What is Export? Explain export process and export
documents.
Export
A foreign trade export is a product or service made in one
country and exported to another country. Exporting can assist a business in
their home country to gain experience curve results and place ecosystems.
Phase of Export:
Explanation of export
process:
There
are mainly 12 steps involved in export process those are explained below:
1. Having an Export Order:
The export order delivery begins with
the issuance of an export order. Simply put, an export order implies that an
agreement in the form of a contract should be reached between the exporter and
the importer before the exporter finally begins processing or procuring
products for shipment.
2. Examination and Confirmation
of Order:
Upon
receipt of an export order, it should be reviewed by the exporter in regard to
the terms and conditions of the deal. In fact, since all subsequent actions and
reactions depend on the terms and conditions of the export order, this is the
most critical step.
Consequently,
the review of the export order involves elements such as the description of the
goods, terms of sale, terms of shipping, inspection and insurance conditions,
payment documentation and the last date of agreement of the documents with the
bank. Once compliant with these requirements, the export order is confirmed by
the exporter.
3. Manufacturing or Procuring Goods:
Under the export credit program, pre-shipment credit is
given to exporters in order to fund working capital requirements for the
procurement, refining and conversion of raw materials into finished products
for export purposes. On the basis of the procedures laid down for the
pre-shipment credit, the exporter approaches the bank.
4. Clearance from Central
Excise:
The
procedure for receiving clearance from central excise duty begins as soon as
products have been manufactured/ procured. The first scheme is to make the
payment of the excise tax payable at the time of departure from the warehouse
of the export shipment and to file a petition for duty exemption after the
goods have been shipped. The second arrangement
is the withdrawal without paying of goods from the factory/warehouse except
under an effective bond with the excise authorities.
5. Pre-Shipment Inspection:
As per the notification of the
Government of India, there are a range of products whose exports need quality
certification. Consequently, before the shipping of merchandise is approved,
the Indian custom authorities shall require the presentation of an inspection
certificate provided by the qualified and appointed authority.
Inspection of export goods may
be conducted under:
(i)
Consignment-wise Inspection
(ii)
In-process Quality Control, and
(iii)
Self-Certification.
The
Inspection Certificate is issued in triplicate. The original copy is for the
customs verification. The second copy of the certificate is sent to the
importer and the third copy remains with the exporter for his reference
purpose.
6. Appointment of Clearing and
Forwarding Agents:
The
exporter shall nominate clearing and forwarding agents to conduct a variety of
duties on behalf of the exporter upon completion of the process of receiving
the inspection certificate from the customs authorities. The key duties
performed by these agents include the processing, marking and labeling of
consignments, transport arrangements for shipping from abroad to the port,
customs clearance of cargo, acquisition of shipments and other documents.
7. Goods to Port of
Shipment:
The
products to be shipped are sealed, labelled and numbered after the excise
clearance and pre-shipment inspection formalities are finished. Proper
branding, tagging and packaging help to move products easily and safely. In
order to reserve space on the ship from which products are to be shipped to the
importer, the export department takes action.
The shipping room can be rented
either on behalf of the shipping company or directly from the shipping company
by the clearing and forwarding agent or freight broker. The shipping company
releases a paper known as a shipping order until the room is reserved. This order
acts as evidence of the reservation of rooms.
8. Port Formalities and Customs
Clearance:
The
clearance and forwarding agent shall, upon receipt of the paperwork from the
export department, take delivery of the freight from the railway station or
road transport company and store it in the warehouse. It also receives customs
clearance and permit from the port authority to carry the container into the
shed.
The customs department gives the
customs office authorization for export and physical inspection of the items in
the shipping shed. On the Shipping Bill, clearance for export is granted.
9. Dispatch of Documents
by Forwarding Agent to the Exporter:
After
obtaining the Bill of Lading from the Shipping Company, the clearing and
forwarding agent dispatches all the documents to his / her exporter.
These documents include:
(i)
Commercial Invoice (attested by the customs)
(ii)
Export Promotion Copy
(iii)
Drawback Copy
(iv)
Clean on Board Bill of Lading
(v)
Letter of Credit
(vi)
GR Form (in duplicate)
10. Certificate of Origin:
Upon receipt of the aforementioned
documents from the forwarding agent, the exporter now demands and obtains a
Certificate of Origin from the Chamber of Commerce. The exporter must receive
the GSP Certificate of Origin from the appropriate body, such as the Export
Inspection Service, if the products are shipped to countries providing GSP
concessions.
11. Dispatch of Shipment
Advice to the Importer:
Finally, the exporter sends 'Shipment
Guidance' to the importer advising the importer of the date of shipment of the
consignment by the vessel and of the estimated time of arrival at the
importer's destination port.
12. Submission of
Documents to Bank:
At
the end of the process, the exporter presents the following documents to his
bank for realization of his amount due to the importer:
(i)
Commercial Invoice’
(ii)
Certificate of Origin
(iii)
Packing List
(iv)
Letter of Credit
(v)
Marine Insurance Policy
(vi)
Bill of Lading
(vii)
Bill of Exchange
(vii)
Bank Certification
(ix)
Commercial Invoice
Export documents:
Pro Forma Invoice
The
Pro Forma Invoice documents the exporter's plan to sell a predetermined number
of goods or items. This invoice is produced by a recognized means of
communication, such as email, fax, telephone or in person, in compliance with
the terms and conditions negotiated between the exporter and the importer.
Customs Packing List
The
list of items used in the package that can be matched to a pro forma invoice by
any party involved in the trade is shown in the customs packaging list. This
list is delivered along with the foreign shipping and, since they know
precisely what is being transported, is extremely convenient for transport
companies.
Country of Origin or COO Certificate
The
Certificate of Country of Origin is a document issued by the exporter
certifying that the products being exported have been entirely purchased, made,
produced or stored in a specific country.
Customs Invoice
For
any export exchange, a customs invoice is a necessary text. This paper will
first be requested by the customs clearance department as it includes order
material, including specifics such as the definition, the sale price, the
number, the cost of packaging, the weight or volume of the products used to
calculate the value of the customs import at the port of destination, freight
insurance, distribution and payment terms, etc.
Shipping Bill
A shipping bill is a conventional
report where the drawback is claimed and acts as a measurable document in the
first place. This can be submitted into a personalized framework of online
applications (ICEGATE). The exporter would require the following documentation
to receive the shipping bill:
- GR Forms for shipment to all the countries
- Packing list (with various details such as information about the content,
quantity, the gross and net weight of each package)
- Export License
- Indent
- Acceptance of Contract
- Invoices (with all relevant information such as the number of
packages, quantity, price, correct specification of goods, etc.)
- Purchase Order
- Letter of Credit
Bill of Lading
The Bill of
Lading is a legal instrument which is given to the shipper by the carrier. It
serves as confirmation of the arrangement for the carriage of goods and items
referred to in the bill issued by the carrier. It also provides information on
the commodity, such as the type, amount, and destination to which the products
are transported.
This
bill can also be considered as a receipt of a shipment at the port of
destination, where it must be forwarded to the customs officer for the
exporter's clearance. This is a must-have paper, irrespective of the mode of
transport, which should accompany the merchandise and must be properly signed
by the carrier, shipper, and receiver's approved representative.
Letter of Credit
The
letter of credit shall be shared by the bank of the importer, specifying that
the importer shall pay the exporter the amount specified in order to conclude
the transaction. The order shall only be dispatched after the exporter has
received this letter of credit, based on the terms of payment between the
exporter and the importer.
Bill of exchange
Bill
of Trade is an alternate payment option where payments for products purchased
by the exporter are to be cleared by the importer either on demand or in a
future that is fixed or determinable. It is comparable to promissory notes
which banks or individuals may draw. By endorsement, you can also pass a Bill
of Trade.
Export License
Businesses
must have an export license which they can issue to the customs authority for
the purpose of exporting or forwarding any goods. This only has to be generated
because, for the very first time, the shipper exports goods to a foreign
destination. Depending on the kind of export you wish to produce, this kind of
license can vary.
Warehouse Receipt
The
receipt of a warehouse receipt is produced after all applicable export duties
and freight charges have been cleared by the exporter after customs clearance.
This is only needed where there is an ICD involved.
Health Certificates
The Health Certificate applies only when agricultural items
of animal or non-animal origin are included in international trade. The
certificate certifies that the food found in the shipment is suitable for human
use and has been vetted prior to export to conform with all environmental
requirements, laws and regulations.
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