India's engineering exports fell 19 per cent short of the target last fiscal at USD 58.

2 billion on account of weak demand from major markets like the US and Europe. The government had set a target of USD 72 billion. "In the first half of 2011-12, the exporters were getting good number of orders, but in the second half there was a weak demand from western markets like the US and Europe," said an official of the Engineering Export Promotion Council (EEPC), which is under the Ministry of Commerce. India's engineering exports are likely to touch USD 76 billion in the current fiscal, an increase of about 27 per cent year-on-year, mainly due to increasing demand from new markets in Latin America. "We are getting good demands from new markets like Brazil, Mexico, Argentina and Columbia. Exporters are also getting good orders from West Asia and Africa too," Engineering Exports Promotion Council (EEPC) Chairman Aman Chadha said. The engineering sector contributes about one-fourth of the country's overall merchandise exports and the share is expected to grow further, Chadha said. During April-June this fiscal, the sector's shipments grew by 94 per cent year-on-year to USD 23 billion. In 2010-11, engineering exports registered their highest ever growth of about 85 per cent to USD 60.1 billion. However, Chadha said outbound shipments during the second half of the current fiscal may get hit due to the end of the Duty Entitlement Pass Book (DEPB), a tax benefit scheme, by September-end. The lion's share of about 60 per cent of the funds under the DEPB goes to exporters in the chemical and engineering sectors.

Under the 14-year-old DEPB scheme, the government spends about Rs 8,500cr annually to reimburse exporters on the taxes paid on the import equivalent content of export products. Exporters are lobbying hard with the Commerce Ministry for further extension of the scheme. "After September, engineering exports may not show excellent growth rates due to the end of DEPB," he said, adding, "If the government fixes high rates in the Duty Drawback scheme, then the high growth could continue."

The government plans to replace the DEPB with an alternate Duty Drawback scheme. The DEPB, which was to end on June 30, was extended till September so that there could be smooth transition to the Duty Drawback scheme. The Commerce Ministry is looking at increasing the country's engineering exports to USD 125 billion by 2013-14. Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners. India's exports stood at USD 245.9 billion in 2010-11.

DOCUMENTATION: EXPORTS Providing your Forwarder with a suitable “letter of authorization” to act as your agent on overseas documentation matters. Although not a required or standardized document, preparing a thorough and well organized “Shipper’s Letter of Instructions” (SLI) is a good practice for your company to establish. You can give your Forwarder limited authorization and initial instructions

with an SLI as soon as the shipment details emerge, which allows time to prepare documents, make arrangements, and ask questions. Freight Forwarder is not absolutely required for a successful export shipment; a licensed Customs House Broker is required to clear goods imported into any country, including the United States. Below are some factors to consider when determining which documents are needed for a particular shipment. Country of origin and destination, as well as transshipment Mode of transportation — truck, rail, ocean, air, pipeline Commodity — agriculture, livestock, safety/security, end-use, intangible- software, service Size — value, volume, weight, dimensions Parties to the transaction — shipper, consignee, agents, brokers, banks Documents can be prepared by the exporter and then processed or forwarded by a Freight Forwarder. Invoices — Commercial, Pro-forma, Consular Packing Lists — Dock, or Warehouse, Receipt Bills of Lading (B/L) — Ocean B/L, or Motor/Truck or Air Bill, or Way Bill Electronic Export Information (formerly the Shipper’s Export Declaration or SED) is not an actual document but still a very important part of the export process Certificates of Origin (C/O), sometimes country-specific — NAFTA C/O, Israel C/O Declaration of Dangerous Goods (DGD) — Hazmat, placards Certificates — Insurance, Free Sale, Inspection, Phytosanitary, Authentication (Apostille) Miscellaneous: Letters of Credit, ATA Carnet, Duty Drawback Essential Documentation The invoice and bill of lading are the two documents required for every export shipment.

INVOICES Pro-forma Invoice: A pro-forma invoice is an invoice sent to the buyer before the shipment, giving the buyer a chance to review the sale terms (quantity of goods, value, specifications) and get an import license, if required in their country. It also allows the buyer to work with their bank to arrange any financial process for payment. For example, to open a Documentary Credit (Letter of Credit), the buyer’s bank will use the pro-forma invoice as a source of information. The exporter/seller should not send their customer a pro-forma invoice unless they fully understand what they are offering to the buyer. If no changes are required on the pro-forma invoice after the buyer reviews it, the exporter can simply change its date and title and turn it into a commercial invoice. Commercial Invoice: A commercial invoice is prepared by the seller/exporter and addressed to the buyer/importer, and is one of the first documents prepared when a transaction has been agreed upon. The invoice identifies the buyer and seller, describes the goods sold and all terms of sale, including Inco Terms, payment terms, relevant bank information, shipping details, etc. An invoice may be itemized to show cost of goods, freight, and insurance, or other special handling. The invoice may be numbered and have multiple “purchase order” numbers. U.S. Customs does not actually need a copy of the invoice, unless requested, but the information included is used to prepare other documents. Consular invoice: A consular invoice is the commercial invoice stamped or notarized by the consulate or embassy of your customer’s country, if required. For example, if you are exporting to Egypt and your buyer requires a consular invoice, the Egyptian embassy in Washington, D.C. will do this for a small fee. Usually a freight forwarder will offer this service, but an exporter can send the original invoice to the consulate, have it notarized/legalized as required, pay the fee, and have the documents returned or forwarded on. It is important to understand that consular invoices are required in the buyer’s country, so you need to add the time/costs associated with obtaining one to the price of the goods

This document is used to transfer accountability when goods are moved by the domestic carrier to the port of embarkation and left with the international carrier. The quantity and items listed on the commercial invoice must match with the packing list. The invoice should include a [non]-diversion statement. For insurance claims and tracking purposes.. Whoever presents one of those Original. At this time. a packing list is taped to palletized cargo or on the main carton/box of a shipment so that the importer’s customs agency or any transportation handlers can have easy access to it to know what the goods are and their destination. it helps to describe what is in each “package”. The packing list should also reference the customer’s purchase order number and destination. the buyer or seller . Bills of Lading (B/L) A Bill of Lading is issued by the carrier to the shipper for receipt of the goods. A B/L can be either negotiable or nonnegotiable. Sometimes the B/L acts as title to the goods so an “Original” B/L is issued. Non-negotiable (or “straight”) B/L: Indicates that the shipper will deliver the goods to the buyer and that title of the goods has not been transferred to the shipper (i. MATERIAL HANDLING Packing List: A packing list is prepared by the shipper and is a detailed breakdown of the items within a shipment. and is a contract between the owner of the goods and the carrier to deliver the goods.you are shipping.e. Dock (or Warehouse) Receipt: The dock or warehouse receipt is issued by a warehouse supervisor or port officer and certifies that the goods have been received by the shipping company. but not necessarily match the pro-forma invoice. It may also include any “special marks” for identification. the customer may want “ABC XX” in blue letters on the side of the packaging. the carrier’s Bill of Lading is also signed by both parties and copies are issued accordingly. For example.usually a set of three. Often. Negotiable B/L can take possession of the goods.

issued “to the order of” a party. basically confirming the cargo will be sailing. are in need of customs clearing. Usually the importer can pick up the goods after customs clearance and duties are paid. It can also be issued “to the order of” the buyer’s bank as part of a documentary credit/letter of credit stipulation so that when the buyer’s bank receives the Original B/L. usually the shipper. Sometimes the negotiable B/L may be consigned “To Order” without reference to a company. . but not customs clearance unless the terms are “delivered duty paid”. Negotiable (or “shipper’s order”) B/L: Serves as a title document to the goods. whose endorsement is required to effect its negotiation.“owns” the goods while they are being shipped). whereas a “Straight” B/L is non-negotiable and is consigned to the buyer. This type of B/L is often used when payment for the goods has already been made in advance. Bills of Lading also include a “notify party” (usually the buyer or their agent) so that when the vessel arrives at the port of destination. and may be issued as a “clean” bill of lading. or are ready for pick up. they can endorse it over to the buyer at the time of payment for the buyer to clear the goods at customs. An “On-Board” B/L may be issued when the goods are received into the carrier’s port facility. “Freight Prepaid” means the shipper pays the freight charges. A negotiable B/L can be bought or traded while the goods are in transit. “Freight Collect” means the consignee pays the freight charges as well. Ocean Bill of Lading (OBL): The Ocean B/L is an invoice. Inland Bill of Lading: Issued by the trucking company and/or the railroad line for taking the goods from the exporter’s facility to the port of embarkation or consolidation facility. the carrier can notify the party that the goods are available. meaning the carrier certifies that the goods have been received without visible damage.

. If the value is under $2. exports valued $2. Free Trade Agreement. verifying the actual filing. like Israel. the exporter must note that using the following statement: “No EEI required. volume and destinations of U. A “house airway bill” is issued by a freight forwarder on behalf of the actual carrier. quantities. Census uses the EEI to collect trade data on the products. dollar value. have a special green C/O form that must be used.stating the items’ country of origin. some countries.” CERTIFICATES Certificate of Origin (C/O): A document prepared by the original manufacturer and certified by a quasi-official authority such as a Chamber of Commerce .S.500. mainly because of the short amount of time that the goods are in transit. The original AWB is rarely needed by the importer at the other end of the shipment to prove ownership of goods. An EEI is filed online and the Internal Transaction Number (Sample: ITN X20091110000001) is applied to key shipping documents. AWBs are non-negotiable. the exporter is responsible for classifying their product under the appropriate Schedule B Number. An EEI is required for U. Export and License Declaration Electronic Export Information (EEI): “EEI” is the acronym for the new process of filing what was the Shipper’s Export Declaration (SED) form 7525V. B/L.e.Air Way Bill (AWB): The Air Way Bill is a form of bill of lading used for the air transport of goods.S. Most countries that require a C/O will accept a generic C/O as long as all of the required data elements are given.500 or more per individual Schedule B Number.S. shipment valued under $2. To take advantage of duty free provisions in a U. Certificate of Insurance: This document indicates the type and amount of insurance in force on a particular shipment for loss or . exports. i. or HS Code. Invoice. However. To properly complete an EEI. which is the case when a freight forwarder has a contract rate with an air cargo service to expedite the documentation. be sure to use the particular C/O that addresses the “rules of origin” criteria for each country.500 per individual Schedule B Number.

Certificate of Inspection: Some customers will require a “preshipment inspection” to satisfy their own requirements or local regulations. confirming the status of the notary who has witnessed the original document. Neutral organizations specialize in these types of certifications. It is sometimes referred to as marine insurance. sometimes referred to as a “merchandise passport”.S. or cosmetic products and can be issued by the VEDP or U. confirming compliance with phyto sanitary safety regarding agricultural and animal health standards. Sometimes an inspector can look at a sample. Certificate of Authentication (Apostille): An original document that has been notarized may require “authentication” by the Secretary of the Commonwealth. this passport allows a company to ship needed materials to foreign trade shows or conduct repairs . It is often required for agricultural. For a fee.. Certificate of Free Sale: This form may be required by the importing country to ensure that the goods offered for entry comply with domestic requirements for sale in the U.damage while in transit. whereby an inspector checks the goods in question prior to shipment. FDA. ATA Carnet: A Carnet. and quantity of hazardous materials and reports the proper classification for each item. but other times inspection must occur when the goods are packaged to issue a certificate. or carrier specification.S.S. according to an industry. quantity. but may cover the entire voyage. duty-free basis only. Phyto sanitary Certificate: Primarily a document required to import goods into the U. is used for shipping goods to countries on a temporary. Special Documents Declaration of Dangerous Goods (DGD): A DGD declares the nature. government. medicinal. An Apostille certificate will be issued according to the country (language) of destination.

IMPORTS . Documentary Letters of Credit (L/C): A letter of credit is a document issued by a bank committing to pay the seller/exporter a stated amount of money on behalf of the buyer/importer as long as the specific terms and conditions are met. errors or making changes to the L/C are the most costly and time consuming because of the risk of payment in error.overseas. Within a year. the materials must return to the U. in order to avoid a hefty fine.S. Of all shipping documents.

places only Computerizatio Customs procedures are largely computerized. . Boat Notes ‘Boat Notes’ are used for transferring small cargo from ship to shore. Goods can be exported only specified from specified places. These can be stored in Inland Container Depot (ICD) or Container Freight Station (CFS). Coastal goods Procedures have been prescribed for coastal goods. Shipping Bill or Bill of Export. warehoused or exported. without berthing the ship. even if there is neither import nor export. ICD and CFS Imported and export goods are usually handled in containers. Such transshipment may be to any major port or airport in India.Basic document Entry’ in relation to goods means entry made in is ‘Entry’ Bill of Entry. The facility is available at all customs ports and Inland Container Depots (ICDs). [Proviso to section 149]. In case of import by post. shipping bill or bill of export. label or declaration accompanying goods is ‘entry’ Loading and Imported goods can be unloaded only at unloading at specified places. or from shore to ship. Transshipment Goods can be transshipped from one conveyance of goods to other after following required procedure. n of customs Most of documents have to be e-filed. The goods can be transshipped to any other customs station in India if Customs Officer is satisfied that the goods are bona fide intended for transshipment to any customs station. it can be amended after clearance only on the basis of documentary evidence which was in existence at the time the goods were cleared. and not on basis of any subsequent document. They function like dry port for handling and temporary storage of imported/export goods and empty containers. procedures Amendment to Documents submitted to customs can be documents amended with permission In case of bill of entry.

GENERAL PROVISIONS ABOUT CUSTOMS PROCEDURES Import Procedures .

with Export Promotion Council if he intends to EPC Risk Self Assessment on basis of ‘Risk Management claim export benefits. Export duty is paid. E-filing of documents is required. After that. duty free color (d) pre-audit is for export of and assessment Customs duty is paid after -assessment. of is done Advance authorization. and examined. Bill of Entry is noted. Export computerized. officer. Duty is not paid and imported goods to export. examined and shipping bill carried out. Electronic submission of documents of FTP] intending to export goods [para 9. by exporter on behalf of Bill of Entry for Importer has to submit Bill of Entry giving details person another).40 payment Registration ofin major ports. or Import report submit Import Manifest or Import Report. Most of customs procedures are Outward’ is given by customs officer. Let export order Conveyance can leave only after ‘Let Export’ order is issued.duty free goods . Imported goods are cleared on payment of Promotion customs duty. relevant Demurrage if Demurragedocuments if goods are not cleared is payable are checked and certified. Then documents for clearance from from port/airport of export is obtained on ARE-1. DEPB etc. Goods can port delayed be incentives disposed of if not cleared from port within 30 days. charge order Customs Charge’ order is issued by customs if assessment. from bonded store room Bond Bond is executed if required color (e) Shipping Bill for it should be pink if assessment is provisional export under DEPB schemerate of color. Merchant exporter means a home of goods being imported. It is for Shipping Bill for export of dutiable goods . goods ex-bond i. It is also Shipping Mill Export is required to submit Shipping Bill with warehousing termed as ‘into bond Bill of Entry’ as bond is required documents for obtaining permission executed.Blue customs duty is subject to form (under FEMA) FEMA formalities GR/SDF/Soft ex certain post import is required conditions. other charges are paid and goods are cleared. third party (i. should be yellow color (c) Shipping bill for Noting. There are five forms : (a) Shipping are transferred to warehouse where these are Bill for export of goods under claim for duty stored. goods are Noting.e.this ex-bond clearance. Person in charge of conveyance is required to Import manifest ‘Person in charge of conveyance’ is required to manifest/Export submit ‘Export Manifest’ or ‘Export Report’. Management party System’ (RMS) has been introduced in respect of or Third Export can be by manufacturer himself System exports specified goods and importers.these should be in Green color (b) warehouse on payment of customs duty. to be submitted. along with required engaged in trading activity and exporting or consumption on documents. Certification of If export is under export incentives. under Export Promotion Scheme. . Report Registration Exporter has to be obtain IEC number from Entry InwardsDGFT and Goods can DGFT is advance.it should be white export of Goods are assessed to examination duty. port dues. demurrage and examination applicable.e. should be customs documents duty registered if exports are under Export White Bill of Entry is for home consumption. export proof within three days. Green Bill of Entry is for clearance from drawback . (PD bond) or concessional . Out of customs Goods can The shipping bill is port after ‘Out of assessed be cleared outside noted.EXPORT PROCEDURES e-filing of Goods should arrivein conveyance can start after ‘Entry Entry Outward Loading at customs port/airport documents only. Scheme Bill of Entry for Yellow Bill of Entry is for warehousing. after grant be ‘Entry be unloaded only He should of registered with Inwards’.

However. ATA Actual Time of Arrival. based airlines and Air Transport Association of America to U.INTERNATIONAL SHIPPING TERMS AQIS Australian Quarantine and Inspection Service. is the broadest kind of standard coverage. Normally AWB refers to the Air Waybill issued by carrying airlines and also called Master Air Waybill (MAWB) which comes with three digits of numeric airline identification codes issued by IATA to non-U. a type of marine insurance. Aircraft Container A unit load device (ULD) which links directly with the airplane cargo handling and restraint system. and riots. Air Way Bill An AWB is a bill of lading which covers both domestic and international flights transporting goods to a specified destination.S. Allotment . Technically. indicating that the carrier has accepted the goods listed therein and obligates it to carry the consignment to the airport of destination according to specified conditions. based airlines. ATD Actual Time of Departure.S. strikes. air freight forwarders also issue HAWB(House Air Waybill) to their customers for each of the shipments. or Airport-To-Airport. All Risk All Risks Coverage. it is a non-negotiable instrument of air transport which serves as a receipt for the shipper. but excludes damage caused by war. or Air Transport Association of America.

sold. A straight bill of lading is nonnegotiable. but without loading fees. BAF (Bunker Adjustment Factor) An adjustment in shipping charges to offset price fluctuations in the cost of bunker fuel. or traded while goods are in transit and is used for many types of financing transactions. There are two types. Goods to be delivered alongside are to be placed on the dock or lighter within reach of the transport ship's tackle so that they can be loaded aboard the ship. . Alongside A phrase referring to the side of a ship. Goods are delivered to the port of embarkation. they will break the consolidation apart per HAWB then precede customs clearance along with associated shipping and import documents. The goods are not subject to duties if re-shipped to foreign points.A term used to describe blocked space by airlines on behalf of forwarders/shippers. When freight forwarder receives the consolidated cargo from carrier. Bonded Warehouse The Customs Service authorizes bonded warehouses for storage or manufacture of goods on which payment of duties is deferred until the goods enter the Customs Territory. Bill of Lading (B/L) Bills of lading are contracts between the owner of the goods and the carrier. Break Bulk (B/B) For consolidated air freight. it is moved under one MAWB and each consignment designated to specific consignee or recipient is under one HAWB. The customer usually needs the original or a copy as proof of ownership to take possession of the goods. Such Break-Bulk is normally handled by airlines or their contracted ground handling agent. A negotiable or shipper's order bill of lading can be bought.

The CAF is charged as a percentage of the freight. CAF (Currency Adjustment Factor) It is a freight surcharge or adjustment factor imposed by an international carrier to offset foreign currency fluctuations. These invoices are often used by governments to determine the true value of goods for the assessment of customs duties and are also used to prepare consular documentation. Governments using the commercial invoice to control imports often specify its form. and number of copies. demonstration or other purposes without paying import duties or posting bonds. and other characteristics. content. without damages or other irregularities. Commercial Invoice The commercial invoice is a bill for the goods from the seller to the buyer. In some cases an emergency currency adjustment factor (ECAF) may be applied when a charge or rate has been originally published in a currency that is experiencing sustained or rapid decline. Clean Bill of Lading It is a receipt for goods issued by a carrier with an indication that the goods were received in apparent good order and condition. Vessels are usually self-sustaining in that they have their own loading and unloading machinery.Break-bulk Vessel A general cargo vessel designed to efficiently handle uncontainerized cargo. Combi Aircraft An aircraft configured to carry both passengers and cargo on the Main Deck. Carnet A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries for display. Consignee . language to be used.

or carriage and insurance paid to.) Customs . Under this term. Consignment It is a delivery of merchandise from an exporter (the consignor) to an agent (the consignee) under agreement that the agent sell the merchandise for the account of the exporter. The consignee sells the goods for commission and remits the net proceeds to the consignor. CIP.) Also. Insurance and Freight (CIF) Cost. Consolidation In order to handle small lot of consignment efficiently and competitively. is a term used for shipment by modes other than water. (Typically used for ocean shipments only. is a term used for shipment by modes other than water. Under this term. the seller quotes a price for the goods that includes the cost of transportation to the named point of debarkation. each consignment will be shipped with one HAW respectively and all of them will be under one master AWB. the documentation differentiates between an intermediate consignee and an ultimate consignee. Cost and Freight (C&F) Cost and Freight (CFR) to a named overseas port of import. freight forwarder usually put many consignments into one lot then tender to carrier for forwarding.The person or firm named in a freight contract to whom goods have been consigned or turned over. insurance. the seller quotes a price for the goods (including insurance). and freight (CIF) to a named overseas port of import. Cost. The consignor retains title to the goods until sold. and miscellaneous charges to the point of debarkation for the vessel. For export control purposes. a method of import valuation that includes insurance and freight charges with the merchandise values. all transportation. CPT. or carriage paid to. (Typically used for ocean shipments only. In this case. The cost of insurance is left to the buyer's account.

Customs Invoice A document. payment of import duties and other required documentations by the nature of the cargo such as FCC or FDA approval. describing the shipment of goods and showing information such as the consignor. required by some foreign countries' customs officials to verify the value.The government authorities designated to collect duties levied by a country on imports and exports. as any person who is licensed in accordance with Part III of Title 19 of the Code of Federal Regulations (Customs regulations) to transact Customs business on behalf of others. The U.S. consignee. Dangerous Goods Commodities classified by IATA according to its nature and characteristic in terms of the effect of its danger to carrier's flying safety. the payment of duties. Customs Service defines a Customs Broker. . or other charges assessed or collected by Customs upon merchandise by reason of its importation. its classification and valuation. quantity. DDP Deliver Duty Paid. and value of the shipment. Customs Clearance The procedures involved in getting cargo released by Customs through designated formalities such as presenting import license/permit. taxes. rebate. or the refund. Customs business is limited to those activities involving transactions with Customs concerning the entry and admissibility of merchandise. DDU Deliver Duty Unpaid. or drawback thereof. and nature of the shipment. Customs Broker An individual or company licensed by the government to enter and clear goods through Customs.

Commerce. nonconsolidation. This is the size of consignment calculated by total square feet by 6000. in whole or in part. is an international syntax used in the . Demurrage refers only to situations in which the charter or shipper. Direct Ship Shipment without consolidation and under one MAWB i. Demurrage Excess time taken for loading or unloading a vessel. rather than the vessel's operator.e. is at fault. Not to be confused with Delivery Order which is used for import cargo. Duty A tax imposed on imports by the customs authority of a country.Delivery Instructions Provides specific information to the inland carrier concerning the arrangement made by the forwarder to deliver the merchandise to the particular pier or steamship line. Electronic Data Interchange for Administration. EDI EDI. and Transportation. Duties are generally based on the value of the goods. or a combination of value and other factors (compound duties). thus causing delay of scheduled departure. of customs duties assessed on imported merchandise that is subsequently exported. Drawback Drawback is a rebate by a government. Drawback regulations and procedures vary among countries. Carrier charge for freight based on the dimensional weight or actual gross weight whichever is higher. some other factors such as weight or quantity (specific duties). Dimensional Weight Also called measurement weight.

This allows easy fork-lift and crane access. Forty-Foot Equivalent Unit (FEU) . CY is the abbreviation of Container Yard. Flat Rack Containers Especially for heavy loads and over-dimensional cargo. This trade term places the greatest responsibility on the buyer and minimum obligations on the seller. However. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. ETA Estimated Time of Arrival. it means full container load all the way from origin to destination. CL or CY Full Container Load. Customs usesEDI to interchange data with the importing trade community.interchange of electronic data. ETD Estimated Time of Departure. Then. The cut-off time for carriers' cargo ramp handling is normally two hours ahead of ETD. It normally takes 3 hours for carriers to Break Bulk then ready to be picked up by forwarders along with customs release notification. Containers do not have sides or a top. Ex Works (.. the freight forwarders' consolidation cut-off time may vary depending on each forwarder's operations respectively. Federal Maritime Commission The FMC is an independent agency’s which regulates ocean borne transportation in the foreign commerce and in the domestic offshore trade of the United States. also known as CY. the seller merely makes the goods avaliable to the buyer at the seller's "named place" of business..named place) (EXW) A term of sale in which for the quoted price. When the term CY to CY.

FEU is a measure of a ship's cargo-carrying capacity. Free Alongside Ship Free alongside Ship." means that the seller pays the freight for the carriage of the goods to the named destination. FOB normally comes with port of loading either airport or sea port. FREE ON BOARD (FOB) Common price term used in international trade meaning sellers responsible for the cost of goods is to the point of loading it to the vessel deck or aircraft loading deck. FAS are also a method of export and import valuation. Freight Carriage ." but with the addition that the seller has to procure transport insurance against the risk of loss of damage to the goods during the carriage. Free Carrier (FCA) Free Carrier. Under FAS.. paid to Like C & F. and Insurance paid to This term is the same as "Freight/Carriage Paid to . loading. ocean transportation. "Freight/Carriage paid to . the risk of loss of or damage to the goods.. .. including air. This term replaces the former "FOB named inland port" to designate the seller's responsibility for the cost of loading goods at the named shipping point... The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods have been so delivered. and insurance are left to the buyer. However. It may be used for multimodal transport. to a named place.. The seller contracts with the insurer and pays the insurance premium.. at a named port of export. FCA.. the seller quotes a price for the goods that includes charges for delivery of the goods alongside a vessel at the port of departure. FAS. container stations. and any mode of transport. One FEU measures forty feet by eight feet by eight feet -. The seller handles the cost of unloading and wharfage. Freight Carriage . An FEU equals two TEUs.the dimensions of a standard forty-foot container.

The forwarder arranges for cargo insurance. The GST is calculate thus: (Purchase price of goods + Duty + Insurance + Freight) x GST . Freight for All Kinds (FAK) FAK is a shipping classification. making up and assembling the necessary documentation for submission to the bank in the exporter's name. gateway refers to a major airport or seaport. Gateway In the context of travel activities. waybill or carrier's receipt. makes the necessary overseas communications. (Also see incoterms) Freight Forwarder An independent business which handles export shipments for compensation. When the seller has to furnish a bill of lading. Internationally. and advises the shipper on overseas requirements of marking and labeling. The forwarder takes care of all documentation needed to move the shipment from origin to destination. GST Goods and Service Tax. he duly fulfills this obligation by presenting such a document issued by the person with whom he has contracted for carriage to the named destination. Goods classified FAK are usually charged higher rates than those marked with a specific classification and are frequently in a container which includes various classes of cargo. known as the CIF value. gateway can also mean the port where customs clearance takes place. is payable on the landed cost of the goods.as well as of any cost increases. is transferred from the seller to the buyer when the goods have been delivered into the custody of the first carrier and not at the ship's rail. At the request of the shipper. the forwarder makes the actual arrangements and provides the necessary services for expediting the shipment to its overseas destination. GST in relation to importing. The term can be used for all modes of transport including multi-modal operations and container or "roll on-roll off" traffic by trailer and ferries.

timetables. is a trade association serving airlines. developed under the auspices of the Customs Cooperation Council. It is for use in reservations. IATA headquarter is in Geneva. passengers. and aids in establishing international airfares. The association promotes safety. Beginning on January 1. HS) is a system for classifying goods in international trade. tariffs as well as air waybill. travel agents. Import Certificate The import certificate is a means by which the government of the country of ultimate destination exercises legal control over the internal channeling of the commodities covered by the import certificate. shippers. Also referred as import permit. Import License A document required and issued by some national governments authorizing the importation of goods. With such documentation. weigh bills). Harmonized System The Harmonized Commodity Description and Coding System (or Harmonized System. tickets. 1989. customs clearance can be conducted. IATA Designator Two-character Airline identification assigned by IATA in accordance with provisions of Resolution 762. including the United States. Import Restrictions . the new HS numbers replaced previously adhered-to schedules in over 50 countries. tickets. iATA International Air Transport Association (IATA). established in 1945. Switzerland. standardization in forms (baggage checks.HAWB House Air waybill issued by carrying airlines' agent. and governments. normally freight forwarder.

forwarding agent. or the prohibition of various categories of imports. rail. It is as good as the issuing bank. or other intermediary (if any) that acts in a foreign country as an agent for the exporter. applied by a country with an adverse trade balance (or for other reasons). airplane. for the purpose of effecting delivery of the export to the ultimate consignee. this codification of terms is used in foreign trade contracts to define which parties incur the costs and at what specific point the costs are incurred. Integrated Carriers Carriers that have both air and ground fleets. Intermodal Movement of goods by more than one mode of transport. railroad and ship. Intermediate Consignee An intermediate consignee is the bank. and other combinations. the imposition of import surcharges. (Also see incoterm section) Insurance Certificate This certificate is used to assure the consignee that insurance is provided to cover loss of or damage to the cargo while in transit. Since they usually handle thousands of small parcels an hour. i. the purchaser. Incoterms Maintained by the International Chamber of Commerce (ICC). they are less expensive and offer more diverse services than regular carriers. or the ultimate consignee. restrictions on the amount of foreign currency available to cover imports. such as sea. and truck. a requirement for import deposits. truck.e. reflect a desire to control the volume of goods coming into the country from other countries may include the imposition of tariffs or import quotas. Irrevocable Letter of Credit A letter of credit in which the specified payment is guaranteed by the issuing bank if all terms and conditions are met by the drawee.Import restriction. .

An exporter who requires a confirmed letter of credit from the buyer is assured payment from the U. documents required.S. A Revocable Letter of Credit is subject to possible recall or amendment at the option of the applicant. This is the most commonly used container in passenger aircraft. Normally it contains a brief description of the goods. Letter of Credit A financial document issued by a bank at the request of the consignee guaranteeing payment to the shipper for cargo if certain terms and conditions are fulfilled. bank. LD3 Lower deck type 3 container. A Documentary Letter of Credit is one for which the issuing bank stipulates that certain documents must accompany a draft. None of the terms and conditions may be changed without the consent of all parties to the letter of credit. a shipping date. The full cargo . A Confirmed Letter of Credit is issued by a foreign bank with its validity confirmed by a U. The documents assure the applicant (importer) that the merchandise has been shipped and that title to the goods has been transferred to the importer. and an expiration date after which payment will no longer be made. Lower Deck The compartment below the Main Deck (also synonymous with lower hold and lower lobe). bank in case the foreign buyer or bank defaults.LCL Less than Container Load. Main Deck The deck on which the major portion of payload is carried. An Irrevocable Letter of Credit is one which obligates the issuing bank to pay the exporter when all terms and conditions of the letter of credit have been met. without the approval of the beneficiary.S. consolidated container load. normally known as Upper Deck of an airplane.

Marine insurance typically compensates the owner of merchandise for losses in excess of those which can be legally recovered from the carrier that are sustained from fire.. products count.p.).a. or damage to. marine life and Maori resources. protecting the health of New Zealanders and ensuring the welfare of our environment." NVD No Value Declared. insurance covering loss of. measurement of each package. and "All Risks Coverage. POD Proof of Delivery. Marine Cargo Insurance Broadly. shipwreck. or a cargo/package receipt with the signature of recipient. Three of the most common types of marine insurance coverage are "free of particular average" (f. etc. weight of each package. flora and fauna. Customs and consignee serving the purposes of identifying detail information of package count. piracy.).a. There is no upper deck or main deck type of container/pallet at passenger aircraft. Pro Forma Invoice . Ministry of Agriculture and Forestry MAF or Ministry of Agriculture and Forestry has now changed its name to The newly formed Ministry for Primary Industries. Packing List A shipping document issued by shipper to carrier. This term has been widely used in courier and express industry and also gaining more attention and implementation at air cargo industry.freighter aircraft has it entire upper deck equipped for main deck type of containers/pallets while Combi aircraft uses it rear part of the upper deck for cargo loading. It is charged with leadership of the New Zealand biosecurity system. "with average" (w. and various other causes. This encompasses facilitating international trade. goods at sea.

informing the buyer of the kinds and quantities of goods to be sent. a Pro Forma Invoice from the beneficiary of such Letter of Credit. boxes. Subchapter XIII. When an importer apply's for Letter of Credit as the means of payment. including the weight of moisture content. Temporary Importation under Bond When an importer makes entry of articles and claimed to be exempt from duty under Chapter 98. is required by the L/C issuing bank. Project Cargo This is a term normal referred to when shipping cargo air or sea. size. Roll-on. Tare Weight The weight of a ULD and tie down materials without the weight of the goods it contains. I.An invoice provided by a supplier prior to the shipment of merchandise. Shipping Mark The letters. an IATA company. Shipping Weight Shipping weight represents the gross weight in kilograms of shipments. wrappings. which does not fall within standard methods. and similar characteristics). crates. over-height or oversize cargo which requires special equipment and handle. and important specifications (weight. Harmonized Tariff Schedule of the United States. numbers or other symbols placed on the outside of cargo to facilitate identification. and containers (other than cargo vans and similar substantial outer containers). their value. Roll-off (RORO) A type of ship designed to load and discharge cargo which rolls on wheels or tracks.e. a bond is posted . usually the exporter. TACT TACT stands for The Air Cargo Tariff. It is published by IAP -International Airlines Publications.

container with integral pallet. War/Strike Clause . One TEU measures twenty feet by eight feet by eight feet -. Any type of container. Value for Customs Purposes Only The U. Transshipment Transshipment refers to the act of sending an exported product through an intermediate country before routing it to the country intended to be its final destination. Failure to export these items makes the importer liable for the payment of liquidated damages for breach of the bond conditions. Through Bill of Lading A single bill of lading covering receipt of the cargo at the point of origin for delivery to the ultimate consignee. Customs Service defines "value for Customs purposes only" as the value submitted on the entry documentation by the importer which may or may not reflect information from the manufacturer but in no way reflects Customs appraisement of the merchandise. Ultimate Consignee The ultimate consignee is the person located abroad who is the true party in interest. aircraft container or aircraft pallet. receiving the export for the designated enduse.with Customs which guarantees that these items will be exported within a specified time frame (usually within one year from the date of importation). using two or more modes of transportation.the dimensions of a standard twenty-foot container. An FEU equals two TEUs. Twenty-Foot Equivalent Unit (TEU) TEU is a measure of a ship's cargo-carrying capacity.S. ULD Unit Load Device.

SEA FREIGHT TERMS (short) B.F.F.A.A.An insurance provision that covers loss due to war and/or strike.S.F. Currency adjustment factor (balance for fluctuations in rate of the various currencies) C. Container service charge (transit costs for containers in Europe) C.Y. (Container Yard) Place where loaded containers are delivered to be shipped or forwarded C/S Congestion surcharge (surcharge for waiting time in the ports) Conference Line Conference Line Shippers which are members of a committee DEMURRAGE Rent of container. Bunker adjustment factor (balance for changing fuel costs) B/L Bill of Lading (transport document listing the sea transport from departure to destination) C. if the container is not picked up at the port within a set time . Wharf age A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.S. Without Reserve A term indicating that a shipper's agent or representative is empowered to make definitive decisions and adjustments abroad without approval of the group or individual represented.C. Container freight station (warehouse where the consolidation containers are loaded or unloaded) C.

Less than container load (partial deliveries) LCL/FCL Consignments in one container from several senders for one recipient LCL/LCL Partial deliveries.T.B.C. Estimated time of arrival (planned arrival of ship) E. Motor Ship M.D.C. Motor Vessel (High-sea ship) Non Conference Line (Outside) Shippers which are not members of a committee Non-Negotiable -Bill of Lading Unsigned B/L copies. not an ownership document) E. which are put into one container in the container freight station and then separated at the destination M.T.C. Full container load (full container service) FCL/FCL Full container service from door to door FCL/LCL Consignments in one container from a sender for several recipients FEU Forty foot equivalent unit (40 foot container unit) L. Estimated time of departure (planned departure of ship) F.DETENTION Rent of container if the empty container is not returned on time E.L.V. Express Cargo Bill of Lading (a freight document.A. which are not originals and therefore have no permit allowances Notify Additional to notified address .L.S.

Where such fundamental phrases as "delivery" can have a far different meaning in the business than in the rest of the world.H.O. Word definitions often differ from industry to industry.O.L.A. depending which is higher) INCOTERMS Language is one of the most complex and important tools of International Trade. Terminal handling charge (Handling costs for container) T/T Transit time TEU Twenty foot equivalent unit (20 foot container unit) W/M Weight or Measurement (calculation of sea freight based on tones or cubic meters. Trans Atlantic Agreement (Committee in the Trans Atlantic Service) T.P.A. That is why the International . This is especially true of global trade. For business terminology to be effective.D. small changes in wording can have a major impact on all aspects of a business agreement. phrases must mean the same thing throughout the industry. Port of discharge P. As in any complex and sophisticated business. Port of loading Stripping Unloading of container Stuffing loading of container T-B/L Through Bill of Lading T.C.

Two items. There are 11 different terms. however. It is also vital for sellers & buyers to arrange insurance on their goods while the goods are in their "legal" possession. however. and broken relationships. each of which helps users deal with different situations involving the movement of goods. "delivery" refers to the seller fulfilling the obligation of the terms of sale or to completing a contractual obligation. lawsuits. are standard: the commercial invoice and the packing list. Determining the paperwork required to move a shipment is an important job. but the business results. the term FCA is often used with shipments involving Ro/Ro or container transport. specifying which parties are responsible for which documents. What is important is not the acronyms.Chamber of Commerce created "INCOTERMS" in 1936. Seemingly common words such as "responsibility" and "delivery" have different meanings in global trade than they do in other situations. since requirements vary so much between countries. In global trade. For example. INCOTERMS can thus have a direct financial impact on a company's business. Outsiders frequently find them difficult to understand. INCOTERMS were created primarily for people inside the world of global trade. the terms wind up boiling down to a few basic specifics: It is essential for shippers to know the exact status of their shipments in terms of ownership and responsibility. Each INCOTERM refers to a type of agreement for the purchase and shipping of goods internationally. In the end. Lack of insurance can result in wasted time. INCOTERMS also deal with the documentation required for global trade. Often companies like to be in control of their .INCOTERMS are designed to create a bridge between different members of the industry by acting as a uniform language they can use. "Delivery" can occur while the merchandise is on a vessel on the high seas and the parties involved are thousands of miles from the goods.

we'll tell you what terms such as CIF and FOB mean and their impact on the trade process. The buyer is responsible for making arrangements with their forwarder for insurance. Terms beginning with F refer to shipments where the primary cost of shipping is not paid for by the seller. . That being the case. which gives them a good grasp of shipments moving out of their country. since we realize that most international buyers and sellers do not handle goods themselves. but work through customs brokers and freight forwarders. buyers and sellers should be aware of this. In an EX-Works transaction. Because shipments are moving into a country. In this glossary. export clearance and handling all other paperwork. INCOTERMS are most frequently listed by category. and buyers may prefer to purchase FOB. Recently the ICC changed basic aspects of the definitions of a number of INCOTERMS. which gives them a tighter hold on goods moving into their country. In addition. EXW (EX-Works) One of the simplest and most basic shipment arrangements places the minimum responsibility on the seller with greater responsibility on the buyer. D terms also deal with the pier or docking charges found at virtually all ports and determining who is responsible for each charge. we'll discuss how both fit into the terms under discussion. Terms that have changed have a star alongside them.freight. In addition. sellers of goods might choose to sell CIF. Terms beginning with C deal with shipments where the seller pays for shipping. D terms usually involve the services of a customs broker and a freight forwarder. E-terms occur when a seller's responsibilities are fulfilled when goods are ready to depart from their facilities. goods are basically made available for pickup at the shipper/seller's factory or warehouse and "delivery" is accomplished when the merchandise is released to the consignee's freight forwarder. D terms cover shipments where the shipper/seller's responsibility ends when the goods arrive at some specific point.

the shipper also chooses the forwarder. Given that the shipper is responsible for transportation. FAS require the shipper/seller to clear goods for export. the seller is responsible for arranging transportation. "Delivery" is accomplished at a predetermined port or destination point and the buyer is responsible for Insurance. "Delivery" is accomplished at this time. . CFR (Cost and Freight) This term formerly known as CNF (C&F) defines two distinct and separate responsibilities-one is dealing with the actual cost of merchandise "C" and the other "F" refers to the freight charges to a predetermined destination point. "Delivery" is accomplished when the shipper/seller releases the goods to the buyer's forwarder. "Delivery" is accomplished when the goods are turned over to the Buyers Forwarder for insurance and transportation. FOB specifically refers to ocean or inland waterway transportation of goods. Where in FOB the freight forwarder or carrier is the choice of the buyer. in FCA the seller chooses and works with the freight forwarder or the carrier. Though frequently used to describe inland movement of cargo. Companies selling on these terms will ordinarily use their freight forwarder to clear the goods for export. It is the shipper/seller's responsibility to get goods from their door to the port of destination. FAS (Free alongside Ship)* in these transactions. FOB means that the shipper/seller uses his freight forwarder to move the merchandise to the port or designated point of origin. FCA (Free Carrier) In this type of transaction. The buyer's responsibility for insurance and transportation begins at the same moment. but he is acting at the risk and the expense of the buyer. It is the buyer's responsibility to cover insurance from the port of origin or port of shipment to buyer's door. which is a reversal from past practices. the buyer bears all the transportation costs and the risk of loss of goods.FOB (Free On Board) One of the most commonly used-and misused-terms.

It is the shipper/seller's responsibility to insure the goods and absorb all costs and risks including the payment of duty and fees. naming the buyer as the insured while the goods are in transit. Insurance and Freight) This arrangement similar to CFR. except for costs related to import clearance. When this particular agreement is in force. is accomplished at the port of destination. The shipper/seller pays for carriage to the named place. The buyer's insurance is effective when the goods are turned over to the Forwarder.CIF (Cost. as carriers. DAT (Delivered At Terminal) This term is used for any type of shipments. DDP (Delivered Duty Paid) DDP term tend to be used in intermodal or courier-type shipments. . the shipper/seller is only required to purchase minimum coverage. the shipper/seller is responsible for dealing with all the tasks involved in moving goods from the manufacturing plant to the buyer/consignee's door. DAP (Delivered At Place) DAP term is used for any type of shipments. "Delivery" as above. CPT (Carriage Paid To) In CPT transactions the shipper/seller has the same obligations found with CIF. In this arrangement. Because it relies on the carrier's insurance. but instead of the buyer insuring the goods for the maritime phase of the voyage. and assumes all risks up to the point that the goods are unloaded at the terminal. CIP (Carriage and Insurance Paid To) This term is primarily used for multimodal transport. Freight Forwarders often act in effect. Whereby. The shipper/seller pays for carriage to the terminal. the seller usually chooses the forwarder. and assumes all risks prior to the point that the goods are ready for unloading by the buyer. except for costs related to import clearance. the shipper/seller will insure the merchandise. with the addition that the seller has to buy cargo insurance.

each example in this paragraph could be classed as transshipment or none of them could be. TRANSSHIPMENT Bear in mind that transshipment is a physical condition. but may be accomplished using more than one device (i.such as rail cargo transferring to road due to a problem with the rail track or bad weather. Sometimes the use of more than one device may be intentional. two vessels. If partial shipments are "not allowed". transit may involve a single type of transport (such as sea freight). Equally.e. then your supplier may ship for example 10units on the 02/04/09 then another 50units on 15/04/09 and then the remaining 40units on 24/04/09. this means that the supplier may ship the order in as many shipments as he likes until the latest shipment date on the L/C. Lots of parties involved in trade have opinions on what the word transshipment means but the only parties to have a uniformly clear and documented opinion on the subject are the banks. The banks have an interest in transshipment as it creates risks that . it may involve a single device (vehicle. vessel etc) or several devices. whereas the credit is a documentary process. then the supplier must ship the total 100unit (give or take tolerance amount) in one single lot on any given day before the 30/04/09.) Depending on your point of view. If you have ordered say a total 100units of a commodity and the latest date of shipment on the L/C is the 30/04/09.PARTIAL SHIPMENT If an L/C calls for partial shipments to be "allowed". such as in the case of multimodal transport. aircraft. sometimes it can be necessary due to unforeseen events . When cargo moves from point A to point B. Accordingly what a transshipment ‘is' depends upon whether you mean in the contract of the physical world at large or only in the narrow context of the credit.

‘.from one conveyance or vessel to another conveyance or vessel. The main problem with this view arose in instances of containerized cargo. .' This effectively meant that every multimodal event involved transshipment as did every hub and spoke movement in airfreight or any sea freight event that involved a feeder service. there was an automatic discrepancy which lead to problems. Banks are able to offer a clear definition of transshipment through the work of the International Chamber of Commerce banking committee and their publication in respect of the Uniform Customs and Practices for Documentary Credits (UCP. Under this pre-1993 UCP definition.. where multimodal movement is the central intention and is virtually unavoidable. The exact definition was.) Prior to the 1993 publication (UCP 500).the transfer and reloading during the course of carriage. With the revision of the UCP in 1993... The likely reason that the applicant prohibited transshipment in the first place was because their own ‘physical' understanding of what transshipment means was at odds with the banks documentary concept.. in that a broken journey could involve cargo leaving country ‘A' but being diverted in transit away from country ‘B'.. multimodal cargo was always ‘transshipped' and if a documentary credit was drawn up with the common clause ‘transshipment not allowed'.need to be considered and managed. subsequent to payment having been made. within the same mode of transport or from one mode of transport to another mode of transport. In that publication it reads. the definition of (sea freight) transshipment was changed.. It may also involve the presentation of documents (under a documentary credit for example) that govern only a portion of the journey. earlier versions of the UCP defined transshipment very narrowly.

the UCP went further and allowed the banks to accept any (conforming) document which indicates that transshipment will or may take place. the text used to define documentary transshipment has been revised and reads Sea freight . the bank's concept of transshipment remains documentary as cargo loaded on a vessel in port ‘A'.' The airfreight equivalent clause substitutes ‘aircraft' for ‘vessel'.. a) transport document may indicate that the goods will or may be transshipped provided that the entire carriage is covered by one and the same transport document.carriage from the port of loading to the port of discharge. Provided one transport document is issued for the entire journey. whereas the road and rail definitions describe transshipment as the movement from one of these modes (road or rail) to the other (road or rail). But as the name emphasizes. containerized cargo moving from road to rail before shipment or subsequent to shipment is no longer seen as transshipment in terms of the documentary credit. (However. rely heavily on an understanding of the physical underlying event of movement."reloading to another means of conveyance (whether or not in different modes of transport) during the carriage from the place of dispatch..unloading and reloading from one vessel to another vessel during. even if the credit prohibits transshipment.. provided the entire journey is covered by one transport document. So. Thus. With this codicil. taking in charge or shipment to the place of final destination stated in the credit. If the . (Further a) transport document indicating that transshipment will or may take place is acceptable.‘.. With the UCP 600 2007 revision. a documentary credit is a ‘documentary' event and is distinctly detached from the physical event of the sale and movement of cargo. The definitions of transshipment. removed in port ‘B' and placed onto a second vessel for carriage to port ‘C' does not involve transshipment in the bank's view. however.

even if the credit prohibits transshipment. they are therefore difficult to comment on. during the carriage from the place of shipment."transshipment means unloading from one aircraft and reloading to another aircraft during the carriage from the airport of departure to the airport of destination stated in the credit. trailer or LASH barge as evidenced by (the sea freight transport document) Airfreight . an) air transport document indicating that transshipment will or may take place is acceptable. and are billed to the importer in the exporter's invoice. this concept of transshipment represents the bank's point of view. rail or inland waterway transport document may indicate that the goods will or may be transshipped provided that the entire carriage is covered by one and the same transport document. (However a) road. (Further. even if the credit prohibits transshipment.goods have been shipped in a container. but as none of these are uniformly applied (unlike the banks)."transshipment means unloading from one means of conveyance and reloading to another means of conveyance. There are other views flowing from the physical condition of transshipment. within the same mode of transport. Prepaid= whoever is shipping Collect =whoever it is delivered to FREIGHT PREPAID Air or ocean freight charges that are paid at the port of origin or loading. (Further) a road. It is not refundable even if . rail or inland waterway transport document indicating that transshipment will or may take place is acceptable. (However an) air transport document may indicate that the goods will or may be transshipped. provided that the entire carriage is covered by one and the same air transport document. dispatch or carriage to the place of destination stated in the credit. Road and Rail . As stated.

then they will pay the charges the trucking company charges to move the item.f. For example. and you pay the shipper for shipping. Items such as Gold Nibs. Duty Entitlement Pass Book DEPB. This amount could be more or less than what you give the shipper. FREIGHT AS ARRANGED "Freight Collect" is a term used in the freight moving business that means that the freight will be paid by the person receiving the freight. but will be automatically billed to you by the company that you use. then they will ship it "freight collect". 1/4/2000. though covered under the generic description of writing instruments. If you have an account with a certain trucking company. Gold watches etc. the exporter is given a duty entitlement Pass Book Scheme at a pre-determined credit on the FOB value. The alternative would be "Freight Prepaid". if the FOB value is Rs. which is issued after exports. Gold Pen. If you order something. Notified on 1/4/1997.e. The pre-export DEPB scheme was abolished w. meaning the trucking company will need a check payable to them when they deliver your item. The DEPB Rates are applied on the basis of FOB value or value cap whichever is lower. components of writing instruments and watches are thus not eligible for benefit under the DEPB scheme.700/- . If you tell the shipper that you will pay the cost when it arrives.the shipment fails to arrive at its destination. The DEPB rates is allows import of any items except the items which are otherwise restricted for imports. Under the post-export DEPB. then you can request that the shipper use that company so that you may be billed. theDEPB Scheme consisted of (a) Post-export DEPB and (b) Pre-export DEPB. It will still be "Freight Collect". Duty Entitlement Pass Book Scheme in short DEPB is an export incentive scheme.

1 to 4. In such cases.per piece. • .15 of Handbook (Vol.per piece.500/-. The DEPB rate and the value cap shall be applicable as existing on the date of exports as defined in paragraph 15. and the value cap is Rs.3 and 4. Implementation of the DEPB Rates Some additional facilities as listed below have been provided for better implementation of the DEPB Rates DEPB rates rationalized to account for the changes in Customs duties. The provisions of DEPB Scheme are mentioned in Para 4.500/. as per SION.5 of the Foreign Trade Policy or Exim Policy. extraneous material up to 5% shall be ignored and the DEPB rate as notified for that export product is be allowed.3. Review of DEPB Rates The Government of India review the DEPB rates after getting the appropriate a export import data on FOB value of exports and CIF value of inputs used in the export product.3.5 of the Exim Policy evenexcise duty paid in cash on inputs used in the manufacture of export product shall be eligible for brand rate of duty drawback as per rules framed by Department of Revenue which was not mentioned in the earlier DEPB Scheme. Such data and information is usually obtained from the concerned Export Promotion Councils. DEPB Scheme is issued only on post-export basis and pre/export DEPB Scheme has been discontinued. • Caps fixed on certain items but there would be no verification of Present Market Value (PMV) on such items.1).3. Benefits of DEPB Rates The benefit of DEPB schemes is available on the export products having extraneous material up to 5% by weight. the DEPB rate shall be applied on Rs. One significant change in the new DEPB Scheme is that in terms of Para 4.

Madurai and the land Customs station at Ranaghat Mallanpur. Trivandrum. Dharamtar and Jamnagar. Moradabad. . Kanpur. Kota. Kakinada. Bangalore. (Wanjarwadi and Maliwada). Meerut Nagpur. Cochin. Hyderabad. Marmagoa. 200 million for fixing new DEPB rates removed. Cochin. Kolkata. Nasik. Sikka. Guntur. Surat (Magdalla). Maintenance of Record It is necessary for Custom House at ports to maintain a separate record of details of exports made underDEPB Schemes. Okha . However. Nagpur and Chennai. Dighi (Pune). Port of Registration The exports/imports made from the specified ports given shall be entitled for DEPB. Daulatabad. Bangalore. • The threshold limit of Rs. Chennai. Mundra. Nagapattinam. including DEPB. Varanasi. Srinagar. Ahmedabad. Kandla.A number of ports have been added for availing facilities under the Duty Exemption Scheme. • Provisional DEPB Rate The main objective behind the provisional DEPB rates is to encourage diversification and to promote export of new products. Gauhati (Amingaon). Jallandhar. Tuticorin Vishakhapatnam. Bhiwadi. Coimbatore. Hyderabad. Jaipur. Faridabad. Dahej. provisional DEPB rates would be valid for a limited period of time during which exporter would furnish data on export and import for regular fixation of rates. Bhubaneshwar Mumbai. Kolkata Coimbatore Air Cargo Complex. Pipavav. Ludhiana. Mangalore. Delhi. Rudrapur (Nainital). Sea Ports: Mumbai. Jodhpur. Jaipur. Pitampur (Indore). Delhi. Paradeep. Airports: Ahmedabad. Nhavasheva. Pimpri (Pune). ICDs : Agra.

Nautanva ( Sonauli). During export. Singhabad . Karur. LCS: Ranaghat. amount of credit against each such export product shall not exceed 50% of Present Market Value (PMV) of export product. Miraj and Rewari. Chennai. The exports made to the following Special Economic Zones (SEZ) are also entitled to DEPB. Utilization of DEPB credit Credit given under DEPB Schemes is utilized for payment of indian customs duty including capital goods. which has been found defective or unfit for use may be again exported according to the exim guidelines as mentioned by the Department of Revenue. Tirupur. exporter shall declare on shipping bill that benefit under DEPB Scheme would not exceed 50% of PMV of export product. NOIDA Credit under DEPB and Present Market Value In respect of products where rate of credit entitlement under DEPB Scheme comes to 10% or more. Waluj. Chheharata (Amritsar). However PMV declaration shall not be applicable for products for which value cap exists irrespective of DEPB rate of product. Surat. Kandla. Varanasi.Garhi-Harsaru. Bhilwara. SEZ : Santacruz . Surat. Raxaul . Jogbani. Re-export of goods imported under DEPB Scheme In case of return of any exported goods. Petrapole and Mahadipur. Bhatinda. . Vishakhapatnam. Dappar. Vadodara. Pondicherry . which are free to import. FALTA.Salem Singanalur. Udaipur. Kochi.

In such cases 98% of the credit amount debited against DEPB for the export of such goods is generated by the concerned Commissioner of Customs in the form of a Certificate. On the basis of certificate. . a fresh DEPB is issued by the concerned DGFT Regional Authority. It is important to note that the issued DEPB have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/unfit goods. containing the amount generated and the details of the original DEPB.

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