sent JE& or on open terms. If the proceeds are to ad1usted against any pre7shipment pac)ing credit loan. If the bill amount is to be ad1usted against any for(ard exchange cover. In case of credit bill (ho has to bear the interest, either exporter or if the same is to be collected from the buyer. Instructions in case non7acceptanceEnon7payment by the buyer. C8 Re,u'ator2 Docu%ent: %egulatory pre7shipment export documents are prescribed by the different government departments and bodies in order to comply (ith various rules and regulations under the relevant la(s governing export trade such as export inspection, foreign exchange regulation, ex port trade control, customs, etc. 5ut of # regulatory documents four have been standardised and aligned. These are shipping bill or bill of export, exchange control declaration

Export Documentation

Page 26

=+% from>, export application doc) challan or port trust copy of shipping bill and receipt for payment of port charges. 98 S +pp+n, -+'': *hipping bill is the main customs document, re uired by the customs authorities for granting permission for the shipment of goods. The cargo is moved inside the doc) area only after the shipping bill is duly stamped, i.e. certified by the customs. *hipping bill is normally prepared in five copies /7 &ustoms copy. 'ra(bac) copy. Export promotion copy. -ort trust copy. ExporterNs copy.

T2pe* of S +pp+n, -+'' !ased on the incentives offered by the government, customs authorities have introduced three types of shipping bills/7 Dra@>ac) S +pp+n, -+'': 5 'ra(bac) shipping bill is useful for claiming the customs dra(bac) against goods exported. Dut+a>'e S +pp+n, -+''/ 7 'utiable shipping bill is re uired for goods (hich are sub1ect to export duty.

Export Documentation

Page 2H

Dut25free S +pp+n, -+'': 5 'uty7free shipping bill is useful for exporting goods on (hich there is no export duty.

In order to facilitate easy recognition and uic) processing, follo(ing colours have been provided to different )inds of shipping bills / T2pe* of ,oo&* 'ra(bac) shipping bill 'utiable shipping bill 'uty7,ree shipping bill Content* of S +pp+n, -+'' <ame and address of the exporter. <ame and address of the importer. <ame of the vessel, master or agents and flag. <ame of the port at (hich goods are to be discharged. &ountry of final destination. 'etails about pac)ages, description of goods, mar)s and numbers, uantity and details of each case. ,5! price and real value of goods as defined in the *ea &ustoms "ct. 0hether Indian or foreign merchandise to be re7exported Total number of pac)ages (ith total (eight and value. -2 Sea +reen Iello( 0hite -2 A+r +reen -in) -in)

S+,n+f+cance of S +pp+n, -+'' a. *hipping bill is the main customs document, re uired by the customs authorities for granting permission for the shipment of goods. >. The cargo is moved inside the doc) area only after the shipping bill is duly stamped, i.e. certified by the customs. c. 'uly endorsed shipping bill is also necessary for the collection of export incentives offered by the government.

Export Documentation

Page 2$

&. It is useful to the &ustoms "ppraiser (hile determining the actual value of goods exported. :8 A8R8E8 9 for% 7Centra' exc+*e.: this form "%E71 is prescribed under &entral 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 (ithout payment of duty. In both the events the goods are to be cleared under form ".%.E71 (hich (ill sho( 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 &entral Excise officials etc. ;8 Exc an,e Contro' &ec'arat+on For% 7?RFPPFSOFTEX.: under the exchange control regulations all exporters must declare the details of shipment for monitoring by the %eserve !an) of India. ,or this purpose, %!I has prescribed different forms for different types of shipments li)e +%I, -- forms etc. These declaration forms must be presented to the customs officials at the time of passing of export documentation. 2nder the E'I processing of shipping bill in the customs, these forms have been dispensed (ith and a ne( form *', has to be submitted to the customs in the place of above forms. <8 Export App'+cat+on: this is the application to be made to the customs officials before shipment of goods. The prescribed form of the application is the *hipping !illE!ill of Export. 'ifferent types are re uired for shipment li)e ex7bond, duty free goods, and dutiable goods and for export under different export promotion schemes such as claims for duty dra(bac) etc. =8 Ge +c'e T+c)etFCart T+c)etF?ate Pa** etc8: before the goods are being ta)en 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 -ort Trust "uthority. This document (ill contain the detail of the export cargo, name and address of the shippers, lorry number, mar)s and number of the pac)ages, driverDs licence details etc. A8 -an) Cert+f+cate of Rea'+*at+on: this is the form prescribed under the ,oreign Trade -olicy, (herein the negotiating ban) declares the fob value of exports and for the date of

Export Documentation

Page 2L

realisation of the export proceeds. This certificate is re uired fore obtaining the benefit under various schemes and this value of fob is rec)oned as fob value of exports. D8 Ot er Docu%ent: -'ac) L+*t Cert+f+cate: it certifies that the shipEaircraft carrying the cargo has not touched the particular country on its 1ourney or that the goods are not from the particular country. This is re uired by certain nations (ho have strained political and economical relations (ith the so called 3!lac) Jisted &ountries4. Lan,ua,e Cert+f+cate: Importers in the European &ommunity re uire a language certificate along (ith the +*- certificate in respect of handloom cotton fabrics classifiable under <"8EA code HH.0#. +enerally four copies of language certificate are prepared by the concerned authority (ho issues +*- certificate. Three copies are handed over to the exporter. " copy is sent along (ith the other documents for realisation of export proceeds. Fre+, t Pa2%ent Cert+f+cate: in most of the cases, the !EJ or "0! (ill mention the transportation and other related charges. .o(ever if the exporter does not (ant 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 sho(ing the freight payment is called the freight certificate. In*urance Pre%+u% Cert+f+cate: this is the certificate issued by the Insurance &ompany as ac)no(ledgement of the amount of premium paid for the insurance cover. This certificate is re uired by the ban) for arriving at the fob value of the goods to be declared in the ban) certificate of realisation. Co%>+ne& Cert+f+cate of Or+,+n an& Ga'ue: this certificate is re uired by the &ommon(ealth &ountries. This certificate is printed in a special (ay by the &ommon(ealth &ountries. This certificate should contain special details as to the origin and value of goods, (hich are useful for determining import duty. "ll other

Export Documentation

Page 2M

details are generally the same as that of &ommercial Invoice, such as name of the exporter and the importer, uality and uantity of the goods etc. Cu*to%* In0o+ce: this is re uired by the countries li)e &anada, 2*" for imposing preferential tariff rates. Le,a'+He& In0o+ce: this is re uired by the certain Jatin "merican &ountries li)e 8exico. It is 1ust li)e consular invoice, (hich re uires certification from &onsulate or authorised mission, stationed in the exporterDs country. Spec+a' Pro0+*+on un&er Un+for% Cu*to%* an& pract+ce for Docu%entar2 Cre&+t UCP5=II/ for Co%%erc+a' In0o+ce8 Art+c'e5;B: &ommercial Invoice o 8ust appear on their face to be issued by the beneficiary named in the credit. o 8ust be made out in the name of the applicant. o <eed not be signed !an)s may refuse &ommercial Invoice issued for amounts in excess of the amount permitted by the credit except other(ise stated. The description of the goods in the commercial invoice must correspond (ith the description of the credit. In all other documents the goods may be described in the +eneral in general terms not inconsistent (ith description in the credit. In all documents goods may be described in general terms not inconsistent (ith the 'escription of the goods in the credit. Pre5S +p%ent Docu%ent*: *hipping bill. Export orderE*ales contractE-urchase order. Jetter of &redit

Export Documentation

Page 2#

&ommercial invoice. -ac)ing list. &ertificate of origin. +uaranteed %emittance =+.%E*',E--E*5,TEA>,or *',. &ertificate of Inspection. Karious declarations re uired as per custom procedure.

Exc an,e Contro' Dec'arat+on For%: all exports to (hich the re uirement of declaration apply must be declared on appropriate forms as indicated belo( unless the consignment is of samples and of C<o &ommercial KalueD ?R FORM: to be completed in duplicate for exports other(ise than by post including export of soft(are in physical form i.e. magnetic tapeEdiscs and paper media. SDF FORM: to be completed in duplicate and appended to the *hipping !ill for export declare to the customs offices notified by the &entral +overnment (hich have introduced E'I system for processing *hipping !ill. PP FORM: to be completed in duplicate for export by post. SOFTX: to be completed in triplicate for export of soft(are other(ise than in the physical form i.e. magnetic tapesEdiscs and paper media.

T e*e for%* are a0a+'a>'e for *a'e +n Re*er0e -an) of In&+a Export declaration forms have utmost importance and are binding on the exporters. It is, therefore, necessary that enough care is ta)en (hile declaring exports on these forms, (ith special reference on the follo(ing points.

Export Documentation

Page ;0

<ame and address of the authorised dealer through (hom proceeds of exports have been or (ill be reali?ed should be specified in the relevant column of the form. 'etails of commission and discount due to foreign agent or buyer should be correctly declared other(ise difficulties may arise at the time of remittance of such commission.

It should be clearly indicated in the form (hether the export is on Coutright sale basisD or Con consignment basisD and irrelevant clauses must be stuc) out 2nder the term Canalysis of full export valueD a brea) up of full export value of goods under ,.5.! value, freight and insurance should be furnished in all cases, irrespective of the terms of contract.

"ll documents relating to the export of goods from India must pass through the medium of an authorised dealer in foreign exchange in India (ithin 21 days of shipment.

The amount representing the full export value of goods must be reali?ed (ithin six months from date of shipment.

D+*po*a' of Cop+e* of Export Docu%entat+on For% +% forms covering export of goods other than 1e(ellery should be completed by the exporter in duplicate and both the copies should be submitted to customs at the port of *hipment. &ustoms (ill give their running serial number on both the copies of the +% forms after verifying the particulars and admitting the corresponding shipping bill. The value declared by the exporter (ill also be verified by the customs and they (ill also record the assessed value. 'uplicate copy (ill be returned to the exporter and the original (ill be remained by the customs for on(ard submission to the %eserve !an). 'uplicate form of the +% form (ill again be presented to the customs at the time of actual shipment. "fter examination of goods and certifying the uantity passed for shipment the duplicate copy (ill again be returned to exporter for submission to an authorised dealer. .o(ever, an exception to submission of +% forms to the &ustoms authorities have been made in case of deep sea fishing.

Export Documentation

Page ;1

7a. -- forms are to be first presented to an authorised dealer for countersignature. The form (ill be countersigned by the authorised dealer only if the post parcel is addressed to his branch or correspondent ban) 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) ,or post parcel addressed directly to the consignee, the authorised dealer

(ill countersign the form, provided B =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 concernedQ or =ii> the full value of shipment has been received in advance by the exporter through an authorised dealerQ or =iii> 5n receipt of full value of shipment declared on this form the authorised dealer (ill for(ard to %!I the duplicate copy along (ith the certified copy of shipperDs invoice. =iv> The authorised is satisfied on the basis of standing and trac) 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 re1ected. <o reference is entertained by the %eserve !an) in such cases. (c) The original -- form countersignature (ill be returned to the exporter by the authorised dealer and the duplicate (ill be retained by him. 5riginal -form should then be submitted to the post office along (ith the parcel. The post office through the goods have been dispatched (ill for(ard the original to %!I. The export of computer soft(are may be underta)en in physical form i.e. soft(are prepared on magnetic tape and paper media as (ell as in non7physical form by direct data transmission through dedicated earth stationsEsatellite lin)s. The export of computer soft(are in physical form is sub1ect to normal declaration on +%E-- form and regulations applicable there to (ill also be applicable to such

Export Documentation

Page ;2

exports. .o(ever, export of non7physical form should be declared on *5,TEA ,orm. !esides computer soft(are, export of video E T.K. *oft(are and all other types of soft(are products E pac)ages should also be declared on the *5,TEA forms. *ince export of soft(are is fraught (ith many ris)s and special guidelines have been framed for handling such exports.

Export Documentation

Page ;;

Export Documentation

Page ;6

Export Documentation

Page ;H

Export Documentation

Page ;$