Module 4

• Understand and Develop Appropriate documentation for Export & Import.

• Essentials for making cross-border business: A Business entity, PAN/BIN Card, Digital Signature,
Bank account, GST registration, Importer Exporter Code (IEC): Understand FEMA, Authorized Dealer
(AD) bank, EPCs Registration
 To start export business, the following steps may be followed:
• Setting up of an appropriate business organization and naming the business
• Deciding on the LOGOS, Email ID, fax nos. etc.
• Opening a Current account with a bank
• Choosing appropriate mode of Operations
• Selecting/Identifying the product, check with FTP about its exportability
• Collecting the Samples and arranging them properly, Labeling and cataloguing
• Applying for PAN with IT authorities
• Registration with local authorities
• Obtaining IEC by applying to them local office of DGFT
• Getting registration with the concerned EPO as RCMC
• Making effective Business correspondence
• Selecting the overseas market
• Selecting prospective Overseas Buyer.
• Selecting channels of distribution
• Negotiations with the prospective Foreign Buyer
• Scrutiny and processing of an export Order
• Entering into a formal export contract
 Import Export Code and when it is required?

An import-export code is a 10-digit alphanumeric code that is issued by the Directorate

General of Foreign Trade (DGFT). It is a unique identification number that importers
and exporters need to run their businesses. The Import Export Code is popularly
known as the IEC number.
• Required by customs authorities when an importer needs to clear shipments.
• Required by the bank when an importer sends money abroad.
• Required by the customs port when an exporter sends shipments.
• Required by the bank when an exporter receives money in foreign currency directly
into their account.
 Benefits of IEC registration
• Unlocks International Market: The IE Code is a mandatory requirement for the import and export business,
allowing products to reach the global market. It facilitates smoother entry for Indian companies and opens
doors for growth and expansion.
• Online IEC Registration: The process of obtaining an IE Code is fully online, making it quick and hassle-free
with minimal document submission.
• Minimal Documentation: Obtaining an IEC requires only a few documents, making it a simple process.
• Lifetime Validity: The IE Code registration is valid for a lifetime as long as the business continues to exist.
There are no issues with updating, filing, or renewing the IEC registration unless it is revoked or surrendered.
• Reduces Illegal Goods Transportation: The IE Code requires the submission of authentic information,
preventing the transportation of illegal goods.
• Availing Several Benefits: IEC registration offers significant advantages for importers and exporters, including
subsidies from Customs, the Export Promotion Council, and other authorities. Exporters can also benefit from
LUT filing under GST to make exports without paying taxes and claim refunds on taxes paid if applicable.
• Compliances: Unlike other tax registrations, businesses with an import or export license are not required to
fulfill specific compliance requirements, such as annual or return filings.
 How to get Import Export Code (IEC) Registration?
• Step 1. Visit the DGFT Website.
• Step 2. On the homepage, click on the ‘services’ tab.
• Step 3. Select the option ‘IEC Profile Management’ option from the drop-down list.
• Step 4. A new page will open. Click on the ‘Apply for IEC’ option on the homepage.
• Step 5. Click on ‘Register’. Enter the necessary details and click on the ‘Send OTP’ button.
• Step 6. Enter the OTP and click on the ‘Register’ button.
• Step 7. Once the OTP is validated, you will receive a temporary password, which you can change after logging in.
• Step 8. After registering on the DGFT website, log in by entering your username and password.
• Step 9. Click on ‘Apply for IEC’ on the DGFT website dashboard.
• Step 10. Click on the ‘Start Fresh Application’ button.
• Step 11. Enter the general information like the details of partner, proprietor, director, karta, partner, bank
information and other details.
• Step 12. After making the payment successfully, it is redirected to the DGFT website. The receipt is displayed and
can be downloaded for future reference.
What are the Documents Required for Import Export Code (IEC) Registration?

• PAN card copy of the individual, firm, or company.

• Voter ID, Aadhar card, or passport copy of the proprietor.
• Proof of establishment, incorporation, or registration for the partnership, society,
proprietorship, company, or HUF.
• Business address proof, such as a sale deed, lease deed, rent agreement, or utility bill
(electricity, telephone, or mobile).
• Cancelled cheque copies of current bank accounts for the individual, firm, or company.
• A self-addressed envelope is required to receive the IEC certificate via registered post.
 When is Import Export Code (IEC) not Mandatory?

• Traders registered under GST do not need a separate IEC. Their PAN will serve
as their IEC code for import and export purposes.
• IEC is not required to import or export goods for personal use, provided they are
not for commercial purposes.
• Government departments, ministries, and notified charitable institutions are
exempt from obtaining an IEC.
Commercial documents
• Commercial Invoice
• Issued by the exporter (seller).
• Lists goods sold, quantity, price, terms (Incoterms), and buyer details.
• Proforma Invoice
• A preliminary invoice sent before shipment.
• Used to confirm details with the buyer or apply for import licenses.
• Packing List
• Lists the contents of each package or container (weight, dimensions, etc.)
 Customs Documents
• Shipping Bill / Bill of Export (India)
- Filed with Indian Customs by the exporter for permission to export.
• Import Declaration / Bill of Entry
- Filed by the importer in the destination country to clear goods through customs.
• Certificate of Origin (COO)
- Issued by a chamber of commerce.
- Confirms the country where the goods were produced.
What exactly a shipping bill contains?
• Exporter and importer information – details of the exporter, including their GST number, and the
consignee in the destination country.
• Goods description: includes precise description of the goods, HS code, quantity, and unit price.
• Invoice and packing list: Reference to the commercial invoice and packing list with the
consignment.
• Customs duty and taxes: calculation of applicable duties, including GST, based on the value of
goods.
• Mode of transport:
• Terms of trade: details like FOB (Free on Board), CIF (Cost, Insurance and Freight) etc.
• Port of export and destination: Identifies the port from where the goods are leaving and where
they are heading to.
• Container and shipping details: Information about the containers, seals, and shipping lines.
• Insurance details:
• Export incentives:
 Shipping bill – types and color coding
• Types of shipping bills
• Free shipping bills (White) – used for export of goods without any export incentives. It is most commonly used
shipping bill for regular exports.
• Drawback shipping bill (Green)- Filed when claiming a drawback on duties paid on imported inputs. It is used when
the exporter claims a refund on duties paid on imported inputs used in the manufacturing of goods.
• Shipping bill for Export under DEPB scheme (Pink)- used when claiming benefits under the Duty Entitlement
Passbook Scheme if the exporter is eligible for the benefits of this scheme.
• Shipping bill for Export under EPCG scheme (Blue)- relevant when exporting goods under the Export Promotion
Capital Goods Scheme. This allows duty-free import of goods.
• Shipping bill for Export under Rebate of Duty scheme (Yellow)- filed to claim rebate on duties paid on exported
goods. This is used for exports under schemes that allow for a rebate of duties already paid on the exported goods.
Transport documents

• Bill of lading (B/L)

- Issued by shipping company (for sea freight).
- Acts as a contract of carriage and document of title.
• Air waybill
- Non-negotiable, used for air shipments.
- The AWB is non-negotiable, unlike a Bill of Lading.
- It contains 11 digits (e.g., 123-45678901) where the first 3 are airline prefixes.
- Used for customs clearance, tracking, and as a receipt of goods.
•There are two main types:
- Master AWB (MAWB) – Issued by the airline.
- House AWB (HAWB) – Issued by a freight forwarder.
Insurance & Regulatory Documents

• Insurance Certificate
• Proves goods are insured against loss or damage during transit.
• Letter of Credit (L/C)
• Issued by the importer’s bank, guaranteeing payment to the exporter.
• Inspection Certificate
• Issued by an independent agency confirming quality/quantity.
• Export/Import License (if required)
• Required for restricted or controlled goods.
Documents Required for Clearance of Goods

• Bill of Entry
• Bill of Lading
• Commercial Invoice
• Packing list of goods
• Certificate of Origin
• Import license of the consignee
• Insurance certificate
• Letter of Credit (L/C)
 Bill of Entry

• The bill of entry is usually prepared by the clearing agent and submitted to the
customs authority before the arrival of goods at the destination port. The agent has
to ensure that the correct description and value of goods are shown on the bill of
entry and that goods come under the correct HS Classification (Harmonized
Systems code). The HS Classification system is an internationally accepted system
of classification and coding of goods. The customs duty calculation will be based on
the HS code. Most of the ports these days have the facility to prepare bills of entry
digitally. The clearing agents only have to input the correct data through the relevant
customs portal.
 Bill of Lading

• A signed bill of lading is issued by the ocean carrier as proof of receipt of cargo from
the shipper, on board the ship. It also gives title over the cargo, normally to the
consignee. It shows the name and address of the consignor, consignee, and notify
party (if applicable). The clearing agent has to ensure that the bill of lading
accompanies other documents for clearance of the cargo.
• The shipping agency provides a Bill of Lading for goods shipped by them. A Bill of
lading usually contains information about the shipper, consignee, carrying vessel,
ports of loading and discharge, place of receipt and delivery, mode of payment, and
name of the carrier.
Sample copy of Bill of Lading
 Commercial Invoice
• A commercial invoice is issued by the seller or consignor and must accompany
the goods. It gives the full name and address of the seller and the buyer. It will
have the details of the goods that are being shipped, the quantity shipped of each
item, their respective costs, and the total amount due from the customer.
Sample copy of commercial invoice
 Packing List
• At a glance, a packing list may look very similar to the commercial invoice. But the
similarity ends there. Its heading will show ‘packing list’, and it will have the
complete details of the products – most importantly the serial number, description of
units, pack and packaging, individual and overall dimensions of each package (if
applicable), the weight of each unit and the total weight, and HS code. The packing
list gives a complete picture of what is contained in the shipment, their packing, and
weight. All the parties involved in the carriage and clearance of the consignment
such as the carrier, the freight forwarder, the clearing agent, port and customs
authorities and the customer require the packing list. It helps them make
appropriate arrangements for handling the goods from loading and carriage through
to unloading, transport, and stacking in the receiver’s storage space.
Sample of Packing List
Certificate of Origin

• A certificate of origin is usually issued by the Chamber of Commerce (CoC) of the

country from where the product originates. It shows the country where the product or
commodity is manufactured or produced. In some countries, certain other
government bodies also issue this certificate to its exporters. Certificate of origin
usually contains the name and address of the exporter, details of the goods, package
number or shipping marks, and quantity, as applicable. In India, for example, the
certificate of origin is issued by two government bodies which are the Chamber of
Commerce and the Trade Promotion Council of India.
Sample of certificate of origin
Import License of Consignee

• The import license is the permission given to the consignee by the relevant
government authority to import the specified goods into the country. This
license must be submitted by the clearing agent to the customs, along with
other documents, prior to clearance.
 Insurance Certificate

• Goods are insured against unforeseen calamities and accidents that can happen
during transit of the cargo. The insurance certificate shows the type of insurance and
the amount for which the goods are covered. The terms of business between the
seller and the buyer may be CIF (Cost Insurance Freight) or CFR (Cost Freight). In
CIF, the insurance is borne by the seller or consignor whereas in CFR goods are
insured by the buyer or consignee.
 Letter of Credit or LC
• A letter of Credit is an arrangement wherein a Bank, on the request of its
customer, agrees to make payment to a beneficiary on receipt of documents from
a beneficiary as per the terms stipulated in the Letter of Credit. Letter of Credit or
LC is used extensively in international and domestic trade transactions
• When trading is done through a letter of credit, the bill of lading may show the
name of the beneficiary as well as the clearing agent under the notify party field.
In such cases, the clearing agent also has the responsibility to follow up with the
bank on the release of clearance documents.
Air Waybills

• An airway bill is proof of shipment of goods by air. Air waybills serve as proof
of receipt of goods for shipment by the air cargo agent, an invoice for the air
shipment, a certificate of insurance, and a guide to the air cargo agent for
handling, dispatch, and delivery of the consignment.
• A typical airway bill contains
- details about the shipper and the consignee
- the departure and destination airports,
- a description of the goods, sign and seal of the carrier.
Air waybill
 Bill of exchange

• A Bill of exchange is used when an importer agrees to pay the exporter in the future
on a date on or before that is mutually agreed upon. A Bill of exchange is an important
written document in wholesale trade involving large amounts of money. A Bill of
exchange can be classified as a bill of exchange after the date and a bill of exchange
after sight. Bill of exchange after the date is when the due date for payment is
counted from the date of the drawing. Bill of exchange after sight is when the due
date for payment is counted from the date of acceptance of the bill.
BIS
Certificate of origin
Commercial Invoice
Air way bill
Export Procedure and Documentation

Step 1: Receive an Inquiry

Step 2: Screen the Potential Buyer and Country
Step 3: Provide a Proforma Invoice
Step 4: Finalize the Sale
Step 5: Prepare the Goods and the Shipping Documents
Step 6: Run a Restricted Party Screening
Step 7: Miscellaneous Forms and Ship Your Goods
 Step1: Enquiry

• An enquiry for product should, inter alia, specify the following details or provide the following data
• Size details - Std. or oversize or undersize
• Drawing, if available
• Sample, if possible
• Quantity required
• Delivery schedule
• Is the price required on FOB or C& F or CIF basis
• Mode of Dispatch - Sea, air or Sea/air
• Mode of Packing
• Terms of Payment that would be acceptable to the Buyer - If the buyer proposes to open any Letter
of Credit, any specific requirement to be complied with by the Exporter
• Is there any requirement of Pre-shipment inspection and if so, by which agency
• Any Certificate of Origin required
• STEP 2: - Proforma Generation- After studying the enquiry in detail, the exporter - be it
Manufacturer Exporter or Merchant Exporter – will provide a Proforma Invoice to the
Buyer.
• STEP 3: Order Placement- If the offer is acceptable to the Buyer in terms of price,
delivery and payment terms, the Buyer will then place an order on the Exporter, giving
as much data as possible in terms of specifications, Part No. Quantity etc. (No
standard format is required for such a purchase order)
• STEP 4: Order Acceptance - It is advisable that the Exporter immediately
acknowledges receipt of the order, giving a schedule for the delivery committed
Export Procedure Flowchart

• Step 1. Receipt of an Order

• Step 2. Obtaining License and Quota
• Step 3. Letter of Credit
• Step 4. Fixing the Exchange Rate
• Step 5. Foreign Exchange Formalities