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Summer internship report

On
Customs house agent in
Chandra shipping and trading services
Submitted to
Lovely professional university

Mentor
Mr. AMRISH DOGRA
Mentor (14804)

Submitted by
Name
: t.sirisha
Reg no

: 11203157

Section : Q1205
Stream : mba (ib)

Contents
ACKNOWLEDGEMENT ....................................................................................................................... 4
Project topic : customs house agent ....................................................................................................... 5
Objective of the study .............................................................................................................................. 5
Introduction to study................................................................................................................................ 5
Company profile...................................................................................................................................... 7
Logistics .............................................................................................................................................. 7
Vision .................................................................................................................................................. 8
Mission ............................................................................................................................................... 8
Company allocated mentor .................................................................................................................. 8
Some competitors of Chandra shipping and trading services ................................................................ 8
References in company ...................................................................................................................... 10
Chandra shipping & trading services branches ................................................................................... 10
INTRODUCTION TO CUSTOM HOUSE AGENTS: ........................................................................... 13
CHA DEMAND IN INDIA ................................................................................................................... 13
INDIA IS WORLDS MAJOR IMPORT & EXPORT DESTINATION: ............................................. 13
Duties and Obligations of a CHA: ...................................................................................................... 15
Objectives Of Indian Custom EDI System: ........................................................................................ 19
OPERATIONS OF CUSTOM HOUSE AGENTS .................................................................................. 21
CLEARANCE PROCEDURE FOR IMPORTS ................................................................................. 21
CLEARANCE PROCEDURE FOR EXPORTS ................................................................................. 30
INTERNATIONAL FREIGHT TERMS .......................................................................................................... 36
Conclusion: ........................................................................................................................................... 49

DECLARATION
I, T.Sirisha, student of Lovely Professional University have completed the Project on Custom
House Agents and Its Operations
To study the Whole Export procedure &what are the duties and responsibilities of a Custom
House Agents.
The information given in this project is true to the best of my knowledge.

(T.Sirisha)

ACKNOWLEDGEMENT
I cannot forget acknowledging them in few words as without the guidance & co-ordination of
them in my project report would not have been possible.
Many individuals contributed to this project. I am thankful to all of them for their help and
encouragement. My writing in this project report has also been influenced by a number of
website and standard textbooks.
First of all I owe my heartfelt gratitude to my faculty guide Mr. Amrish dogra for his noble
guidance throughout the completion of the Project.
I would like to extend my heartfelt thanks to my trainer Mr.shiva Kumar of Chandra shipping
and trading services, Kakinada, A.P for giving me an opportunity to work on this project. For
his guidance, inspiration, and constructive suggestions, which helped me in the Project.
I must also thank the management of Chandra shipping and trading services to provide
excellent opportunity and environment to be able to pull my project through. Cooperation of the
staff is also gratefully acknowledged.
Last but not least, also give my sincere thanks to all the people to directly indirectly have help
and encourage me in finding the way to us collecting the requisite information and completing
the project effectively and timely.

Project topic : customs house agent

Complete documentation and filed operations (customs documentation) in customs.

Objective of the study

Exploring the opportunity in shipping fortuning for upcoming executives.


Complete documentation and filed operations in customs.
To know what are the duties and responsibilities of custom House Agents.

Introduction to study
This project is all about to know about export import procedure/ documentation of shipment.
This project puts more focus on to know custom clearness, to make export - import invoice, to
get shipping bill number from custom department etc. This project will also find out how
Chandra shipping and trading services could sustain in the competitive world by providing vast
range of cargo handling through all instruments which flexible prompt and innovative in meeting
the requirement of the customer. The purpose of the study was to know about export procedure
and custom house responsibilities of Chandra shipping and trading services.
CHA is a person who is licensed to act as an agent for transaction of any business relating to the
entry or departure of conveyances or the import or export of goods at any Customs station. The
agent to do everything that an importer or an exporter can do .Filing a bill of entry, shipping bill,
submitting supporting documents therewith, helping in examination of goods, payment of duty
on behalf of the principal, warehousing of goods, removal from warehouse and the like.

Important Abbreviations

Company profile
Beginning the journey with 4 people under 1 roof, Chandra Group has grown into
workforce of 600 plus spread across 25 offices including the major ports. More than a
decade long, we have gained rich experience & good exposure of varied upstream segment
by serving clients ranging from PSU & private operators to drilling contractors, seismic
surveyors, construction companies, dredging companies, OSV companies, etc.
Why CHANDRA

Understand your business needs & offering personalized services 24 x 7

Consistency, Reliability & Quality services are our USP

Maintaining good client base for over a decade

Services with no hidden cost & no cost escalation

Logistics

Operating in east coast and west coast.

Management of international and domestic ocean/air Freight, project cargo handling and
transportation.

Arranging Various Statutory Clearances, Licenses, Permits, Customs Clearances and Security
Clearances for Men & Material.

Import/export of vessels/barges/rigs/equipment/ consumables/door-to-door logistics.

Port Operations, Vessel Agency, Stevedoring, Break-Bulk Handling.

Yard/shore base facilities for storage (open and covered)/ warehouse management.

Handling equipment like cranes, forklifts, trailers and multi-axle trailers for ODC, trucking, etc.

Crew Management.

Project office set-up/workshop/fabrication yard/inspection & testing facilities.

Chartering and Ship Broking.

Charter Helicopters, meet and greet facilities/co-ordination with local supply boats.

Vision
To have extensive and substantial presence in the support services related to Oil and Gas industry
with care for the environment by developing relevant systems and procedures and competent
employees to address the needs of the clients in timely, satisfactory and compliant manner.
Mission
Achieving excellence in supply chain management by providing superior customer service.

Company allocated mentor


Mr. Shiva kumar
Senior executive in operations
Email : shivakumarb@chandra_logistics.com
Phone : 09848017895

Some competitors of Chandra shipping and trading services


Seahorse offshore & marine services Pvt. Ltd
Location : valasapakala, Kakinada,
East Godavari dist,
Andhra Pradesh, India
GAC shipping (I) Pvt. Ltd
Location : rammohanraja nagar, Kakinada -3
East Godavari dist,
Andhra Pradesh

Cargo gear services Pvt. Ltd


Location : vakalapudi, Kakinada,
East Godavari dist,
Andhra Pradesh

Paras offshore services


Location : main road, Kakinada,
East Godavari dist,
Andhra Pradesh
Oceanic offshore international
Location : valasapakala, Kakinada,
East Godavari dist,
Andhra Pradesh
Admiral marine services Pvt. Ltd.
Location : dairy form centre, Kakinada,
East Godavari dist ,
Andhra Pradesh
TCRC
Location : tilak street, Kakinada,
East Godavari dist,
Andhra Pradesh
Eastern petro technologies (India) Pvt. Ltd.
Location : tammavaram Kakinada,
East Godavari dist,
Andhra Pradesh
KEI RSOS Maritime Ltd
Location : atchampet junction, Kakinada,
East Godavari dist,
Andhra Pradesh
Skilled engineering
Location : NFCL Road, Kakinada,
East Godavari dist,
Andhra Pradesh

References in company
Mr. Sri ram
Managing director
Email : sriramb@chandra_logistics.com
Phone : 09393794666

Mr. Shiva Kumar


Senior executive in operations
Email : shivap@chandra_logistics.com
Phone : 09848017895
Mr. Ramana murthy
HR manager
Email : ramanamurthy@chandra_logistics.com
Phone : 0984845918
Mr. Venkat
Senior executive in operations
Email : venkatbhagawathi@chandra_logistics.com
Phone : 09550326701 , 09848949401
Mr. k.Prasad
Senior executive in operations
Email : prasadk@chandra_logistics.com
Phone : 09948098990

Chandra shipping & trading services branches


CHENNAI
89/49,SAIBABA TEMPLE LANE,
ANNA SALAI, GUIDNDEY,CHENNAI -600032
PHONE : (044)22323036,45532465 FAX : 044-45532464

MUMBAI
602-603, SAGAR TECH PLAZA B ANDHERI KURLA ROAD,SAKI NAKA,

ANDHERI(EAST)MUMBAI 400 072,


PHONE : 022 66780206/07, 42008000 FAX : 022 66780208

VISAKHAPATNAM
D.NO 9-28-1, MARUTHI NIKETAN, CBM COMPOUND,
VISAKHAPATNAM 530 003
PHONE : 0891 2707845, FAX : 0832 2712555

GOA
OLD MPT BOARD ROOM, 1ST FLOOR MPT ORT USERS COMPLEX,
CUSTOMES HOUSE, MUMAGAO HARBOUR
INDRAPURAM, GOA 403 803
PHONE : 0832-2521784/85 FAX : 0832-2521814

NEW DELHI
NO.7,LOWER GROUND FLOOR,AMARPALI COMMERCIAL COMPLEX, 1/3 VAIBHAV KHAND,
INDRAPURAM, GHAZIABAD 201010
PHONE : 0120- 4138375/6, FAX : 0120- 4138377

HYDERABADA
PLOT NO : 17A, FLAT NO : 202, H .NO:7-1-644/17A,
SUNDER NAGAR COLONY,
HYDERABAD 500 038PHONE : 040-65585485, FAX : 040-23814041

Fig : Import export and customs procedures

INTRODUCTION TO CUSTOM HOUSE AGENTS:

Customs House Agent (CHA)


CHA is a person who is licensed to act as an agent for transaction of any business relating to the
entry or departure of conveyances or the import or export of goods at any Customs station. The
agent to do everything that an importer or an exporter can do .Filing a bill of entry, shipping bill,
submitting supporting documents therewith, helping in examination of goods, payment of duty
on behalf of the principal, warehousing of goods, removal from warehouse and the like.
Being a Clearing Agent:
It empowers, which allows agents of importers and exporters to act on behalf of importers and
exporters. This is necessitated by the highly involved and technical nature of the work to be done
in connection with clearance of imports into and exports out of country. The importers and
exporters themselves may have neither time nor the requisite knowledge on their own. Therefore,
agents are allowed to act on their behalf. The work of the agents is governed by the Customs
House Agents Licensing Regulations.
The common law principle that an agents actions bind the principal is given the status of a legal
presumption. The consequences of all actions will bind the importers and exporters on whose
behalf they act. An agent who is authorized to act on behalf of the importer or exporter is treated
as the owner of imported or exports goods. In respect of that particular transaction, a notice could
be given to that agent. This does not normally extend to recovery of duty not paid or short paid
by the owner, importer or exporter of goods. As an exception, this is permissible when the
Deputy/Assistant Commissioner is of the opinion that such recovery from the owner, importer or
exporter of goods is not possible.

CHA DEMAND IN INDIA


INDIA IS WORLDS MAJOR IMPORT & EXPORT DESTINATION:
Indians demand various products like clothes, food, furniture, books, medicines etc. Many of
these items are imported and many more exported. For every import export transaction the goods
and documents have to cross though Customs and every such document has to be processed by
the CHA LICENCE holder. Therefore the demand of CHAs in the market place is very high.
CHAs usually earn set percentage of the export import value of the goods consignment, which
translates into very healthy income and reflects the skill nature of the job.

Essential Features of CHA Licensing Regulations:

No ceiling for number of CHAs who can be appointed in a Customs House.

Issue of regular licence is preceded by a period of grant of temporary licence.

Prescribing criteria of experience and financial soundness for appointment.

Grant of regular licence is subject to passing examination, satisfying minimum volume of


business and complying with obligations under Regulation No. 14.

Change in the constitution of partnership or firm not to affect th operations of CHA.

Commissioners have been empowered to prescribe fees to prevent excess billing by the
CHAs.

Temporary Licence:
After scrutinizing and accepting the application a temporary licence for a period of one year is
granted under Regulation 8 in Form B.
Before receiving the temporary or regular licence, the applicant has to go through another
important step. He is required to execute a bond and give a surety or bank guarantee in Forms D
and E. For major ports, the surety amount is Rs.25000/- For other ports, it is Rs.10000/- Surety
may also be given in the form of National Savings Certificates or postal security. In the last two
forms of surety, these should be pledged in the name of the Commissioner. It is important to note
that since a regular licence holder is allowed to work in more than one Customs station, separate
bond and surety have to be given in respect of each Customs station.

Regular Licence:
An application for regular licence can be made by a person who has passed the examinations.
Application for regular licence is made in Form C. Form A and Form C are almost identical
except that while the first form is issued under Regulation 5, the latter form is issued under
Regulation 10. Licence fee is Rs.5000/-. Regular licence is granted in Form D. The applicant for
regular licence has to satisfy following conditions:

The applicant must satisfy the norms regarding quantity or value of cargo cleared form
the Custom House. This is determined by the Commissioner.

The conduct of the applicant during the period of holding temporary licence must be
business like. There should be no delay in clearance of goods or in payment of duty on
account of conduct of the applicant. There should be no complaint of misconduct of the
applicant. There also should not be any complaint of non-compliance of provision of
Regulation 14, which casts some important obligations on the CHAs.

Disqualifications for regular licence:


Regulation 10(1) specifies that only a person who qualifies in the examination can apply for a
regular licence, Nevertheless, sub-regulation (3) provides that the Commissioner may reject the
application of a person who fails to qualify in the examination, It further provides that if
performance criteria is not satisfied (regarding quantity and value of clearances or conduct), the
application may be rejected. A representation can be made against an order of rejection within 30
days to Chief Commissioner. The Chief Commissioner is also empowered to review the
procedure of grant of regular licence within one year.
Note: Regular licence granted to a person cannot be transferred [Regulation 13].
Validity of licence Under Regualtion12 (1), the validity of licence is for a period of five years
Records to be maintained by the CHA:
CHAs have to maintain detailed, itemized and up to date books of accounts. The accounts should
reflect all financial transactions entered into as a CHA. A copy of all documents such as shipping
bill, bill of entry, transhipment application etc. filed must be maintained by the CHA for at least
five years. These records should be made available for inspection by the officers of the
department.

Duties and Obligations of a CHA:

Clearances only against authorization A CHA is required to clear goods for import or
export only against specific authorization from the principal and must produce it
whenever required by the Deputy/Assistant Commissioner.

Method of transacting business The CHA has to either personally clear the goods or
clear it through an employee who is approved by the Deputy/Assistant Commissioner
who is designated for this purpose by the Commissioner. All the documents prepared by
him should prominently bear the CHAs name at the top of the document. The CHA
should not attempt to influence the conduct of Customs officers in matters pending before
him or his subordinates. There should be no threats, false accusations or duress against
such officers. No promise of advantage or benefit or gift should be made or bestowed on

such officers. Duty of CHA should be discharged with utmost speed and avoid delays. He
cannot charge for his services in excess of rates approved by the Commissioner.

Personal interests of CHA If the CHA is a former officer of the department, he cannot
represent any matter before a Customs officer, which he had personally considered as
such officer. He cannot also use facts which came to his knowledge when he was an
officer.

Duty to tender correct advise The CHA is duty-bound to advise the client to comply
with the provisions of the Act and the regulations. If there is non-compliance of
provisions by any client, he is required to bring it to the knowledge of the
Deputy/Assistant Commissioner. This regulation requires the CHAs to act as source of
information to the department.

The CHA has to exercise diligence and ensure that he passes on correct information to the client,
ensure that all information relevant for clearance or cargo or baggage is passed on to the client if
it is relevant for clearance of cargo or baggage.

Accounting for money received The CHA has a duty to promptly pay to Government all
money received from client for payment of duties and taxes. Similarly, any money
received by him from the client or from the Government should be promptly and fully
accounted to the client.

Liability as to information CHA should not attempt to gather information from


Government records if it is not granted by the proper officer. Access to record maintained
by him should not be denied, nor removed or concealed when sought by the
Commissioner. There is a duty to maintain records and accounts as directed by the
Deputy/Assistant Commissioner and produce them before that officer for inspection. All
documents have to be prepared strictly in accordance with the rules and orders.

Note:

If the licence granted to a CHA is lost, it should be promptly reported to the


Commissioner.

If there is failure in complying with obligations under Regulation 14, the Commissioner
may prohibit a person from acting as a CHA within his jurisdiction.

Changes in Constitution of Firms, Companies, Concerns:

Any change in the partners or directors should be informed to the Commissioner


[Regulation 15].

If there is any change in the constitution of the firm or company, an application for grant
of temporary and regular licence should be made within 30 days of such change. If there
is nothing adverse against the firm or company, the Commissioner will grant licence of
the category held by the firm or company earlier. In the meantime, the concern may be
allowed to continue its business as a CHA if an application to that effect is made to the
Commissioner.

If the concern is not a firm or company, in case of any change in the constitution of the
concern, permission will be granted to continue the business as CHA by the
Commissioner, If the change occurs due to death of person who was licenced to act as a
CHA, his legal heir who was assisting him in his work as CHA under Regulation 20 may
be granted licence if there is nothing adverse against that person and he also passes the
examination.

If there is any change of qualified person acting on behalf of the firm or company, such
information should be immediately given to the Deputy/Assistant Commissioner.

Customs House Agents and Information Technology:


NIC (National Informatics Centre) developed RES for Indian Customs, a basic software for
creating and filing Shipping bill(Customs Document)on Indian Customs Website- ICEGATE.
The software is free to download from Indian Customs website but to use this software, one need
to register at website as a registered user with ICEGATE. This software is Internet Browser
depended. One need to install and configure Netscape Navigator and Netscape
Communicator first.
There are some private sector companies, which also provide software packages for online
preparing SB(Shipping Bill) and BE(Bill of Entry) and filing it to Indian Customs
gateway, ICEGATE.
CAFFE (Customs and Freight Forwarding Expert)is one of the available option, shares a good
market ratio of Customs House Agents and Freight Forwarding Companies. It is complete and
integrated solution to manage all activities associated with Customs Clearance and Freight
Forwarding activity in India with online connectivity of various offices. The Software has been
developed, with the feedback from persons having years of experience in Cargo trade and an
aptitude for processing of data and managing activities electronically in order to achieve smooth
functioning of an agency broadly covering the all important functional areas. The Software is
also available in SAAS model. User just need to pay for the usage.

These Software packages are very much helpful in following manners

Minimize the data entry operations and to reduce human errors, to being almost non-existent,
which occur during the entry of the information in the Customs Annexure.
Increases efficiency.
Customized MIS Reports for Top and Middle Management.
Keep track of SB and BE filed with ICEGATE.
Integrated Customer Relationship Management.
Multi User, Multi Branch working.

CHA Software (Custom Clearance Software in India):

Vishruta Software Solutions ([1]) has its product CHA Eternity, An online ERP software for
CHA and it is also on SAAS technology. It has an in-built JOB COSTING ACCOUNTS
system. Perhaps the only product with accounts module in-built in the market
Royal Tech Systems ([2]) also provide CHA Software
FOCUS is the most used product and it also of low cost. But it assists only in online filing
alone
Visual Impex

CUSTOM HOUSE:

A custom house or customs house was a building housing the offices for the government
officials who processed the paperwork for the import and export of goods into and out of
a country. Customs officials also collected customs duty on imported goods.

The customs house was typically located in a seaport or in a city on a major river with
access to the ocean. These cities acted as a port of entry into a country. The government
had officials at such locations to collect taxes and regulate commerce.

Due to advances in electronic information systems, the increased volume of international


trade and the introduction of air travel, the customs house is now often a historical
anachronism. There are many examples of buildings around the world whose former use
was as a custom house but that have since been converted for other use, such as museums
or civic buildings.
In the Indian phrase custom house is used instead of the plural customs house. This was
after a "Custom House" was erected at Wool Wharf in Tower Ward, to contain just the
officials of the Great Custom on Wool and Woolfells.

Objectives Of Indian Custom EDI System:

The main objectives set for Indian Customs EDI System by the Customs were:

Respond more quickly to the needs of the trade

Computerization of customs related functions including import/export, general


manifest

control, ex-bond clearance of warehoused goods, goods imported against

export promotion schemes, monitoring of export promotion schemes.

Reduce interaction of the trade with Government agencies

Provide retrieval of information from other custom locations to have uniformity in


assessment and valuation

Provide management information system for policy making and its effective revenue
and

Provide quick and correct information on import/export statistics to Director General of


Commercial Intelligence and Statistics

The guiding principles for the officials of Customs and National Informatics Centre while
designing the ICES system were:

Facilitation: While

ensuring

proper

enforcement

of

Customs

laws

and

regulations, Customs Administration should strive to improve facilitation of Customs


clearance procedures.

Accountability: Customs Administration should be accountable for their actions through


a transparent and easily accessible process of Administration and/or judicial review.

Consistency : Customs laws, regulations, administrative guidelines and procedures


should be applied in a uniform manner.

Transparency: Customs laws, regulations, administrative guidelines and procedures


should be publicly available in a prompt and easily accessible manner.

Simplification: Customs laws, regulations, administrative guidelines and procedures


should be simplified to the extent possible so that Customs clearance can proceed without
undue burden.

Fig : Export and Import flow chat

OPERATIONS OF CUSTOM HOUSE AGENTS

IMPORT CLEARANCE
AND
EXPORT CLEARANCE

CLEARANCE PROCEDURE FOR IMPORTS


TABLE OF CONTENTS

Role of Legal Services Cell


Customs Clearing Process for Imports
Customs Clearance / Introduction
Arrival of Goods at the Customs Port
Filing / examination of Bills of Entry
Clearance Procedure for White bill of entry
Clearance Procedure for Yellow Bill of Entry
Clearance Procedure for Green Bill of Entry
Important Issue
Where the owner does not have full information
Clearance of goods requiring immediate release
Assessment of duties/taxes
Basis of Calculation of Duty
Release of Goods
Clearance through Pakistan Customs Clearance System
Procedure under PACCS
Submission of Goods Declaration
Process of Goods Declaration
Difference of Opinion over Assessment by the Customs
Automated Customs Clearance Procedure
Exceptions to ACP

ROLE OF LEGAL SERVICES CELL

The Legal Services Cell [LSC] is a part of Business and Sector Development Division of
SMEDA and plays a key role in providing an overall facilitation and support to SMEs.

The LSC provides guidance based on field realities pertaining to SMEs in India and other
parts of the world.

LSC believes that information dissemination among the SMEs on the existing regulatory
environment is of paramount importance and it can play a pivotal role in their sustainable
development.

In order to facilitate SMEs at the Micro Level LSC has developed user-friendly systems,
which provide them detail description of the Laws, and Regulations including the process
and steps required for compliance.

The purpose of this document is to disseminate information amongst the SMEs about the
Customs Clearance Procedure for Imports. For convenience of the readers a process flow
chart explaining the procedural details and sample of various forms are also annexed with
the document. The information given herein is provided on as is basis with no liability of
SMEDA of whatsoever as to any act or omission consequent there to.

Procedure for Imports


The procedure for imports comprises of following three processes:
Arrival of Goods at Customs Port
Filing and Examination of Bills of Entry; and
Assessment of customs duty.
Customs Clearance / Introduction:
It is a common belief by the importers in India that custom clearance is easy, time consuming
and cumbersome procedure. As a result it has become a common practice to engage a clearing
agency in fulfilling the requirements and procedures of the customs departments, as well as
clearance of consignments. However a part of the negative perception relates to the low
awareness level about the compliance requirements for import procedure. It can be divided into
two major segments.
First appraisal, where the goods are physically verified and customs duty is
assessed and second appraisal where the actual or final duty is calculated and levied upon the
importer. This document covers all the necessary aspects, which are the fundamental part in
clearance of goods/shipment and the process of assessment of customs duty and taxes. Shipments
may be received at either the Sea, Air port or Dry port declared by the customs authorities as
customs ports, customs air port and land customs station; the procedure for clearance is same for
every customs station.
Arrival of the goods at Customs Ports
The Central Board of Revenue of and on declares the customs ports comprising of sea, land and
air ports for the purposes of clearance of goods. The customs clearance process starts with the
arrival of cargo ship, plane or other carrier of goods in the country on the designated sea, land
and air ports. Upon arrival of the goods at the customs port, the port authorities issue the Import

General Manifest (IGM) to each shipment. It is a number indicating the serial of the shipment
arrived during the year. Upon receipt of the IGM the consignment is further indexed to allow for
a systematic reference of all goods received. After issuing this number, the shipment is off loaded
and sent back to port warehouse. In the case of land customs station i.e. dry port etc. the IGM is
issued not at the time the goods reach the land customs station but at the time the goods are off
loaded at the sea or air port.
Upon arrival of the off loaded goods, the clearance process starts. Normally at this point a
clearing agency is engaged by the importer to facilitate the process of customs clearance and to
reduce interface with the customs officials. Following documents are required and provided to
the clearing agent for processing.
a) Invoice of shipment
b) Packing list
c) Bill of lading
d) Copy of the Letter of Credit or Contract
If the importer is importing for the first time, following additional documents are to be
submitted:
a) Copy of the Sales Tax Registration Certificate as an importer
b) Copy of Registration Certificate issued by the Export Promotion Bureau in
case of import of Gems and Jewellery
c) Copy of the National Tax Number
d) Copy of the most recent sales tax return
It may be noted that now there is no need to obtain import and export licence from the Export
Promotion Bureau.
Filing / Examination of Bills of Entry:
Provided all the above mentioned documents are complete, the clearing agency preparesthe Bill
of Entry. It may be noted that at present the bills of entry are being filed electronically with the
customs department. For such purposes the customs official have issued Pin Code to every
clearing agent along with a CD which contains the standard formats of bills of entry in blank
form. The clearing agent after giving all the particulars in the bills of entry hand over the CD
along with all the requisite documents to the customs officials for their review and clearance of
goods. There are three types of colour coded Bills of Entries, which are explained as here under

White Bill of Entry: The bill is prepared when the consignment is to be cleared against
the cash payment of the duty levied without transferring it to a warehouse.
Yellow Bill of Entry: This bill is filed when the shipment is transferred to the bonded
warehouses.
Green Bill of Entry: This bill of entry is used for the release of shipments which have
been placed in bonded warehouse against the yellow colour bill of entry.

Clearance Procedure for White Bill of Entry:

The clearing Agent first receives the delivery order from the shipping agency and subsequently
files the Bill of Entry contained in the computer CD along with the previously mentioned
documents with the customs department, where a manifest for the consignment is filed. After the
filing of the manifest machine number and group number is allotted. Group number is a
predefined number based on the category set by Customs department. The bill of entry should be
completed in all respects and the amount of payable customs duty, sales tax, income tax etc.
should also be typed on the bill of entry, calculated on the basis of invoice under the correct
Pakistan Customs Tariff (PCT) Heading.
The test reports (where applicable) should be typed in case of chemicals. Similarly, in case of
Clearance Procedure for Imports Legal Services Cell imports of tea, the values certified by
Pakistan Tea Association shall be declared on the bill of entry for the purposes of assessment.
Next step is the Appraisement of the consignment. The designated customs officials examine the
goods to ensure whether the particulars given in the bill of entry i.e. amount of duties and taxes,
PCT Heading etc. correspond with the goods imported. Provided there is no contradiction with
the particulars given in the bill of entry and the goods actually imported, the case is marked to
the principal appraiser of the assessment hall, for assessment of duties and taxes on the imported
goods. On assessment of the duties and taxes, the amount so assessed is deposited in the treasury
and the goods are released.
Clearance Procedure for Yellow Bill of Entry:
The procedure for the yellow Bill of Entry is almost identical to the white bill of entry however;
the only difference is that instead of clearing the shipment against cash, it is placed in a bonded
warehouse. The customs appraisal procedure remains the same, however, in case of filing of
yellow bill of entry, a No Objection Certificate is required from the bonded warehouse authority.
In addition to NOC a surcharge amount equivalent to 2% of the customs assessed value of the
shipment or such other rate, as is for the time being fixed by the CBR, is paid to the Government.
Bonded warehouse can be very helpful to business, which do not require the whole shipment
immediately released. It can be best utilized in case of shortage of cash amount with an importer
for the release of a consignment. It is a storage facility, where the consignment is stored under
secured conditions for a certain period of time that has been predefined. The shipment remains in
the bonded warehouse against nominal charges for a specified period until the importer requires
part of whole of the shipment, which can be cleared and released against the filing of green bill
of entry.
Clearance Procedure against Green Bill of Entry:
The procedure for clearance against green bill of entry is same as that of white bill of entry
except that it is filed to ex-bond the goods in whole or in part of the goods bonded against yellow
bill of entry.

IMPORTANT ISSUE:

Once the white bill of entry is filed for clearance of goods, it is not possible to transfer the
consignment into bonded warehouse.

Where the owner does not have full Information about the consignment:

In case an owner of a shipment is unable to make complete entry of the goods imported in a bill
of entry, he may make a declaration to that effect before the appropriate officer with the request
to examine the goods. The appropriate officer may, subject to the conditions prescribed by the
Collector, permit such officer to examine the goods in the presence of an officer of customs or to
deposit of such goods in a public warehouse without warehousing the same, pending the
production of such information.

Clearance of Goods requiring immediate Release:


An officer of customs not below the rank of Assistant Collector Customs may allow release of
goods requiring immediate clearance, even prior to presentation of bill of entry thereof and
subject to such conditions and restrictions as may be prescribed by the Central Board of
Revenue.
Assessment of duties / taxes:
On delivery of the bill of entry, the goods or any part thereof is examined without delay for the
purposes of assessment of customs duty and other taxes thereon. This examination is made in the
following manner.

First appraisal of the consignment:

During first appraisal the case is forwarded to the appraisement hall where the specific
percentage of goods imported is determined for examination. The principal appraiser marks the
case to the Inspector and Deputy Superintendent for examination. The inspector after examining
the goods marks the case to the Deputy Superintendent for further approval. Provided the case is
approved by both of them, the case is referred to the Principal Appraiser for assessment of
customs duty and other taxes thereon.

Second appraisement of the shipment:

It is carried out by the customs department in reference to the report


forwarded by the principle appraiser along with documents submitted by the clearing agent for
determination of customs duty.
Basis of calculation of duty:
The customs duty calculation on the consignment is based on three different methods; the same
are:

Declared Value: This is the value of the consignment as given on the invoice and shown
in the bills of entry.

Karachi Data Base Value: The value of the consignment is calculated on the recent
price of the commodity released from the report by the Karachi Collector ate from their
data base; and

Evidence Value: This value is based on the history of previous duty paid by the importer
of the same commodity.

Release of Goods:
After assessment of valuation the case is then forwarded to the Inspector - Out of Charge for
final release and issuance of a gate pass. Following documents are submitted to the Inspector
for Processing:
a) Copy of Invoice
b) Copy of Packing List
c) Bill of Entry (Original Copy, Quadruplicate Copy and Statistical Copy)
With the issuance of gate pass, the importer is directed to deposit the amount of duty assessed,
warehouse charges, fines and penalties, if any, placed by the port authorities. Once the payment
is made, the shipment is released and can be loaded and transported to its destination.
Provisional Assessment of duty:
Where it is not immediately possible to assess the customs duty on any imported goods for the
following reasons:
That the goods require chemical or other test or
Further inquiry for the purposes of assessment or
That all the documents or complete documents or full information pertaining tothose
goods have not been furnished.
An officer not below the rank of Assistant Collector or Deputy Collector of Customs may order
that the duty payable on such goods be assessed provisionally subject to the payment of any
additional amount or furnishing of bank guarantee for the purposes of securing payment of duty,
if any, payable on final assessment, by the importer, as such officer deems sufficient.

Limitation for Final Assessment:


In cases of provisional assessment of customs duty, the amount of duty actually payable is finally
assessed within one year of the date of provisional assessment or such other extended period not
exceeding ninety days as may be allowed by the Collector of .Customs concerned.

Clearance through Pakistan Customs Computerized System (PACCS):


In addition to the above, CBR has also started clearance of goods through PACCS with
immediate effect from May 01, 2005. In this regard, initially, a Model Custom Collector ate has
started clearance of goods under PACCS from Karachi International Container Terminal (KICT).
However, following cargo are not covered under the clearance through PACCS: 1. LCL Cargo
2. EPZ Cargo
3. Commercial Afghan Transit Cargo
4. Temporary Imports under SRO 410 and DTRE
5. Imports under quotas for Deletion Program and Survey Certificates
Procedure under PACCS:
For clearance under PACCS following requirements must be met:

The importer, and if clearance is desired through agent, both must have a PACCS user ID.
This user ID may be obtained from Model Customs Collector ate, Customs House
Karachi between 1000hours to 1400hours on all working days.

Copy of the packing list and invoice of the cargo must be available inside the imported
containers. These documents are retained by the customs and are not returned to the
importer.

National Tax Number

No objection certification Number from any government department in case of any


restriction of import of an item by such department.

Free Tax Number FTN in case of exemption from income tax liability.

Minimum Computer System Requirements i.e.,

1. Internet Explorer 6.0 (or above)


2. In case you wish to use off-line software for filing of Goods Declaration: MS Office info Path
2003 (with MS Office 2003 Service Pack 1)
3. High Speed Internet Access preferably a DDP connection through Cyber net

4. Regulatory Authorities like Government departments, Banks etc. would require static IPs to
interact with PACCS

There is no need to file any document to the customs. All the declarations (Bills of Entry,
shipping Bills etc.) are electronically available online.

Submission of Goods Declaration:


The Goods Declaration i.e. on line filing of bills of entry etc. may be filed on line at least 24
hours before the arrival of the vessel. The duties and taxes are computed and discharged (at any
nearest online bank branch) by the importer before submission of the declaration to the Customs.
On submission of the document the importer is granted an online receipt in the shape of Customs
Reference Number (CRN) also known as Machine Number.
Process of Declaration:
The moment a CRN is allotted, the Risk Management System of PACCS commences the
processing of the declaration. In case the customs are satisfied that the particulars contained in
the declaration do not pose a threat to the country of the exchequer, the cargo is cleared in
seconds and the importer is intimated online. However, in case a threat is detected, detailed
scrutiny including examination of the cargo is undertaken.

PACCS has a highly sophisticated automated Risk Management System and designed to
detect any illicit practices. Therefore, in order to avoid delays and confusion later it is
advisable to file your declaration carefully and to ensure that correct information is
declared to customs.

The Customs if not satisfied with the declaration may also require additional information,
verify certain documents, question value, HS code etc.

Difference of opinion over Assessment by the Customs:


In case the importer differs with the assessment of Customs he will be provided with an online
opportunity to record his grounds for differing with the Customs. This will initiate first review of
the assessment. The first review will be conducted by an officer not below the rank of Principal
Appraiser and the importer will have the right to appear in person if he so desire.
If after the first review, the importer is not satisfied with the decision of Customs, he is entitled to
file a second review which will be conducted by an officer not below the rank of Assistant
Collector of Customs and the importer shall have the right to appear in person if so desired by
him. In case the importer is still not satisfied with decision of the Customs, he may get his cargo
cleared from the port by furnishing security equivalent to the differential amount. In such an
event the case would be automatically forwarded to the valuation department, HS committee etc.
depending upon the nature of the dispute. However, in case the importer does not clear your

cargo by furnishing the security, he may challenge the decision before the relevant appellate
authorities.
Automated Customs Clearance Procedure (ACP):
In addition to the above, on some other main ports including Lahore, Peshawar etc. other than
KICT, Customs Clearance procedure under ACP is also operative. The same is however,
available to following eligible importers:
I. All the Federal / Provincial Governments, Public sector organization, State owned corporations
and defence imports.
II. All the importers, having import value more than Rs. 30 million during last twelve months
will be eligible for ACP as per parameters laid down in implementation strategy.
III. The import of risk prone commodities shall not fall in the preview of ACP.
IV. The clearing agents (up to five) who have been clearing goods of such importers in the past
one year would be taken as nominated clearing agents, unless otherwise desired by such
importers through application to the Deputy Collector, Import Section or any proceedings have
already been initiated against clearing agent under customs law.
V. The importers who do not meet the ACP criteria may also apply to the Collector for special
enrolment.
VI. The facility of ACP shall be withdrawn at any stage if it is found that a case of misdeclaration
or fiscal fraud exists or has been detected against the importer, (or a director in case of company /
firm).
VII. The facility of ACP will be availed only for goods imported against valid LC (letter of
Credit) or registered bank contract.
Exception to the ACP:
The ACP will not be available in following cases:
a) Where the Goods Declaration is filed prior to the arrival of the vessel under section 79 (1).
b) Import of scrap of all kinds, second hand machinery, job lot / stock lot goods.
c) Chemicals on the controlled list or useable in the manufacturing of narcotics, psychotropic
substance or chemical weapons.
d) Items meant for re-export.
e) Banned / restricted items as per current Import Trade & Procedures Order.
f) Items in section II (Procedural Requirements) of current Import Trade & Procedures Order,
except CKD kits of motor cars and other motor vehicles, and trucks and buses, or unless allowed
by Collector of Customs.

g) Items ordered to be excluded from ACP due to high risk, by the Appraisement Intelligence
Branch, after approval of additional Collector in charge and notice issued by Additional
Collector (Imports).

CLEARANCE PROCEDURE FOR EXPORTS


Customs Clearance
Custom House Agent (CHA) and freight forwarders, who are known as clearing
and forwarding agents, generally act on behalf of importance and exporters for handling their
export shipments or clearing their import consignments.
They handle all documentation work through the customs & port authorities and other
regulatory agencies
Documents required for customs clearance:

1) Shipping Bill: Shipping bill is the main document required by customs authority for
allowing shipment. The exporter has to submit some documents for shipping bill which are
as follows:
SDF (GR Form) in duplicate for shipment.
Four copies of packing list giving contents, quantity gross and net weight of
each package
Four copies of invoice indicating all relevant particulars such as number of packages,
quantity, unit rate, total FOB/CIF value, correct and full description of goods etc

Purchase Order, Letter of Credit


Inspection certificate

Each shipping bill set consist of following copiesi) Original

Retained by customs

ii) Duplicate

Exporters certificate

iii) Triplicate

Drawback copy/DEEC copy

iv) Quadruplicate

to excise department

v) Quintuplicate

Export Promotion Copy

vi) SIXT plicate

Exchange Control Copy

* Exchange control copy is also called GR Form/SDF Form.


Types of Shipping Bills:
i) Free (White in colour): Used in cases where exported goods do not get any export
benefits.
ii) Drawback (Green in colour): Used in cases where the exported goods attract the
benefit under drawback rules.
iii) Dutiable (Yellow in colour): Used where the exported goods are manufactured in
bond (EOU Goods). Such type of shipping bill is not used by exporters because the
company has no dealing with EOUs.

iv) Bond (Pink in colour): Used where the exported goods are manufactured in bond
(EOU goods). Such type of shipping bill is not used, because the company has no
dealing with EOUs.

2) GR/SDF Form: GR/SDF form is filled and submitted by the exporter. The exporter give this
form to his shipping agent to get it stamped from the customs office after clearance of goods
from custom. GR/SDF form is prepared in duplicate. The original copy remains with
authorities and they submit it to the Reserve Bank of India. Duplicate copy is submitted to
Negotiating Bank, after mentioning the date of receipt of payment on GR/SDF form they also
send it to RBI.
Contents of GR Form:
i) Name of advising bank (if exports is under L/C arrangement)
ii) Name of bank through which payment is to be realized.
iii) Customs assessable value.
iv) Quantity of goods.

3) Bill of Lading:

The bill of lading is a document issued by the shipping company or its

agent acknowledging the receipts of the goods mentioned in the bill for shipment on board and
undertaking to deliver the goods in who like order and condition as received to the consignee or
his order provided the freight and other charges specified in the bill of lading require will depend
upon the terms of better of credit.

CONTAINERISATION
Modern ship building technology has brought forth dry cargo bulk carriers and tankers to
reduce per unit cost of transportation in tramp shipping. Likewise the container technology
has brought in the cellular ships to carry general cargo in containers to reduce cargo-handling
cost and promote faster movements.
The container system of transportation involves bulking of the break-bulk cargoes by putting
them in containers of standard sizes shown below: -

Length Strength Height


10 X 8 X 8
20 X 8 X 8-81/2-9-91/2
30 X 8 X 8
40 X 8 X 8
The movement of containers would progress in the following phases:

From port to port (Pier to Pier)- the carriage of containers is confined to the Scaliger
of journey.
From Inland Container Depot (ICD) in one country to ICD in another country- the
movement of containers is extended to the interior parts of the country and
Door to Door-the movement of containers is further extended right to the factory gates
of the manufacturer/exporter to the door of the importers warehouse in a foreign
country.

Thus the container transportation system through effective co-ordination of international


movements operates on a much wider scale and endeavours to provide maximum convenience
to cargo owners. The system aims at:

Faster and reliable delivery of goods.


Better protection of fragile & containable cargoes.
Ensuring original quality of goods.
Reduction in pilferage.
Physical separation of dirty cargoes.
Simplification of documents & procedures.
Reduction in the Packing cost of the cargo.
Reduction in cargo handling cost & ships time at ports.

Volumetric Calculation of Weight for charging: -

When shipping lightweight and bulky packages, use the following formula to help you
determine their volumetric weight:

Multiply the width by the length by depth of your shipment and divide the total by 6000.

For example

If the width is 50cm, length 40cm and the depth 30cm.

Vol. Wt. = 50cm x 40cm x 30cm = 10 Kgs

In India, ships transport more than 90 per cent of the cargo. It therefore interesting to study the
export processed by ship documentation related to it.
Processing of an export order:
i. Exporter operation starts with the receipt of enquiry by the exporter from importer. Bar on
the enquiry exporter submits his offer giving complete details of products technical
specific price delivery payment terms etc.

ii. After the process negotiations importer sends a purchase order follow by letter of credit (if
applicable).

iii. The exporter manufactures the goods according to the specification given in purchase order.

iv. As soon as the


goods are ready the exporters invites the representative of Export
inspections agency (EIA) for pre shipment inspection and obtain the certificate of
inspection.
v. After that, the exporter prepared following documents:--- INVOICE

PACKING LIST
ARE1 FROM EXSICE DEPARTMENT
MARINE INSURANCE POLICY
COPY OF PURCHASE ORDER / L/C

vi. Above those documentation sends to CHA by exporter.

vii. Based on these documents CHA agent completes the octopi formalities, obtain port permit
and prepare shipping bill which is a customs documents.

viii. Custom department check the export cargo on the basis of information provided on the
shipping bill. If satisfy then cargo allow to loaded on the board of ship.

ix. The shipping line gives mate receipts to CHA agents after the payment of ocean freights and
port due obtains the bill of lading (B/L) from shipping line .B/L is a proof of dispatch of
cargo and also a negotiable document.

x. After that, CHA agent send various documents back to exporter which is
Customs attested invoice
Copy of shipping bill
Full set of non board bill of lading.
Copy of purchase order or L/C
Copies of ARE1 Form
SDF form
xi. After that the exporter submitted above these documents for negotiation to the bank which
include :--- Commercial invoice
Packing list

SDF form
Original copy of purchases order
Certificate of origin
Bill of exchange
Shipment advice

After that, bank scrutinizes these documents and if found correct make payment to exporter
against documentations.

INTERNATIONAL FREIGHT TERMS

ABI - Automated Brokerage Interface: Is a system available to Indian Customs Brokers with
the computer capabilities and customs certification to transmit and exchange customs entries and
other information, facilitating prompt release of imported cargo.
Acceptance: A time draft (or bill of exchange) which the drawer has accepted and is
unconditionally obligated to pay at maturity. Drawers act in receiving a draft and thus entering
into the obligation to pay its value at maturity. An agreement to purchase goods under specified
terms.
Add Hoc Charter: A one-off charter operated at the necessity of an airline or charterer.
Ad Valorem ("according to the value"): A fixed percentage of the value of goods that is used
to calculate customs duties and taxes.
Admiralty Court: Is a court having jurisdiction over maritime questions pertaining to ocean
transport, including contracts, charters, collisions, and cargo damages.
Advance Against Documents: Load made on the security of the documents covering the
shipment.
Advising Bank: A bank that receives a letter of credit from an issuing bank, verifies its
authenticity, and forwards the original letter of credit to the exporter without obligation to pay.

Advisory Capacity: A term indicating that a shipper's agent or representative is not empowered
to make definite decisions or adjustment without the approval of the group or individual
represented.
Affiliate: Is a company that controls, or is controlled by another company, or is one of two or
more commonly controlled companies.
Airfreightment: An agreement by a steamship line to provide cargo space on a vessel at a
specified time and for a specified price to accommodate an exporter or importer, who then
becomes liable for payment even though he is later unable to make the shipment.
Agency Agreement: The steamship line appoints the steamship agent and defines the specific
duties and areas of responsibility of that agent.
Air Cargo Agent: Is a type of freight forwarder who specializes in air cargo and acts for airlines
that pay him a fee (usually 5%). He is registered with the International Air Transport Association,
IATA (See also Air Freight Forwarder; Forwarder, Freight Forwarder, Foreign Freight
Forwarder).
Air Freight Forwarder: Is a type of freight forwarder who specializes in air cargo. He usually
consolidates the air shipments of various exporters, charging them for actual weight and deriving
his profit by paying the airline the lower consolidated rate. He issues his own air waybills to the
exporters, is licensed by the CAB (Civil Aeronautics Board) and has the status of an indirect air
carrier (See also Air Cargo Agent, Forwarder, Freight Forwarder, Foreign Freight Forwarder.)
Air Waybill: A bill of landing that covers both international and domestic flights transporting
goods to a specified destination. This is a non-negotiable documents of air transport that serves
as a receipt for the shipper, indicating that the carrier has accepted the goods listed and obligates
itself to carry the consignment to the airport of destination according to specified conditions.
AITA: International Air Transport Association, IATA, (French, German).
All-Risk Clause: Is an insurance provision that all loss or damage to goods is insured except that
of inherent vice (self caused). (See All Risk Insurance).
All Risk Insurance: Is a clause included in marine insurance policies to cover loss and damage
from external causes, such as fire, collision, pilferage, etc. but not against innate flaws in the
goods, such as decay, germination, nor against faulty packaging, improper packing/ loading or
loss of market, nor against war, strikes, riots and civil commotions (See Marine Insurance)
Alongside: A phrase referring to the side of a ship. Goods to be delivered "alongside" are to be
placed on the dock or barge within reach of the transport ship's tackle so that they can be loaded
abroad the ship.
Arbitration Clause: Is a standard clause to be included in the contracts of exporters and
importers, as suggested by the American Arbitration Association. It states that any controversy or
claim will be settled by arbitration in accordance with the rules of the American Arbitration
Association.

Assignment: The transfer of the rights, duties, responsibilities and/or benefits of an agreement,
contract, or financial instrument to third party.
Assignment of Proceeds: A stipulation within a letter of credit in which some or all of the
proceeds are assigned from the original beneficiary to one or more additional beneficiaries.
A.T.: American Terms (Marine Insurance) A term used to differentiate between the conditions of
American Policies from those of other nations, principally England.
Automated Brokerage Interface (ABI): An electronic system allowing customhouse brokers
and importers to interface via computer with the US Customs Service for transmitting entry and
entry summary data on imported merchandise.
Automated Commercial System (ACS): The electronic system of the US Customs Service,
encompassing a variety of industry sectors that permits online access to information in selected
areas.
Automated Manifest System (AMS): The electronic system allowing a manifest inventory to be
transmitted to the US Customs Service data centre by carrier, port authority or service centre
computers.
BAA: British Airports Authority
BACA: Baltic Air Charter Association
Balance of Trade: The difference between a country's total imports and exports; if exports
exceed imports, favorable balance of trade exists, if not, a trade deficit is said to exist.
Barter: Trade in which merchandise is exchanged directly for other merchandise without use of
money. Barter is an important means of trade with countries using currency that is not readily
convertible.
B/B: (See Break-Bulk Cargo)
Belly Cargo: Freight accommodation below the main deck.
Beneficiary: A firm or person on whom a letter of credit has been drawn. The beneficiary is
usually the seller or exporter.
Bermuda Agreement: An agreement concluded in 1946 between the U.K. and the U.S.,
designed to regulate future international air traffic. Most governments accept its principles and
follow it inter alia by limiting traffic rights on international routes to one or two carriers.
Berth: Is the place beside a pier, quay or wharf where a vessel can be loaded or discharged.
Berth Liner Service: Is a regular scheduled steamship line with regular
Published schedules (port of call) from and to defined trade areas.
Berth or Liner Terms: Is an expression covering assessment of ocean freight rates generally
implying that loading and discharging expenses will be for ship owner's account, and usually

apply from the end of ship's tackle in port of loading to the end of ship's tackle in port of
discharge.
Bill of Lading: A document that establishes the terms of a contract between a shipper and a
transportation company under which freight is to be moved between specified points for a
specified charge. Usually prepared by the shipper on forms issued by the carrier, it serves as a
document of title, contract of carriage, and a receipt for goods. Also see Air Waybill and Ocean
Bill of Lading.
Bonded Warehouse: A warehouse storage area or manufacturing facility inwhich imported
goods may be stored or processed without payment of customs duties.
Brussels Tariff Nomenclature Number (BTN): The customs tariff number used by most
European nations. The United States does not use the BTN, but a similar system known as the
Harmonize Tariff Schedule.
CAA: Is the Civil Aviation Authority. Government body responsible for regulating to U.K.
airlines.
Cabot age: Is where cargo is carried on what is essentially a domestic flight and therefore not
subject to international agreements that fix set rates. Cabot age rates are negotiable between
shipper and airline and apply on flights within a country and to its overseas territories.
CAD Can have two meanings in the industry:

CAD: The acronym meaning "cash against documents," a method of payment for goods
in which documents transferring title are given to the buyer upon payment of cash to an
intermediary acting for the seller.

CAD/CAM: Computer Aided Design/Computer Aided Manufacturing.

Cage: The transporting of goods by truck to or from a vessel, aircraft, or bonded warehouse, all
under customs custody.
Cargo: Is merchandise/commodities/freight carried by means of transportation.
Cargo Receipt: Is a receipt of cargo for shipment by a consolidator (used inocean freight).
Carnet: A customs document permitting the holder to carry or send merchandise temporarily
into certain foreign countries (for display, demonstration, or similar purpose) without paying
duties or posting bonds.
Carriers(s) Containers or Shipper(s) Containers: The term Carrier(s)Container(s) or
Shipper(s) Container(s) means containers over which the carrier or the shipper has control either
by ownership or by the acquisition thereof under lease or rental from container companies or
container suppliers or from similar sources. Carriers are prohibited from purchasing, leasing or
renting shipper owned containers.

Carrier, Common: A public or privately owned firm or corporation that transports the goods of
others over land, sea, or through the air, for a stated freight rate. By government regulation, a
common carrier is required to carry all goods offered if accommodations are available and the
established rate is paid.
Cartel: Is an association of several independent national or international
business organizations that regulates competition by controlling the prices, the production, or the
marketing of a product or an industry.
Cash in Advance (C.I.A.): Payment for goods in which the price is paid in full before shipment
is made. This method is usually used only for small purchases or when the goods are built to
order.
Cash Against Documents (CAD): Payment for goods in which a commission house, or other
intermediary, transfers title documents to the buyer upon payment in cash.
C.C.E.F. ---- Customs Centralized Examination Facility.
Certificate of Analysis: Is a certificate required by some countries as proof of the quality and
composition of food products or pharmaceuticals. The required analysis may be made by a
private or government health agency. The certificate must be legalized by a foreign consul of the
country concerned, as is the case with such similar certificates as the phytosanitary certificate.
Certificate of Inspection: A document certifying that the goods were in apparent good condition
immediately prior to shipment.
Certificate of Manufacture: A statement in which a producer specifies where his goods were
manufactured, certifies that manufacturing has been completed, and confirms that the goods are
at the buyer's disposal.
Certificate of Origin: A statement signed by the exporter, or his agent, andAttested to by a local
Chamber of Commerce, indicating that the goods being shipped, or a major percentage of them,
originated and were produced in the exporter's country.
C.E.S.----Customs Examination Station
C&F: Is a quoted price includes cost of goods and freight.
C & I: Is a quoted price includes cost of goods and insurance.
CFS (Container Freight Station): The term CFS at loading port means theLocation designated
by carriers for the receiving of cargo to be packed intoContainers by the carrier. At discharge
ports, the term CFS means the bonded location designated by carriers in the port area for
unpacking and delivery of cargo.
CFS/CFS (Pier to Pier): The term CFS/CFS means cargo delivered by break bulk to Carrier's
CFS to be packed by Carrier into containers and to be unpacked by Carrier from the container at
Carrier's destination port CFS.

CFS/CY (Pier to House): The term CFS/CY means cargo delivered break-bulk to Carrier's CFS
to be packed by Carrier into containers and accepted by consignee at Carrier's CY and unpacked
by the consignee off Carrier's premises, all at consignee's risk and expense.
CFS CHARGE (Container Freight Charge): The term CFS Charge means the charge assessed
for services performed at the loading or discharging port in packing or unpacking of cargo
into/from containers at CFS.
CFS Receiving Service: The term "CFS Receiving Services" means the service performed at
loading port in receiving and packing cargo into containers from CFS to CY or shipside. "CFS
Receiving Services" referred herein are restricted to the following
1. Moving empty containers from CY to CFS
2. Drayage of loaded containers from CFS to CY and/or ship's tackle
3. Tallying
4. Issuing dock receipt/shipping order
5. Physical movement of cargo into, out of and within CFS
6. Stuffing, sealing and marking containers
7. Storage
8. Ordinary sorting and stacking
9. Preparing carrier's internal container load plan
CIF (cost, insurance and freight): Seller is responsible for inland freight,Ocean/air freight and
marine/air insurance to the port of final entry in the buyer's country. The buyer is responsible for
inland transportation to his or her location.
Chargeable Kilo: Rate for goods where volume exceeds six cubic meters to the tone.
Charter: Originally meant a flight where a shipper contracted hire of an aircraft from an airline.
Has usually come to mean any non-scheduled commercial service.
Charter Party: The contract between the owner of a ship and the individual or company
chartering it. Among other specifications, the contract usually stipulates the exact obligations of
the ship-owner (loading the goods, carrying the goods to a certain point, returning to the
charterer with other goods, etc.); or it provides for an outright leasing of the vessel to the
charterer, who then is responsible for his own loading and delivery. In either case, the charter
party sets forth the exact conditions and requirements agreed upon by both sides.
Charter party Bill of Lading: A bill of lading issued under a charter party. It is not acceptable
by banks under letters of credit unless so authorized in the credit.
Chassis: A wheel assembles including bogies constructed to accept mounting of containers.

CIA: The acronym meaning "cash in advance," a method of payment for goods whereby buyer
pays seller in advance of shipment of goods.
C.I.F.: Is a quoted price includes cost of goods, insurance and freight.
C.I.T.E.S.: Committee on International Trade of Endangered Species.
Class Rates: A class of goods or commodities is a large grouping of variousitems under one
general heading. All items in the group make up a class. The freight rates that apply to all items
in the class are called class rates.
Classification: Is a customs term.The placement of an item under the correct number in the
customs tariff for duty purposes. At times this procedure becomes highly complicated; it is not
uncommon for importers to resort to litigation over the correct duty to be assessed by the
customs on a given item.
Claused Bill of Lading: Is a bill of lading which has exemptions to the receipt of merchandise
in "apparent good order" noted.
Clean Bill of Lading: Is a bill of lading which covers goods received in "apparent good order
and condition" and without qualification.
Clean Draft: Is a draft to which no documents have been attached.
CNS: Cargo Network Services, an IATA company. See IATA.
Collective Paper: All documents (commercial invoices, bills of lading, etc.)submitted to a buyer
for the purpose of receiving payment for a shipment.
Commercial Risk: Risk carried by the exporter (unless insurance is secured) that the foreign
buyer may not be able to pay for goods delivered on an open account basis.
Confirmed Letter of Credit: A letter of credit, issued by a foreign bank, with validity
confirmed by a U.S. bank. An exporter who requires a confirmed letter of credit from the buyer
is assured of payment by the U.S. bank even if the foreign buyer or the foreign bank defaults.
Conference: A group of vessel operators joined together for the purpose of establishing freight
rates.
RoRo/Container Vessel: Ship designed to accommodate containers and roll-on roll-off cargo.
It can be self sustaining.
RoRo/Container/Break-bulk Vessel: Designated to accommodate three types of cargo, usually
self sustaining.
Commercial Code: A published code designed to reduce the total number of words required in a
cablegram.
Commodity Specialist: An official authorized by the U.S. Treasury to determine proper tariff
and value of imported goods.

Consignee: Person or firm to whom goods are shipped under a bill of landing.
Consular Declaration: A formal statement, made to the consul of a foreign country, describing
goods to be shipped.
Consular Invoice: A document, required by some foreign countries, describing a shipment of
goods and showing information such as the consignor, consignee, and value of the shipment.
Certified by consular official of the foreign, it is used by the country's customs official to verify
the value, quantity, and nature of the shipment.
Combi: Is an aircraft with pallet or container capacity on its main deck as well as in its belly
holds.
Combination Vessels: Container/Break-bulk vessel - this type of ship Accommodates both
container and break-bulk cargo. It can be either self Sustaining or non-self sustaining.
Commercial Invoice: An itemized list of goods shipped, usually included among an exporter's
collection papers.
Common Carrier: A firm or individual that transports persons or goods for Compensation.
Confirmed Letter of Credit: A letter of credit, issued by a foreign bank with validity confirmed
by a U.S. bank.
Confiscation: The taking and holding of private property by a government or agency acting for a
government. Compensation may or may not be given to the owner of the property.
Consignee: The individual or company to whom a seller or sipper sendsMerchandise and who,
upon presentation of necessary documents, is recognized as merchandise owner for the purpose
of declaring and paying customs duties.
Consignee Marks: A symbol laced on packages for identification purposes;Generally consisting
of a triangle, square, circle, diamond, cross, with lettersAnd/or numbers as well as port of
discharge.
Consignment: Is the physical transfer of goods from a seller (consignor) with whom the title
remains, to another legal entity (consignee) who acts as a selling agent, selling the goods and
remitting the new proceeds to the consignor.
Consignor: A term used to describe any person who consigns goods to himself or to another
party in a bill of lading or equivalent document. A consignor might be the owner of the goods, or
a freight forwarder who consigns goods on behalf of his principal.
Consolidated Shipment: An arrangement whereby various shippers pool their boxed goods on
the same shipment, sharing the total weight charge for the shipment.
Consolidator: An agent which brings together a number of shipments for one destination to
qualify for preferential airline rates.

Consortium: The name for an agreement under which several nations orNationals (usually
corporations) of more than one nation, join together for a common purpose. It could be for
management or exploitation of a natural resource, as in the case of some international petroleum
consortiums.
Consul: A government official residing in a foreign country, charged withRepresenting the
interests of his or her country and its nationals.
Consular Documents: Special forms signed by the consul of a country to which cargo is
destined.
Consular Invoice: A document, required by some foreign countries, describing a shipment of
goods and showing information such as the consignor, consignee, and value of the shipment.
Certified by a consular official of the foreign country, it is used by the country's customs officials
to verify the value, quantity and nature of the shipment.
Container: The term container means a single rigid, non-disposable dry cargo, insulated,
temperature controlled flat rack, vehicle rack portable liquid tank, or open top container without
wheels or bogies attached, having not less than 350 cubic feet capacity, having a closure or
permanently hinged door that allows ready access to the cargo (closure or permanently hinged
door not applicable to flat rack vehicle rack or portable liquid tank). All types of containers will
have constructions, fittings and fastenings able to withstand without permanent distortion.
Container Ship: Ocean going ship designed to carry containers both internally and on deck.
Some are self sustaining.
Containerization: Is a concept for the ultimate unitizing of cargo used by both steamship lines
and air cargo lines. Containers allow a greater amount of cargo protection from weather, damage,
and theft.
Containers (Air Cargo): Many types of air cargo containers are offered: The containers are
designed in various sizes and irregular shapes to conform to the inside dimensions of a specific
aircraft.
Containers (Ocean): Are designed to be moved inland on its own chassis and can be loaded at
the shippers plant for shipment overseas. Basic types of containers are; dry van, open top, half
high, hi cube, flat rock, tank container, refrigerated container, insulated container, tilting
container. Average outside dimensions is generally 20, 35, and 40 feet in length, 8 feet wide and
8 feet high standard.
Continuous Bond: Is an annual customs bond insuring compliance with all regulations and
requirements.
Contract Rate: Is a charge levied by carriers selling capacity forward over agiven route to a
shipper of forwarder; the client is therefore assured of capacity, which must be paid for
regardless of load carried.

Coordinating Committee for Export Controls (COCOM): An informal group of 15 western


countries established to prevent the export of certain strategic products to potentially hostile
nations.
Correspondent Bank: A bank that, in its own country, handles the business of a foreign bank.
Countertrade: Is a reciprocal trading arrangement, which includes a variety of transactions
involving two or more parties.
Countervailing Duties: Is a special duties imposed on imports to offset theBenefits of subsidies
to producers or exporters of the exporting country.
Credit Risk Insurance: Insurance designed to cover risks of nonpayment for delivered goods.
Customs Bonded Warehouse: Is a warehouse where imported goods may be stored for a total of
three years without the payment of duty or taxes.
Customhouse Broker: An individual or firm licensed to enter and clear goods through Customs.
Customs Court: Is the court to which importers might appeal or protestDecisions made by
Customs officers.
Customs Tariff: Is a schedule of charges assessed by the federal government on imported goods.
Customs Union: Is an agreement between two or more countries in which they arrange to
abolish tariffs and other import restrictions on each other's goods and establish a common tariff
for the imports of all other countries.
DAT: Dangerous articles tariff.
Date Draft: Draft that matures in a specified number of days after the date it is issued, without
regard to the date of Acceptance. See Draft.
DCA: Department of Civil Aviation. Commonly used term to denote theGovernment department
of any foreign country that is responsible for aviation regulation and granting traffic rights.
DDP: Delivered duty paid. Also known as "free domicile."
DDU: Delivered duty unpaid. Reflects the emergence of "door-to-door"Intermodal or courier
contracts or carriage where only the destination customs duty and taxes (if any) are paid by
consignee.
Dead Leg: Is a sector flown without payload.
Dead Freight: Is freight charges paid by the charterer of vessel for thecontracted space, which is
left partially unoccupied.
Deck Cargo: Is cargo carried on deck rather than stowed under deck. On deck carriage is
required for certain commodities, such as explosives.

Deferred Payment Credit: Type of letter of credit providing for payment some time after
presentation of shipping documents by exporter.
Deferred Rebate: The return of a portion of the freight charges by a carrier or a conference
shipper in exchange for the shipper giving all or most of his shipments to the carrier or
conference over a specified period of time (usually 6 months). Payment of the rate is deferred for
a further similar period, during which the shipper must continue to give all or most of his
shipments to the rebating carrier or conference. The shipper thus earns a further rebate which
will not, however, be paid without an additional period of exclusive or almost exclusive
patronage with the carrier of conference. In this way, the shipper becomes tied to the rebating
carrier or conference. Although, the deferred rebate system is illegal in U.S. foreign commerce, it
generally is accepted in the ocean trade between foreign countries.
Demurrage: A penalty for exceeding free time allowed for loading or unloading at a pier or
freight terminal. Also a charge for undue detention of transportation equipment or carriers in port
while loading or unloading.
Density: Density means pounds per cubic foot. The cubage of loose articles or pieces, or
packaged articles of a rectangular, elliptical or square shape on one plane shall be determined by
multiplying the greatest straight line dimensions of length, width and depth in inches, including
all projections, and dividing the total by 1728 (to obtain cubic feet). The density is the weight of
the article divided by the cubic feet thus obtained.
DEQ: Delivered ex quay/duty paid.
Destination Control Statement: Any of various statements that the U.S.Government requires to
be displayed on export shipments and that specify the destination for which export of the
shipment has been authorized.
D.F.: Dead Freight
DGR: Dangerous Goods Requirement.
Dim Weight: (Dimensional zed Weight) Determined by calculating length x width x height and
dividing by 166. Charged when actual weight is less than the dim weight.
Dock Receipt: When cargo is delivered to a steamship company at the pier, the receiving clerk
issues a dock receipt.
Documents against Acceptance (D/A): Instructions given by a shipper to aBank indicating that
documents transferring title goods should be delivered to the buyer (or drawee) only upon the
buyer's acceptance of the attached draft.
DOT: Department of Transportation
Draft (or Bill of exchange): An unconditional order in writing from one person (the drawer) to
another (the drawer), directing the Drawer to pay a specified amount to a named Drawer at a
fixed or determinable future date.

Drawback: A U.S. customs law that permits an American exporter to recover duties paid on
imported foreign raw materials or components included in products that are subsequently
exported out of the United States.
Drawee: The individual or firm on whom a draft is drawn and who owes the stated amount to
the drawer.
Dry Lease: The rental of a "clean" aircraft without crew, ground staff or supporting equipment.
DST: The acronym meaning "double stack train" service, which is the transport rail between two
points of a trainload of containers with two containers, one on top of the other, per chassis.

D.W.: Deadweight (tons of 2,240 lbs.)


D.W.C.: Deadweight for cargo
E.A.O.N.: Except as otherwise noted.
EDI or EDIFACT: Electronic Data Interchange for Administration, Commerce and Transport,
from the UN-backed electronic data interchange standards body, to create electronic versions of
common business documents that will work on a global scale. One digital document under
consideration, the International Forwarding and Transport Message will do the jobs of six
different electronic messages currently in use.
Empty Leg: Results from an aircraft primarily chartered outbound having cargo capacity
inbounds or vice versa. A cheap form of airfreight.
Endorsement in Blank: Commonly used on a bank check, an endorsement in blank is an
endorsement to the bearer. It contains only the name of the endorser and specifies no particular
payee. Also, a common means of endorsing bills of lading dawn to the order of the shipper. The
bills are endorsed "For..." (see Bill of Lading, Order).
Eurodollars: U.S. dollars on deposit outside of the United States to includeDollars on deposit at
foreign branches of U.S. banks, and dollars on deposit with foreign banks.
"Ex": Signifies that the quoted price applies only at the indicated point of origin (e.g. "price ex
factory" means that the quoted price is for the goods available at the factory gate of the seller).
Ex. B.L.: Exchange bill of lading.
Export Broker: The individual who brings together buyer and seller for a fee, eventually
withdrawing from any transaction.
Export Declaration: A form to be completed by the exporter or their authorized agent and filed
in triplicate by a carrier with the United State Collector of customs at the point of exit. It serves a
twofold purpose:

1. Primarily, it is used by the U.S. Bureau of Census for the compilation of export statistics on
United States foreign trade (for this reason an export declaration is required for practically all
shipments from the United States to foreign countries and the United States possessions, except
for mail shipments of small value, or for those of a non commercial character);
2. The declaration also serves as an export control document because it must be presented,
together with the export license, to the United States Customs at the port of export. If the goods
may be exported under general export license, this fact must be stated on the export declaration.

Export License: A document secured from a government, authorizing an exporter to export a


specific quantity of a particular commodity to a certain country. An export license is often
required if a government has place embargoes or other restrictions upon exports. See General
Export License.
Export Trading Company: A corporation or other business unit organized and operated
primarily for the purpose of exporting goods and services, or of providing export related services
to other companies.
Express: Premium-rated service for urgent deliveries.
EXW: Ex works. Same as the former "Ex Works."

Conclusion:
It is clear from the above study that the complexity of international import-export business can
be overcome easily by a systematic export procedure & fair documentation. This is only the
documentation which safeguards the interests of Exporter, Importer, Banks, Governments,
Transport Agencies, Insurance Agencies and Inspection Agencies. Thus the whole study
concludes in brief:

To survive & grow in todays international market for any export house, the systematic
export procedure is compulsory.

To overcome any kind of error, bottleneck, fraud and mistake; the awareness and
implementation of standardized rule-regulations & documentation is necessary.

The final indicator of success any business is its financial viability and in exports the
inflow of funds is from across the borders. Thus mode of payment must be decided on
the basis of best business suitability according to the Govt. & RBI policies.

Also the Government of India has instituted many support programmers with a view to
give thrust to our sectors. These programmers have been made to facilitate the exporters
in their exports efforts at various stages of export process.