Documents - Contents

By

D Sinha, IIFT, Kolkata Campus

 Who is a Shipper ??
• .........is  the party responsible for the shipment. 

• Owner / Seller / Exporter / Trader / Importer

• When a buyer of goods enters into a contract with seller of

the goods through sale contract, apart from other things
they also decide who would arrange for the transport.

• In the multi-modal transport, they may decide which leg of

transport is under whom.

• Who bears what risk is also the basis of various 

INCOTERMS defined by the International Chamber of
Commerce.
 “Contract of carriage” & “Sale
contract” 
• Shipper is a term related to “Contract of
carriage” but is also closely related to sale
contract. 

• Under Ex-works the importer wears 2 hats ;

one as shipper and also the buyer

• He is shipper under “contract of carriage” but

he is buyer (or seller) under sale contract.
 Can a Shipper be any one other than
exporter or importer
• Shipper is a person or a company ships the
goods, whose details are mentioned in the
shipping documents.

• The shipper can be a freight forwarder also who

transfer the goods to main carriers for on
carriage.

• The FF acts on behalf of either exporter or

importer as per INCO Terms and may issue a HBL
to the exporter or importer
 is a Exporter also the Consignor
• Exporter  is a person or a company authorized by
government agency to move the goods out of the border of
a country.

• The value of goods is received from the overseas buyer by

the exporter, as he is the ‘seller’ of goods.

• Also the accountability of exported goods by government

of the exporter’s country is entrusted with the exporter.

• Exporter receives export order against goods to be

exported.
 Who is a Consignor
• Consignor is a person or a company who
consigns the goods.

• The consignor also can be a seller who sells

the goods in domestic market.

• If a consignment is moved to a foreign

country, the consignor acts as an exporter or
shipper. 
 An Manufacturer may not be the Exporter ??
• In a third party exports, the overseas order is obtained by a third party
exporter. So the Foreign Inward remittance is received by the third
party exporter, as he had obtained the export order. So the purchase
order from overseas buyer, Foreign Inward Remittance Certificate
(FIRC) etc. will be in the name of third party exporter and not in the
name of manufacturer exporter. So the Reserve Bank point of view,
the regulation of inward remittance is monitored with the third party
exporter.

• he may not have goods under the said purchase order. He procures
goods from another manufacturer exporter and exports the goods on
his name and obtain foreign exchange by the third party exporter.

• The third party exporter pays the value of goods to the manufacturer
exporter as per mutually agreed terms and conditions. Normally third
party exporter pays the value of goods in local currency to
manufacturer exporter. In turn, the third party exporter receives his
export proceeds from overseas buyer in foreign currency.
 Third Party Exports
• Para 2.42 of FTP (2015 – 2020) :-
• Third party exports (except Deemed Export) as defined in Chapter 9
shall be allowed under FTP. In such cases, export documents such
as shipping bills shall indicate name of both manufacturing
exporter/manufacturer and third party exporter(s). Bank
Realisation Certificate (BRC), export order and invoice should be in
the name of third party exporter.
• Para 9.60 of FTP (2015 – 2020) : -
• "Third-party exports" means exports made by an exporter or
manufacturer on behalf of another exporter(s).
• In such cases, export documents such as shipping bills shall indicate
name of both manufacturing exporter /manufacturer and third
party exporter(s). Bank Realisation Certificate, Self Declaration
Form (SDF), export order and invoice should be in the name of third
party exporter.
• An Advance Licence holder may export
directly or through third party(s) and
discharge his export obligation.

• In the case of export through a third party,

shipping bills relating to the export shall show
the names of both the licence holder and the
third party.
 Deemed Export
• We can ship deemed export to ANY customer
who is in possession of Deemed export licence
without paying any basic excise duty, but only
when the goods are accompanied by an ARE-3
doc.
• For this in R/3 we have to enter the CUSTOMERS
DEEMED EXPORT LICENCE.
• note thNt we can issue an ARE-3 only with
respect to a customer deemed licence and its
should be assigned to ARE-3
• All the process steps involved in ARE-1 are same here to except that customer warehouse person
receives the goods ,fills out the part b of ARE-3 doc and send it back to the excise clerk..
 Consignee
• Consignee is the person to whom the carrier
(Ship) is supposed to deliver the goods.
• In most cases the consignee is the Buyer of the
goods but not always.
• Consignee could be the agent nominated by
the buyer.
• Consignee could also be the buyer’s bank.
 “Consignee” and “buyer”

• Another principle different between the terms

“Consignee” and “buyer” is that while
“Consignee” is the term used in “contract of
carriage”, the term “buyer” is used in “sale
contract”.
 Notify Party
• Notify party is the party to whom the carrier is suppose to notify
regarding the arrival ETA’s of the vessel.
• Notify party is then responsible for arranging the arrival formalities
of the vessel.
• notify party could be agent ,  receiver of the cargo or any other
person/entity who has the interest in the arrival of the cargo.
• While the shipper or carrier has the responsibility to keep the notify
party abreast of the arrival details of the vessel and failing to do so
may lead to unpleasant situations,
• sometimes we find on bill of lading a clause where shipper and
carrier assume no responsibility for failure to notify. This clause is
particularly common in liner shipping.

• Though very unusual, however there is no restriction on having

more than one notify parties. Usually there is only one notify party,
who in turn informs all other interested parties regarding the arrival
notifications of the vessel and cargo.
 If Bill of Lading is consigned ‘To
Order’ : What does it means
• To order, to the order, to the order of, to the order of
bank, to the order of xyz bank etc.etc. are the terms used
under negotiable instruments generally.

• However, if such terms are used in a Bill of Lading or Air

Way Bill which are two of negotiable instruments,

• that means, the ownership of goods under such Bill of

Lading/Airway bill is transferable to another party.

• Here, have mentioned Air Way Bill as one of

the documents of title. But, commonly Airway bill is not
a document of title, but Airway Bill can be prepared in
such a way to treat as document of title.
If Bill of Lading is consigned and banks
address as consignee in Bill of lading
• the title of cargo is with the said Bank and without the
endorsement by the bank; the final consignee cannot take
delivery of cargo.

• If the final consignee is DEF, bank has to endorse back side

of original bill of lading by affixing his rubber stamp and
mentioning as ‘Please delivery goods to DEF…’ or
equivalent words.

• Bank can also issue a separate document as Delivery Order

to issue goods to DEF with endorsement on back side of
original bill of lading in lieu of endorsing reverse side of Bill
of Lading.
When are Banks referred as Consignee

• Generally Bill of lading is consigned “To Order”

or “To the Order of XYZ Bank” under Letter of
Credit terms mutually agreed with buyer and
seller.
 Letter of Credit terms
• Bank Release Order (BRO) or Bank Delivery order in imports is quite
common term used regularly in an import trade where in Letter of
Credit is involved.

• If Bill of Lading consigned ‘To Order’ followed by Banks address, the

carrier can not release delivery order to final consignee without Bank
Delivery Order, as the consignee in bill of lading is Bank address. 

• If an exporter instructs carrier to mention ‘To order’ in ‘consignee

column’ of Bill of Lading, the carrier act accordingly by mentioned the
same.

• If consignee column shows ‘To Order of Bank’, the carrier is

responsible to deliver cargo as per the order of bank only.
 Who would be consignee when the
consignee changes say from DEF to PQR

• However, in some cases, ‘To Order’ in

consignee column is used to resell the goods
or transfer the goods to a third party by the
buyer
 DP / DA Credit Terms
• Here, once after receiving original bill of lading by
the beneficiary bank under letter of credit, he
notifies his client who is the final importer and
advises him to accept documents.

• The final importer approaches bank and accepts

documents by necessary endorsement. 

• Once after accepting documents, the bank delivers

original bill of lading to him along with ‘Bank
delivery order’, instructing carrier to deliver the
goods to the said importer. 
Letter of Credit at sight (LC at sight)
• However, in the case of LC bank releases Delivery Order only after
collecting export proceeds from importer. 

• Means, importer need to pay the value of goods to his supplier

through his bank as agreed while opening LC. 

• The Carrier release his delivery order to the final consignee only
after receiving  Bank Release Order  along with original bill of lading
under said shipment in such cases.
 
• Carriers also accepts Bank’s Delivery order  on reverse of original Bill
of Lading issued by his counterpart at port of loading subjected to
all information and proper endorsement of  bank mentioned in the
consignee column of Bill of Lading.
 Export of goods through courier or foreign post offices using e-Commerce

(i) Exports of goods through courier or foreign post office using e-

commerce, as notified in Appendix 3C, of FOB value up to Rs. 25000
per consignment shall be entitled for rewards under MEIS.
(ii) If the value of exports using e-commerce platform is more than
Rs 25000 per consignment then MEIS reward would be limited to
FOB value of Rs.25000 only.
(iii) Such goods can be exported in manual mode through Foreign
Post Offices at New Delhi, Mumbai and Chennai.
(iv) Export of such goods under Courier Regulations shall be allowed
manually on pilot basis through Airports at Delhi, Mumbai and
Chennai as per appropriate amendments in regulations to be made
by Department of Revenue. Department of Revenue shall fast track
the implementation of EDI mode at courier terminals
Ineligible categories under MEIS as per Import Export Policy 2015-2020 (FTP 2015-
20)
(i) EOUs / EHTPs / BTPs/ STPs who are
availing direct tax benefits / exemption.
(ii) Supplies made from DTA units to SEZ
units
(iii) Export of imported goods covered
under paragraph 2.46 of FTP;
(iv) Exports through trans-shipment,
meaning thereby exports that are
originating in third country but trans-
shipped through India;
(v) Deemed Exports;
(vi) SEZ/EOU/EHTP/BPT/FTWZ products
exported through DTA units;
(vii) Items, which are restricted or
prohibited for export under Schedule-2
of Export Policy in ITC (HS), unless
specifically notified in Appendix 3B.
(viii)Service Export.
(ix) Red sanders and beach sand.
(x) Export products which are subject to
Minimum export price or export duty.
(xi) Diamond Gold, Silver, Platinum,
other precious metal in any form
including plain and studded jewellery
and other precious and semi-precious
stones.
(xii) Ores and concentrates of all types
and in all formations.
(xiii) Cereals of all types.
(xiv) Sugar of all types and all forms.
(xv) Crude / petroleum oil and crude /
primary and base products of all types
and all formulations.
(xvi) Export of milk and milk products.
(xvii)Export of Meat and Meat Products.
(xviii)Products wherein precious
metal/diamond are used or Articles
which are studded with precious stones.
(xix) Exports made by units in FTWZ.
Risk Management System under MEIS and SEIS
• The policy relating to Risk Management System is
given in Paragraph 3.19 of Foreign Trade Policy.
• The Computer System in DGFT HQ, on random basis,
will select 10% of cases for each RA which has issued
scrips in the preceding month by 10th of the month.
• The list of such selected cases will be sent to
concerned RA by NIC by 15th of the month.
• Concerned RA, will in turn, ask for the original
documents by 30th of the month for examination in
detail. The applicant shall be under obligation to
submit the document asked for in the next 15 days.
 Risk Management System under
MEIS and SEIS
• Concerned RA in turn will examine such documents in next 15
days. In cases, there is any deficiency the applicant shall
rectify it in next one month from the date of communication
by RA. In case of excess availment of rewards, the applicant
shall refund the excess claim with interest as prescribed in
paragraph 3.19 of FTP.

• In case the applicant fails to submit the original documents/

rectify the deficiencies / refund the excess claim as stipulated
above, RA will initiate action as per FTDR Act and Rules.
 Re-export of defective  or unfit goods under MEIS
• Goods imported which are found defective or unfit for
use, may be re-exported, as per Department of Revenue
guidelines.
• Where Duty Credit Scrip has been used for imports,
Customs shall issue a certificate containing particulars of
Scrip used, date of import of re-exported goods and
amount debited while importing such goods.
• Based on this certificate, upon application, a fresh Scrip
shall be issued by concerned RA to extent of 98% of
debited amount, with same port of registration and valid
for a period equivalent to balance period available on
date of import of the defective / unfit goods. 
 Enclosure for proof of landing to claim MEIS,
Merchandise Exports from India Scheme
Applicant shall be required to submit or upload, as the case may be, any one of the
following documents as a proof of landing of export consignment in notified Market:

(i) A self attested copy of import bill of entry filed by importer in specified market, or

(ii) Delivery order issued by port authorities, or

(iii) Arrival notice issued by goods carrier, or

(iv) Tracking report from the goods carrier (Shipping Line/Airline etc. or his
accredited agent in India) duly certified by them, evidencing arrival of export cargo
to destination Market, or

(v) For Land locked notified Market, Rail/Lorry receipts of transportation of goods
from Port to Land locked notified Market.

(vi) Any other document that may satisfactorily prove to RA concerned that goods
have landed in / reached the notified Market.
 Enclosure for proof of landing to claim MEIS,
Merchandise Exports from India Scheme
• In case of (iv) and (vi) above, the accredited agent of the
Goods Carrier must certify that he is the accredited agent of
the concerned Goods Carrier on the date of issuance of the
tracking report / document.
• Further, in the case of issuance of any other document under
(vi) above, the accredited agent must state that proof of
landing of goods in relevant notified Market is given based on
information available in the Goods Carrier’s backup database
and he has verified the same and issued this document
accordingly.
• In cases of exports using e commerce, exporter may submit
express operator landing certificate/online web tracking print
out indicating airway bill number as prescribed in enclosure
(B) to ANF 3D.
 DUTY EXEMPTION / REMISSION SCHEMES
• 4.00 Objective Schemes under this Chapter enable duty
free import of inputs for export production, including
replenishment of input or duty remission.
4.01 Schemes
(a)Duty Exemption Schemes. The Duty Exemption
schemes consist of the following:
(i) Advance Authorisation (AA) (which will include Advance
Authorisation for Annual Requirement).
(ii)Duty Free Import Authorisation (DFIA).
(b) Duty Remission Scheme
(i) Duty Drawback (DBK) Scheme, administered by
Department of Revenue.
 4.03 Advance Authorisation
(a)Advance Authorisation is issued to allow duty free import
of input, which is physically incorporated in export product
(making normal allowance for wastage).
In addition, fuel, oil, catalyst which is consumed / utilised in
the process of production of export product, may also be
allowed.
(a)Advance Authorisation is issued for inputs in relation to
resultant product, on the following basis:
(i)As per Standard Input Output Norms (SION) notified
(available in Hand Book of Procedures); OR
(i) On the basis of self declaration as per paragraph 4.07 of
Handbook of Procedures.
4.04 Advance Authorisation for Spices
• Duty free import of spices covered under
Chapter-9 of ITC (HS) shall be permitted only
for activities like crushing / grinding /
sterilization / manufacture of oils or
oleoresins.

• Authorisation shall not be available for simply

cleaning, grading, re-packing etc.
 4.05 Eligible Applicant / Export / Supply

(a)Advance Authorisation can be issued either to a

manufacturer exporter or merchant exporter tied to
supporting manufacturer.

(b) Advance Authorisation for pharmaceutical products

manufactured through Non-Infringing (NI) process (as
indicated in paragraph 4.18 of Handbook of Procedures)
shall be issued to manufacturer exporter only.
 4.05 Eligible Applicant / Export / Supply
(c) Advance Authorisation shall be issued for:
I. Physical export (including export to SEZ);
II. Intermediate supply; and/or
III. Supply of goods to the categories mentioned in
paragraph 7.02 (b), (c), (e), (f), (g) and (h) of this FTP.
iv. Supply of ‘stores’ on board of foreign going vessel /
aircraft, subject to condition that there is specific
Standard Input Output Norms in respect of item
supplied.
Eligibility Condition to obtain Advance Authorisation for Annual Requirement

• (i) Exporters having past export performance

(in at least preceding two financial years) shall
be entitled for Advance Authorisation for
Annual requirement.

• (ii) Entitlement in terms of CIF value of imports

shall be upto 300% of the FOB value of physical
export and / or FOR value of deemed export in
preceding financial year or Rs 1 crore,
whichever is higher.
 Value Addition Value Addition for the purpose of this Chapter
(except for Gems and Jewellery sector for which value addition is
prescribed in paragraph 4.38 of FTP)

• shall be:- VA =[(A – B) / B] x 100, where

• A = FOB value of export realized / FOR value
of supply received.
• B = CIF value of inputs covered by
Authorisation, plus value of any other input
used on which benefit of DBK is claimed or
intended to be claimed.
 4.09 Minimum Value Addition
(i) Minimum value addition required to be achieved
under Advance Authorisation is 15%.
(ii) Export Products where value addition could be less
than 15% are given in Appendix 4D.
(iii) For physical exports for which payments are not
received in freely convertible currency, value addition
shall be as specified in Appendix 4C.
(iv) Minimum value addition for Gems & Jewellery Sector
is given in paragraph 4.61 of Handbook of Procedures.
(v) (v) In case of Tea, minimum value addition shall be
50%.
 Details of Duties exempted Imports under Advance Authorisation

• are exempted from payment of Basic Customs

Duty, Additional Customs Duty, Education Cess,
Anti-dumping Duty, Safeguard Duty and
Transition Product Specific Safeguard Duty,
wherever applicable.
• However, Import against supplies covered under
paragraph 7.02 (c), (d) and (g) of FTP will not be
exempted from payment of applicable
Antidumping Duty, Safeguard Duty and Transition
Product Specific Safeguard Duty, if any.
Ineligible categories of import on Self Declaration basis
• (a) Import of following products shall not be permissible on
self-declaration basis:
(i) All vegetable / edible oils classified (iv) All types of fruits/ vegetables having a
under Chapter-15 and all types of duty of more than 30%, classified under
oilseeds classified under Chapter-12 Chapter-7 and Chapter-8 of ITC (HS) book;
of ITC (HS) book;
(v) Horn, hoof and any other organ of
(ii) All types of cereals classified under animal;
Chapter–10 of ITC (HS) book;
(vi) Honey;
(iii) All Spices other than light black
pepper (light berries) having a basic (vii) Rough Marble Blocks/Slabs; and
customs duty of more than 30%,
classified under Chapter-9 and 12 of (viii) Rough Granite.
ITC (HS) book;
(ix) Vitamins except for use in
pharmaceutical industry.
 Biotechnology
• Where export and/or import of biotechnology
items and related products are involved,
Authorisation under paragraph 4.07 of
Handbook of Procedures shall be issued by
Regional Authority only on submission of a
“No Objection Certificate” from Department
of Biotechnology.
Q&A