Export order processing

An export order, simply stated, means that there should be an agreement in the form of a document, between the exporter and importer before the exporter actually starts producing or procuring goods for shipment. Generally an export order may take the form of proforma invoice or purchase order or letter of credit

1. Export Order Processing Supriya Lamba Sahdev Assistant Professor Amity International Business School* Amity University Uttar Pradesh** I-3 Block, 1 st  Floor, Amity University Campus Sector – 125, Noida – 201 313. UP, INDIA Tel: [phone]  [email protected]   |  www.amity.edu/aibs  

2. Processing of an Export Order Starts with the receipt of an export order.

3. Processing of an Export Order Acknowledging the export order- Must acknowledge its receipt by intimating. 2.Examination & Confirmation of export Order contents should be checked . Contents should be examined particularly –product description, marking & labeling, terms of payment, terms of shipment , type of inspection ,insurable value, documents for realizing payment ,last date of negotiation of docs with the bank.

4. Processing of an Export Order 3.Manufacturing or procuring goods as per specifications- for this a delivery note is prepared; duplicate of the same is given to production department or to the marketing dept. in case of merchant –exporter (known as purchase order). Delivery note/ purchase order give details about-product specification , quantity, packing, marking, labeling, excise clearance, intimation to transport dept.

5. Processing of an Export Order 4.Pre-shipment & Post-shipment Credit facility by commercial banks- Pre-shipment credit is given to finance working capital requirement, like purchase of raw materials, processing them & converting them into finishes goods. Post-shipment Credit is given to bridge the time gap b/w shipment of goods & the realization for sale proceeds.

6. Processing of an Export Order 4.Procedure for obtaining Pre-shipment & Post-shipment Credit facility from commercial banks- Exporter hands over export order/ L/C to the bank. Bank will calculate the drawing power of the exporter. Funds will be credited to his a/c. Goods are required to be sent through approved transport agencies & forwarding agents. Goods will be suitably insured while in the warehouse & in transit.

7. Processing of an Export Order 5.Booking of shipping space- Usually done 4-6 weeks in advance. Can be done through the C& F agent or freight broker. After booking ,shipping company issues shipping order, as a proof of space reservation.

8. Processing of an Export Order 5.Booking of shipping space- Sending goods through road-lorry/ truck receipt is issued with other docs to C& F at the port town for taking the delivery of the cargo. Sending goods through rail-docs to be submitted at railway station/yard are: forwarding note( a railway doc), Sipping order ( as a proof of reservation of shipping space), Wagon registration fee receipt. After wagons are allotted , goods are loaded , for which railways will issue RR (railway receipt).this receipt along with other docs is sent to C & F at the port town.

9. Processing of an Export Order 6. Central Excise Clearance- The Central Excise & Salt Act of India –provide refund of excise duty paid. Docs used are -invoice & ARE1/ARE2 forms. As goods become ready foe despatch, production dept. apply to the central excise authority for excise clearance .

10. Processing of an Export Order 7.Pre-shipment Inspection of Export goods- GOI notifies goods whose export is subject to compulsory quality control/ Pre-shipment Inspection . Indian Customs Authority require submission of an inspection certificate, before permitting the shipment to the importer’s place. Basis of inspection is usually importer’s specification. Inspection can be conducted in 3 ways- consignment wise, in- process quality control, self certification.

11. Processing of an Export Order 7.Pre-shipment Inspection of Export goods- Application for applying for this certificate, should go along with the following docs-copy of commercial invoice, crossed cheque of inspection fee, copy of export contract, importer’s technical specifications/ approved sample. Original copy is given to customs verification, second copy to the buyer & third copy is for exporter’s record.

12. Processing of an Export Order 8.Apointment of C & F Agent- Also known as Freight Forwarder. Undertakes the procedural & documentary formalities on behalf of the exporter/ importer. Helps the shipper in packing ,marking & labeling of consignment, arranging for transport to the port, customs clearance of cargo, arranging shipment overseas & procurement of transport & other docs. Main function –is to obtain customs clearance, ship goods & procure the relevant transport doc( bill of lading or airway bill)

13. Processing of an Export Order 9. Despatching goods to Port of Shipment- Movement of goods to the port for shipment involve following activities: Packing , marking & labeling of consignment, Arrangement for movement of goods either by road or by rail. Export- worthy packing minimizes freight & delivery costs & eliminates possibility of the insurance company’s refusal to pay the claim.

14. Processing of an Export Order 9. Despatching goods to Port of Shipment- After packing , goods are marked & labeled. Proper marking helps in quick & safe transportation. Labels are either stenciled or affixed on the packs which contains handling instructions.

15. Processing of an Export Order 10.Documents required for Export- Docs that are sent from export dept. to the freight forwarder along with shipping instructions: Commercial invoice Customs declaration form Packing list Original L/C Inspection certificate GR form –original & duplicate Invoice Railway receipt/ lorry way bill

16. Processing of an Export Order 11.Port formalities & customs clearance- C & F ,on receiving docs, store the goods in warehouse ,after receiving it from road / rail transport. He initiates action to obtain customs clearance & permission from port to bring cargo into the shipment shed.

17. Processing of an Export Order 11.Port formalities & customs clearance- Objectives of customs control are- Ensure goods go out of country after compliance with different laws concerning export trade. Ensure authenticity of value of export goods to check over/ under invoicing. Correctly assess & collect export duty. Compile data on cargo movements.

18. Processing of an Export Order 11.Port formalities & customs clearance- Customs authority checks docs at the office of customs. Customs authority do physical examination of goods in shipment shed. Doc on which customs give clearance for export is the shipping bill .

19. Processing of an Export Order Docs which C & F has to file wit the Customs: Shipping bill Contract L/C Commercial invoice G R form Inspection certificate ARE1/ ARE2 form Packing list

20. Processing of an Export Order Customs officer after thorough check of the docs, Tells that the value & quantity declared in shipping bill is the same as in the export order or L/C. Tells that the formalities regarding exchange control, pre-shipment quality control inspection etc., have been duly completed.

21. Processing of an Export Order After taking the delivery of docs from the export dept., C & F presents the port trust doc to the shed superintendent. He gets carting order for bringing the export cargo to the transit shed for physical examination by the dock appraiser & for their shipment.

22. Processing of an Export Order After brining the cargo into the shed ,he presents the following docs to the Dock Appraiser for conducting physical examination of the cargo: Copies of shipping bill Commercial invoice Packing list ARE1/ARE2 form Inspection certificate GR form

23. Processing of an Export Order Dock appraiser after conducting physical examination, records examination report & makes “ Let Export” endorsement on the duplicate copy of shipping bill. Dock officer hand over it to Forwarding agent along with all other docs to be presented to the Preventive Officer of the Customs Dept who supervises the loading of cargo on board the vessel. Preventive officer makes an endorsement “Let Ship” on the duplicate copy of the shipping bill. The duplicate copy is then given to the agent of the shipping company.( shipping company is to accept the cargo on the vessel.

24. Processing of an Export Order 12.Obtaining mate’s receipt & bill of lading After goods are loaded , captain issues Mate’s Receipt to Shed superintendent. Forwarding agent makes payment of port charges & takes Mate’s receipt. Forwarding agent gives Mate’s receipt to Preventive Officer , who records Certificate of Shipment. Preventive Officer returns export promotion copy , a copy of drawback shipping bill & presents Mate’s receipt to shipping co., & requests to issue Bill of Lading.

25. Processing of an Export Order 13. Dispatch of docs by Forwarding Agent to the Exporter- after getting B/L from shipping co. , the agent sends following docs to exporter- Copy of commercial invoice Export promotion copy of shipping bill Drawback copy of shipping bill Full set of ‘ Clean on Board Bill of Lading’ Original L/C Copies of Customs invoice ARE1/ ARE2 & invoice GR form

26. Processing of an Export Order 14. Certificate of Origin After getting docs from Forwarding agent, Exporter fills application of getting ‘Certificate of Origin ‘ from Chamber of Commerce. If importer’s country if offering GSP concession ,then the same will be taken by the exporter from EIA .

27. Processing of an Export Order 15. Advising importer of Shipment- Exporter sends ‘shipment advice ‘ to importer intimating about –date of shipment, name of the vessel, & its expected time of arrival at destination port. Docs that are sent along with the shipping advice ,so that importer start arrangements of taking cargo delivery are- Non- negotiable copy of B/L, Commercial invoice, Packing list, customs invoice.

28. Processing of an Export Order 16. Presentation of docs to Bank for Negotiation- Commercial invoice Certificate of Origin Customs Invoice GR Form Packing List Full set of ‘ Clean on Board Bill of Lading’ Additional copies of commercial invoice for certification by the Bank. Original L/C Bank Certificate in the prescribed form in duplicate. Marine insurance policy Bill of Exchange

29. Processing of an Export Order 17. Process of claiming Export Incentives- Excise rebate- After completing post-shipment formalities, C & F agent will file following docs with the Maritime Central Collector or Jurisdictional Assistant collector of Central Excise for claiming the refund of excise duty or for obtaining release from bond, are: ARE1/ ARE2 form, which has been certified by the Customs Preventive Officer, And Non- Negotiable copy of B/L certified by the Customs Preventive Officer. Additional docs to be submitted for claiming refund are- Application for refund & Pre-receipt.

30. Processing of an Export Order 17. Process of claiming Export Incentives- b. Duty Drawback- For the same ,the exporter’s agent file customs attested copy of Drawback shipping Bill, with following docs- Drawback claim proforma , bank or Customs Certified copy of Commercial Invoice, Non- Negotiable copy of B/L . After finding claim to be correct , the Drawback Dept will dispatch cheque to the exporter or will sent it to his bank & the amount will be credited to his a/c.

31. Processing of an Export Order 17. Process of claiming Export Incentives- c. DEPB- DEPB shipping bills are submitted to Regional Licensing Authorities for insurance of DEPB Script for duty free imports.