Mr Babu Ezhumavil

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PRESENTED BYEXIM BITS

(AN INSIGHT INTO EXIM MATTERS)

UNDERSTANDING

EXPORTDOCUMENTATION


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IMPORTANCE OF EXPORT

DOCUMENTATION

Documentation plays a vital role in internationalbusiness to facilitate flawless transactions andmovements of goods across national frontiers.

Follow certain formalities and procedures with the

help of various documents.

Documents are prescribed with specific purposesand therefore carries its own significance.

If the purpose and preparation are understoodalongwith its timings and number of copiesrequired, when and where to file, the process

becomes very easy and speedy.

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Export Documentation

Manual Documentation has become a themeof past.

It lacked proper co-ordination, causingdelays and mistakes, rendering the task veryclumsy, tiresome, repetitive, and trulyfrustrating.

An Internationally accepted ADS (AlignedDocumentation System) came into being in1991

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Complex documentation due to number of agencies Take help of anybody either CHA or EPCs or

Consultants no shame Row starts from Buyers, Buyers agents, Bank (Both

foreign and India) Excise, Customs, DGFT, otherdisbursing agencies such as APEDA and PortAuthorities, VAT Insurance Companies, Inspection

Agencies, Clearing and Forwarding Agents,Shipping Companies/Airlines and Inland Carriersetc. and no end.

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Proper Documentation can save time and moneywhich ensures hurdle-free transactions to enjoysuccess in business.

Accuracy is the key word so dont leave documents

inaccurate or incomplete. It will cause seriousfinancial losses and damage the goodwill not of thatparticular person, but the whole countrys.

So a clear understanding of documents purpose-wise is essential. Even keep alert on documents thatare to be received from agencies.

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Categories of Export Documents

Primary 4 categories:(1) Commercial (2) Regulatory

(3) Incentives Documents (4) Buyers requirements

(1) Commercial Documents: to dischargetheir respective legal and other

incidental responsibilities under salescontract.

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Commercial Documents

(i) Principal Commercial Documents:These documents serves thefollowing purposes:

(a) To effect physical transfer of goodsand title of the goods from exporter

to the buyer.(b) To realize export sales proceeds.

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Principal Documents include:

Commercial Invoice (and the invoice prescribed bythe importer)

Packing list

Certificate of Inspection Certificate of Insurance/Insurance Policy

Bill of Lading/Airway bill/Combined TransportDocuments

Certificate of Origin

Bill of Exchange

Shipment AdviceEXIM BITS


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Commercial Export Documents

(ii) Auxiliary Commercial Documents: TheseDocuments are required to prepare /procure the principalcommercial documents and include:

Proforma Invoice

Shipping Instructions

Insurance Declaration

Intimation for Inspection

Shipping Order

Mates Receipt Application for Certificate of Origin

Letter to bank for negotiation /collection of documents

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(2) Regulatory Documents:

(i) Exchange Control Declaration Form-GR Form(ii) Freight Payment Certificate

(iii) Insurance Premium Payment Certificate

(iv) ARE I/ARE II Forms(v) Shipping Bill/Bill of Export

(vi)Port Trust Copy of Shipping Bill

/Export Application/Dock Challan

(vii) Receipt of Payment of Port Charges

(viii) Vehicle Ticket.

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(3) Export Incentives Documents: claimingvarious incentives like FPS, FMS, MLFPS,DFIA, AA, EPCG, VKGUY and others from

EPC/EDA etc(4) Buyers requirements: documents as per

the Countrys instructions/manualto like

certificates of origin, consular invoice,quality control certificate etc. even someunder FTAs etc.

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(1) Commercial Invoice:

Basic and primary document of a transaction. All the columns are required to be filled in.

Exporters details, Invoice number with date,details of the consignee and buyer (if the buyer isother than consignee), buyers order number withdate, country of origin of the goods, country of finaldestination, terms of payment and delivery, pre-

carriage details (Road/Rail), vessel/flight number,port of loading, port of discharge, final destination,container number, number and kind of packaging,detailed description of goods, quantity, rate andtotal amount chargeable etc

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Therefore, a Commercial Invoice contains thecomplete details of the export order.

Normally, the trade practice is to raise and senda Proforma Invoice to the buyer for his approval,

once the order has been finalized. On receipt of the approved Proforma Invoice,

the exporter can use it as a part of the exportcontract.

The Commercial Invoice then becomes easier toprepare on the basis of the approved ProformaInvoice.

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Commercial Documents(2) Packing List:

Containing number of packages; quantity packed ineach of them; the weight and measurement of eachof the package and the net and gross weight of thetotal consignment.

Net weight refers to the actual weight of the itemsand the gross weight means the weight of the itemsplus the weight of the packing material.

The packing list serves and helps both exporter andimporter in despatch and receipt for cross checks ofgoods sent.

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Easy in handling of the consignment at the port. It eases Customs examination procedure like

physical, weight, measurements vis-avisdeclarations made by exporter.

(3) Certificate of Inspection: This is the Certificateissued by the Export Inspection Agency or anyother agencies nominated for the purpose ofinspection - the pre-shipment inspection of goods

for export provided the goods fall under thenotified category of goods requiring compulsoryshipment of inspection.

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Commercial Documents(4) Certificate of Insurance/Insurance Policy:

Insurance is an important area in the exportbusiness as the stakes are usually very high.

Protection needs to be taken in the form ofinsurance cover for the duration of transit of goods

from the exporter to the importer.(5) Bill of Lading:

This is issued when the goods are shipped usingocean (marine) transport.

When the exporter finally hand over the goods tothe shipping company for loading on board theship for transport to their final destination, theshipping company issues a set of Bills of Lading to

the exporter. EXIM BITS


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Commercial Documents(6) Airway Bill:

Airway Bill is a bill of lading when the goods areshipped using air transport.

It is also known as air consignment note or airway

bill of lading.(7) Combined Transport Document:

This is also known as Multi-modal Transport

Document. Popularity of container usage brought the concept

of Combined Transport Document.

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(8) Certificate Of Origin:

Proof of the country of origin of goods forthe importer in his country.

Be produced at the time customs clearanceof import cargo to ascertain theirimportabilty.

Important part in computing the liability

and the rate of import duty in the countryof import, if under FTAs if any.

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(9) Bill of Exchange:

an instruments for payment realization.

unconditional order for payment from a drawer(exporter) to a drawee (importer), directing thedrawee to pay a specified amount in specifiedcurrency to the drawer or a named payee at a fixed

or determinable future date, either to himself or hisnominee (endorsee).

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Bill of Exchange contd.

This order could be made for payment on demand,called a bill of exchange at sight or payment at a

future date, called a usance bill of exchange.(10) Shipping Advice:

The exporter sends shipping advice, to the buyer

soon after the shipment containing details ofshipment, as an advance intimation of the shipmentand allows the importer to arrange for delivery ofthe same.

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Mr Babu Ezhumavil

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