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Summer Internship Report

OM FF Pvt.Ltd

INSTITUDE OF MANAGEMENT DEVELOPMENT &


REASEARCH, PUNE
(IMDR)

Summer Internship Report


ON
IMPORT EXPORT PROCEDURE & DOCUMENTATION
OM FREIGHT FORWADERS PVT Ltd., MUMBAI

Presented By
Aditya Gokhale
Roll no. 03
PGDIT
(2009-2011)

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

CONTENTS
Serial No.

Topic

Page No.

1.

Acknowledgement

2.

Objective

3.

Executive Summery

4.

Organisation overview & its activities

5.

Introduction to CHA and FF

6.

Departments in the organisation

12

7.

SEA IMPORT

13

I. import procedure
13
II. Bank involved import procedure
III. Import procedure for Factory Stuffing

15
16

IV. Consolidation
18
8.

SEA EXPORT
I. Freight Forwarder

21
21

II. CHA

22

III. Pre-shipment Documents


25
9.

AIR EXPORT
I. Procedure Flow chart

27

II. Pre-shipment Documents

30

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

SERIAL
NUMBER
10.

OM FF Pvt.Ltd

TOPIC
AIR IMPORT

Page No.
33

I. Freight Forwarder
33
II. CHA
36
11.

Containerization
41

12.

Marketing Part
43
44

13.
14.

Some Situations observed


Causes of Disputes in Clearance

45

15.

Few Definitions related to Import Export procedure

46

16.

Organization

17.

Conclusion

51
52

18.

Bibliography

53

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

ACNOWLEGMENT

I would like to express my gratitude towards the management of OM FREIGHT


FORWADERS PVT.Ltd. for providing me with the opportunity to learn and know
about the organization by way of summer training.
I express my sincere gratitude to the following people without whom this training
would have been impossible.
Managing Director Mr. Rahul Joshi., Joint Director, Mr.Sanjiv Joshi (Air Division),
Air Export Mr. Vijay Dixit, MR. Kaushal Pipariya in consolidation department, Mr.
Kannubhai Upadhay CHA for their guidance and training in various activities in Air at
Sahar Cargo Complex at Andheri.
At Sea Division Mr. Jiten, MR.Kaushik Joshi (freight forwarding department) also
contributed to learn activities involved in sea export & import along with operations
of shipping company.
All the working members of Om Freight Forwarders Pvt. Ltd Mumbai, who extended
their ungrudging co-operation in giving valuable suggestions for the enrichment of
this project. Without their co-operation, this project and my learning would have not
been possible.
The internship would not have come my way if the Institute had not groomed us in a
specific way. I thank our Prof. Ajay Nagre for engraving on our minds the 'Ground
Realities' and providing me with an opening to the practical experience in the
industry. I am also thankful to our Prof. Manish Mishra & Mrs. Vipra Tiwari for
guiding me during the internship to achieve my personal objectives.

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

INTENSHIP OBJECTIVE
The objective of the summer training at the end of the first year of International Trade
was to familiarize with the service industry related with import and export field.
I have worked with OM FERIGT FORWADERS PVT Ltd. This company has its
services in Freight Forwaders, Custom House Agent. This firm has major operations
in CHA area, thats why I utilised this opportunity to learn and see the daily activities
& operations of CHA.
The objectives of Summer Internship can be briefly stated as:
To learn the documents which are used & handled by the CHA, Freight
Forwaders, Shipping company in export & import procedure.

To understand the role of clearing agent, freght forwarder in process of import


& export.
.To understands the mechanics of carrying out operations.
To learn about the services provided by the Shipping line, freight forwadres,
CHA & by airlines also.
To know the clients, their expectations and be able to deliver services to them
on time.
To understand the how operations &co-ordination takes place between freight
forwarders and shipping line with respect to the services carried out.
To learn the complexities of Import Export procedures and co-relation
between their workings.
To experience the work culture and the grass root level realities of an
organization.
.To elaborates on the scope of the subjects thought theoretically and finding its
application in the particle sense of business.

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

EXECUTIVE SUMMERY
I have under gone two months training at OM FERIGHT FORWADERS
Pvt. Ltd., Mumbai and learned various practical aspects of working of Custom House
Agent (CHA). This report gives a window overview regarding daily practices and
procedures adopted by Custom House Agent (CHA) and its various departments like
Freight Forwaders, Consolidation witnessed and understood by me during my
internship period. It did help in achieving the Summer Internship objectives and gave
me an opening to the industry. Overall the internship was a great learning experience
The PGDIT course in our Institute is designed in such a way that students would get
the necessary theoretical knowledge regarding the International Trade and also get a
practical exposure towards the functioning of a company, which is involved in
International Trade. To attain this objective we worked under the CHA, Freight
Forwarder & Shipping Company also to know the ground realities of import & export
procedures.
While working in this organisation we worked on live cases & daily handling of of
the consignment in Air & Sea department this gives us deep insight of theoretical
knowledge which we have gained already.
I also got opportunity to see the actual problems faced by the International Trade
Industry especially during this recession period of time. Learning involved
understanding & learning basic principals of documentation, its implementation.
This summer internship also helped to get the exposure to corporate industry this
helped a lot to know the structure & Woking culture of corporate sector as I have
came from science background thats why new to this field.
At the end, I would like to thank all the employees of OM Logistics to make me equip
with the tools required for an individual to work in this Industry. Thus working for 8
weeks in a logistics company was a worth mentioning experience.

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

ORGANISATION OVERVIEW & ACTIVITIES


I feel great proud to introduce the organisation where I completed my Summer
Internship of two week is named as OM FREIGHT FORWADERS, MUMBAI.
This organisation services to and from world-wide destinations. OM Freight can offer
a wide range of services for your Personal and Household Effects, including storage
and packing. Customer has choice to choose Door to Door, Door to Terminal,
Terminal to Terminal, whatever option is the most suitable.
With our network of overseas agents this organisation offers the complete package.
OM Freight operate Personal and Household Effects shipping services to and from
Europe, Australia, New Zealand, USA, Canada, South America, South Africa, Asia
along with many other destination.
s
Om freight service contract with many shipping lines and airlines ensures confirm
shipment movements on pre confirmed dates and at reduce cost.

Services offered
IMPORTS / EXPORTS - AIR & SEA

AIR FREIGHT
Confirmed flight booking
Total shipment monitoring
Flight details& pre-arrival notice.
Service contracts with major Airlines
Door to door service
Full documentation service & custom house brokerage service.
Warehousing & transportation throughout the India
Worldwide network of agents providing services from any airport in world.
SEA FREIGHT
Contracts with major steamships lines
huge volumes (4000 to 5000 TEUs)
Very Competitive Rates
In-House transportation partner
Confirmed Free Time at ports
Full documentation services and customs house brokerage services
Container unloading, palletization, trucking to any destination in India
Warehousing and distribution throughout India
Expedited Delivery services
DDU and DDP Processing
Worldwide network of agents providing service from every major airport in
the world.

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

OSCAR FREIGHT PVT.LTD is the sister concern, has pioneered bonded trucking Services. These Services are
operated exclusively between Airports, CFSs and ICD

Other services
Freight Forwarders
Air Freight - IATA Accredited
Sea Freight
Sea Air Multimodal Operation
Consolidation
Cargo Tracking
Chartering
Flight
Ship
Barge
Break Bulk
Project Cargo
Courier
Bonded trucking
Domestic Transportation

Value Added Services


WAREHOUSING

The warehouse also allows the organisation to remove your cargo to a secure area as
soon as possible after clearance and therefore avoid the heavy storage which is
imposed by the airlines.
CHARTER

OM provides a full range of charter aircraft services 24 hours a day, 365 days a year.
Whether you are shipping across the continent or across the globe, OM Freight
provides you with maximum control over your cargo regardless of its size, type,
origin or destination. Your cargo departs and arrives at its destination together this
includes large shipments in single lots, saving you time, money and duplication of
documentation. Organisation extensive experience in chartering every type of aircraft
enables us to determine the most cost-effective transportation modes.
TRANSPORTAION

With its own fleet of open/close bodied trucks, mini trucks, 20 Feet / 40 Feet
trailers, OM Freight has the edge in providing the best services for all your logistics
needs.

PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

INTRODUCTION TO CHA and FF


CUSTOM HOUSE
CHA is a person or company who is licensed to act as agent for transaction of any
business relating to the entry or departure of conveyance or the import or export of
goods at any customs station.
Services provided by CHA:
Preparing the customs entry form and assuring that all the necessary documents are in
order for proper processing through customs channels.
Calculating the amount of duty according to Tariff Act.
Arranging for the goods to be transferred under bond from the port of entry to an
interior destination for customs clearance.
Obtaining special permits for immediate delivery of perishable goods.
If necessary requesting extension of the general order time from the collector of
customs.
Providing the surety bond required by the customs Authority, which guarantees full
payment of all duties.
Preparing the warehousing entry bond and arranging for goods to be transferred to the
bonded warehouse.
Arranging for the withdrawal of goods from the bonded warehouse in part or
completely. Payment of duties will be made accordingly to the quantity of goods
withdrawn.
ROLE OF CUSTOM HOUSE AGENT:
The imports into India and Export out of India take place only through ports and
airports declared under Section 7 of the Custom Act. The international trade has
therefore necessarily developed and concentrated at such ports and airports like
Mumbai, Chennai, Calcutta, Delhi, Cochin, Kandla, Vishakhapattanam, and Tuticorin.
Trade, no doubt is also through minor ports all among the coast. The importers who
consume the goods imported and exporters who produce the goods for export
however are spread all over the country. The distance between the point of
import/export and the exporters/importers quite happens to be long and the timeinvolved clearance deters the trade for handling the clearance themselves. They have
necessarily to depend on agents positioning themselves at such ports and have
specialized such jobs. In fact such institutions have been in existence almost from the
beginning of the trade.
Unlike the work related to Central Excise and Income Tax, the customs facilities can
not be attended to leisurely, as clearance is allowed only on completion of formalities
and payment of duty, where due. To meet this situation alone this provision for
licensing Custom House Agents to represent importer/exporter for clearance work has
been made in the Custom Act (under sec. 146)
A Custom House Agent has to be not only knowledgeable in Customs Laws,
procedure and documentation, but also alert all the time closely following the
PGDIT 2009-10

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

instructions or changes brought about by issue of Public Notices from time to time.
He is in a peculiar position in that though he is employed by importers /exporters, he
is licensed by the Customs dept. The Customs House Agent is answerable both to the
Customs dept. for doing the clearance correctly and expeditiously. In case he defaults,
the clearance may be delayed and demurrage etc. incurred. His knowledge and
experience particularly in the areas of classification and valuation of goods and more
so in procedural formalities to be compiled with, in Custom big role to play in the
clearance of goods through customs.
FREIGHT FORWARDER (FF)As the name indicates, the job of Freight Forwarder Company is to work as a
middleman between the exporter and importer for handling the cargo movement.
He arranges the transport to pick up the cargo from exporters warehouse/factory, and
then stuffing the container then hands over to the shipping line, gets the customs
clearance etc. He also arranges for customs clearance and transport from the port of
discharge to importers door step.
His real business comes from the consolidation of cargo from various shippers. He
collects LCL (Less than Container Load) from various shippers and makes on FCL
(Full Container Load) to be exported. He makes arrangement of container for both
dock as well as factory stuffing of the container. He appoints transporter to carry it to
the CFS (Container Freight Station) or Exporters factory as required.
Various complexities of customs clearance are taken over by forwarder. He gets the
shipping bill passed from Customs and obtains N.O.C (No objection Certificate) from
Customs for further movement of the cargo. Cargo measurement is one the important
responsibility of the forwarder. On getting the delivery of the cargo from exporter,
forwarder arranges to measure its weight and dimensions from some private agency
and gets certificate of measurement.
ROLE OF A FREIGHT FORWARDER:
Forwarder books the space on the vessel for cargo loading with some shipping lines
agent. He does pay freight to agent at an agreed rate, which depends upon the weight
and dimensions of the cargo. He collects the Bill of Lading (Master Bill of Lading)
from agent and delivers it to the overseas receiver of the cargo i.e. consignee
mentioned in the MB/L. Forwarder also takes care of cargo while loading on vessel so
that it does not get any damage by cargo handling party. He appoints his person for
supervision in the actual port where the cargo is loaded on the vessel. After receiving
the cargo in his custody, forwarder issues/releases his HB/L (Bill of Lading) to the
shipper/exporter, which he later sends to the overseas buyer/end consumer for getting
the delivery of cargo from forwarders agent. He also arranges for warehousing of the
cargo in Customs Bonded Warehouse. For which he pays the warehousing charges to
Customs Department.
Activities for which the Freight Forwarder charges his client: Agency Fee- Agency fee includes Processing and passing shipping bill, obtaining
carting order from the shipping company, Arrangement of customs examination,
Preparing bill of lading.

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Summer Internship Report

OM FF Pvt.Ltd

Warehousing charges
Transportation- Transportation charges for movement of consignment from factory to
CFS.
THC- Terminal Handling Charges which are payable to shipping company.
Security- if the cargo is hazardous, forwarder needs to post security till the cargo is
stuffed in the container.
Processing of shipping bill under DEEC / DEPB
Labour /Forklift/ Crane for loading and unloading.
Insurance
Service Charge as per the regulations.

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Departments in the organisation


The firm with which I have worked has divided their operations into two divisions
namely;
1. AIR DIVISION
2. SEA DIVISION
These above two divisions have also divided their operations into following
subdivisions
AIR
1.
2.
3.
4.

EXPORT
FF
CONSOLIDATION
IMPORT

SEA
1. EXPORT
2. FF
3. CONSOLIDATION
4. IMPORT

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

SEA DIVISION
IMPORTS
Import procedure involves following steps
CHA receives BL copy, invoice, packing list,
Certificate of origin from the importer.

CHA sends set of above documents to his


Office at port destination

CHA sends set of above documents to his


Office at port destination

CHA enters all details into software called Visual


Impex

Checklist generated with duties calculated in it

CHA send copy of checklist to importer for his


approval

.
CHA gets ETA from custom website or journals

CHA file BOE on ICE Gate

PGDIT 2009-10

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Summer Internship Report

OM FF Pvt.Ltd

IGM No. given by shipping company


Before 24 hours of arrival of ship

Arrival of ship/cargo

CHA get inward date i.e. confirms IGM No.

CHA forwards BOE No. & TR-6 challan no. to importer


online

Importer goes to Ice Gate with the help of BOE no.


& pays the duties

CHA gives original B/L to shipping company

CHA pays CAN &DO charges of shipping company on


behalf of importer (if freight collect)

Shipping company releases DO to CHA.

CHA goes at dock with DO

At port agent of CHA take print


of BOE

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Examination of cargo

Out of charge order

Import procedure if Bank is involved


After getting the payment from importer Bank
Releases original B/L with its endorsement

Consignees endorsement on B/L


(To give permission to CHA for clearance)

CHA also gives its own endorsement on B/L

CHA sends above original B/L , CMC, DO payment


to shipping company.

Shipping company releases DO

Stamp duty is paid along with BOE

DO is given by CHA to yard i.e. warehouse where


Cargo is kept & get delivery with CMC order

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Import procedure for Factory Stuffing


In this case cargo directly goes to factory of the importer.
Following documents are involved in this case
1. Bond on 100 Rs. stamp paper signed by the importer to shipping company & CHA
2. Insurance policy
3. Sign verification of importer
4. Bank cheque for security deposit (charges if damage to container if any)
All above documents are submitted to shipping company
Shipping company gives permission letters for factory de-stuffing.
Other entities involved
1. CFS manager
2. Assistant commissioner of custom
3. Empty return container officer
This officer mentioned date on which importer has to return the container.
4. Empty survey letter
It includes the survey of container while taking out & while again coming back in
CFS .if any damages then importer has to pay through security deposit cheque.
-After returning container, Empty Container Yard officer gives endorsement on BOE,
that container is received.
-CHA submit this endorsement to shipping company to get back the security cheque.
Shipping company DO contain following charges
1. THC
2. Washing charges
3. Documentation
4. Survey
5. Stamp duty +processing charges
6. Service tax
7. Detention charges after free period
Documents required at time of clearance
1) Original Declaration
2) B/L copy
3) Commercial invoice
4) Packing list
5) Certificate of origin
Two sets of above documents are sent to CUSTOMS & DOCKS before the arrival of
vessel.

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OM FF Pvt.Ltd

Types of Declaration:
Declaration 1
Importer has to declare that the goods he is importing is for his own use in factory and
not for selling purpose.
Declaration 2
If importer is trading company who is going to sell products in market then he has to
label the MRP on product .if custom satisfy with the MRP then further process is
allow otherwise importer has to pay more duty.
Shipping Agent
-Shipping agent is agent who doesnt have his own vessel & buy space on others
vessel and sell it to actual importer & exporter at marginal price.
-Name of shipping agent is mentioned on B/L
-He also releases DO.
Demurrages
-Demurrages start from 7th day, after the unloading of cargo from vessel to the
ground. First 6 days are free.
-Demurrages after 6 days
For first 20 days---37.50/ton/day
For first 21 to 40 days---56.25/ton/day
For more than 40 days ---75/ton/day
-10.30 % of demurrage value of a day is service tax per day.
Release Advice (RA)
-Release advice is given by the custom.
-If DEPB licence is registered at NAVA SHEVA port & shipment is coming at
Bombay port, then we have to take RA to get DO.
-Documents required to tale RA are B/L, checklist & packing list.
.

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Consolidation
Overseas agent sends pre-alert to agent in India.
It contain MBL, HBL, debit note

Manifest is prepared by console department

Manifest send to shipping company

Shipping company send this manifest to customs


(Before 2-3 days of arrival of ship)

Before 24hours or when ship arrives shipping


agent or shipping line gives IGM No.

Cargo moves to CFS by shipping company.

CAN copy is send by console department to


importer

After payment of CAN, console department releases


DO to importer.

PGDIT 2009-10

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OM FF Pvt.Ltd

Importer or CHA pay DO charges of shipping


company.

After showing original B/L importer get delivery of


cargo

.Direct shipment
In case of direct shipment,
ShipperReal shipper
ConsigneeTo order /Bank
Notifying partyReal importer
-In case of direct shipment, consignee pays all charges to exporter & receives original
B/L.
-consignee will go with original B/L to shipping company & take delivery by paying
THC, DO charges to shipping company.

Bank Related Order (BRO) shipment


Consignee goes to bank & pays the amount of
exporter

Bank releases original B/L with its own &


exporters endorsement.
Consignee goes to Shipping agent submit
original B/L
& also pays the DO charges of shipping agent
Shipping agent releases NOC, covering note,
copy of MAWB, HAWB to consignee/CHA of
consignee.

At the end, endorsement of shipper, Bank,


importer, CHA on B/L & given to shipping
company.

PGDIT 2009-10

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Summer Internship Report

OM FF Pvt.Ltd

Debit Note includes following charges


1. Local trucking
2. Freight
3. Container charges
4. Document charges
5. Telex release charges 6. B/L charges
BILL OF LADING:
Bill of Lading is a document issued by the shipping company/ its agent
acknowledging the receipt of goods mentioned in the bill for the shipment on board
the vessel and undertaking to deliver the goods in the like order and condition as
received to the consignee or his order provided the freight and other charges specified
in the bill of Lading have been duly paid
TYPES OF B/L
1. Surrender B/L
All payment is done by the shipper at port of origin then overseas agent sends
B/L online to shipping agent in India as surrender written on it.
This surrender can be used at port of discharge to get the DO.
2. Telex message
Overseas agent sends this message to agent in India that B/L is surrendered at port of
origin.
3. Telex Release
Shipper pays all the charges at port of origin.
Overseas agent sends B/L online with stamp on it(i.e. this B/L can be used
to take DO).
This type of B/L is called as telex release B/L
But this entry should be there in BOTH the shipping company record i.e. overseas
Shipping company & in Indian shipping line.

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OM FF Pvt.Ltd

SEA EXPORT
FERIGHT FORWADERS
Freight forwarder receive mail from shipper
(Requirements, port of destination, weight,
freight etc.)

FF Sends quotations

If shipper agrees FF prepare


B/L

FF sends this B/L to shipper

If shipper agrees B/L print is Send to


shipping company

First print of B/L will come by shipping


company

Final print of B/L will come by shipping company


Only after the payment of freight if prepaid & other
charges.

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Aditya Gokhale

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OM FF Pvt.Ltd

CHA
CHA receives documents from exporter i.e.
Invoice, packing list, Bank authorised dealer letter

CHA enters all details of exporter into the software


called Visual IPEX.

Checklist is generated
.
Filing of shipping Bill at ICE GATE

Shipping bill NO. Or Noting NO. is


generated on checklist

With cargo CHA sends checklist, packing


list, Invoice, ARE form to custom

Custom checks all the documents

Physical examination of cargo

LEO
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OM FF Pvt.Ltd

Shipping bill & all other documents with


Sign come back to CHA.

B/L prepared by CHA is draft to


exporter

Conformation of exporter

Stuffing of cargo

Cargo on the
vessel

Departure of vessel

. After 24 hours of departure of ship


EGM is filed
by shipping company into customs
First print of B/L to
CHA

Agent of CHA goes to Shipping Company


for Mates receipt.

this Mates
receipt
get
AfterOn
7 days
of sail of
vesselCHA
CHAwill
receives
EP copy
of shipping Bill from customs.
Mates
receipt.

CHA pays the charges to shipping


company
Original B/L releases to
CHA
PGDIT 2009-10

CHA sends B/L to


exporter & exporter to
Importer.
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OM FF Pvt.Ltd

Documents send to Exporter by CHA after completion of all procedure of


EXPORT.
1) Acknowledgment (CHA)bill
2) Excise gate pass
3) Mates receipt
4) EP copy of Shipping Bill
5) DEPB copy( if used of DEPB license)
6) ARE-1 copy.

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OM FF Pvt.Ltd

PRE-SHIPMENT DOCUMENTS
Pre shipment documents are the documents which are required before the shipment of
the cargo / container. The main pre shipment documents are:1)
2)
3)
4)
5)
6)
7)
8)

Invoice
Packing List
S.D.F.Form
Shipping letter of instruction
ARE -1 Form
Letter of Credit
N Form
GSP certificate

Invoice It is the invoice / bill masked type format given by Govt. customs, raised by
the exporter on importer. The invoice gives the details of net amount receivable from
the importer in U.S. dollars or respective currency. The terms of delivery are also
mentioned in it like CIF, FOB, and Ex-Work etc., which clarify terms of contract
between shipper and buyer.
It also gives the description of goods to be exported. It contains the tariff-heading no.
Sr.No. Of invoice and is signed by the exporter. One copy goes to the customs
department, which serves the purpose of checking whether goods have been rightly
valued or undervalued.
Packing List - It gives the information like the invoice number, number of pieces,
number of pieces per package, number of packages, dimensions of packages, general
description of cargo, net weight, gross weight, etc.
ARE 1 Form:
It is an application for removal of excisable goods for exports from India by any mode
i.e. sea, air, post and land. It is required in cases where sealing of goods and their
examination takes place at the place of dispatch and also for dispatch of goods
without examination.
These forms are required to be printed in different Colour to facilitate disposal of
goods for export in bond or under rebate of duty by giving letter of credit.
Letter of Credit:
A letter of credit is basically a document issued by a bank guaranteeing a client's
ability to pay for goods or services. A bank or finance company issues a letter of
credit on behalf of an importer or buyer, authorizing the exporter or seller to obtain
payment within a specified timeframe once the terms and conditions outlined in the
letter of credit are met. The letter of credit acts like an insurance contract for both the
buyer and seller and practically eliminates the credit risk for both parties, while at the
same time reducing payment delays. A letter of credit provides the exporter or seller
with the greatest degree of safety when extending credit. It is useful when the
importer or buyer is not well known and when exchange restrictions exist or are
possible.

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OM FF Pvt.Ltd

Form N
An export consignment can be exempted from Octroi duty provided that N-Form (in
triplicate) is submitted along with the duplicate copy of the shipping bill with the
concerned octroi check post. This procedure pre-supposes that shipping bill is got
processed well in advance of shipment data or before moving the goods to the
Mumbai.
GSP certificate (Certificate of Origin)
The certificate of origin is the document, which mentions the country of origin of
goods, which are to be exported. The said certificate is prepared as per requirement of
consignee/ buyer for destination customs or duty benefit at destination. Certificate of
origin is issued / authenticated by local authority like Chamber of commerce or export
inspection agency. (A govt. body appointed for issuing the certificate.)

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OM FF Pvt.Ltd

AIR EXPORT
Procedure Flow chart
CHA receive invoice & packing list from exporter

If necessary CHA also prepare invoice & packing list on


basis of details provided by the exporter

CHA enter all details into Visual IPEX (Software


package)

Submit it at ICE GATE (customs website)

Shipping Bill No. generated

Checklist is generated

CHA files Air Way Bill

Booking of space in Airline

Send Fax of master AWB to


exporter for approval

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

CHA apply for Carting order


online.
After getting carting order, serially cargo is
taken inside the Air Sahar Cargo Complex.

Show gate pass+ submission of extra copy of


AWB at gate

Tally documents, NET weight is done

Registration (In EDI system Shipping Bill


NO. is entered & all details come.)

One custom officers name is assigned

Sign on documents (I.e. cargo is permitted for


the custom clearance)

Examination by the officer & gave the report

LEO generated

Shipping Bill generates


PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Stuffed cargo loaded


in aircraft.

After 24 hours of shipment CHA


receives EGM NO. by Airlines.

B/L by airlines to
CHA

Customs seal & officers sign on EP


copy.
(Indicating that customs endorsement is
completed)

B/L to Exporter

Exporter sends invoice, packing


list, B/L to Impoter.

EP copy of shipping bill to customer.


OTHER DOCUMENTS

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

PRE-SHIPMENT DOCUMENTS
The documents that are received along with the goods in the warehouse are as follows:
Invoice
Packing list
Bank details: The bank details consist of the shippers banks name, account number, IEC
number & dealer code number.
IEC (Importer Exporter Code) Copy
SDF (Shippers Declaration Form)
House Airway bill (HAWB)
Master Air waybill (MAWB)
Airway Bill
In Air shipment CHA receives the Airway Bill from the particular airline,
Then he fil it as shown in above procedure.
There are 12 original copies of AWB namely,
1. shippers copy
2. Issuing carrier copy
3. For consignee
4. Delivery receipt
5. Airport of destination
6. First carrier copy
7. Second carrier copy
8. Third carrier copy
9. Extra copy for carrier
10. Extra copies (3)
Shipping Bill
This document required by the customs authorities for allowing shipment. It is
prepared by the CHA &issued by the customs.
Custom sign &attested it. Custom is the owner of shipping bill. EP COPY of shipping
bill is only attested.
Shipping Bill is usually of five types.
i)Duty Free Shipping Bill:
This type of shipping bill is not used for the goods for which neither duty nor
is cess applicable.
It is also used for the goods manufactured out of materials imported under the
duty free import.
It is white in colour.
PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

ii)Dutiable Shipping Bill:


This type of shipping bill is used for goods subject to export duty/ cess, which
either entitled or not entitled for drawback.
It is yellow in colour.
(I)

(II)

(III)

Drawback Shipping Bill:


If the export of goods is simultaneously by duty free and / or subject to
export duty / cess, this type of shipping bill is compulsorily to be used
whether alone or along with any other shipping bill.
It is green in colour.
Shipping Bill for shipment Ex-Bond:
In case of goods imported for re-export and kept in-bond, this type of
shipping bill is used.
It is pink in colour.
DEPB Shipping Bill:

This kind of Shipping Bill is used when the export is under the scheme of
DEPB. It is blue in colour.
NFEI shipment
It is No Foreign Exchange Involve Shipment.Expoter is not liable to bring any
foreign exchange in country.
e.g. gifts,baggages, sample, repair etc.
GR waiver
This form is the declaration by the exporter to the bank that the goods
which he is exporting is not involved any remittance or foreign
exchange.
Form is issued by the bank itself.
This form is applicable in case of sample, repaired & return good.

In case of sample if it costs more than RS.25000 then exporter has to


take GR WAVER form.

In case of repair & return, GR waiver has to take for any amount.

In case of evaluation of faulty goods no GR waiver required if it is less


than 25000/- RS

In case of Baggage a person is allowed to fly with baggage of


particular amount & remaining baggage is exported by the CHA.
If remaining baggage is more than RS.25000 then exporter has to take GR
WAVER form.

PGDIT 2009-10

31

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

RE-EXPORT & Sec.74


Re-export involves
Import
export
Import
74 Sec.
Under sec.74 if imported goods are sending back to the country from
where they were imported then we can take Drawback scheme under
sec.74 to refund the duties which we paid at the time of import.
e.g. goods can be send back if their lease period is over.
In this case goods are not come back again once they are exported.
Import

Export

Bonded Trucking
Cargo comes from place where there is no Airport but with custom
clearance seal on packages.
Therefore at Bombay Airport this cargo is loaded in aircraft without
opening i.e. doing custom clearance of
Account part
- Accountant prepares the Cargo Sale Report (CSR) on basis of 15 days.
- It contains the space booked with particular Airline and the charges for it.
Airline gives 5% commission to the CHA on 15 days total sale of space.
- Break Up Of Agency Charges.
1) Air Freight Charges per Kg.
2) Miscellaneous charges per Kg
-Min.150 RS./1 RS per Kg,whichever is higher.
3) Cartage
-Min 50 RS/1 RS per Kg, whiever is higher.
4) Fuel surcharges per Kg
5) Security surcharges per Kg
6) Gate pass charges
-Min 170RS/75 paisa per Kg
7) AWB fees
8)Processing charges
.

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

AIR IMPORT
FREIGHT FORWADER
Agent of OM freight forwarders book cargo in other country.

After shipment of goods from exporters side, FF in India


Receives document online before the 24 hours of arrival of
shipment.(pre-alert)

Pre-alert contain Master AWB, House AWB, invoice. Packing


list & manifest copy.

CHA enters all the details in software called


VISUAL IMPEX

Filing of all documents at ICE gate.

Use document tracking system to check whether documents


are Submitted or not.

Before 3 to 4 hours of arrival of flight IGM No. is issued by


airlines.

Flight check

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Segregation report
(Tally manifest with actual
cargo)

FF issues CAN to the importer which includes DO charges.


(Number of CAN issued is equal to the number of House
AWB.)

Airline issues Console pouch which contain original copies


of MAWB, HAWB, invoice, packing list.

Importer pays the DO charges to FF


and received actual DO receipt.

Documents
Cargo General Manifest
Manifest is bifurcation of master AWB.
It is useful to console the cargo i.e. to tally whether all the HAWB copies which are
mentioned in the manifest are received or not.
Manifest contains details of the packages, details of every house.
CAN
CAN charges includes following charges
1. Freight charges in INR
2. cc fees (if charges collected)
3. Cartage(to airline)
4. Handling charges
5. E.D.I
6. DO charges
7. Service tax
8. Education & higher education cess
CAN charges are different for different importers i.e. its negotiable.
45 days credit period is also allowed by the Agency to importers for the CAN charges
payment.
PGDIT 2009-10

34

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

CC charges are negotiable with Importer.


Bank Release Order (BRO term)
This term is used between the exporter & importer. This term is used to guarantee the
safe delivery of the goods.
In this case,
Consignee is Bank & Notifying party is Importer
Debit Note
This is the note which is send by the overseas agent to the FF in India.
It is applicable when type of freight payment is collect i.e. freight is paid by the
importer at port of destination.
Debit note comes along with pre-alert.
Credit Note
If freight is paid by the exporter at port i.e. prepaid condition then overseas agent
sends credit note to the FF in India.
In Ex-Work
In this case overseas agent send local transport charges to the FF in India but overseas
freight charges are negotiated by the FF in India with overseas agent.
If overseas freight charges are also given by the overseas agent then it can involve
many overseas agent i.e. F1, F2, F3 etc. and this charges are very higher.
Detention Period
This is the period during which cargo is allow to keep in custom warehouse ,once this
period get over then demurrages started.
Detention period in
Air14 days
Sea3days
Types of the freight payment
1. Freight collect
In this case freight is paid by the importer at port of destination.
Local charges which include cc fees, DO fees, education cess & telex release charges
are paid by the importer only.
2. Freight prepaid
In this case exporter pays the freight charges at port of origin including local charges.
Label Missing Case
In certain cases label on cargo get missed due to improper handling or any other
reasons.
If House AWB is missing
FF prepare label & put it on cargo & also pays the penalty on the behalf of importer ,
finally importer pays it to FF.
If Master AWB is missing

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

If Master AWB is missing then it is relabelled by the Airlines.

CHA
CHA is involved in following activities in case of import

Scanning of documents received in pre-alert

Scanning of documents received in pre-alert

All details entered into software called visual


IMPEX, Along with the duties which
impoter has to pay.

Checklist of BOE sends to impoter

Filing of BOE at ICE GATE

Custom issues BOE NO


.
TR-6 challan & NO. Generate
automatically (EDI)

Take print of TR-6 challan which is


generated Through EDI
PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

File it manually & deposit the amount in


authorised bank

Cargo & documents are hand over to


custom

In custom shed, examination order, DO,


AWB, BOE are required.

Examine officer enter all the details in EDI.

Physical examination

Apprising officer passes


BOE

Out of charge order

Final BOE is printed as proof of completion of


shipment.

Delivery challan signed by the impoter

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Delivery Challan
This is signed declaration by the importer that he has received the goods in sound
condition.
Two copies of the delivery challan
1. CHA copy
2. Importer copy
After Examination documents required to show for out of charge order of goods
1) Custom copy of BOE
2) Out of charge order copy of BOE
3) TR-6 challan of BOE
4) Invoice
5) Packing list
6) MAWB
7) HAWB
8) Country of origin certificate
9) GATT declaration signed by the importer.
10) Copy of delivery order.etc.
In bond BOE filing
In bond
Warehouse code
In warehouse

seal

book Space

BOE file bond

Examination

Double duty
Bond

Submit it to
Custom

BOE can be filed in advance i.e. without the IGM number to save the time after
arrival of shipment.

Kaccha BOE
This type of BOE is prepared in case of perishable products & animals.
CHA first prepare kaccha BOE, pay all the duties.
After arrival of consignment at port convert kaccha BOE into normal BOE.
Different methods to file BOE
1. Online
2. Annexure i.e. manually
3. Floppy if network problem.
Documents required at the time of custom clearance
1. GATT declaration
2. Orignal & Xerox copy of invoice

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

3. Orignal packing list


4. Declarations
5. Orignal BOE
6. Orignal Examination order
7. Orignal TR-6 challan
DUTY CALCULATION
A) Accessible Value (A.V) = CIF +1% landing charges
(CIF value = invoice *Exchange rate+ Freight + Insurance)
B) BCD= 10% of AV
EXCISE:
C) CVD= 10% of A+B
D) E. CESS= 2% of C
E) SHE= 1% of C
CUSTOMS:
F) E. CESS= 2% of B+C+D+E
G) SHE= 1% of B+C+D+E
F) ADDITIONAL CVD= 4% of A+B+C+D+E+F+G
In above case, freight is the actual freight charged by Airlines or the 20% whichever is
lower to calculate the duty.
Insurance is calculated as 1.25% of invoice value, if no policy
And if importer has policy insurance will be 0.0225% of invoice.
Bank Guarantee & Temporary import
--Bank guarantee has to in case of temporary import.
--It will ensure that we will export the imported goods after use or after repair.
--Max.extended period is 18 months in case of temporary import ,after 18 months if
importer wish to keep the goods ,then he has to pay full normal duty.
--E.g. for three months import 5% of actual duty is paid.
--Finally duty which importer has to pay =
Remaining duty+ 15% interest charges per day.
BOE copies
1. Orignal BOEat custom clearance
2. BOE (Xerox copy) + N formBMC
3. BOE (Xerox copy) --- to Importer
4. BOE (Xerox copy) --- CHA reference
5. BOE (Xerox copy) + Nform--- octroi Department

TR-6 challan copies


1. Custom copy
2. Importer copy
3. Bank copy

PGDIT 2009-10

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

N form
N form has to pass within 7 days after its filing.
Octroi=5.5% (AV+ custom Duty)
Importer has to pay octroi on duty saved.
If Importer wants to save octrio on duty saved, he has to give the Bank Guarantee.
There are 4 original copies of N form as below
1. BMC
2. Importer
3. CHA to Naka
4. BMC to Naka
Schemes & license used
DEPB
-Duty Entitlement Passbook
-One licence of DEPB is of particular amount
-Certain percentage of FOB value of export will be given as licence
-From this licence balance, import duty gets deducted & remaining balance of licence
can be use for next import duty payment.
-Products which are mentioned while taking this licence should be always there in
shipment
-This licence is transferable i.e. exporter can transfer this license to other Importer on
commission basis if this exporter is not going to import.
MODVAT Scheme
Excise which is paid at the time of import get refund if same raw material is exported
after processing it.
Reimport of repaired goods 094/96
In case of reimport of repaired goods custom charges the duty on repairing cost.
Indian Origin Good 158/98
Import for repairing purpose.
This is duty free.
Declaration within 6 months we will re-export this repaired goods.
EPCG Licence
DGFT charges 3.09% duty on capital good & machinery imported for export purpose
and remaining duty i.e. normal duty- 3.09% is saved in this scheme.
Importer have to promise within 8 years from date of issue of license he will export
specific amount of goods.
Specific items which are published in annexure only those items can be imported.
Import of Second Hand Goods
Custom consider the amount of depreciation while importing second hand goods.
These items required chartered Engineer Certificate.
This certificate shows the present value of the goods.

PGDIT 2009-10

40

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Carnet Form
This form is taken when there is import of instruments for music shows, events i.e.
these items going export after the use.

CONTAINERIZATION
Containerization is the most significant among all forms of utilization in transport.
The advantage of the principle of increasing the size of unit load and reducing
handling and transportation cost is best realized through containerization. The
container system is easily adaptable to multi model transport operations in
international trade.

Container Classifications
Containers are available in configurations to take almost every kind of cargo and
mode of transportation (ocean, air, road, and rail).
1 General Cargo Container:
General purpose (dry cargo) container: It is suitable for the widest varieties of cargo.
It is fully enclosed and weatherproof, having rigid walls, roof and floor, with at least
one of its walls, either end wall (end loading) or side wall (side loading), equipped
with doors
Specific purpose container:
It is used to facilitate the packing (loading) and emptying (unloading) of container
other than by means of doors at one side of the container, and for other specific
purposes like ventilation.
1. Platform (flat rack)
It does not have a superstructure that is, rigid sidewalls and load-carrying structures.
The term load refers to static/dynamic form of load (not cargo load) or forces arising
out of the lifting, handling and transporting of container. It is equipped with top and
bottom corner fittings. The corner fittings provide means of supporting, stacking,
handling and securing the container. The flat rack is used for machinery, lumber, and
other heavy or large objects.
2. Closed ventilated container: It is used for the carriage of cargo, such as hides,
that cannot stand excessive moisture. It is similar to the dry cargo container with
specially designed natural or mechanical (forced) ventilation.
3. Open top container:
It is similar to the dry cargo container except that it has no rigid roof, but has a
movable or removable cover (e.g. a cover made of canvas, plastic or reinforced plastic
material) supported on movable or removable roof bows. The open top container is
used for machinery, sheet glass, and other heavy, bulky or long objects.

PGDIT 2009-10

41

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Platform based containers open sidedargo Container


(a) Thermal container (reefer)
It has insulated walls, doors, roof, and floor, which limit the range of temperature loss
or gain. It is used for perishable goods like meat, fruits and vegetables.
(b) Tank container
It is used for the carriage of bulk gases and liquids like chemicals.
(c) Dry bulk container
It is used for the carriage of dry solids in bulk without packaging, such as grains and
dry chemicals. It consists of a cargo-carrying structure firmly secured within the
intercontinental container framework.

PGDIT 2009-10

42

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Marketing Part
Entities involved
Exporter

overseas
Agent

Agent
in India

Importer

-If it is case of import, then importer approaches to the FF agent in India for the
Quotation & other details.
-FF in India contacts to its overseas agent and ask for his (overseas agent) rates.
-Overseas agent tells his rate for that particular shipment including his own profit.
- FF in India will tell the rates to importer as overseas agents rate + its own rate
including his margin.
The marketing department plays the most vital role in the smooth functioning of the
organization. It helps generate profits for the company. The marketing department of
OM FF somewhat performs in the following manner:
Potential clients or new clients are tapped. This is done by the sources of Internet and
references from existing clients or any other possible means. Each marketing
executive is allotted a sector. E.g.: South America, Gulf, Far East, etc. These
executives visit the clients corporate offices and discuss about potential business
deals. The execs present the companys profile, the achievements and strong points
and future plans of the company in front of the clients to impress the client and assure
him best of the rates and services in the market. Once the client is assured of the
same, he may ask the execs to quote rates or may book the cargo upfront.
Once the cargo is booked/rates are quoted, the marketing execs inform the CSV team
about the same. The CSV team then keeps up a periodic follow-up with the clients to
convert the enquiry into business.
Each marketing sector is allotted a separate customer service executive follow-up.
These executives are divided according to the Import/Export and by products. Eg:
LCL, FCL, Console, Projects, Liquid cargo, etc.

PGDIT 2009-10

43

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Some Situations observed


There were three situations, which I found different than usual workings.

High Sea Sale


Return to Origin Shipment
Short landing

High Sea Sale


Om Freight had a shipment for custom clearance that was from Gala precision. When
the shipment arrived, Gala approached on our office and intimated us that shipment
has been sold on high seas.
When a carrier is in international waters (which is generally referred as High Sea), it
can sale its cargo before landing. In such case the seller has to give an application to
Asst. commissioner of custom seeking his permission to amend the name of
consignor.
Documents to be produced for the satisfaction of authority are:
Sale deed
Custom attested Invoice and P\L.
No Objection Certificate from original consignor
Amendment in L\C, if any.
Asst. commissioner then allows to amend the name of consignor.
In general practice, amending a L\C is a hectic job hence original consigner clears
goods on his name and then at the time of taking delivery from custom warehouse
name of consignor is changed with the help of High Sea Sale documents.

Return to Origin Shipment


Some times when wrong goods are imported, or Faulty goods are imported they need
to be sent back to its origin. This shipment is called as RTO ( return to origin).this is
completely different from intermediate exports.
In Om Freight a shipment from Kodak was damaged and they wanted it to send back
to its origin. Documents required for this consignment are
Report of Surveyor
Letter from Exporter, stating that it is a RTO shipment giving reasons for
the same.

PGDIT 2009-10

44

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Banks Certificate stating, no foreign exchange transactions is involved in


shipment and that, it is RTO.

We have to file shipping bill and follow usual procedure for exports.

Short Landing
Suppose a shipment is due to arrive in two or more pieces under one Airway bill and
when shipment arrives it contains less pieces than those are stated in Airway bill then
that shipment is said to be short landed.
In such cases it is not possible to Custom clear cargo, since goods doesnt match
invoice and P\L .we have to wait for full shipment to arrive and then only we can
custom clear the goods.
Problems in short landing are:

Unnecessary delay

Mounting demurrage charges

Substantial cost for Air Cargo

Certificate from Airlines stating that Cargo is short landed.

Custom should allow clearance of short landed cargos with some simplifications.

Causes of Disputes in Clearance

Acceptance of Declared Classification


Acceptance of Declared Value
Denial of Duty Exemption
Damaged Goods
Good are pilfered or not traceable
Goods are lost or misrouted or short shipped
Wrong goods shipped by Shippers
Goods shipped either excess or short
No proper documentation / information available

PGDIT 2009-10

45

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

Few Definitions related to Import Export procedure


Airway Bill
It is a receipt issued by an Airline or its agent for the carriage of goods is called as
Airway bill. It is issued in terms and conditions of the contract of carriage of
goods. It is not a document of title and is not issued in the negotiable form.
There are two types of Airway bill A. Master Airway bill
B. House Airway bill
A. Master Airway Bill

Master Airway bill is issued by Airline company. It is between the Airline


company and the Freight forwarding agent. There are 3 originals and 11 copies.
The Freight forwarding agent issues it. It is between exporter and freight
forwarding agent. There are 3 originals and 9 copies.
B. House Airway bill
Agent (FF) issues 3 originals and 9 copies of House Airway bill. All the 3 originals
are given to the exporter and 3-4 copies of House Airway bill is kept with himself.
The exporter sends all the three original House Airway bill directly to the Importer.
The importer gets the delivery order from the freight forwarding agent only after
showing the original House Airway bill.
ROTATION NUMBER (R NO.): When the cargo is deposited in the customs
warehouse the shipment is given an R No. to track & identify the cargo in the
warehouse.
SHIPPING BILL:
It is issued by the CHA and endorsed by the customs so that the shipper can claim the
drawbacks under various export incentive schemes.
It is a document needed by custom authority for shipment permission. It is prepared
by the CHA on behalf of the Exporter. It contains several details of the cargo being
exported. Shipping Bill is usually of four types.
1.Duty Free Shipping Bill :-(white)
This type of shipping bill is used for the goods for which neither duty not cess
applicable. It is also used for the goods manufactured out of materials imported under
the duty free import.
2.Dutiable Shipping Bill:-( yellow)
This type of shipping bill is used for goods subject to export duty/ cess, which either
entitled or not entitled for drawback. It is used separately in respect of which export
duty is levied on the basis of (a) market price (b) tariff assessed value.
3.Drawback Shipping Bill: - (green)

PGDIT 2009-10

46

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

If the export of goods is simultaneously by duty free and / or subject to export duty /
cess, this type of shipping bill is compulsorily to be used whether alone or along with
any other shipping bill.
4.Shipping Bill for shipment Ex-Bond: - (pink)
In case of goods imported for re-export and kept in-bond, this type of shipping bill is
used.
There are different types of shipping bills to claim export benefits under different
schemes.
The commonly used shipping bills are :
DEPB
FREE SHIPPING BILL
DEEC
DUTY DRAWBACK
100% EOU
EPCG

Bill of Entry
Bill of Entry is the document, which is required for the clearance of imported goods.
The central board of excise and customs has standardized the form of B/E. Different
types of Bill of Entry are prepared for different purposes. Like
i) Goods entered for home consumption are cleared under Bill of Entry for Home
Consumption. (White Bill of Entry)
ii) Goods entered for warehousing are removed into bond on In Bond Bill of Entry.
(Yellow Bill of Entry)
iii) Goods for Home Consumption/Exports from bonded warehouse on payment of
duty are removed under Ex-Bond Bill of Entry. (Green Bill of Entry)
iv) Goods imported for Defence purpose are cleared under Defence Bill of Entry.
(Pink Bill of Entry)
Bill of entry should be presented for 'noting' in the import department of the custom
house after the import general manifest which gives a detailed description item wise
of the goods brought by the concerned vessel is filed by the steamer agent. A facility
has been afforded to the steamer agent to lodge this manifest 14 days in advance of
arrival of the vessel. This concession has been given to facilitate the importer's C.H.A.
to keep the documents ready so that immediately on arrival of the vessel and landing
of the cargo, the same could be cleared on examination and payment of duty thereon
without any loss of time. The date of presentation of bill of entry is very important, as
the rate of duty applicable to the imported goods will be rate that is in force on the
date of presentation.
There are different types of shipping bills to claim export benefits under different
schemes.
The commonly used shipping bills are :
DEPB
FREE SHIPPING BILL
DEEC
DUTY DRAWBACK
100% EOU
EPCG

PGDIT 2009-10

47

Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

MANIFEST: it gives the number of houses coming under one master.


EXPORT GENERAL MANIFEST (EGM): The EGM Number is given by the
Customs to a particular flight of an Airline that is carrying the cargo so as to put
the details of one particular flight under one number. The number is given serial
wise.
IMPORT GENERAL MANIFEST (IGM): The IGM Number is given by the
Customs to a particular flight of an Airline after the flight check so as to put the
details of one particular flight under one number. The number is given serial wise.
POST SHIPMENT DOCUMENTS: Following are the documents that are delivered
to the shipper after the cargo is shipped:

ECC (Exchange Control Copy)


EP (Export Promotion) Copy
ARE-1 Form
SDF

These documents are handed over to the shipper after the shipment is through but with
the airline documents, which are as follows, are sent to the consignee:
House Airway bill (HAWB)
Invoice
Packing list
Bill of Lading
The Bill of Lading is a document issued by the shipping company or its agent
acknowledging the receipt of goods mentioned in the bill of shipment on board of
vessel, and undertaking the delivery of goods by the consignee after paying freight
and other charges specified in the Bill of Lading.
There are two types of Bill of Lading

A. Master Bill of Lading


B.
House Bill of Lading

Master Bill of Lading


The shipping line issues Master B/L.. It is between the shipping line and Freight
Forwarding agent.
CARGO ARRIVAL NOTICE (CAN): It is issued after cargo is forwarded to the
custom warehouse. It is prepared when the documents are received & a copy of CAN
along with the document is handed over to the consignee or his clearing agent. CAN
is the bill drawn on the consignee by the freight forwarder. Incase of a collect
shipment cartage charge, service fee, freight charges & Currency Adjustment Factor
(CAF), CC fees (Collect Charges) are charged in the CAN. Incase of a prepaid
shipment only Cartage Charge & Service fee is charged to the consignee.
DELIVERY ORDER (DO)
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OM FF Pvt.Ltd

The consignee takes it from OM at the time of clearing the cargo from the custom
warehouse. The DO carries the name of the consignee, import Rotation number, IGM
number, flight number, master number, House Airway Bill number, description of
packages & nature of goods. Its a tool through which the payments are recovered
because DO allows the consignee to file for the Bill of Entry.

Commercial Invoice
A commercial invoice is the exporters bill for the sale of goods. It is the basic and
most important document required for preparation of all other documents which is
greater or lesser reproduces information from a commercial invoice. Export /
Import duty is also accessed on the basis of this invoice.

Packing List
A packing list / note should include the date of packing, connecting invoice
number, details of shipping such as name of the steamer, bill of lading number and
date of sailing, case number to which the list / note relates, contents of goods such
as quantity and weight and item wise details.
It gives the information like invoice number, number of pieces, number of pieces
per package, number of packages, dimensions of packages, general description of
cargo, net weight , gross weight.

Certificate of Origin / GSP Certificate


Australia, Austria, Canada, Finland, Japan, Mexico, Norway, Sweden, Switzerland,
USA, Belgium, Denmark, France, Greece, Germany, Ireland, Italy, Luxembourg,
Netherlands, Spain, UK and New Zealand are giving rebate on duty, if the goods
are imported from the developing country.
Certificate of Origin is required by the Importer either for taking advantage of a
preferential tariff or to ensure that the particular goods of the exporting country are
not banned
A shipper can get Certificate of Origin from the export inspection council. The
export inspection council takes one invoice and puts a seal on the Certificate of
Origin.
For Paying the Octroi The Following Documents Are Required:
Bill Of Entry Copies (2 sets)
The Copy Of TR6 Challan. (3 Sets)
Cheque In Favours Of Municipal Corporation Of Greater Mumbai
For the goods going out of BMC -Bombay Municipal Corporation 'N' form has to be
prepared. This form is issued at payment of Rs 100. For the goods not leaving the area
of BMC, octroi has to be paid. Octroi is calculated as 5.5% of value +duty paid.
'N' form issued should be submitted at the 4 Nakas within 7 days or else octroi
amount is to be paid.
For the purpose of clearance of Government goods instead of N- form, S-form is used.
N form is made in four copies:
Original- To BMC
Duplicate- To check post

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Summer Internship Report

OM FF Pvt.Ltd

Triplicate To transporter
Quad plicate- Reference copy

In case of N form passing, following documents are required:


2 copies of N Form.
Sales Tax Certificate.

CARTING:
Before entrance of cargo inside the custom warehouse the CHA inform the concerned
airline. They maintain a carting register and keep record of the nature of cargo, no. of
packages, airway bill no, etc. After that they attest the carting copy of the airway bill.
GATE PASS:
After Carting we submit the carting copy of the airway bill to the airport authority and
collect the gate pass. Carting copy of airway bill is necessary for gate pass.

EXAMINATION:
After getting the name of the examiner and carton / package number we go to the
examiner and he/she examines the cargo. The examiner examines the cargo according
to the documents. Otherwise it will be subject to further investigation.

EXAMINATION REPORT:
The examiner types the examination report after the examination. In the report he/she
declares that the cargo is according to the invoice, packing list and other documents. It
is very important for clearance.

LEO:
Let Export Order (LEO) is given by the custom superintendent, who passes the
documents on the basis of examination report. Without it the export cant be done.
After the Let Export Order only the shipping bill gets printed. It is nothing but
permission to export.

PRINTED EDI SHIPPING BILL AND ATTESTATION:


After examination and LEO the print out of shipping bill and examination report
come and checked by the CHA. If any mistake is still there then the custom
superintendent can amend it on the spot though EDI system. And a fresh shipping bill
and examination report will be printed out. After getting the print out of the shipping
bill and examination report the CHA takes the signatures of the custom examiner and
the LEO officer. The signature must be with the stamp of the officer.

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

ORGANISITION
Organisational Activities & InvolvementDuring the internship in organisation I got an opportunity to take part in the daily
activities of the organisation.
In Sea Imports division I learnt how to file for Bill of Entry on Visual Impex, how to
collect B/E from Shipping Agent, how to correct the B/E etc.
In Air Export Division I Filed the AWB, bookspace on aircraft by calling particular
airline, also online application of carting order also took daily flight report which
involved checking the position of the cargo which we have sent already.
In Import department CHA asked me to calculate the duty structure for different
consignment.
Organisation Realities
The organisation where I worked is family run business by a Gujarati family.
Because of this factor most of the higher post people are Gujrati or from same family.
The number of female working is very rare especially at Airport division.
Strengths of the organisation
Friendly atmosphere is the main motivating force due to which most of the people
work in organisation.
Good facilities to the staff snacks, kitchen, rest room etc.
Staffs are sincere in work thats why most of the process gets completed on time.
Credit is given to the personal achievements of any employment in contributing to the
profit of company.
Company has designed efficient way of carrying out the activities which conteudutes
to the fast processing of the consignment handling.
Weakness in organisation
Due to family run business most of the higher posts are restricted to Gujrati people
only.
Staff is not very satisfied with the amount paid and the number of hours of worked
done.
Extent of Team Work in organisation
As the organisation is divided into many departments due to this staff within the
department is very cooperative with each other which lead higher productivity of
organisation in terms of service.
At the end this Summer Internship has given me great experience of in the area of
CHA & Freight Forwarders procedure. It helps a lot to clarify my doubts of
theoretical concepts in practical manner.

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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

CONCLUSION
At the end of this report I would like to conclude by saying that the enriching
experience I received from OM Freight Forwarders as a part of my curriculum will
go in a long way to help me in my future. The Indian Industry still has to go a long
way before it is internationally accepted for its professionalism. Also the customs has
to get itself abreast with latest technology and the time for clearing consignments
takes exceptionally long as compared to other countries.
As an internee, I joined Om Fright Forwarders Pvt. Ltd. I was advised to begin the
internship in the documentation department by getting familiar with the files and
documents being prepared in the office. I therefore made a start by going through the
various files, thereby understanding all the documents needed for both imports and
exports. I also watched the documents being prepared and at every stage clarified any
doubts I had with the employees.
After having in depth knowledge of the procedures and understanding the relevance
of each document, I ventured into the actual preparation of documents by preparing
dummy documents like the various types of shipping bills, bills of entry, bills of
lading etc. In effect, I acquired proficiency in preparing a complete customs file
(containing all the essential documents and their required number of copies) which is
submitted to the customs for the purpose of assessment.
While working in the documentation department, I realized that accuracy and speed in
the preparation of documents is of vital importance as the output of this department is
the inputs of the operations department. Hence, it is the responsibility of the
documentation department to keep a record of all the documents handed over by the
clients, maintain the files for each transaction and forward duly filled in forms with all
the necessary documents in time to the operations department.
Thereafter, in order to have the complete picture of customs clearance, I paid a few
visits to the Container Freight Station at JNPT (Punjab). These visits were extremely
enlightening as I witnessed the stuffing /de-stuffing of containers, warehousing of
cargoes, Customs examination of cargo, unloading of cargo from the containers etc.
Thus, in spite of not being able to see the actual noting of documents, appraisement of
documents, filing of the bills of entry and shipping bills etc, the visits to CFS, went a
long way in further clarifying the doubts regarding the customs clearance procedures.
By getting conversant with the operations of imports and exports, I would have a
better edge when I actually begin work in this area, as it would be possible for me to
detect any kind of fraudulent practices with regard to my companys consignment at
any point of time. The training has helped me with a wide area of exposures and
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Aditya Gokhale

Summer Internship Report

OM FF Pvt.Ltd

practical experiences, which would help me to adapt myself in the corporate world.
Working with this company has provided with me with an all-round picture of the
precise procedures and practices. Having the opportunity to work 'on-the -job' has
familiarized me with the complicated practices undertaken to facilitate the smooth
sailing of exports and imports. It is only after putting into practice what I've learnt
from books that I realize what an integral bearing the Service Organization has on the
Exporting Organization.
This was my first work experience in the field of International Trade. It has helped me
in understanding documentation process and procedure involved in international
trade.

BIBLIOGRAPHY
Air Export-Mr.Sagar Shah
AIR Import-Mr.Deepak Paradkar
Air FF & consolidation-Mr.kaushal Pipariya
SEA export & Import-Mr.kaushik Joshi
www.omfreight.com
Journals received at organisation

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