This action might not be possible to undo. Are you sure you want to continue?
of merchandise from and to other countries under contracts of sale. No country in the world produces al in the commodities it requires. On the contrary a country may produce more of those commodities in the production of which it has a greater or comparative advantages, and may not produce or may produce smaller quantities of those in the production of which it has a greater or comparative disadvantage. The commodities which a country produces at an advantages it exports, while those in producing which it has grater disadvantage it imports. This happens under what in economic terms is called the law of comparative cost or advantage. Further, the price at which goods are traded between two countries depends on the extent and sufficiency of demands for the goods to be imported and exported, this is expressed in economic terms as the law of reciprocal demand.
Foreign trade- meaning Trade is exchange of goods and service between a purchaser and a seller. If the purchaser and the seller are the residents in the same country and purchases and sells goods and /or services then such business is called as inland trade. But when the resident of two or more different countries do the transactions of sale and purchase of goods or services, such trade is said to be foreign trade and transactions are known as foreign trade transactions. Such trade is also known as international trade. The features of foreign trade are: a. Involvement of different monetary units. b. Imposition of restriction in imports and exports by various countries. c. Impositions of restrictions on release of foreign currencies. d. Existence of multiple regulations, legal practices and rule in different countries. Foreign trade is of 2 types 1. Imports 2. Exports If seller is aboard and the buyer is in the home country, trade is know as import trade, while when the seller is in the home country and purchaser is aboard the trade is know as export. What is import for one country is export for other country 1|Page
DOCUMENTS USED IN FOREIGN TRADE and vice versa. Foreign trade can be divided into 2 more types according to visibility; viz. Visible and invisible : visible trade is one which can be seen i.e. trade of goods, merchandise. Transfer or exchange of goods is visible while, exchange of services between the purchaser and seller is invisible. It is not visible but it actually takes place i.e. shipping transfer of technical know how, insurance, transportation, fees of the professional experts, bank charges, commission, exchange interest etc, are in visible.
Methods of foreign trade Foreign trade may be carried on, that is goods may be traded between the exporter and importer, in any of the following three way: a. On open account basis : this means that the goods may, where the credit status of the importer is high, be sent direct to him in expectation of payment in due course on presentation of the relative documents through a bank. Exports on this basis are not permissible in India. b. Under bill of exchange : the exporter may draw bills of exchange on the importer for the value of the exports and collect the bills through a bank. c. Under letter of credit : the exporter my agree to exports the goods only against a letter of credit opened in his favour.
EXPORT IMPORT PROCEDURE 1. Seller and Buyer conclude a sales contract, with method of payment usually by letter of credit ( documentary credit ) 2. Buyer applies to his issuing bank, usually in Buyer’s country , for letter of credit in favor of Seller ( Beneficiary ) 3. Issuing bank request another bank, usually a correspondent bank in sellers country, to advise, and usually to confirm, the credit. 4. Advising bank, usually in seller’s country, forwards letter of credit to seller informing about the terms and conditions of credit. 5. If credit terms and conditions conform to sales contract, seller prepares goods and documentation, and arranges delivery of goods to carrier. 2|Page
Export Sales Contract A contract of sale is made by an offer to buy or to sell goods for a price and the acceptance of such offer. sends the documents and draft to the issuing bank 9. 8. As far as India is concerned. Apart from these procedures which are internationally accepted . accept or negotiate. if other than the issuing bank. If complied with. It is. Bank examines the documents and draft for compliance with credit terms. These changes take place during negotiation Strictly speaking . when finally accepted by an importer normally undergoes some changes. Seller presents documents evidencing the shipment and draft (bill of exchange) to paying . various taxes levied in the process of trade at the national level need to be neutralized / refunded. An offer sent by an exporter. The principle of export is exporting of goods and services and not taxes. Therefore. accepting or negotiating bank named in the credit (the advising bank usually). These procedures include interaction to be carried out with various government departments. to have a document in writing covering what has been agreed by them .Buyer surrenders bill of lading to carrier ( in case of ocean freight in exchange for the goods or the delivery order. Seller’s draft is honored. any exporter is required to interact with customs. central excise . or any bank willing to negotiate under the terms of credit. It may be implied from the conduct of the parties or it can be in writing. In order to get these taxes neutralized. 7. it is prudent and beneficial for all parties involved. If complied with. Bank examines the documents and draft for compliance with credit terms. or on other terms agreed between the bank and Buyer. sales tax and other such government departments to get the required relief from taxation.DOCUMENTS USED IN FOREIGN TRADE 6.Documents release to Buyer after payment. bank will pay. it is not compulsory to have a written sales contract signed by both parties. 10. 3|Page . exporter is expected to file various forms and follow different procedures. 11. Bank. there could be specific procedures related to each country. therefore necessary to master such other procedures as well. However .
one must draft a clear. Need of both parties. etc. Maximum clarity.R. This written documents adds clarity to the transaction. Technical specification.I. Quality 6./C. Grade. Trade practices. Following Terms / Conditions are covered in an Export Sales contract :1. Rate and terms of delivery ( F. Coverage is complete./C. Standard Export Sales Contract forms are also available. discount 7. status and their addresses. 4. 6. 2. 2. 5. responsibilities . While drafting the sales contract one must ensure the following :1. simple and complete contract which covers all aspects of the transaction agreed between parties in words and spirit. ownership changes from one party to other parties.B. Description of goods. 3. Etc. Future probability to be provided. 3. ). Packing.F. These can be used as it is or with some modification as per individual need.DOCUMENTS USED IN FOREIGN TRADE An export sales contract aims to determine the exact point at which the expenses . It reduces the probabilities of disputes & differences as it fixes the role and responsibilities of each party. 4|Page . lables. Terms and conditions Having understood the need of a written contract. Total contract value. Law of both countries. marking etc. Name of the parties. 5. 4.O. Contract No.F. 8.
Arbitration 15. To achieve this goal of “Successful Execution of an export order” one must carefully process an export order. permit. sea or road 11.Signature by all parties to the contract 17. 2.Modes of shipment :. Executing an export order successfully is most important. Delivery period . This is to be done very quickly. Very often exporters do not enter into any formal contract and finalize the trade deal through exchange of letter.Force majeur clause. 4. Following steps are suggested. Scrutinize the details given in export order. 5|Page . trans shipment. fax. 1. However it is wise to incorporate all important terms & conditions of their deal in a separate contract in writing. please draw attention of the importer and get it included. Compare carefully every word and comma. part shipment. Nothing is omitted in export order. The contract is normally prepared in duplicate.Any other terms : Special documents.by air. If any point is not covered in export order. 3. advance payment.L/C. D/A. Processing of an export order It is always regarded as a happy moment when an exporter receives an Export order. taxes and duties. check that what is mentioned in export order is the same you both have meant and agreed. warehousing.DOCUMENTS USED IN FOREIGN TRADE 9. This will avoid disputes arising out of uncertainty. Changes required should be intimated in writing to buyer and get his reply confirmation in writing. quality control certification .Date and place. 12. nomination of carrier 16. telephone. 14. D/P . performance guarantee licence. 13. 10.Inspection. as soon as it is received. Receiving an export order is half success. Upon receipt of an export order please send an acknowledgement to the buyer immediately.Terms of payment :.
our reputation is not so good as far as quality is concerned. All documents are to be checked twice before presenting to concerned authority. 6|Page .One of the main differences in export business compared to local business is involvement of documentation. chambers of commerce . specifications. 2. Export Promotion council. This process of execution is divided in two parts.DOCUMENTS USED IN FOREIGN TRADE 5. Licensing Authority . Inspecting Agency. Reserve Bank of India. Compromising in quality of goods will end future business and the buyer will lose confidence in you and sometimes even in your country. shipping company etc. There are several documents required in export transaction . Execution (1) Goods documentation 1. Quality . Any error/mistake made in documents result into problems and cost. Once you have accepted an export order. Customs. packing and other aspects of goods should receive your best attention. This loss will be very compared to gain one may get by saving in goods. GOODS : Sufficient care should be taken in manufacturing/procuring goods meant for export. you have to arrange for timely production of goods and ship in time. In many countries. If samples are sent and approved then goods should also be in conformity with sample. Bank. these documents are required by different people or organizations like importer. Calculations are to be re-checked. Port Authority. Utmost care should be taken in preparing documents required for exports. DOCUMENTATION :. It is a paramount duty of an exporter to deliver the same goods which he has agreed.
customs offices and foreign exchange authorities etc. but it is also of concern to their respective countries.DOCUMENTS USED IN FOREIGN TRADE Important Documents The importance of documentation Documentation is one of the most important aspects of overseas trade. The exporter is required to produce copies of export order to various Government departments/financial institutions e. Export Order An order is a commercial transaction which is not only important to the exporter and importer. Following are the main documents involved in overseas trade. not just a matter of product. insurance underwriters. Order Acceptance: 7|Page . availing post-shipment finance and other incentives and dealing with inspection authorities. Correct documentation is very important because it alone can secure the swift passage of goods through the customer resulting in prompt payments of goods exported. therefore. but it has to be mastered and the pattern of documents used is repetitive so that practice makes perfect in the end. shipment and payment but also one of the concerns to licensing authorities.g. manufacturing. exchange control authorities and banks dealing in export trade. For the beginner it is confusing and irksome aspect. for various purposes. It is. packing. obtaining export licenses when the product is covered under the restricted items or items reserved for State Trading Enterprises. since it affects the balance of payment position of both the countries.
country of final destination. The format of proforma invoice is very near to commercial invoice. a. country of origin. c. consignee’s name. This document is originated by an exporter and sent to buyer. selling price to the buyer for each unit and total price. Commercial invoice is a prima facie evidence of the contract of sale and purchase. The invoice should be strictly in accordance with the contract of sale. Under this document he commits the shipment of goods covered at the agreed price during a specified time. quantity shipped. It contains detailed description of goods consigned. the consignor’s name. if any. terms of payment etc… Proforma Invoice. Sometimes an importer needs proforma invoice to apply for licence from his government. mode of transport. Letter of Credit may be established as per proforma invoice. the description of goods. The order acceptance normally covers the name and address of the indent or. special marking. It will help to eliminate common error of wrong description . Proforma invoice when accepted by buyer becomes a contract. if applicable. When negotiation is finalized and buyer intends to place an order he normally requests the exporter to send proforma invoice incorporating all details of proposed transaction. order acceptance or contract number and date. import licence number. Sometimes. Commercial Invoice Commercial Invoice is a fundamental and basic document of prime importance. price of each product and total amount of the order. quantity . This proforma invoice is prepared in 3-4 copies. name and address of the consignee. marks and number of packages. consular and customs declaration. reference of proforma invoice is also given. In that case it becomes an important document while negotiation. Proforma invoice is useful to buyer in different ways. Many times in L/C. the exporter needs a copy of his order acceptance signed by the importer. provisional temporary invoice. port of shipment. packing and marking details. It is regarded as a preliminary. terms of sale. 8|Page . terms of payment. amount of freight and insurance. name of the steamer. particulars about packing. details of freight and insurance. spelling and technical specifications. It does not have status of commercial invoice as far as payment is concerned. b. terms of delivery. number and date of bill of lading.DOCUMENTS USED IN FOREIGN TRADE The order acceptance is another important commercial document prepared by the exporter confirming the acceptance of order place by the importer. It is the exporter’s bill for sale of goods.
Packing List Packing List is a consolidated statement in a prescribed format detailing how goods are packed. Certain importing countries may require their importers. It is a very useful document for customs at the time of examination and Warehouse keeper of buyer to maintain inventory record and to effect delivery. Quality is a key word of success in an export business. In normal course 7 to 10 copies are required. The importer uses the packing list to inventory the incoming consignment. net weight. not the exporters in the exporting country. Customs uses the packing list as a check-list to verify the outgoing cargo ( in exporting) and the incoming cargo ( in importing ). quantity . but the importer often needs a commercial invoice too. Consular Invoice / Legalized Invoice The customs invoice is used in lieu of the commercial invoice in a few importing countries for customs purposes. The invoice is self-certified by the exporter. It is required to be signed by the exporter or his agent.DOCUMENTS USED IN FOREIGN TRADE In India. This inspection can be an Inspection 9|Page . In that case. now along with other documents this invoice is also standardized. The blank customs invoice is available from the customs broker or forwarder and specialized printer. The customs invoice can be in a form called the certificate of value. This invoice will have 10-15 copies as per requirement. Inspection Certificate. care should be taken that there is no mistake in making invoice as it leads to an error in subsequent documents. Packing List describes Carton/ Package wise detail of goods . Packing List will have many details common from invoice but it does not indicate unit rate value of goods. The invoices vary in format but they contain essentially the same data as in the commercial invoice and packing list. to provide the completed customs invoice for customs clearance. This invoice is normally prepare first and several other documents are prepared by deriving information from this invoice. Depending upon buyers instruction number of copies of packing list are prepared. The exporter or his/ her agent – the customs broker or the freight forwarder— reserves the shipping space based on the gross weight or the measurement shown in the packing list. gross total weight and dimension. Many times an inspection is required before goods are shipped.
if any. This certificate indicates the country where the goods were originally produced or manufactured. Global 10 | P a g e . If an inspection is a part of transaction. Central Silk Board etc. Inspection Agency may also be nominated by importing countries’ Government i. A small fee is charged for this certificate.e. insisted by customs authority of importing country before goods are allowed to enter in the country.e. i. Normally inspection charges are borne by an exporter.DOCUMENTS USED IN FOREIGN TRADE Agency appointed by the Government of India. Some times buyer makes payment when inspection is at his instance. This certificate is the basis on which it is established as to goods belong to which origin. The inspector after completing inspection issues necessary inspection certificate. There are two categories of certificate of Origin viz. SGS and OMIC by some African Country. Certificate of Origin is the instrument to establish evidence on the origin of goods imported into any country. This certificate is required either by customs before allowing shipment of goods or by a banker to negotiate the documents. Sometimes buyer himself appoints an independent private inspector to inspect the goods . Customs can ensure that certain prohibited goods of particular countries are not imported. The preferential arrangement / scheme under which India is receiving tariff preferences for its exports are Generalized System of Preferences ( GSP ).. than an exporter is required to arrange for necessary inspection. (1)Preferential and (2) Non Preferential. This is a universal document and for political and social reason. The procedure to get this certificate is simple. This certificate is issued normally by a Chamber of Commerce on prescribed form. It also ensures that goods have not been reshipped by a seller who has brought them into his own country from some other place of origin. Certificate of Inspection is issued by the Inspection Agency concerned certifying that the consignment has been inspected as required under the Exports ( Quality Control and Inspection ) Act. Textile committee. Export Inspection Agency. This certificate bears cross references of invoice or contract number. Certificate of Origin Certificate of Origin is normally required by an importer to clear goods from the customs. This certificate helps the importer to take an advantage in duty concession . 1963 and satisfies the conditions relating to quality control and inspection as applicable to it and is certified exportworthy.
Bangkok Agreement. 2. SAARC Preferential Trading Agreement ( SAPTA). verification and certification of eligibility etc. UK. Development Commissioner. Generalized System of Preferences. This form is available in triplicate and has two Parts. These arrangements/ agreements prescribe Rules of origin which have to be fulfilled for the exports to be eligible for the tariff preference. (GSP ) This is also a kind of Certificate of Origin . 4. Central Silk Board – Silk Product. for services renedered. Coir Board – Coir and Coir Product. 6.DOCUMENTS USED IN FOREIGN TRADE System of Trade Preferences (GSTP ). Denmark and Greece have adopted the Generalised System of Preferences. 3. Handicarft – Indian items of Readymade Garment and other Handicraft items. Luxembourg. Germany. The authorized agencies may charge a fee. Belgium. if it is exported from a particular country. Export Inspection Council ( EIC ) is the sole agency authorized to print blank certificates. This document is required by an importer. Textile Committee – Fabric based products. The EEC countries comprising France. Export Inspection Agony – Any Product. Ireland. These Certificates of Origin evidence the origin of goods and do not bestow any right to preferential tariff. The authorized agencies shall provide services relating to issuance of certificate of origin. India. as approved by Ministry of Commerce and Industry. including details regarding the rules of origin .Sri Lanka Free Trade Agreement ( ISLFTA ) and Indo-Thailand Free Trade Agreement. 5. Netherlands. extent of tariff preference. 11 | P a g e . Italy. Part ‘A’ and Part ‘B’ Following agencies are authorized to issue GSP Certificate : 1. 1923. Under this system. Director General of Foreign Trade – Any Product. The Government has also nominated certain authorized agencies to issue Non Preferential Certificate of Origin in accordance with Article II of International Convention Relating to Simplification of Customs formalities. It aims to give preference in tariff to an importer of specific goods. list of items covered by an agreement. manufacturers and semi-manufacturers from developing countries including India are entitled to a concessional rate of import duty in these countries.
It is prepared by the exporter and it contains the name of vessel. exporter’s name and address. Handicraft item. numbers and description of goods. There are over 20 industrialized countries—donor countries ( country of destination ) . An exporter should mention list of supporting documents to support his declaration.which maintain GSP programs and over 100 least developed countries – beneficiary countries ( country of origin ) – which are eligible under the GSP program. It is only after the shipping bill is stamped and passed by customs. total number of packages with total weight and value and the name and address of the importer. flag. FOB price. details of each case.DOCUMENTS USED IN FOREIGN TRADE Form ‘B’ is on the reverse of triplicate form and it constitutes an application.g. marks and numbers. details about packages. Shipping Bills are of different types. the cargo will be allowed to be carted to Dock/Port sheds. quantity. port at which goods are to be discharged. All instructions to fill up form are given in the form. Most imports eligible under the GSP program are free of duty. In case of Air Shipment. It contains basic details of export transaction and also states the origin of goods. E. A. master or agents. DUTIABLE SHIPPING BILL : It is used in the case of those goods which are subject to Export Duty / Cess. country of final destination. whether Indian or Foreign merchandise to be re-exported.. many times an importer asks this certificate to be sent separately first by courier. B. The blank forms are available with the above agencies against the prescribed fees. FREE SHIPPING BILL : it is used for Export of goods which neither attract any Export duty / cess nor entitled to any duty Draw Back on their Exportation. real value as defined in the Sea Customs Act. Shipping Bill Shipping Bill is a document required to seek permission of customs to export goods by Sea / Air. This duty is charged either on quantity basis ( Fixed 12 | P a g e . Form ‘A’ is a combined declaration and a certificate of origin . The form is serially numbered. ‘BILL OF EXPORT” is used for Export by land.
D. if there is no Central Excise on the Export Product. C. An exporter is also required to indicate Name of his banker and account number in which the drawback amount is to be credited. E. This copy is the utmost important for claiming incentives. He should mention serial number. It is difficult to get another copy ( Duplicate ) of “EXPORT PROMOTION COPY” of said Shipping Bill. It is a normal practice that Shipping Bill is prepared by a Clearing Agent.g. ARE1 FORM This is a Central Excise form required in case. One of the copies of Shipping Bill is marked “EXPORT PROMOTION COPY”. In such cases it is mentioned “Provisional”. When goods are removed from factory and sent to port by means of a container which is 13 | P a g e . F. Brass Articles. DRAWBACK SHIPPING BILL : This shipping bill is used for export of goods on which Duty Drawback is to be claimed e. Drawback rate or percentage and amount of Duty Drawback. are subject to Central Excise. when goods which are removed from manufacturing unit. DEPB CUM DRAWBACK SHIPPING BILL : This shipping bill is used for export of goods on which DEPB and DRAWBACK is to is to be claimed.g. Each Shipping Bill is serially numbered and dated.DOCUMENTS USED IN FOREIGN TRADE amount per Kg or per Metric tonne ) or on certain percentage of assessable value. That means.e. An exporter must carefully preserve this copy. Spices. This form is an application for removal of excisable goods for export purpose. If an exporter has applied for Brand Rate fixation of Duty Drawback then it should be mentioned accordingly. if you are exporting ball pen or magazine on which there is no excise applicable. E. ARE1 Form is not at all required i. On the reverse side of Shipping Bill an exporter has to write particulars of his claim for Duty Drawback. if required to be exported this special kind of Shipping Bill is used. DEPB SHIPPING BILL : This shipping bill is used for export of goods on which DEPB is to be claimed. SHIPPING BILL FOR SHIPMENT EX-BOND : In case imported goods which are kept in Bond. DFRC SHIPPING BILL : This shipping bill is used for export of goods on which DFRC is to be claimed. G. you do not require to fill up above form.
drums have leakage. Mate Receipt with such remark is known as “Qualified Mate Receipt”. Mate’s Receipt It is a receipt issued by the Master of the vessel after the cargo is loaded on the ship. port of lading. customs will normally check seal of the container and not the goods. gross weight condition of cargo at the time of its receipt on board the vessel and shipping bill number and date. ARE 3 This form us used for clearance of goods from factory or warehouse to another warehouse without payment of duty.DOCUMENTS USED IN FOREIGN TRADE sealed by Central Excise superintendent/ Inspector. Many times Bank/ Importer does not accept this “Claused Bill of Lading” since it is not a “Clean Bill of Lading. vessel. port of discharge. the master of vessel will indicate it. This form is filled by the exporter who claims rebate of duty paid on finished goods or exports under bond or letter of undertaking. place of delivery. 14 | P a g e .” An exporter therefore must take utmost care in packing the goods. It is regarded as a bad document. If packages are damaged. This form is to be submitted to the officer-incharge of the warehouse at least 24 hours before it is intended to remove the goods. marks and numbers. “Bill of Lading” will also bear this remark based on Mate Receipt. It should be seaworthy export packing. description of goods. In docks. It contains the name of shipping line. ARE 2 This form is used when the exporter simultaneously claims rebate on excise paid on the finished products as well as rebate on the inputs used in the manufacture of such finished products. number and kind of packages. container status/ seal number. This rebate is paid only if the exporter has not exported under duty drawback / not claimed cenvat on inputs. boxes are torn out or any such defects are found with the parcels / packages of the cargo.
Every Mate’s Receipt is serially numbered. Normally. These are the various types of declaration form prescribed by Reserve Bank of India for exporters. for deciding the entitlement of DEPB Or Target Plus Scheme. [prepared in duplicate ] Used for export to all countries by parcel post [prepared in duplicate] Used for exports to all countries by parcel post under arrangement to receive 15 | P a g e . Mate’s Receipt is one such document. you will find that the date of export in case of first example is March. then the date of Export will regarded as 28th February. if the Bill of Lading is dated 28th February and Mate’s Receipt is dated 1st March.DOCUMENTS USED IN FOREIGN TRADE In case of ascertaining the exact date of shipment. the date of export will be 1st March. DGFT considers Let Export date as mentioned on the shipping bill as date of export. The difference is due to the difference in the date of the Mate Receipt. on which the Bill of Lading is issued. The date of Export becomes very crucial when some export benefit is related with particular date or a time period. whereas.VP/ : : : Used for exports to all countries made otherwise than by post. the date of Export is regarded as “The date of Mate Receipt or the date of Bill of Lading. in second case it relates to the month of February. 1GR 2. if the Bill of Lading is dated 28th February and Mater Receipt is dated 27th February. it becomes essential for Reserve Bank of India to regulate the export trader and transactions. Alternatively. The mate’s receipt is of a transferable nature and must be presented immediately at the shipping company’s office to be exchanged into Bill of Lading. whichever is later “ i. if you see in the above two examples.PP 3. For example . the mate’s receipt date is also very important.e. Now. GR Form / SDF One of the main functions of Reserve Bank of India is to control and monitor foreign exchange reserve of the country. Since exports directly relate to the country’s foreign exchange reserve.
Customs will verify all particulars of the goods and their value declared on GR form. 4. GR form is of utmost importance and is a binding obligation to an exporter. An exporter should note this point very carefully. An exporter is required to give analysis of full export value giving breakup of FOB. then an exporter has to bring forex within that period. Each GR form bears a pre-printed distinctive number which appears on both the copies of the form. Details of commission due to foreign agent or buyer should be correctly declared. normally maximum period allowed is 6 months. difficulties may arise at the time of remittances of such commission/payment. Name and address of exporter. Name and address of authorized dealer through whom the proceeds of the exports have been . An exporter has to mention the period within which he will realize full export value of transaction. discount. GR form contains : 1. This form is available with the bankers as well as Reserve Bank of India. original of GR form will be retained by the customs for onward submission to the Reserve Bank of India. However. Full particulars of exports are required to be declared in the said forms before shipment of the goods. All exports to which the requirements of declaration apply. After the shipment of effected. 16 | P a g e . realized. 3. [other than Bhutan and Nepal ] must be declared on appropriate form. or will be. It should be clearly indicated whether the export is on “Outright Sale Basis” or “On Consignment Basis” 5. IEC code number and description of goods. If the shipment is on DA terms. : 1.SOFTE X 5. commission. Otherwise . 3. Distribution / disposal of copies of GR forms. 2.SDF : : payment through postal channels on “Value Payable” on “Cash on Delivery” basis [ prepared in one copy only ] Used for export of computer software in non-physical form [ prepared in triplicate ] Used for declaring exports in the case of specified customs offices and specified categories of shipping bills under EDI systems. insurance. 2. etc… 6. GR forms covering export of goods should be completed by the exporter in duplicate and both the copies should be submitted to customs at this time of shipment. Freight.DOCUMENTS USED IN FOREIGN TRADE CODE 4.
it is always not possible that he would be able to demand the same from the buyers. the transaction will be treated as over and complete. ‘All Risk’. Freight –Contract. The insurance is normally covered to the extent of 110% of CIF value. when the goods are in transit . Marine Insurance Policy In the international trade. The amount paid to insurance company as consideration is known as ‘Premium’. The policy should specify different kinds of risks covered. It is a factor of cost and calculated roughly at 1% . an exporter has to arrange for insurance. Marine insurance policy is a contract whereby the insurer ( insurance company ) in consideration of a payment or premium by the insured agrees to indemnify the latter against loss incurred by him in respect of goods exposed to perils of the sea. It provides the protection to the goods in ‘transit’ and also extends to ‘storage of goods’. The duplicate copy of GR form will be returned to the exporter. 7. Marine insurance is intended to protect the insured against the risk of loss or damage to goods in transit due to marine perils. but not later than 21 days from the date of shipment to Authorized Dealer. Reserve Bank of India will compare all particulars of originals with duplicate and endorsement/s thereon. normally through the CHA. When an invoice amount is realized from overseas.DOCUMENTS USED IN FOREIGN TRADE 4. In today’s competitive world. Once the Reserve Bank of India is satisfied as the realization of export value. 6. exporters are required to give credit and under these circumstances the exporter is at risk of not receiving money 17 | P a g e . they are exposed to marine perils. If the shipment term is FOB –Free on Board – then the buyer has to arrange for insurance. if so desired. Why export credit guarantee is required ? Though every exporter would like to have advance payment or Letter of Credit as the safest mode. 5. Insurance . the banker will endorse the duplicate copy of GR form. ‘Warehouse to Warehouse’ and ‘Clause A’ are popular coverage’s which the exporters prefer. Export Credit Guarantee Corporation of India Limited. Banker will also verify the particulars in the duplicate of GR. if such storage is incidental to transportation. The duplicate copy then will be forwarded to Reserve Bank of India. The claim of insurance can be made payable at destination. This is termed as ‘ Release of GR ’ 8. In case of CIF – Cost. An exporter is under obligation to submit this duplicate copy of GR as soon as possible .
MULTI-BUYER EXPOSURE POLICY 8. was established in the year 1957 by the Government of India to strengthen the export promotion drive by covering the risk of exporting on credit. SPECIFIC SHIPMENT POLICY ( SHORT TERM ) 4. 18 | P a g e . STANDARD POLICY 2. Being essentially an export promotion organization. There is no insurance offered for such risks arising out of credit transaction by General Insurance companies which normally cover marine insurance. SMALL EXPORTER’S POLICY 3. MATURING FACTORING 12. insurance and exporting community. In order to provide such credit insurance services. VARIOUS PRODUCTS AND SERVICES 1. BUYER EXPOSURE POLICY 7.DOCUMENTS USED IN FOREIGN TRADE on account of commercial default like bankruptcy of the buyer of political disturbances like war in the importing country. IT-ENABLED SERVICES POLICY . ECGC is the fifth largest credit insurer of the world in terms of coverage of national exports. EXPORTER TURNOVER POLICY 6. It is managed by a Board of Directors comprising representatives of the Government . CONSIGNMENT EXPORTS POLICY ( STOCKHOLDING AGENT ) 11. EXPORT ( SPECIFIC BUYERS ) POLICY 5. banking. Government of India. What is ECGC ? EXPORT Credit Guarantee Corporation of India Limited. it functions under the administrative control of the Ministry of Commerce. SOFTWARE PROJECT POLICY 9. the government has set up a company called Export Credit Guarantee Corporation of India Limited. CONSIGNMENT EXPORTS POLICY ( GLOBAL ENTITY ) 10. Reserve Bank of India.
It is prepared either in an international currency or Indian rupees depending on the terms of the contract. (ii) Usance Draft – Where the exporter has agreed to give credit to the foreign buyer he draws a ‘Usance Bill’ i. It is of two types : (i) ‘Sight Draft’ or ‘Draft at Sight’ and ( ii ) ‘Usance Draft’ or ‘ Usance Bill’ (i) Sight Draft – When the drawer ( exporter ) expects the drawee ( importer ) to make payment immediately upon the draft being presented to him. A Bill of Exchange or draft as it is commonly known is “ an instrument in writing containing an order. In a usance draft.” The draft is widely used in international trade. A draft any be drawn according to the period of credit viz.e. signed by the maker. When the payment is received in advance no Bill of Exchange is required to be drawn. It is also used in the open account without any L/C involved. E. 19 | P a g e . draft if drawn for payment at a date later than the date of presentation. it is called a ‘Sight Draft’. Bank Certificate for Export and Realization. most frequently in the payment against a letter of credit (L/C).DOCUMENTS USED IN FOREIGN TRADE BILL OF EXCHANGE. directing a certain person to pay a certain sum of money only to the order of a person to the instrument. When a BE is drawn on foreign firm it is termed as a foreign draft. a bill drawn in US dollars is known as a “Dollar Bill” and when prepared in rupees it is termed as “Rupees Bill” Drawn is sets When the goods are exported the bill is drawn in a set.g. Accordingly.30 days. exporter extends credit to the importer. 60 days after it is presented to the drawee (importer ) who will retire the documents by accepting the draft by putting his signature and date. the bill is known by the name of currency in which it is drawn. Buyer cannot take delivery of goods/documents without making payment.
GR/PP/SDF form number. the bank passes on the original copy of bank certificate along with attested invoice to the exporter. 1. 6. This certificate is to be filled in Appendix 22A and it contains the following details. the certificate is issued after the realization of export sale proceeds. 9. 5. 8. 3. for shipment on board of the vessel and undertaking to deliver the goods in the like order and condition as received . After necessary verification / certification of FOB value. This certificate must be accompanied with copies of invoice and custom attested shipping bill Bills of Lading The Bill of Lading is a document issued by the shipping company or its agent acknowledging the receipt of goods . 10. FOB value. 7. Insurance. mentioned in the bill . if applicable. to the consignee or his order provided the freight and other charges 20 | P a g e . Bank retains the triplicate copy of the certificate for its record. Bill amount Freight. Invoice number and date Shipping Bill number and date Bill of Lading or Airway Bill Number and date.DOCUMENTS USED IN FOREIGN TRADE This certificate is issued by the bank in triplicate. Duplicate copy of bank certificate is sent to the concerned licensing authority. It is required for claiming export benefits/ import licences against exports. 4. date and category of duty free license. Number. 11. Description of goods Destination of goods. 2. commission . if any Amount actually realized in free foreign exchange. Date of realization of export proceeds. For exports on consignment / approval basis.
The bill of lading ( B/L) serves as a receipt ofr goods. 21 | P a g e . All originals are duly signed by the master of the ship or the agent of the steamship company and all the originals are equally valid for taking the delivery of the goods and once one original is utilized the other originals become null and void. Shipping company’s name and address 2. or the agent on behalf of the master. and it must be signed or authenticated by the carrier or the master. 5. Utmost care is. In other words. The bill of Lading is issued by the shipping company’s agent and this is a final proof that the goods have been exported out of India. this is the legal document to be referred in case of any dispute over the shipment. Shipping marks and particulars. 3. It contains the following information : 1. and a document of title to the goods. therefore require to be exercised to ensure that full set of original bill of lading is obtained by the exporter form the shipping company and no original copy goes in the wrong hand. Port of loading and port of discharge.. Bill of Lading is generally made out in the sets of two or three originals. The type of Bill of Lading depends upon the terms of Letter of Credit e. Shipped on board with date-rubber stamp.DOCUMENTS USED IN FOREIGN TRADE specified in the bill of lading have been duly paid. Consignee’s name and address. the name and capacity of the carrier or the master on whose behalf such agent signs or authenticates must be indicated. as per the details mentioned therein. so as to avoid any problem whatsoever at the time of presentation of the document for negotiation . and in the case of agent signing or authenticating. Few extra copies of bill of lading are also issued generally marked as ‘Non-negotiable copy’ which cannot be utilized for taking the delivery of goods. Combined Bill of Lading etc. Number of Packages. On deck Bill of Lading. It is the responsibility of the clearing agents to ensure that all the relevant particulars are correctly given. The B/L must indicate that the goods have been loaded on board or shipped on a named vessel. The signature or authentication must be identified as carrier or master . Received for Shipment Bill of Lading. Bill of Lading is issued in the standardized aligned document format.g. 4. an evidence of the contract of carriage. 6.
the importer can obtain the goods from the carrier at destination without paying the issuing bank or the consignor. unless a cash payment has been received by the exporter or the buyer’s integrity is unquestionable. 8.Shipper’s name and address. For air consignment to certain destinations. the name and the capacity of the carrier on whose behalf the agent signs or authenticates must be indicated. The AWB must indicate that the goods have been accepted for carriage. The goods in the air consignment are consigned directly to the party ( the consignee ) named in the letter of credit ( L/C).Signature of the shipping company’s agent 11. The AWB is issued usually in set of twelve copies. and it must be signed or authenticated by the carrier or the named agent for or on behalf of the carrier. In air freight. The signature or authentication of the carrier must be identified as carrier. Unless the goods are consigned to a third party like the issuing bank. the exporter ( the consignor ) often engages a freight forwarder or consolidator to handle the forwarding of goods. and in case of agent signing or authenticating. Freight details and name of the vessel 10. Copies 1. Hence. The originals are usually marked as : Copy 1 – Original for Carrier Copy 2 – Original for Consignee 22 | P a g e . Gross weight and net weight.DOCUMENTS USED IN FOREIGN TRADE 7. Description of packages and the goods. Therefore. The goods are released to the importer only after the importer makes the payment and complies with the instructions in the AWB. it is possible to arrange payment on a COD ( Cash on delivery ) basis and consign the goods directly to the importer. but it is not a document of title to the goods.Container number if any 12.2 and 3 of AWB are originals and have the same validity. 9. consigning goods directly to the importer is risky. the AWB is non-negotiable. Types of bill of lading : Airway bill/ Air Consignment Note The air way bill – air consignment note or airway bill of lading – serves as a receipt for goods and an evidence of the contract of carriage.
The date stamped on the face of a post receipt is deemed to be the date of shipment/ dispatch. 4 copies of packing lists 4. FLOW OF DOCUMENTS IN EXPORTS. In such a case. 23 | P a g e . it will. 5 copies of invoices. If the post parcel is sent directly in the name of the buyer. Hence. the buyer can take possession of the post parcel from the foreign correspondent bank. the buyer can take immediate possession of the goods sent by the exporter sometimes without paying for it. only after the payment of bill drawn by the exporter. 1. be in the interest of the exporter to send post parcels in the name of foreign correspondent bank unless the condition of letter of credit provides for the dispatch of goods directly in the name of buyer. 3. Both copies of gr. Covering letter 2. DOCUMENTS FROM EXPORTER TO CHA.DOCUMENTS USED IN FOREIGN TRADE Copy 3 – Original for shipper Post Parcel Receipt Post parcel Receipt evidences the receipt of goods for exports by the post office and it is also not treated as a document of title.
if any. 7. DOCUMENTS FROM CHA TO CUSTOMS 1. Packing list/ measurement slip DOCUMENTS FROM CUSTOMS TO RBI 1. Inspection certificate. Duplicate GR 2. 5 copies of invoices. Letter of credit . Inspection certificate. 24 | P a g e . Any other documents including IEC. 9. 2. Shipping bill. Original GR duly signed after the shipment. if any. 8.DOCUMENTS USED IN FOREIGN TRADE 5. Both copies of gr. 5. Declaration ( customs ) in triplicate. DOCUMENTS FROM CUSTOMS OFFICE TO CHA 1. Contract copy 6. if any. if any. 4 copies of packing lists 3. Customs attested invoice. Contract copy 7.Freight memo + freight cheque. Letter of credit . Declaration ( customs ) in triplicate. Any other documents including IEC 9. 4. 6. 10. Copies of shipping bill 3. 8. 4.
Copies packing list 4. copy of SDF 2. Shirt shipment certificate. Port trust copy of shipping bill 4. EP copy of shipping bill 3. Customs attested invoice. if any 10. 3. Set of bill of exchange 7. 5. 8. Original and duplicate copies of ARE-1 9. Receipt of port trust charges. 9. Rs. 7. Set of negotiable and non-negotiable bill of lading/post parcel receipt/ courier receipt/airway bill/railway receipt/consignment not/ softex form. DOCUMENTS TO BE SUBMITED BY EXPORTER TO AUTHORISED DEALER 1. 11. Set of negotiable and non-negotiable bill of lading/post parcel receipt/courier receipt/airway bill/railway receipt/consignment note/softex from duly endorsed 2. Copies of certificate origin/GSP certificate 5.His bill.2 revenue stamp affixed on reverse of original letter of credit . legalized invoie.DOCUMENTS USED IN FOREIGN TRADE DOCUMENTS FROM CHA TO EXPORTER 1. Contract with covering letter from bank and amendments 25 | P a g e . Duplicate GR. Customs attested packing list 6.Copy of freight memo. Supplicate GR/copy of SDF 6. Copies of commercial invoice. Original letter of credit 8.
All documents as required by buyer alongwith bank’s own covering schedule/settlement instruction DOCUMENTS FROM CHA TO SHIPPING LINE 1. Invoice 26 | P a g e . DOCUMENTS FROM AUTHORISED DEALER TO FOREIGN BANK 1. Report ENC statement while forwarding documents 2.Insurance policy 11. Report in R return on realization 3. Upon receipt of payment/acceptance on B/E all documents are handed over duly endorsed (excluding covering letter/non. Bank certificate of export and realization DOCUMENTS FROM BANK TO RBI 1.Inspection certificate 12.Any other documents DOCUMENTS FROM AUTHORISED DEALERS TO EXPORTER 1. Freight certificate 3. Carrier’s certificate as per wording of letter of credit DOCUMENTS FROM FOREIGN BANK TO BUYER 1. Freight amount cheque 5. 3 bank attested invoice 2.DOCUMENTS USED IN FOREIGN TRADE 10.Bank certificate of exports and realization in triplicate 13.negotiable copy of B/L & invoice DOCUMENTS FROM EXPORTER TO BUYER 1. Duplicate GR to be held on record. Measurement slip 2. Copy of letter of credit 4.
When an invoice amount is realized from overseas. Receipt of port charges REALISATION OF PROCEEDS. Shipment advice certificate of any DOCUMENTS FROM CHA TO PORT CUSTOMS 1. The duplicate copy of GR form will be returned to the exporter. but not later than 21 days from date of shipment to authorized dealer. GR forms covering exports of goods should be completed by the exporter in duplicate and both the copies should be submitted to customs at time of shipment. Packing list 3. Certificate origin 4. the exporter’s account is credit with the amount of the invoice.DOCUMENTS USED IN FOREIGN TRADE 2. 27 | P a g e . The exporter is under obligation to submit this duplicate copy of GR as s0on as possible. normally through the CHA. Reserve bank of India will compare all particulars of originals with duplicate and endorsements thereon. Once the reserve bank of India is satisfied as the realisation of export value. the transaction will be treated as over and complete. Copy of shipping bill 3. This is termed as release of GR. the banker will endorse the duplicate copy of GR form. original GR form will be retained by the customs for onward submission to the reserve bank of india. One copy of invoice 4. The duplicate copy then will be forwarded to reserve bank of India. Banker will also verify the particulars in the duplicate of GR. Customs will verify all particulars of the goods and their value declared on GR form.MOVEMENT TO GR When the documents submitted by the exporter to his bank are found in accordance with the requirements of the letter of credit. Packing list DOCUMENTS FROM PORT CUSTOMS TO CHA 1. Port charges 2. Non-negotiable copy B/L 5. After shipments is effected.
DOCUMENTS USED IN FOREIGN TRADE 28 | P a g e .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.