International Trade and Documentation new.pdf

documents required for international trade

1. Presentation on
“Export Procedure Documentation”
Established under the Gujarat Private Universities Amendment Act 2011 and recognized under section 22 and 2(f) of UGC
Subject: International Trade Procedures and Documentation
Subject Code: BBA404T
Assigned by:
Dr. Murari Behera
Assistant Professor
Department of Business and Management

2. About Me!
Name: Pranshu Raval
IAR No. : IAR/12854

3. Table of contents
05 Post-Shipment Stage
04 Shipment Stage
03 Pre-Shipment Stage
02 Registration Stage
01 Introduction

4. Introduction
01

5. Exporting 101: A Complex but Rewarding Journey
Exportinginvolvesnavigatingintricate
commercialandregulatoryformalitiesacross
borders.Exportersmustbewell-versedin
theseprocedures,ensuringcompliancewith
boththeirownandtheimportingcountry's
regulations.Carefulpreparationof
documentationacrossfourkeystages–
registration,pre-shipment,shipment,and
post-shipment–iscrucialforasmoothand
successfulexportjourney.
Introduction about Export Trade Procedure

6. Registration Stage
02

7. Steps involved in the Registration Stage
•RegistrationofOrganisation
•OpeningBankAccount
•ObtainingImporter-ExporterCodeNumber(IECNo.)
•ObtainingPermanentAccountNumber(PAN
Number)
•ObtainingSalesTaxNumber
•RegistrationwithExportPromotionCouncil(EPC)
•RegistrationwithECGC
•RegistrationwithotherAuthorities
The following steps are involved:

8. Registration of the Organisation
TheformoforganisationselectedbytheexportermustberegisteredundertheappropriateAct
ofthecountry.
A joint stock company under the Companies Act, 1956
A partnership firm under the Indian Partnership Act, 1932
Asoletradershouldseekpermissionfromthelocalauthorities

9. Opening a Bank Account
Theexportershouldopenacurrentaccountinthenameofthefirmorcompanywitha
commercialbankwhichisauthorisedbytheReserveBankofIndia(RBI)todealinforeign
exchange.

10. Obtaining Importer-Exporter Code Number
(IEC No.)
Priorto01
st
January1997,itwasobligatoryforeveryexportertoobtainCNXnumberhasbeen
replacedbyIECnumberissuedbytheDirectorGeneralforForeignTrade(DGFT).The
applicationformforobtainingIECnumbershouldbeaccompaniedbyfeeofRs.1000.

11. Obtaining Permanent Account Number
(PAN Number)
Exportincomeissubjecttoanumberofexemptionsanddeductionsunderdifferentsections
oftheIncomeTaxAct.Forclaimingsuchexemptionsanddeductions,theexportershould
registerhisorganisationwiththeIncomeTaxAuthoritiesandobtainthePAN.

12. Obtaining Sales Tax Number
Exportablegoodsareexemptedfromsalestax,providedtheexporterorhisfirmisregistered
withtheSalesTaxAuthorities.Forthispurpose,theexporterisrequiredtomakeanapplication
intheprescribedformtotheSalesTaxOfficeinwhosejurisdictionhisofficeissituated.

13. Registration with Export Promotion Council
(EPC)
ItisobligatoryforeveryexportertoregisterwiththeappropriateExportPromotionCouncil
(EPC)andobtainthe'Registrationcum-MembershipCertificate'(RCMC).Thebenefits
providedinthecurrentEXIMPolicyareextendedonlytotheregisteredexportershavingvalid
RCMC.

14. Registration with ECGC
TheexportershouldalsoregisterwiththeExportCreditandGuaranteeCorporationofIndia
(ECGC)inordertosecureoverseaspaymentsagainstpoliticalandcommercialrisks.Italsohelps
theexportersinobtainingthefinancialassistancefromcommercialbanksandotherfinancial
institutions.

15. Registration with other Authorities
Theexportershouldalsoregisterwithvariousotherauthoritiessuchas:
FederationofIndianExportOrganisation(FIEO)
IndianTradePromotionOrganisation(ITPO)
ChambersofCommerce(COC)
ProductivityCouncils

16. Pre-Shipment
Stage
03

17. Steps involved in the Pre-Shipment Stage
•ApproachingForeignBuyers
•InquiryandOffer
•ConfirmationofOrder
•OpeningLetterofCredit
•ArrangementofPre-ShipmentFinance
•ProductionorProcurementofGoods
•PackingandMarking
•Pre-ShipmentInspection
•CentralExciseClearance
•ObtainingInsuranceCover
•AppointmentofC&FAgent
The following steps are involved:

18. Approaching Foreign Buyers
Inordertosecureanexportorder,anewexportercanmakeuseofoneormoreofthe
techniques,suchas,advertisingininternationalmedia,salespromotion,publicrelation,personal
selling,publicityandparticipationintradefairsandexhibitions.

19. Inquiry and Offer
Aninquiryisarequestfromaprospectiveimporteraboutdescriptionofgoods,theirstandard
orgrade,size,weightorquantity,termsofpayments,etc.Ongettinganinquiry,theexporter
mustprocessitimmediatelybymakinganofferintheformofaproformainvoice.

20. Confirmation of Order
Oncethenegotiationsarecompletedandthetermsandconditionsarefinalised,theexporter
sendsthreecopiesofproformainvoicetotheimporterfortheconfirmationoforder.The
importersignsthesecopiesandsendsbacktwocopiestotheexporter.

21. Opening Letter of Credit
Thedocumentarycreditorletterofcreditisthemostappropriateandsecuredmethodof
paymentadoptedtosettleinternationaltransactions.Onfinalisationoftheexportcontract,
theimporteropensaletterofcreditinfavouroftheexporter,ifagreeduponinthecontract.

22. Arrangement of Pre-Shipment Finance
Onsecuringtheletterofcredit,theexporterprocuresapre-shipmentfinancefromhisbankfor
procuringrawmaterialsandothercomponents,processingandpackingofgoodsandtransferof
goodstotheportofshipment.

23. Production or Procurement of Goods
Onsecuringthepre-shipmentfinancefromthebank,theexportereitherarrangesforthe
productionoftherequiredgoodsorprocuresthemfromthedomesticmarketasperthe
specificationsoftheimporter.

24. Packing and Marking
Thenthegoodsshouldbeproperlypackedandmarkedwithnecessarydetailssuchasportof
shipmentanddestination,countryoforigin,grossandnetweight,etc.Ifrequired,assistancecan
betakenfromtheIndianInstituteofPacking(IIP).

25. Pre-Shipment Inspection
Ifthegoodstobeexportedaresubjecttocompulsoryqualitycontrolandpre-shipment
inspectionthentheexportershouldcontacttheExportInspectionAgency(EIA)forobtaining
aninspectioncertificate.

26. Obtaining Insurance Cover
Theexportermusttakeappropriatepoliciesinordertoinsurerisks:
ECGEpolicyinordertocovercreditrisks
Marinepolicy,ifthepricequotationagreeduponisCIF

27. Appointment of C&F Agent
Ifthegoodstobeexportedaresubjecttocompulsoryqualitycontrolandpre-shipment
inspectionthentheexportershouldcontacttheExportInspectionAgency(EIA)forobtaining
aninspectioncertificate.

28. Shipment Stage
04

29. Steps involved in the Shipment Stage
•ReservationofShippingSpace
•ArrangementofInternalTransportationuptothePortof
Shipment
•PreparationandProcessingofShippingDocuments
•CustomClearance
•Obtaining‘Cartingorder’fromthePortAuthorities
•CustomExaminationandIssueof‘LetExportOrder’
•Obtaining‘LetShipOrder’fromtheCustomsPreventiveOfficer
•ObtainingMate’sReceiptandBillofLading
The following steps are involved:

30. Reservation of Shipping Space
Oncetheexportcontractisfinalised,theexporterreservestherequiredspaceinthevesselfor
shipment.Onacceptingtheexporter'srequest,theshippingcompanyissuesaShippingOrder.
Theoriginalcopyoftheshippingorderisgiventotheexporterandtheduplicateissenttothe
commandingofficeroftheship.
“Theshippingorderisaninstructionbytheshippingcompanytothecommandingofficerofthe
shipthatthegoodsasperthedetailsgivenshouldbereceivedonboard.”

31. Arrangement of Internal Transportation up to
the Port of Shipment
Theexportermakesnecessaryarrangementsfortransportationofgoodstotheporteitherby
roadorrailways.Onloadinggoodsintotherailwaywagon,therailwayauthoritiesissuea
'RailwayReceipt',whichmaybeeither'freightpaid'or'freighttopay'.Itservesasatitletothe
goods.Theexporterendorsestherailwayreceiptinfavourofhisagenttoenablehimtotake
deliveryofthegoodsattheportofshipment.

32. Preparation and Processing of Shipping
Documents
Asthegoodsreachestheportofshipment,theexportershouldissuedetailedinstructionstotheC&F
agentfortheshipmentofcargoalongwithacompletesetofthedocumentslistedbelow:
•LetterofCreditalongwiththeexportcontractorexportorder
•CommercialInvoice(2copies)
•PackingListorPackingNote
•CertificateofOrigin
•GRForm(originalandduplicate)
•ARE-IForm
•CertificateofInspection
•MarineInsurancePolicy.

33. Custom Clearance
ThecargomustbeclearedfromtheCustomsbeforeitisloadedontheship.Forthis,the
abovementioneddocuments,alongwithwithfivecopiesofshippingbill,aretobesubmitted
totheCustomsAppraiserattheCustomsHouse.TheCustomsAppraiserensuresthatallthe
formalitiesrelatingtoexchangecontrol,qualitycontrol,pre-shipmentinspectionandlicensing
havebeencompliedwithbytheexporter.Afterverification,alldocuments,excepttheoriginal
GR,originalcopyofShippingBillandonecopyofCommercialInvoice,arereturnedtothe
C&Fagent.

34. Obtaining ‘Carting Order’ from the Port Trust
Authorities
TheC&Fagent,then,approachestheSuperintendentoftheconcernedPortTrustforobtaining
the'CartingOrder'formovingthecargoinsidethedock.AfterobtainingtheCartingOrder,the
cargoisphysicallymovedintotheportareaandstoredintheappropriateshed.

35. Custom Examination and Issue of ‘Let Export
Order’
TheCustomsExaminerattheportofshipmentphysicallyexaminesthegoodsandsealsthe
packagesinhispresence.Thesamecanbearrangedforatthefactoryorwarehouseofthe
exporterbymakinganapplicationtotheAssistantCollectorofCustoms.TheCustoms
Examiner,ifsatisfied,issuesaformalpermissionfortheloadingofcargoontheshipinthe
formofa'LetExportOrder'.

36. Obtaining ‘Let Ship Order’ from the Customs
Preventive Officer
'LetExportOrder'mustbesupplementedbya'LetShipOrder'issuedbytheCustoms
PreventiveOfficer.TheC&FagentsubmitstheduplicatecopyofShippingBill,dulyendorsedby
theCustomsExaminer,totheCustomsPreventiveOfficerwhoendorsesitwiththe'LetShip
Order'.

37. Obtaining Mate’s Receipt and Bill of Lading
ThegoodsarethenloadedonboardtheshipforwhichtheMateortheCaptainoftheship
issuesMate'sReceipttothePortSuperintendent.ThePortSuperintendent,onreceiptofport
dues,handsovertheMate'sReceipttotheC&FAgent.TheC&FAgentsurrenderstheMate's
ReceipttotheShippingCompanyforobtainingtheBillofLading.TheShippingCompany
issuestwotothreenegotiableandtwotothreenon-negotiablecopiesofBillofLading.

38. Post-Shipment
Stage
05

39. Steps involved in the Post-Shipment Stage
•SubmissionofDocumentsbytheC&FAgenttotheExporter
•ShipmentAdvicetoImporter
•PresentationofDocumentstoBankforNegotiation
•DespatchofDocuments
•AcceptanceofBillsofExchange
•LetterofIndemnity
•RealisationofExportProceeds
•ProcessingofGRForm
•RealisationofExportIncentives
The following steps are involved:

40. Submission of Documents by the C&F Agent
to the Exporter
Onthecompletionoftheshippingprocedure,theC&Fagentsubmitsthefollowingdocuments
totheexporter:
•AcopyofinvoicedulyattestedbytheCustoms
•Drawbackcopyoftheshippingbill
•Exportpromotioncopyoftheshippingbill
•Afullsetofnegotiableandnon-negotiablecopiesofbilloflading
•TheoriginalL/C,exportorderorcontract
•DuplicatecopyoftheARE-Iform

41. Shipment Advice to Importer
Aftertheshipmentofgoods,theexporterintimatestheimporterabouttheshipmentofgoods
givinghimdetailsaboutthedateofshipment,thenameofthevessel,thedestination,etc.He
shouldalsosendonecopyofnon-negotiablebillofladingtotheimporter.

42. Presentation of Documents to Bank for
Negotiation
Submissionofrelevantdocumentstothebankandtheprocessofgettingthepaymentfromthe
bankiscalled"NegotiationoftheDocuments"andthedocumentsarecalled'NegotiableSetof
Documents'.Thesetnormallycontains:
•BillofExchange,SightDraft
•FullsetofBillofLadingorAirwayBill
•OriginalLetterofCredit
•CustomsInvoice
•CommercialInvoiceincludingonecopydulycertifiedbytheCustoms
•PackingList
•Foreignexchangedeclarationforms,GR/SOFTEX/PPformsinduplicate
•ExchangecontrolcopyoftheShippingBill
•CertificateofOrigin,GSPorAPRCertificate,etc.
•MarineInsurancePolicy,induplicate

43. Despatch of Documents
Thebanknegotiatesthesedocumentsto
theimporter'sbankinthemanneras
specifiedintheL/C.Beforenegotiating
documents,theexporter'sbank
scrutinisestheminordertoensurethat
allformalitieshavebeencompliedwith
andalldocumentsareinorder.Thebank
thensendstheBankCertificateand
attestedcopiesofcommercialinvoiceto
theexporter.

44. Acceptance of Bills of Exchange
BillofExchangeaccompaniedbytheabovedocumentsisknownastheDocumentaryBillofExchange.Itis
oftwotypes:
•DocumentsagainstPayment(SightDrafts):Incaseofsightdraft,thedrawerinstructsthebanktohandover
therelevantdocumentstotheimporteronlyagainstpayment.
•DocumentsagainstAcceptance(UsanceDraft):IncaseofUsancedraft,thedrawerinstructsthebankto
handovertherelevantdocumentstotheimporteragainsthis'acceptance'ofthebillofexchange.

45. Letter of Indemnity
Theexportercangetimmediatepayment
fromhisbankonthesubmissionof
documentsbysigningaletterof
indemnity.Bysigningtheletterof
indemnitytheexporterundertakesto
indemnifythebankintheeventofnon-
receiptofpaymentfromtheimporter
alongwithaccruedinterests.

46. Realisation of Export Proceeds
Onreceivingthedocumentarybillofexchange,theimporterreleasespaymentincaseofsightdraftor
acceptstheusancedraftundertakingtopayonmaturityofthebillofexchange.Theexporter'sbank
receivesthepaymentthroughimporter'sbankandiscreditedtoexporter'saccount.

47. Processing of GR Form
Onreceivingtheexportproceeds,theexporter'sbankintimatesthesametotheRBIbyrecording
thefactontheduplicatecopyofGR.TheRBIverifiesthedetailsinduplicatecopyofGRwiththe
originalcopyofGRreceivedfromtheCustoms.Ifthedetailsarefoundtobeinorderthenthe
exporttransactionistreatedtobecompleted.

48. Realisation of Export Incentives
Iftheexporteriseligibleforexportincentives,
thenheshouldsubmitclaimforthesame
accompaniedbythebankcertificatetothe
appropriateauthority.

49. THANK YOU!