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Ascot Centre, Mumbai
A Study of options available for the recovery of cost incurred in Special Clearance processes done by DHL
As a part of Summer Training Project for MBA Degree course
By Abhishek Pandey Avinash Singh Aditya Faculty of Management Studies Banaras Hindu University, Varanasi
TABLE OF CONTENTS
• • • • • •
ACKNOWLEDGEMENT PREFACE INTRODUCTION NEED FOR STUDY OBJECTIVE CLEARANCE PROCESS 08 04 05 07
• RESEARCH METHODOLOGY
• • • • • •
DATA COLLECTION DATA ANALYSIS
28 33 41
RECOMMENDATIONS AND SUGGESTIONS LIMITATIONS ANNEXURE BIBLIOGRAPHY 42 43 47
With deep satisfaction and immense pleasure we present. This report on “ To Look for an option of recovery of cost for special clearance done by DHL in the process of Import and do a market study of competitors providing such services”. This study of cost recovery could not have been successful without the support and motivation provided by the employees at Ascot Centre Office of DHL Express (I) Ltd, Mumbai. It is our proud privilege to have got an opportunity to work with an esteemed organization like DHL Express. The encouraging work environment and culture has enabled our learning. They were always ready to provide constant support and give their intellectual inputs to guide us through this enriching endeavor. We would like to thank them for the keen interest they have taken in clarifying all the concepts and the underlying fundamentals. At the onset we would like to express our deep heartfelt gratitude to Ms. Aditi Sinha, National Gateway Manager for giving us an opportunity to work on this project in DHL Express. We would like to thank Mr. Vasudevan Rajagopalan, BOM
Gateway Manager for granting us permission to work at his office at Ascot centre and provide us with suggestions and help when required.
We devote our special and sincere thanks to Mr. Ashutosh Bajpai – Director South Asia for providing us his guidance and valuable advice. We would like to thank our guide Mr. Nikhil Umarane, Manager NCG (BOM GTW) without whose constant support and feedback this project would have been a mere idea with out a form or content. We would like to express our heartfelt gratitude to the DHL staff at Ascot Centre who helped us to comprehend the various processes involved in Logistics and Express Industry. Our special thanks to Ms. Vaishali Kamble, Resourcing Manager HR for her care and providing us an opportunity to work with DHL. Finally, I would like to thank my Institute FMS BHU for making this experience of summer training in an esteemed organization like DHL Express (I) Ltd, Mumbai possible. The learning from this experience has been immense and would be cherished throughout life. Last but not least we would like to thank all those who were involved directly or indirectly in the completion of the project. Thank You. Abhishek Pandey Avinash Singh Aditya (Summer Trainees) Faculty of Management Studies Banaras Hindu University Varanasi (U.P.)
which we hope will prove to be useful in time to come. This report is submitted as a part of course curriculum of MBA degree at Faculty of Management Studies. We have ensured our best to cover all the aspects related to this topic and make the report purposeful.PREFACE It gives us immense pleasure to present the report on our project entitled “To look for an option of recovery of cost for special clearance done by DHL in the process of Import and do a market study of competitors providing such services” for DHL Express (I) Ltd. Abhishek Pandey Avinash Singh Aditya 5 . For the purpose we did a thorough study of the process and have provided suggestions. This report is written in an easy and comprehend-able language using systematic methodology. This report addresses the various issues and processes which are involved in the custom clearance of shipments imported and includes a market study of the Express Industry which includes the competitors who are providing such services. Banaras Hindu University.
The special clearance process involves use of processes and paper work separate than the normal clearance process in which the goods are cleared after paying the customs duty. papers. The company might be loosing revenue by not charging the cost incurred to the customer and an opportunity to earn more profits. This is why the company had a need to find out the cost incurred on these processes and the option of the recovery of the cost from the customers.INTRODUCTION The Special Clearance process is a part of Custom Clearance Process in Imports in which the shipment involves some special type of clearance. etc more than what is involved in normal clearance process. The Indian Customs provide for some concession in duty to the goods which are imported for the use in production of goods which will be exported. time. 6 . The special clearance is done for the shipments which involves some kind of exemption from the customs duty. In order to decide how much to charge from the customers we also need to study the market as how much is the other companies in the market are charging for the same kind of services the provide to the customers. so the need of this study was felt by the company. which involves some additional processes. The processes involved are more and the dedication of man power and time in the process is more than the normal clearance process. The cost incurred by the company till now is not being charged to the customer. The company incurs extra cost in the special clearance process as the paper work required is more. The SEZ companies also get some type of exemption on the goods imported by them and the goods also require a special type of clearance. The goods which need a NOC (No Objection Certificate) from the various departments concerned with the specific goods. or the imported goods which will be used for educational process.
The study was mainly conducted in the following steps: • Map the process involved in all the type of special clearance done by the company. • Look for the methods in which the costs can be charged from the customers. • Analyze the collected and arranged data with the help of graphs and charts to find out variations and the differences. 7 . • Arrange the data systematically in excel sheet for facilitating analysis. • Determine the cost incurred for the process above the normal clearance process. • Decision to be taken on in which way and how much charge is to be levied on the customers. • Find out the time involved in the process and the person responsible for each process. • Collect the data regarding the prices or the charges of the competitors or others companies providing same kind of services.
The company is loosing out the revenue which it could have earned and in turn is loosing out on the profit which it could have earned.NEED FOR STUDY The problem arises when: • • • The cost incurred by the company for special clearance process is not charged to the customers. • 8 . The company might be loosing its customers to the competitors who are providing these services at different prices. Competitors are providing these clearances at different prices.
OBJECTIVE Look for an option of recovery of cost for special clearance done by DHL in the process of Import and do market study of competitors providing such services. EPGC. Competitors are providing these clearances at different prices. Look for options from where these costs can be recovered. NFEI) Out of Scope: 9 . Drawback. SCOPE In Scope: • • • • • EOU ADC/ NOC SEEPZ Advance License Schemes (DEPB. PERIPHERAL OBJECTIVES • • • The cost incurred by the company for special clearance process is not charged to the customers. • Determine the ways and the charges which are to be levied on the customer.
• • • Form IV Form V Formal Clearance 10 .
4. 5. Documents received by the SKYLINE Team from CSA. 7. BoE of Cargo is made on the computer using software called Visual Impex and filing of BoE is done online. The documents are thoroughly checked whether all the required documents are available or not. 6. 3. IGM (Import General Manifest) MWAB (Master Airway Bill ) HAWB (by DHL) Delivery Order Invoice and Packing list Other Documents Related with the shipment. This process is to be completed four hours before the flight timings. 2. The customs duty which is to be levied on the shipment is calculated. 2. 6. 5. PROCESS FOR CARGO CLEARANCE 1. The filing of documents done. A. The BoE along with other documents is sent on ICEGATE (Indian Customs EDI Gateway). 3. (A) CARGO OR FREIGHT COURIER CARGO DOCUMENTS REQUIRED FOR CARGO CLEARANCE 1. B.CLEARANCE PROCESS IMPORTS DHL Express does the following Custom Clearance under the Import process. 4. This system is known as EDI (Electronic Data Interchange). (B) COURIER TYPES • • FORM IV FORM V FORMAL 11 • .
Importers copy and DDR is sent to Billing Department which does the billing and send the documents to the consignee 11. Send the document for deciding the custom duty applicable on the shipment. GATT and Importer’s declaration and upload the data into Visual Impex. 9. Send the document with the decided duty to print the BoE. Rests of the documents are sent to Operations Department for clearance of the shipment. The documents are received by the SKYLINE Team from CSA. 10. Documents are received after process of customs. d. 2. • Original copy of BoE. AWB Invoice Copy and Packing list Detention Memo IEC Codec (Import Export Certificate). whether all the documents required is present. 2. 7. 3. Authority signatory checks all the documents and signs. c. 5. 4.for PO (Preventive Officer) customs. DOCUMENTS REQUIRED FOR FORM IV AND FORM V COURIER CLEARANCE AWB Invoice Copy and Packing list DOCUMENTS REQUIRED FOR COURIER WHICH REQUIRE FORMAL CLEARANCE b. Attach all the documents to BoE. Manual BoE is made and 6 copies of BoE are printed. is filled.for AO (Appraisal Officer) customs. 8. Documents are stamped and DDR no.1. Documents are checked by the Supervisor. a. • 6th copy for DHL records. • 5th copy for custodian. 6. • Duplicate copy of BoE. PROCESS OF FORMAL CLEARANCE OF COURIER 1. 12 . • 3rd and 4th copy of BoE for importer. Document sent to customs for further processing.
e. STPI (Software Technical Park) EHTP (Electronic Hardware Technical Park) BTP (Bio-Technical Part) DOCUMENTS REQUIRED FOR EOU CLEARANCE 1. File number of the importer registered in Central Excise. 13 . Deputy Commissioner signs the documents at last and the documents are finally ready to be sent to SKYLINE Team. IIT. Railways etc. Appraisal officer checks the paper and signs the documents. Green Card copy. IIM etc or the shipments which material is used for producing goods for defence or educational purpose. 7. Form 17-B bond. or related to Educational Institutes i.e. 5. 6. IEC Codec. shipments i. then DEC (Duty Exemption Certificate) is also required. 3. clerk signs on all the copies of BoE and serial number is obtained. 2. Detention Memo. DEC is generally for Govt. Defence. EOU (Export Oriented Units) UNDER EOU 1. 2. 8. *If Customs Exemption. AWB Copy. Auditor checks the documents and signs it. 4. 4. SPECIAL CLEARANCE UNDER COURIER (FORMAL) 1. Examiner will examine the package physically and sign the documents. 5.PROCESS AT CUSTOMS 1. Examination of paper work is done and signed by the custom officer. 3. Procurement Certificate by Central Excise of EOU division. Invoice copy and Packing list. 6. 2. Notification of the documents is done in the register of customs. 3.
Documents are checked by the Supervisor. When the shipment arrives. Attach all the documents to BoE. • Package if to be delivered in Bombay. 9. customs. 3. Notification of the documents is done in the register of customs. Appraisal officer gives the Note sheet to DC. whether all the documents required is present. of importer registered in Central Excise of EOU division. is given to DHL with the intimation letter. Send the document for deciding the custom duty applicable on the shipment. Customs. Green Card no. 6. clerk signs on all the copies of BoE and serial number is obtained. PC (Procurement Certificate) is issued by Central Excise in the name of DC. Printing of BoE which is yellow in colour. • Duplicate BoE is signed by AO and DHL staff stating that shipment is given to DHL and shipment is received by DHL respectively. 11. All the documents with PC are received by the SKYLINE Team. is accompanied by Customs Officer and handed over to Central Excise. 14. • Package if to be delivered outside Bombay. 16. known as Yellow BoE. Examination of paper work is done and signed by the custom officer. • Shipment given to DHL on the guarantee that if it is stolen or lost. 12. 14 . Intimation letter issued by Customs to Central Excise of EOU division. and Form 17-B Bond no. It is provided to DHL by the customer. is to be mentioned on the BoE. 8. 13. File no. 5. Document sent to customs for further processing. 4. 3. Authority signatory checks all the documents and signs. Shipment is delivered to consignee after taking it from CE of EOU division. 2.PROCESS FOR EOU CLEARANCE 1. 7. Examiner will examine the package physically and sign the documents. the duty is paid. Appraisal officer checks the paper and signs the documents. 10.
get them noted in register of customs clerk .CLEARANCE PROCESS FOR EOU IMPORTS PROCESS AT ASCOT CENTRE PROCESS AT CUSTOMS Get the documents from CSA Receive the documents from ascot centre . DC signs the documents and documents are send back to Ascot center 15 . GATT and upload the data into Visual Impex Examiner physically examines the package. signs and gives registration no. Send documents back to ascot centre for correction Customs examine documents. If the contents are correct Get all the documents corrected and demand required documents from customer No Print six copies of BoE and attach all Documents to BoE Yes Examiner signs the documents and send the to auditor for signature Supervisor checks if all the documents required are present No Auditor signs the documents and send them for signature of DC Yes Supervisor signs on document and send it to customs for further processing Documents required 1) B-17 Bond 2) Detention Memo 3) AWB Copy 4) Green Card 5) IEC code 6) Invoice copy and packing list 7) Procurement certificate by Central Excise 8) File no of the file in which importer is registered in Central Excise. are documents correct No Are the required documents present and correct No Send documents back to customer and ask for fully completed documents Yes Decide the customs duty applicable on the shipment Customs officer signs the documents and send them to examiner Detain the package for later clearance Print BoE.
OTHER PROCESS RELATED TO EOU CLEARANCE These processes are done after other processes at Ascot centre and Customs are done. Appraisal Officer gives note sheet to DC DC signs the note sheet Intimation letter issued by Custom to Central Excise of EOU division Is EOU in same city Yes No Package given to DHL for taking it to EOU with the intimation letter to Central Excise of EOU division Package is accompanied by Custom Officer till EOU Package is delivered to consignee by DHL 16 .
• Triplicate and Quadruplicate for consignee (delivered after billing department does billing and attaches bill to it). Thoka no. BoE is sent to SEEPZ at MIDC. 8. Examination of shipment is done. and consignee name. IDF (Import Duty Free) no.2. PROCESS FOR SEEPZ CLEARANCE 1. PO gives permission for escorting the shipment to SEEPZ. AO passes BoE and DC Customs SEEPZ signs on it. Manual BoE made on the same day when shipment arrives. Documents are then sent to Airport for further processing. 7. Shipment is delivered to consignee and sign taken on Dform for DHL records. Gate pass is received at Airport by Escorting PO. Shipment is Passed-In by SEEPZ PO. 14. 11. Any other documents related to shipment. Documents are received from CSA. 3. AWB Invoice and Packing list. 16. 2. Noting of BoE is done by Customs and no is put on BoE. 9. 17 . 2. Documents are checked by the supervisor whether all the required documents are present. 3. Filing of R-form is done. 15. 4. Four copies of BoE made and duty calculated on the shipment is mentioned. 12. is put on BoE by the SEEPZ Customs. 10. 6. Usually shipment is accompanied by Escorting PO till the SEEPZ. is put on BoE. SEEPZ SEZ (Santa Cruz Electronics Export Processing Zone) (Special Economic Zone) DOCUMENTS REQUIRED FOR SEEPZ CLEARANCE 1. • Original and Duplicate copy for SEEPZ Customs (delivered within 15 days with a list of Thoka no. 13. 5.
put on the documents and they are sent to Airport Filing of R-Form is done for exemption of OCTROI duty Documents received along with the shipment. from Airport Gate pass issued by PO to DHL and permission given on BoE to escort the shipment till SEEPZ . Shipment usually escorted by PO till SEEPZ BoE sent to MIDC at SEEPZ Shipment passed in by the SEEPZ PO and examined by Examination Officer Documents required 1) AWB Copy 2) Invoice copy and packing list 3) Any other documents related with the shipment 4) BOE Given to DHL for delivery to the consignee 18 . Thoka No. is put on the documents Are the required documents present and correct No Noting done by customs at SEEPZ and no.PROCESS FOR CLEARANCE OF SEEPZ IMPORTS PROCESS AT ASCOT CENTER PROCESS AT SEEPZ Get the documents from CSA Send documents back to customer and ask for fully completed documents Receive the documents from Ascot Centre. is put on documents Yes Decide the customs duty applicable on the shipment Documents are passed by AO and DC Customs at SEEPZ signs the documents Print four copies of BoE IDF no.
energy. Two copies of Advance license are issued.to a manufacturer exporter or to a merchant exporter or to a supporting manufacturer. Advanced License is submitted in customs with bond B-17 and Bank Guarantee (BG) or bond with License Undertaking (LUT) for registration. Export obligation indicates the FOB value of exports that have to be made by the holder of the Advance License in lieu of the of the duty-free import facility he gets. Also. to be supplied to the ultimate exporter. catalysts etc. customs copy and excise copy. Customs copy goes to customs signed and verified. which are consumed in the course of their use to produce the export product. At the time of making BoE for imported goods. Advance License . Advance License An Advance License is issued to allow duty free imports which are physically incorporated in the export product (making normal allowance for wastage).In Part I will be recorded all the imports allowed to be made and the actual imports made (CIF Value). Other products like fuel. their quantities and value required to be exported (FOB values).3. oil. may also be allowed under this scheme. 19 . • Intermediate suppliers to a manufacturer for the import of inputs required in the manufacture of goods. license number is indicated on it. and in Part II the products. Advance License is issued for • Physical exports .Basic Points Advance License is issued in two parts . constituting the export obligation and the actual exports made (as seen in the shipping bills). mandatory spares (up to 10% of CIF value of the license which are to be supplied with the resultant product) are also allowed under the Scheme. Advance License carries with it the concepts of export obligation and value addition. This process is called bulleting.
in the system. Clear the consignment by paying the duty as applicable. License is available. Delivery of the shipment to customer after the landing of shipment. 4. Register Bond & BG at ACC and obtain relevant file number from BBG Cell. 8. Check whether the License is complete in all respects. 5. 2. 11. Bond & Bank Guarantee (BG) is provided by the importer as per the schemes. 3. 9. Hard copy of License & BoE is debited by AO. Compare the eligibility of goods imported with respect to License available.Duty levied on the imported goods is debited from the bond filled by the importer. 6. 7. 20 . 10. Bond & BG is debited in the system by AO & DC during Assessment of goods. Preparing & filing of BoE according to the scheme to be claimed. Bond & BG is accepted by the AO & DC. BoE is debited by DC against the Bond no. PROCESS FOR ADVANCE LICENCE CLEARANCE 1.
Licenses DHL Facility License is available . Register Bond & BG at ACC and obtain relevant file number from BBG Cell Bond & BG is debited in the system by AO & DC during Assessment of goods Note: Bond: Declaration given byimporter on Rs.200 Stamp paper binding himself to comply with all the conditions of notification claimed . the system Hard copy of License & BoE is debited by AO Follow the Importers for completion of Export obligation & documentation required for cancellation of Bond/ BG Clearance Agent Clear the consignm ent by paying the duty as applicable 21 . Check whether the License is com plete in all respects Air Cargo Complex Com pare the eligibility of goods im ported wrt License available Bond& Bank Guarantee (BG) is provided by the im porter as per the schem es Bond & BG is accepted by the AO & DC Proceed for preparing& filing of BoEaccording to the scheme to be claimed. Bond should be notorised and signed by 2 witnesses along with their Name & Address BBG Cell: Bond Bank Guarantee Cell BoE is debited by DC against the Bond no in .
they are not returned to origin but destroyed. snacks etc. status of vaccination etc. weapons. leaves and other herbs are checked and if found free from risk of disease or infection. If any discrepancy is found with these goods. The items related to plants like seeds. ivory. NOC for Machine parts This NOC is required for machine parts ensuring quality and safety. medicines.e. type. require a NOC issued by the Police. NOC is issued else the items are quarantined. sharp objects like knives etc. cosmetics o Checks for these items restricted in India o Personal Import of medicine can be done on Form-12B issued in Mumbai. TC (Textile Committee Certificate) This certificate is issued after ensuring that the textile being imported is free from restricted chemicals. scientific name etc. statues etc. quantity. These items should be accompanied by Certificate of origin. NOC from Archaeological Survey of India This NOC is required for antique pieces. drinks. o Checks medicine details i. This NOC is issued for animal goods like skins. flowers. PNQ (Plant Quarantine NOC) Phyto-sanitary form is required along with certificate of origin. AQ (Animal Quarantine NOC) This NOC is issued after checking the health of the animal being imported. Police NOC Some items like dead bodies. leather etc. It requires certificates of place of origin.ADC (Asst. Drug Controller) o Checks done for drugs. However if the textile imported is for making dresses which are fully for export. Form 10 is for storing imported drugs. PHO (Public Health Organization NOC) Eating products. It includes certificate from country of origin. Different types of NOC (No Objection Certificate) • WLRO (Wild Life NOC). disease it is used to cure. no NOC is required. require PHO certificate. For Aircraft parts. • • • • • • • 22 . Air worthiness certificate is also required.
23 . 9. On receipt of ADC NOC pay the required duty and clear the shipment. Importer gives a test bond (Letter of Guarantee) and clears the shipments. 7. and sample to be tested. Deliver the shipment to customer. Put up the BoE along with the Invoice to ADC. 2. 6. Receive documents from CSA. 4. Is the ADC satisfied with the above documents & sample? 8. 11. 10. Get the full markings present on the product. ADC asks for literature. On receipt of the test report ADC will give the NOC & cancel the test bond. chemical contents. Is the ADC satisfied with the details of the product? 5. Prepare BoE and report at Customs with the Filed BoE 3.PROCESS FOR ADC/NOC CLEARANCE 1.
Drugs & Pharmaceuticals Air Cargo Complex R p rt a C sto s eo t u m wth th F l e B E i e i d o Put up the BoE along with the Invoice to ADC Is the ADC satisfied with the details of the product? No G t th fu l mrki n s e e l a g p sen o th p d ct . re t n e ro u su a ch s 1 C e i ca n m ) hm l a e 2 Cn n ) o te ts 3 B tch/S ri a n ) a e l o 4 Mn factu r’ s n m ) au re ae 5 M & E d te ) fg xp a s Yes Is the ADC satisfied with the markings on the product? No ADC asks for 1) Literature 2) Chemical contents 3) Sample to be tested Is the ADC satisfied with the above documents & sample? Yes Yes No Im porter gi ves a test bond (Letter of Guarantee) and cl ear the shi pm ents Note: Importer cannot use the goods unless ADC NOC is obtained ADC endorses its NOC & clears the shipment On receipt of the test report ADC will give the NOC & cancel the test bond Cl earance A gent CSA 24 .
etc. dated 29. Advance Licences are also issued on the basis of annual requirement for exports/supplies. Advance Licences are issued under Duty Exemption Scheme to allow import of inputs. Since Advance Licence Scheme involves technicalities. energy catalysts. fuel. which are physically incorporated in the export product (after making normal allowance for wastage). All Advance Licences and/or materials. etc. can also be allowed under the scheme. airports. which is consumed in the course of their use to obtain the export product.48/99-Customs. Intermediate supplies and Deemed exports. both dated 27. (Reference: Customs notification No. on case to case basis by making suitable arrangements at such other places.4.4. ICDs. however. its operation has been restricted to limited ports.. Commissioners of Customs have. which are notified for the purpose. In addition. been empowered to permit export/import under the Scheme from any other place which has not been notified.20) 25 . In order to ensure proper monitoring and utilisation of inputs imported against Advance Licences (except Advance Licence for deemed exports). oil. a Duty Entitlement Exemption Certificate (DEEC) Book is issued along with the Advance Licence by DGFT authorities. and 51/2000-Customs. imported there under are not transferable even after completion of export obligation. Value and quantity of each item permitted duty free import are specified in the Advance Licence Advance Licences are issued for Physical exports.99 and 50/2000-Cus.SCHEMES: DEEC (Duty Exemption Entitlement Certificate) Scheme: Duty Exemption Scheme is an export promotion scheme and it enables import of inputs required for export production free of Customs duty..
in such cases brand rate of duty drawback is admissible . in cases where CVD is paid in cash on imported inputs. The DGFT have so far notified DEPB rates for nearly 2000 export products. Since DEPB Scheme also involves technicalities. its operation has also been restricted to limited ports.. dated 7.1997 under EXIM Policy 1997-2002.4. Import against DEPB scrips is allowed at the port specified in the DEPB which is the port from where exports have been made. i. These scrips are for a certain amount of DEPB credit and can be utilised for adjusting Customs Duties (Basic or CVD) against import of any products into India. however.34/97-cus.e.4. etc. been empowered to permit import/export under the scheme from any other place which has not been notified. which are notified for the purpose. ICDs. or where indigenous duty paid inputs are used in the manufacture of export product. on case to case basis. without the necessity of any co-relation between the export product and the import goods.97) 26 . The normal validity period of a DEPB Scrip is 12 months and DGFT authority (who issues the scrip) is empowered to grant revalidation. However. Commissioners of Customs have. airports. (Reference: Customs notification No.DEPB (Duty Entitlement Pass Book) Scheme: DEPB Scheme was first announced on 1. The DEPB and/or the items imported against it are freely transferable. It is an export promotion scheme and grants DEPB Credit Entitlement to an exporter at the time of export at a fixed rate notified by DGFT. No duty drawback is allowed on exports made under DEPB Scheme. it is not necessary to import only the relevant inputs corresponding to the export product.
The normal validity period of EPCG licence is 24 months and DGFT authority (who issues the licence) is empowered to grant further revalidation. 27 . Capital goods imported under EPCG Scheme are subject to actual user condition and the same cannot be transferred / sold till the fulfillment of export obligation specified in the licence.EPCG (Export Promotion Capital Goods) Scheme: Under EPCG Scheme import of capital goods which are required for the manufacture of resultant export product specified in the EPCG Licence is permitted at concessional rate of Customs duty. In order to ensure proper accountable of fulfillment of export obligation.28/97-cus.4. This Scheme also enables upgradation of technology of the indigenous industry. dated 27.2000 (5% duty)) NFEI (No Foreign Exchange Involved) This advance licence is taken by the companies who have their branches in the foreign countries.97 (10% duty) and 49/2000-cus. Advance Licence. The company is importing from its own branch and does not have to make any payments.. in accordance with the terms of the individual scheme(s). when they import goods from their branch outside India there is no foreign exchange involved in the process. the EPCG licence holder is required to indicate the EPCG licence No/date on the body of the Shipping Bill.dated 1. Exporter of goods manufactured with the help of Capital Goods imported under the EPCG Scheme is entitled to input duty incidence neutralisation benefits like Drawback. etc. (Reference: Customs notification Nos.4. In theses cases the company obtain a licence from Commissioner of Customs for exemption of duty. DFRC.
Clear the consignment by paying the duty as applicable. Check whether the License is complete in all respects. Bond & BG is debited in the system by AO & DC during Assessment of goods. License is available for the clearance under the required scheme. 8. 7. 10. Delivery of the shipment to customer after the landing of shipment. in the system. 4. Compare the eligibility of goods imported with respect to License available. 9.Process followed for Schemes Clearance. Preparing & filing of BoE according to the scheme to be claimed. 5. 11. Bond & Bank Guarantee (BG) is provided by the importer as per the schemes. Register Bond & BG at ACC and obtain relevant file number from BBG Cell. 2. Hard copy of License & BoE is debited by AO. 28 . 6. Bond & BG is accepted by the AO & DC. 1. BoE is debited by DC against the Bond no. 3.
200 Stamp paper binding himself to comply with all the conditions of notification claimed . Register Bond & BG at ACC and obtain relevant file number from BBG Cell Bond & BG is debited in the system by AO & DC during Assessment of goods Note: Bond: Declaration given byimporter on Rs. Bond should be notorised and signed by 2 witnesses along with their Name & Address BBG Cell: Bond Bank Guarantee Cell BoE is debited by DC against the Bond no in . the system Hard copy of License & BoE is debited by AO Follow the Importers for completion of Export obligation & documentation required for cancellation of Bond/ BG Clearance Agent Clear the consignm ent by paying the duty as applicable 29 . Check whether the License is com plete in all respects Air Cargo Complex Com pare the eligibility of goods im ported wrt License available Bond& Bank Guarantee (BG) is provided by the im porter as per the schem es Bond & BG is accepted by the AO & DC Proceed for preparing& filing of BoEaccording to the scheme to be claimed.SCHEMES CLEARANCE PROCESS DHL Facility License is available .
o The price charged in case of ADC/NOC is only in the case of WMX shipments. Textile Committee. etc respectively. This additional cost for different types of special clearance and the prices charged by DHL Express are as following: • • • Comparison between Cost Incurred and Price charged to customer EOU SEEPZ ADC / NOC Advance License Schemes Charged Nil Nil 1000 Nil Nil Cost Incurred 410 410 410 / 700 410 410 o The charges mentioned above are in rupees. o The two costs mentioned in case of ADC/NOC are the cost incurred in case of ADC and NOC for Plant Quarantine. 30 . COST DETERMINATION • The cost incurred by the company in the Special Clearance process which is to be taken in to account is the additional cost above the cost incurred in the normal clearance process. o The Price Charged from customer does not include the freight charges. the customs duty. etc. o The cost incurred is the additional brokerage charge incurred during the special clearance process. The cost incurred in the normal clearance process is accounted for and is charged to the customer. This additional cost is needed to be charged from the customer in the terms of brokerage charge. the other custom charges.DATA COLLECTION 1.
) 410 410 No of shipments Cleared 149 200 Total Cost (In Rs.) 61090 82000 143090 EOU SEEPZ TOTAL May 2008 EOU SEEPZ TOTAL Cost Incurred (In Rs.April 2008 Cost Incurred (In Rs.) 72570 84870 157440 • Total cost incurred by company on EOU and SEEPZ clearance in two months was Rs.) 410 410 No of shipments Cleared 177 207 Total Cost (In Rs. 31 . 300530.
The data was collected with the help of an open ended and multiple choice type questionnaires. In order to find out the prices prevailing in the market data from different companies was collected with help of survey. 32 .Market Study The Competitors are providing different types of Special Clearance at different prices. They are also taking different amount of time for same type of clearance. The time taken by each company and price charged by them for different types of Special Clearance processes are shown in the table.
DHL Express 1 2 2 1 1 1 1 SEEPZ NA 1 2 2 2 2 1 ADC NOC 1 1 1 1 1 1 1 Advance License 2 1 2 3 2 3 2 Schemes 2 1 2 3 2 3 2 • Time mentioned is approximate. and is in No. of days for each kind of clearance. Ltd. Welgrow India Pvt. 33 . Ltd.Time taken by DHL and other companies for the various clearance processes: EOU TNT UPS AFL Cargo Partner Schenker India Pvt.
Ltd. Welgrow India Pvt. 1000 for ADC /NOC in only in case of WMX shipment. 34 . DHL charge of Rs. DHL Express 3000 1600 2500 2000 1800 2000 Nil SEEPZ NA 1600 2500 2000 1800 2000 Nil ADC NOC 3000 1600 2500 2000 1800 2000 1000 Advance License 3000 2000 2500 2000 1800 2000 Nil Schemes 3000 2000 2500 2000 1800 2000 Nil • • Charges mentioned are approximate and are in INR. Ltd.Charges of DHL and other companies for various Special Clearance process EOU TNT UPS AFL Cargo Partner Schenker India Pvt.
DATA ANALYSIS 1. 35 . of Days. GRAPH OF TIME TAKEN BY VARIOUS COMPANIES • Time taken is in No.
EOU • The charges mentioned are in INR.• Comparison of charges by different companies for various special clearance processes. 1. 36 .
2. SEEPZ SEE PZ 2500 2000 1500 1000 500 0 TNT A FL Sc henker DHL India Pvt. Ex press Ltd. 37 . SEEPZ • The charges mentioned are in INR.
ADC NOC • • The charges mentioned are in INR. ADC / NOC ADC NOC 3000 2500 2000 1500 1000 500 0 TNT AFL Schenker DHL India Pvt. 38 . Express Ltd. The charge by DHL is only in the case of WMX shipment otherwise it is not charging anything.3.
Advance License • The charges mentioned are in INR.4. 39 .
5. Schemes • The charges mentioned are in INR. 40 .
Prices charged 11. In case of ADC/NOC company charges Rs. The time taken by various companies for all the Special clearances varies from one day to three days. 3000 but DHL is not charging anything. 1000 only in the case of Cargo WMX shipments other shipments are not charged. 9. In the case of SEEPZ all the other companies are charging price from Rs 1500 to Rs 2500 but here also DHL is not charging from the customer. 2. except AFL and UPS who take a day extra than others. 41 . 12. ADC / NOC clearance is done by all the companies in same time. SEEPZ clearance is done fastest by DHL and UPS while others take an extra day and TNT does not do SEEPZ clearance. For EOU all the companies do in almost same number of days. 4. In SEEPZ Clearance Company is not charging any thing from the customers. The cost incurred by DHL in EOU clearance is not charged to the customer. 1500 to Rs. 7. 5. DHL and all the other companies take two days to do the Advance License and Schemes clearance except Cargo Partner and Welgrow India who take three days. In the case of EOU shipment all the companies are charging price from the customer in the range of Rs. Time Involved 6. which was not charged to the customer. The total cost incurred by company in two months of April and May in EOU and SEEPZ clearance was around Rs 300530. 8.Findings Cost incurred 1. 3. The company is also not charging the customer for Advance License and Schemes Clearance under Cargo. 10.
14. 16.13. In the terms of ADC DHL charges only in the case if the shipment is WMX else no charges are levied all the other companies are charging in the above mentioned range. 15. 42 . The prices charged by all the company are different and there is no fixed charge in the market. In the case of Advance License and Schemes Clearance all the other companies are charging price from the customer except DHL. The charges depend mostly on market forces.
the billing software so as just after indicating the type of shipment the price is automatically added in the bill. so it should charge for faster services. All the competitors or companies are charging price to The price should include cost and sufficient margin but The price can be charged under brokerage charges. The company will not lose business as even after charging The prices to be charged must be uploaded in the ACA and customers. 7. 2. the cost. so it should be charged to customer. to other companies or in same time as others. 4. should be less than that if other companies for the same process. 43 . 8. 5. sufficient margin for its services. 6. the prices will remain the lowest in the market.SUGGESTIONS AND RECOMMENDATIONS 1. 3. So DHL should also charge for the same. The company may be losing upon revenues and profits by Company should charge a price which includes a cost plus DHL is providing all the clearance in lesser time compared not charging to customers.
5. 2. The authenticity of data provided by the companies cannot be verified. The time and charges mentioned for the clearance process are approximate.LIMITATIONS 1. Some companies either refused to reply while others provided information which was not very reliable. The study is based on the data collected with the help of questionnaire and the response of companies. 3. Usually the companies contacted were not comfortable in disclosing the data without knowing the exact motive. 44 . 4.
DEPB. What are the types of special clearance done by your organization under imports? (Tick which ever applicable) (a) EOU (Export Oriented Unit) (b) SEEPZ (Santacruz Electronics Export Processing Zone) (c) ADC NOC (No objection Certificate) (d) Advance licence (e) Schemes (DEEC. Any information provided here in will be used purely for academic / research purpose and will be kept confidential. Que1. EPGC. What are the services provided to customers by your organization? (a) Courier (b) Cargo (c) Post (d) Others Que2. NFEI) DEEC: Duty Exemption Entitlement Certificate DEPB: Duty Exemption Passbook EPGC: Export Promotion Goods Certificate NFEI: No foreign Exchange Involved (f) Any other (Please mention) ____________________________________________________________________ _ 45 .ANNEXURE Questionnaire The objective of this questionnaire is to study and analyze the Special Clearance process of major Express / Cargo companies.
How much do you charge (in INR) for EOU clearance other than freight. What documents are required for SEEPZ clearance? (Tick which ever applicable) (a) AWB (b) Invoice and Packing list. How much is the time taken for shipment to get cleared under EOU clearance? (a) Less than 1 day (b) 1 day (c) 2 days (d) More than 2 days Que5. (g) Green Card copy. (h) File number of the importer registered in Central Excise. duty and customs charges? ________________________________________________________________________ SEEPZ Que6. (d) IEC (Indian Exporters Certificate) Code. What documents are required for EOU clearance? (Tick which ever applicable) (a) Detention Memo. (c) Invoice copy and Packing list. (f) Form 17-B bond. (e) Procurement Certificate by Central Excise of EOU division.EOU Clearance Que3. (b) AWB (Airway bill) Copy. (c) Any other (Please mention) __________________________________________________________________ ___ 46 . (i) Any other (Please mention) __________________________________________________________________ ___ Que4.
What documents are required for ADC NOC clearance? (Tick which ever applicable) (a) AWB (Airway Bill) (b) Invoice and Packing list (c) ADC / NOC Copy (d) Any other (Please mention) ____________________________________________________________________ _ Que13.Que7. How much is the time taken for shipment to get cleared under Advance licence clearance? (a) Less than 1 day (b) 1 day (c) 2 days (d) More than 2 days Que11. How much is the time taken for shipment to get cleared under SEEPZ clearance? (a) Less than 1 (b) 1 day (c) 2 days (d) More than 2 day days Que8. What documents are required for Advance Licence clearance? (Tick which ever applicable) (a) AWB (Airway Bill) (b) Invoice and Packing list (c) Advance Licence Copy (d) Any other (Please mention) ____________________________________________________________________ __ Que10. How much do you charge (in INR) for SEEPZ clearance other than freight. How much do you charge (in INR) for Advance licence clearance other than freight. duty and customs charges? ________________________________________________________________________ ADC / NOC (Assistant Drug Controller / No objection certificate) Que12. How much is the time taken for shipment to get cleared under ADC NOC clearance? 47 . duty and customs charges? ________________________________________________________________________ Advance Licence Que9.
duty and customs charges? (Please mention against required) (a) DEEC (Duty Exemption Entitlement Certificate): (b) DEPB (Duty Exemption Passbook): (c) EPGC (Export Promotion Goods Certificate): (d) NFEI (No foreign Exchange Involved): Please fill in your details below: Name_________________________________________________ Designation__________________________________________ Organization_________________________________________ Phone________________________________________________ Email________________________________________________ Website______________________________________________ 48 . duty and customs charges? ________________________________________________________________________ Schemes (DEEC.(a) Less than 1 day (b) 1 day (c) 2 days (d) More than 2 days Que14. How much is the time taken for shipment to get cleared under Schemes clearance? (a) Less than 1 day (b) 1 day (c) 2 days (d) More than 2 days Que17. and NFEI licences (d) Any other (Please mention) ____________________________________________________________________ _ Que16. How much do you charge (in INR) for ADC / NOC clearance other than freight. How much do you charge (in INR) for Schemes clearance other than freight. EPGC.What documents are required for Schemes clearance? (Tick which ever applicable) (a) AWB (Airway Bill) (b) Invoice and Packing list (c) Advance licence copy of DEEC. NFEI) Que15. EPGC. DEPB. DEPB.
gov.ieport. www.nic.dhl-discoverlogistics.in 5. www.in 12. www.gov. www.dpwn.nic.in 49 .com 11.Thank You BIBLIOGRAPHY 1.gov.com 10. www. www. www. http://dateyvs.in 4.gov. www.com 8.gjepc.bluedart.in 7.icegate.org 3.accmumbai.com 9.in 6.ias.mcgm.cbec.com/regulatory.html 2. www. www.ices. www.
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