Professional Documents
Culture Documents
Course: MBA
LC Code: 00918
Subject Code: IB0013
Q1. What do you mean by export? How many types of exports are there?
Discuss.
Ans: Meaning: The term export means shipping in the goods and services out of the
jurisdiction of a country. The seller of such goods and services is referred to as an
"exporter" and is based in the country of export whereas the overseas based buyer is
referred to as an "importer". In international trade, "exports" refers to selling goods and
services produced in the home country to other markets
Export of commercial quantities of goods normally requires involvement of the customs
authorities in both the country of export and the country of import. The advent of small
trades over the internet such as through Amazon and eBay have largely bypassed the
involvement of Customs in many countries because of the low individual values of these
trades. Nonetheless, these small exports are still subject to legal restrictions applied by
the country of export. An export's counterpart is an import.
Methods of export include a product or good or information being mailed, handdelivered, shipped by air, shipped by vessel, uploaded to an internet site, or
downloaded from an internet site. Exports also include the distribution of information
that can be sent in the form of an email, an email attachment, a fax or can be shared
during a telephone conversation.
Types:
The company can decide to export directly or indirectly to a foreign country.
Direct selling in export strategy
Direct selling involves sales representatives, distributors, or retailers who are located
outside the exporter's home country. Direct exports are goods and services that are sold
to an independent party outside of the exporters home country. Mainly the companies
are pushed by core competencies and improving their performance of value chain.
Direct selling through distributors
It is considered to be the most popular option to companies, to develop their own
international marketing capability. This is achieved by charging personnel from the
company to give them greater control over their operations. Direct selling also give the
company greater control over the marketing function and the opportunity to earn more
profits. In other cases where network of sales representative, the company can transfer
them exclusive rights to sell in a particular geographic region.
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What demands will exporting place on the company's key resources management and personnel, production capacity, and finance - and how will
these demands be met?
Are the expected benefits worth the costs, or would company resources be better
used for developing new domestic business?
A consumer may fail to make a payment due on a mortgage loan, credit card, line
of credit, or other loan.
To reduce the lender's credit risk, the lender may perform a credit check on the
prospective borrower, may require the borrower to take out appropriate insurance, such
as mortgage insurance, or seek security over some assets of the borrower or a
guarantee from a third party. The lender can also take out insurance against the risk or
on-sell the debt to another company. In general, the higher the risk, the higher will be
the interest rate that the debtor will be asked to pay on the debt. Credit risk mainly
arises when borrowers unable to pay due willingly or unwilingly.
Q5. What is the significance of bill of lading for exporter and importer? Explain
any 2 types.
Ans:
Bill of lading: A bill of lading (sometimes abbreviated as B/L or BoL) is a document
issued by a carrier which details a shipment of merchandise and gives title of that
shipment to a specified party. Bills of lading are one of three important documents used
in international trade to help guarantee that exporters receive payment and importers
receive merchandise. A straight bill of lading is used when payment has been made in
advance of shipment and requires a carrier to deliver the merchandise to the
appropriate party. An order bill of lading is used when shipping merchandise prior to
payment, requiring a carrier to deliver the merchandise to the importer, and at the
endorsement of the exporter the carrier may transfer title to the importer. Endorsed
order bills of lading can be traded as a security or serve as collateral against debt
obligations.
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As cargo receipt
The principal use of the bill of lading is as a receipt issued by the carrier once the goods
have been loaded onto the vessel. This receipt can be used as proof of shipment for
customs and insurance purposes, and also as commercial proof of completing a
contractual obligation,[8] especially under Incoterms such as CFR (cost and freight) and
FOB (free on board).
As evidence of the contract of carriage
The bill of lading will rarely be the contract itself, since the cargo space will have been
booked previously, perhaps by telephone, email or letter. The preliminary contract will
be acknowledged by both the shipper and carrier to incorporate the carrier's standard
terms of business. If the Hague-Visby Rules apply, then all of the Rules will be
automatically annexed to the bill of lading, thus forming a statutory contract.
As title
The bill of lading confers prima facie title over the goods to the named consignee or
lawful holder. Under the "nemo dat quod non habet" rule ("no one gives what he doesn't
have"), a seller cannot pass better title than he himself has; so if the goods are subject
to an encumbrance (such as a mortgage, charge or hypothec), or even stolen, the bill of
lading will not grant full title to the holder.
2 types of B/L: Bills of lading have a number of additional attributes, such as on board,
and received-for-shipment. An on-board bill of lading denotes that merchandise has
been physically loaded onto a shipping vessel, such as a freighter or cargo plane. A
received-for-shipment bill of lading denotes that merchandise has been received, but is
not guaranteed to have already been loaded onto a shipping vessel. Such bills can be
converted upon being loaded.
Direct Bill of Lading: Direct Bill of Lading is used when you know the same
vessel that picked up the cargo will deliver it to its final destination.
Inland Bill of Lading: Inland Bill of Lading is the bill of lading which allows the
shipping carrier to ship cargo, by road or rail, across domestic land, but not over
seas.
Q6. What are the different types of custom duties levied on imported goods?
Ans: Main types of custom duties :
1. Basic custom duty:Basic custom duty is the main type of custom duty. It is payable u/s 2 of custom
tariff act 1975.It has three sub parts
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with
following
conditions
margin
of
dumping
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