Import Export Procedure
Unit 2
Excise clearance for export:-
Excise duty is a tax imposed by a central government on goods manufactured in
India it is collected at sources before removal of goods from the factory premises.
[Link] Under Rebate:-
The export rebate system allows exporters to claim back the excise duties or taxes
that have been paid on goods that are later exported.
2. Export Under Bond:-
Under this system, goods that are exported are not subject to excise duties at the time
of export, but the exporter must execute a bond ensuring that the goods will be
exported.
3. Rebate of Duty on Goods Export Procedure:-
Under the first procedure known as rebate of duty on goods export, the manufacturer
has first to pay the excise duty on goods meant for export and then claim refund of
the same after exportation of such a goods to countries except Nepal and Bhutan.
• Document Usage in Rebate and Bond Procedures
Original: This is usually submitted to customs or excise authorities for verification
or clearance.
Duplicate: For the exporter’s internal records or to submit to a separate authority or
department.
Triplicate: For additional copies required by customs, excise, or other relevant
departments.
Quadruplicate and Sixtuplicate: In case multiple departments or entities need to
verify, process, or audit the transaction.
Basic Documentation:-
1. Commercial Invoice
This is the primary document used in international trade. It serves as a bill for the
goods being sold and includes details like the buyer’s and seller’s contact
information, a description of the goods, quantity, price, terms of sale, payment terms,
and delivery terms.
2. Packing List
This document details how the goods are packed for shipment. It helps customs
officers and freight companies verify the contents and packaging of each shipment.
3. Bill of Lading (B/L)
A contract between the shipper and the carrier, this document serves as proof of
shipment and receipt of goods. It is essential for transferring ownership of goods and
is needed to claim the goods at the destination.
4. Export License
In some cases, especially for restricted or controlled goods (e.g., sensitive
technology, military equipment), an export license is required from the government
of the exporting country. It’s permission granted by the government to allow the
export of specific goods.
5. Insurance Certificate
This document verifies that the goods in transit are insured. It provides details of the
coverage and protects the exporter and importer in case of damage or loss during
transportation.
6. Export Declaration
This is a document submitted to the customs authority in the exporting country,
declaring the goods being exported. It is essential for clearing goods through
customs and obtaining permission for export.
Quantity: Pre- Shipment inspection
Pre-shipment inspection (PSI) refers to the process of verifying the quantity, quality,
and overall condition of goods before they are shipped from the seller’s location to
the buyer. It’s a crucial step to ensure that the shipment meets the contractual
requirements and international standards.
1. Consignment to Consignment Inspection
Each individual consignment is inspected by the Export Inspection Agency
Commodity Board and Certificate of inspection is issued.
2. Application
The application should be made in duplicate in the new prescribed form Intimation
for inspection ads per standardised pre shipment export documents to the nearest
office of the respective export inspection agency.
3. Issue of Certificate of Inspection
A Certificate of Inspection (COI) is a document issued by an independent inspection
agency after evaluating and verifying the quality, quantity, and conformity of goods
to the specified requirements before shipment. This certificate ensures that the goods
meet the standards set by the buyer, regulatory authorities, or industry standards, and
confirms that a pre-shipment inspection has been conducted.
Packaging, Marketing, Labelling
1. Packaging
Packaging serves several purposes in the import-export process, including protecting
products during transport, facilitating storage, and attracting customers. Proper
packaging is essential for maintaining the integrity and safety of goods, especially
during international shipping.
2. Marking
Marking involves labelling the package with the necessary information to ensure
proper handling, identification, and compliance with regulations. Proper markings
help customs, shipping agents, and the recipient to identify the contents, origin,
destination, and other critical details.
3. Labelling
Labelling provides important information about the product, ensuring compliance
with legal requirements, aiding consumer decision-making, and promoting the
brand.
Shipment of Goods
The shipment of goods refers to the process of transporting goods from the exporter
to the importer, either through sea, air, rail, or road. It is a critical part of the
international trade process, as it involves handling, packaging, documentation, and
transportation of the goods. Below is an overview of the key aspects of the shipment
process:
Shipment by Sea: Ideal for bulky, large quantities, or low-value items over long
distances. It takes longer but is cost-effective.
Shipment by Air : Suitable for urgent deliveries, high-value, or small and light items.
It is faster but more expensive.
Land Transport (Road/Rail): Common for neighbouring countries or domestic
transportation within the same region.
GSP (Generalised System of Preferences) Rules & Origin
The Generalized System of Preferences (GSP) is a trade program designed to
promote economic development in developing countries by offering preferential
tariff rates on certain products imported from these countries. Under the GSP,
developed countries provide preferential access to their markets for goods coming
from eligible developing nations, thereby facilitating trade and helping boost their
economies.
Role of Overseas agent & Remittance of Commission
In international trade, an overseas agent plays a crucial role in facilitating
transactions between a company (usually the exporter) and a foreign market. Here’s
an overview of their role and the remittance of commission:
Role of an Overseas Agent
1. Market Representation:
An overseas agent acts as the representative of the company in a foreign country or
market. They represent the exporter’s interests in the target market, identifying
potential buyers or sellers.
2. Sales and Promotion:
They help in promoting the goods or services of the company in the foreign market.
This may involve advertising, contacting potential clients, organizing meetings, and
providing information about the product.
3. Negotiation and Contracts:
The agent may negotiate terms of sale, pricing, delivery schedules, and other
contract details between the exporter and the importer, although the final contract
might be directly between the buyer and seller.
4. Documentation and Compliance:
Overseas agents assist with the preparation of necessary documents (e.g.,
import/export paperwork, customs clearance, etc.) to ensure that the transaction
complies with local regulations.
Remittance of Commission
Overseas agents are typically compensated for their efforts in promoting and selling
the goods or services of the exporter. The commission structure depends on the terms
agreed between the two parties. Here’s how the commission is generally remitted:
1. Commission Agreement:
The agent and the exporter agree on a commission rate in advance, which can either
be a percentage of the sale value or a fixed fee per transaction.
This rate is usually stipulated in an agency agreement or sales contract.
2. Calculation of Commission:
The commission is typically calculated based on the total sales made by the agent.
This can include direct sales or any deals that the agent has facilitated. It is generally
calculated as a percentage of the sale price (often ranging from 5% to 20%, but it
varies depending on the industry and agreement).
3. Timing of Commission Payment:
The payment is usually made after the completion of the sale, i.e., once the buyer
makes payment or once the goods are delivered. The exporter may set specific terms
for commission payment based on milestones such as contract signing, receipt of
payment, or successful delivery.
4. Currency and Method of Payment:
The commission is usually paid in the currency agreed upon in the contract (often
the local currency of the agent’s country or the exporter’s currency). Common
payment methods include bank transfers, cheques, or electronic payments
Incentives for export from government.
A)Import facilities for exporters.
1. Advance License
An advance license is granted for the import of inputs without payment of
basic customs duty.
2. Duty Entitlement Pass Book Scheme
Duty Entitlement passbook scheme, In short, DEPB is an export incentive scheme.
Notified on 1st April 1997, the DEPB scheme and consisted of a)post export DEPB
and b) Pre-export DEP B. The pre export DEP B scheme was abolished WEF 1st
April 2000.
B) Fiscal Incentives
Financial sufficiency its core to export competitiveness new exporters face
significant start-up cost as they gather information on foreign markets, develop
marketing channels, adapt products and packaging to foreign tests, and learn to deal
with new. Bureaucratic procedures, market and government failures mean that these
sunk costs bar firms from joining the export market.
Various Modes Of Transport
1. Air Transport
This mode of transport is used for perishable goods and goods that are not
bulky. This is a very fast mode of transportation and therefore used for goods
that need fast delivery.
2. Sea Transport
This mode is used by industries, especially when goods to be deliver are bulky
and the distance between the sores and the destination is large.
3. Multimodal Transport
Multimodal Transport can be viewed as the chain that interconnects different
links or Modes of Transport Air, sea and land into one complete process that
ensures an efficient and cost- effective door-to-door movement of goods under
the responsibility of a single Transport operator.
4. Road Transport
This is the most widely used mode of transportation. This is a reliable mode
of transport because there exist or reliable transport network which is
existence to every part of a region.
5. Rail Transport
This is also a reliable Modes of transportation for bulky goods and it is used
to Transport coal and other bulky goods.
Benefit of Export.
Refer Unit 1 Notes(Advantages Of Exporting)