Directorate General of Systems and Data Management

CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS

Date: 6th October 2023 Category: Customs

Issued by: ICEGATE

Subject: Advisory for Trade regarding Check introduced for the Shipping Bill in
reference to Nature of Contract

Introduction
A check has been introduced for Shipping bills in reference to ‘Nature of Contract’ that wherever
an exporter/ CHA declares “Nature of Contract” for invoice as CIF, the unit value at item level for
that invoice would be treated as inclusive of freight and invoice, and system would calculate the
correct FOB value accordingly.

This check shall ensure that the same nature of contract is declared at invoice level and item level
during export.

Export related incentives or export duty, if applicable on export goods, are calculated on the FOB
Value. Therefore, it is to be noted that wherever “Nature of Contract” for invoice is declared as
CIF, FOB value at item level would be derived by the system after deducting declared insurance
and freight amount proportionately among the items of that invoice. Similarly, if “Nature of
Contract” is declared as “CF” or “CI”, unit value at item level would be treated as inclusive of
freight and inclusive of insurance respectively and thereafter FOB value would be derived by the
system.

Points to be noted by Trade

1. For different types of “Nature of Contract”, trade to ensure to correctly declare “whether unit
price include” or “add freight” field in the shipping bill message format, at the time of filing of
shipping bill, as per following conditions:
 CIF : only B is allowed.
 CI : only I is allowed.
 CF: only F is allowed.
 FOB: only N is allowed.

2. Trade to ensure that amount and currency of “freight” and “insurance” has been
declared correctly, since FOB value would be derived by the system, wherever “Nature
of Contract” has been declared as “CIF”, “CF” and “CI”.

For any further queries or help kindly contact ICEGATE Helpdesk Team on
icegatehelpdesk@icegate.gov.in or 1800-3010-1000

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