Exports documentation/procedures basics

8/9/2019 Exports documentation/procedures basics

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exportsexportsFrom India to other countriesFrom India to other countries


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ExportsExports--increase in revenueincrease in revenue

Exports contribute to a major extent in increasing revenue toExports contribute to a major extent in increasing revenue tothe country at the same increase profitability to thethe country at the same increase profitability to themanufacturer or the trader which in turn createsmanufacturer or the trader which in turn createsemployment in multifoldemployment in multifold,,

but the only factor that comes is being in India we do findbut the only factor that comes is being in India we do find

some parties who are trouble some, but how can we trust asome parties who are trouble some, but how can we trust afirm which is far away and concerned persons are never metfirm which is far away and concerned persons are never metbefore, then how about my security?before, then how about my security?

as generally huge amounts are involved this can be a debacleas generally huge amounts are involved this can be a debacleif something goes wrong in the transaction?if something goes wrong in the transaction?


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ECGCECGC

This is where your tension is eased ,ECGCThis is where your tension is eased ,ECGCIndia, established in 1957 takes care ofIndia, established in 1957 takes care ofvarious risks involved in export business itvarious risks involved in export business it

offers credit risk insurance cover foroffers credit risk insurance cover forexporters against loss in export of goodsexporters against loss in export of goodsor servicesor services

1 standard policy1 standard policy 2 small exporters policy( turn over not2 small exporters policy( turn over not

exceeds 50 lacs /year.)exceeds 50 lacs /year.)


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3 specific shipment policy3 specific shipment policy

4 export (specific buyers) policy4 export (specific buyers) policy

5 export turn over policy5 export turn over policy

6 exposure single buyers policy6 exposure single buyers policy

7 exposure multi buyers policy7 exposure multi buyers policy


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8 consignment exports policy8 consignment exports policy

9Cinsignment exports (stock holding9Cinsignment exports (stock holding

agent) policyagent) policy10 service policy (service industries)10 service policy (service industries)

11specific contract for supply contract11specific contract for supply contract

A specific shipment (s) policyA specific shipment (s) policy B specific contract policyB specific contract policy


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12 software project policy12 software project policy

These different policies are depended uponThese different policies are depended upontype of exports and situations of countriestype of exports and situations of countriesthe products are being exportedthe products are being exported

The following risks are covered dependingThe following risks are covered dependingon the policies we opt as per our needs inon the policies we opt as per our needs in

generalgeneralA.A. commercial riskscommercial risks

B. political risksB. political risks


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A.A. commercial riskscommercial risks--Insolvency of the buyerInsolvency of the buyer

Failure of the buyer to make the payment due within aFailure of the buyer to make the payment due within aspecified period normally 4 months from the date ofspecified period normally 4 months from the date ofissueissue

Buyers failure to accept the goods, subject to certainBuyers failure to accept the goods, subject to certainconditionsconditions


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B.B. political riskspolitical risks--

Imposition of restriction by the governmentImposition of restriction by the governmentof the buyers country or any governmentof the buyers country or any government

action, which may block or delay theaction, which may block or delay thetransfer of payment made by the buyertransfer of payment made by the buyerwar, civil war, revolution or civilwar, civil war, revolution or civildisturbances in the buyers country ,newdisturbances in the buyers country ,newimport restrictions or cancellations of aimport restrictions or cancellations of avalid import license in the buyers countryvalid import license in the buyers country


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Political risks (contd)Political risks (contd)

Interruption or diversion of voyage outsideInterruption or diversion of voyage outsideIndia resulting in payment of additionalIndia resulting in payment of additional

freight or insurance charges which canfreight or insurance charges which cannot be recovered from the buyernot be recovered from the buyer

Any other cause of loss occurring outsideAny other cause of loss occurring outsideIndia not normally insured by generalIndia not normally insured by general

insurers and beyond the control of bothinsurers and beyond the control of bothexporter and the buyerexporter and the buyer


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Status certificatesStatus certificates (govt. export performance certificates)(govt. export performance certificates)

Category totalCategory total-- FOB/FOR value during the precedingFOB/FOR value during the precedingthree licensing years (in Rs)three licensing years (in Rs)

EXPORT HOUSEEXPORT HOUSE -- 45 CRORE45 CRORE

TRADING HOUSETRADING HOUSE -- 300 CRORE300 CRORE

STAR TRADING HOUSESTAR TRADING HOUSE --1500 CRORE1500 CRORE

SUPER STAR TRADING HOUSESUPER STAR TRADING HOUSE-- 600CRORE600CRORE


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Are you relaxed now?Are you relaxed now?

You should be by now because when you take aYou should be by now because when you take arisk you will be concerned about your security ofrisk you will be concerned about your security ofthe stock or about currency expectationsthe stock or about currency expectations

but thats not allbut thats not all----------------------------

1.We have to register for IEC (import export code)1.We have to register for IEC (import export code)from DGFT (director general of foreign trade)from DGFT (director general of foreign trade)

2.Registration cum membership certificate (RCMC)2.Registration cum membership certificate (RCMC)from export promotion councilfrom export promotion council

3.Registration with ECGC3.Registration with ECGC


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But think! Can we export?But think! Can we export?

Are the products we do businness areAre the products we do businness areexport worthyexport worthy

Are these products are recognised by theAre these products are recognised by thegovt for exportsgovt for exports

If yes any restrictions by the govt onIf yes any restrictions by the govt onthese productsthese products

What is the demand of these products inWhat is the demand of these products inother countriesother countries


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Possible nearest country where we canPossible nearest country where we canstart doing business to begin withstart doing business to begin with

Present production capacity and fullPresent production capacity and fullcapacity to meet the required demand forcapacity to meet the required demand forgoods to be delivered in timegoods to be delivered in time

Are we up to the quality standards toAre we up to the quality standards to

export our productsexport our productsAre we ready to upgrade our machineryAre we ready to upgrade our machinery

to meet standards if requiredto meet standards if required


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contdcontd Are we in a position to wait if there is delay in payments dueAre we in a position to wait if there is delay in payments dueto various reasons in order to run the show with out anyto various reasons in order to run the show with out any

hindrance (financially )hindrance (financially )

An importer sends us an enquiry basing on follow up to send aAn importer sends us an enquiry basing on follow up to send aquotation mentioning details of products ,price, quality,quotation mentioning details of products ,price, quality,

mode of delivery terms and conditions if anymode of delivery terms and conditions if anyAny importer will be asking the samples to gain confidence onAny importer will be asking the samples to gain confidence on

the quality and to meet his requirements here we actuallythe quality and to meet his requirements here we actuallymake the beginning in the exports proceduresmake the beginning in the exports procedures

Enough care has to be taken for the shipment of samples asEnough care has to be taken for the shipment of samples as

that is going to decide your future in exports because qualitythat is going to decide your future in exports because qualityand specifications should be intact in order to get betterand specifications should be intact in order to get betterresultsresults


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You have done it, what next?You have done it, what next?

Your product has been approved by theYour product has been approved by theimporter ofX country now you are in allimporter ofX country now you are in all

smilessmiles


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Export proceduresExport procedures

1 Indent1 Indent --(with all the details as told mode of payment is(with all the details as told mode of payment isalso mentioned generally on L/C)also mentioned generally on L/C)

2 Pro forma invoice2 Pro forma invoice --(for clarification on total amount on(for clarification on total amount onforeign currency and other costs involved for shippingforeign currency and other costs involved for shippingetc)etc)

3 Export invoice3 Export invoice-- (with complete details like invoice(with complete details like invoicenumber, date, buyers indent /purchase order, address ofnumber, date, buyers indent /purchase order, address ofexporter, address of consignee, address of buyer,exporter, address of consignee, address of buyer,description of goods ,price, quantity ,gross weight, netdescription of goods ,price, quantity ,gross weight, netweight, packing ,country of origin, marks flight, port ofweight, packing ,country of origin, marks flight, port ofloading, destination, route of travel, payment terms, etc)loading, destination, route of travel, payment terms, etc)


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contdcontd 4Consular invoice this invoice is signed by consul of the4Consular invoice this invoice is signed by consul of the

importers country (U S,CANADA)importers country (U S,CANADA)

5Customs invoice special form prescribed by custom5Customs invoice special form prescribed by customauthorities of importing country and helps for allowingauthorities of importing country and helps for allowingentry of goods in the importing country at preferential ratesentry of goods in the importing country at preferential rates(U S ,CANADA)(U S ,CANADA)

6Legalized/visaed invoice6Legalized/visaed invoice--invoices sworn for theirinvoices sworn for theirgenuineness by the seller as being correct by thegenuineness by the seller as being correct by theconsulate/embassy they bear the stamp and authencationconsulate/embassy they bear the stamp and authencationof the consulate/chapter of commerce/embassy as being inof the consulate/chapter of commerce/embassy as being inorderorder

7 COA7 COA-- (certificate of analysis of the product, bath number,(certificate of analysis of the product, bath number,manufacturing date, date of expiry), pyrogen(fever) freemanufacturing date, date of expiry), pyrogen(fever) freereport if requiredreport if required


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contdcontd 8 Packing list8 Packing list --(invoice number ,date, indent/purchase order number,(invoice number ,date, indent/purchase order number,

address of exporter, address of consignee ,address of buyer, pre carriage by,address of exporter, address of consignee ,address of buyer, pre carriage by,vessel/flight number, port of discharge , port of loading ,final destination,vessel/flight number, port of discharge , port of loading ,final destination,marks and numbers container numbers, number and kind of packages,marks and numbers container numbers, number and kind of packages,description of goods, quantity, remarks, etcdescription of goods, quantity, remarks, etc

9 L/C9 L/C-- ((letter of credit details as per the contract between the importerletter of credit details as per the contract between the importerand exporter) payment terms are mentioned,and exporter) payment terms are mentioned,

10ARE1,CT110ARE1,CT1-- forms duly filled meant for tax exemption for export offorms duly filled meant for tax exemption for export of

goods,goods,form Nform N required for octrai in mumbairequired for octrai in mumbai

11Drug license copy ,factory license copy ,GMP certificate copy,11Drug license copy ,factory license copy ,GMP certificate copy,income tax PAN numberincome tax PAN number


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Export value declaration12

Export value declaration-- value of currency involved in thevalue of currency involved in thecountry of exportcountry of export

13 SDF (self declaration form)13 SDF (self declaration form)it is the declaration under foreignit is the declaration under foreignexchange regulation act, declaring that the value as contracted withexchange regulation act, declaring that the value as contracted withthe buyer is same as the full export value in the shipping bills ,the buyer is same as the full export value in the shipping bills ,

14 Shippers certificate14 Shippers certificate forfor non hazardous cargonon hazardous cargo (declaring that(declaring thatthe products are not listed under current edition of IATA/dangerousthe products are not listed under current edition of IATA/dangerousgoods regulationsgoods regulations--DGR)DGR)

15Certificate of origin15Certificate of origin that the product is manufactured in thisthat the product is manufactured in thiscountry where the company is situated( issued through chamber ofcountry where the company is situated( issued through chamber ofcommerce in the country concerned)commerce in the country concerned)


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16Draw back/AIR drawback/section 74 drawback/advance16Draw back/AIR drawback/section 74 drawback/advancelicense/ duty entitlement pass book scheme (depb)/exportlicense/ duty entitlement pass book scheme (depb)/exportpromotion capital goods scheme (epcg). various schemespromotion capital goods scheme (epcg). various schemesavailable to claim the duty free on export goodsavailable to claim the duty free on export goods

17 Incoterms international commercial terms17 Incoterms international commercial terms-- this is thethis is thedeclaration given by the exporter that who is going to pay what kind ofdeclaration given by the exporter that who is going to pay what kind ofexpenses (exporter and importer) from embarkation to debarkationexpenses (exporter and importer) from embarkation to debarkationdepending on the contract upon by the importer and exporterdepending on the contract upon by the importer and exporter likelike exexworks (EXW), free carrier (FCA), free along side shipworks (EXW), free carrier (FCA), free along side ship(FAS),free on board (FOB), cost and frieght (CFR),cost(FAS),free on board (FOB), cost and frieght (CFR),costinsurance and frieght (CIF), cost and insurance (CI), carriageinsurance and frieght (CIF), cost and insurance (CI), carriagepaid to (CPT),carriage and insurance paid (CIP) , deliverd atpaid to (CPT),carriage and insurance paid (CIP) , deliverd atfrontier (DAF), deliverd ex ship (DES), deliverd ex quayfrontier (DAF), deliverd ex ship (DES), deliverd ex quay(DEQ),deliverd duty unpaid (DDU), deliverd duty paid (DDP)(DEQ),deliverd duty unpaid (DDU), deliverd duty paid (DDP),,generally FOB ,CPT,CIP,CFR,CIF ,FCA are commonly used which is togenerally FOB ,CPT,CIP,CFR,CIF ,FCA are commonly used which is tobe mentioned in the export invoice along with payment termsbe mentioned in the export invoice along with payment terms


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18 Shipping bill/bill of landing18 Shipping bill/bill of landing issued by shipping agent for theissued by shipping agent for theships owner responsibility to take the goods from one place toships owner responsibility to take the goods from one place toanother for the seller documentary proof that the merchandiseanother for the seller documentary proof that the merchandisewas shipped in a certain vessel ,in certain conditions and consigneewas shipped in a certain vessel ,in certain conditions and consignee

to certain buyer including merchandise conditions characteristicsto certain buyer including merchandise conditions characteristicsand quantity ,for the buyer the necessary document for claim theand quantity ,for the buyer the necessary document for claim themerchandisemerchandise

19 air way bill19 air way bill a reciept issued by international courier companya reciept issued by international courier companyand an evidence of the contract of carriageand an evidence of the contract of carriage


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20 marine insurance20 marine insurance--A specific policy, B open cover policy C customA specific policy, B open cover policy C customduty cover policy depending on type of shipment, country andduty cover policy depending on type of shipment, country andnumber of shipments risk coverage's the policies are being designednumber of shipments risk coverage's the policies are being designed

21 customs declaration21 customs declaration letter to the customs authority producingletter to the customs authority producingthe filled all necessary documents (originals with copies) ready for thethe filled all necessary documents (originals with copies) ready for theexport of goodsexport of goods

2222--original copies of all the documents related have to beoriginal copies of all the documents related have to be

sent to the consignee, generally the consignee is the banksent to the consignee, generally the consignee is the bankwho in turn informs the importer to pay the amount andwho in turn informs the importer to pay the amount andcollect the documents to release the good from the designatedcollect the documents to release the good from the designatedplaceplace


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2323-- And also most important thing is some countries ask forAnd also most important thing is some countries ask fordifferent set of forms like form 7,form9,form3 etc which havedifferent set of forms like form 7,form9,form3 etc which haveto be sent along with the documentsto be sent along with the documents

2424--bonds and surety/security may be required to bebonds and surety/security may be required to beprovided to authority of customs and central excise forprovided to authority of customs and central excise forclaiming duty exemption ,generally B1 general bond is usedclaiming duty exemption ,generally B1 general bond is usedfor this purpose,B17 bond is used by EOU/EHTP/STP unitsfor this purpose,B17 bond is used by EOU/EHTP/STP units

2525--payment terms in general T.T (telegraphic transfer or cashpayment terms in general T.T (telegraphic transfer or cash

advance) ,L/C at sight given by the buyers bank that theyadvance) ,L/C at sight given by the buyers bank that theywill pay for the goods exported, CAD cash against documentwill pay for the goods exported, CAD cash against document,mentioned in the L/C,mentioned in the L/C

and to be mentioned in the export invoiceand to be mentioned in the export invoice


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26 types of credit (L/C)26 types of credit (L/C) irrevocable L/C, unconfirmed L/C,irrevocable L/C, unconfirmed L/C,confirmed L/C, standby L/C ,revolving L/C, transferable L/C, backconfirmed L/C, standby L/C ,revolving L/C, transferable L/C, backto back L/Cto back L/C

Just keep in mind all is not that easy and nothing is impossible as longJust keep in mind all is not that easy and nothing is impossible as longas we take necessary precautions in documentations as per theas we take necessary precautions in documentations as per thecontract and quality specifications are met up to the standardscontract and quality specifications are met up to the standards,sufficient insurance coverage is given to take care of the goods it,sufficient insurance coverage is given to take care of the goods itwill be a good beginning and a successful journey towards a greatwill be a good beginning and a successful journey towards a greatachievements in the businessachievements in the business

wish you good luckwish you good luck

Thank youThank youKrishnaKrishna

(corrections are well come in any manner please free to send your(corrections are well come in any manner please free to send youropinions on these slides)opinions on these slides)

Documents

Exports documentation/procedures basics