Export Procedure

Export Procedure means the method, the system or the manner in which various formalities are required to be completed in case of export trade transactions. It includes everything that the exporter is required to do right from the receipt of the confirmed order up to the last stage of realization of payment. It may be easy to receive an export order but extremely difficult to satisfactorily and successfully implement the same. The procedure involves various formalities to be completed and the exporter or his agent is expected to be well conversant with all the formalities.

The Export procedure

1. 2. 3. 4. The procedure is divided into 4 stages Registration Stage Pre shipment Procedure Shipment Procedure Post Shipment Procedure

Registration Stage
1. Deciding the nature of the business - Sole Proprietorship - Partnership - Joint Stock Company This will help him to decide the capital requirements and the amount of bank finance required. 2. Opening Bank Account: The exporter has to open a current account with a bank dealing in foreign exchange. He must select a bank which undertakes to fulfill all the bank formalities connected with negotiation of documents and relisation of export proceeds.

 Fixing the credit limit: The exporter must apply to the bank and get pre shipment and post shipment credit limit fixed. Obtain Fax Facility: It is necessary for every exporter to have a fax facility. Registration with EPC( Export Promotion Council): The Government has set up various export promotion councils for various commodities . Every exporter is required to to register his firm with the concerned council meant for his commodity. For eg. For textiles we have textiles EPC.The concerned EPC issues three forms:

 Application for Registration Application fro membership Application for registration cum membership (RCMC) These forms along with the registration fee , industrial license and a bank certificate is submitted to the EPC. The EPC verifies all the documents and then issues a RCMC to the exporter. From the date of receipt of the RCMC the exporter is known as a registered exporter. In case of export houses and trading houses RCMC is issued by the FIEO

 Obtaining Membership of Chambers of Commerce: membership of such an organization is useful in securing Certificate of Origin Registration with income tax authorities: - GIR no. - PAN no. Registration with DGFT: In order to get IEC no. ( Importer exporter Code no.). This no is granted by the Director General of Foreign trade.

 Registration with Sales Tax authorities: To apply for sales tax registration number in order to get deduction from sales tax. Registration with Excise authorities: f refund of excise duty paid Registration with ECGC: An exporter must register with ECGC to insure political and commercial risks, to insure export realization , exchange rate risks, etc. Obtaining membership of IIFT and NPC: IIFT provides useful information ABOUT FOREIGN MARKETS, EXPORT POTENTIAL Registration with FIEO: It helps the exporter to get VISA and certificate of Origin for export promotion Tours.

Pre- shipment Procedure

Inquiry by the ImporterIt begins from the inquiry of the importer regarding the product, price etc. Proforma Invoice : the second step is the exporter sending a proforma invoice regarding the quantity, quality, price weight, conditions and warranties. Receipt of confirmed order/Indent: This order contains all details regarding the type of goods required, and all instructions regarding packing, shipping, insurance, port of delivery etc. after acceptance of the order the exporter send an acknowledgement to the importer that the goods will be sent as per the terms and conditions of the order.

 Obtaining a confirmed letter of credit: Along with the acknowledgement letter confirming the order the exporter sends a formal request to the importer to open a letter of credit in the exporters favour. Obtaining pre- shipment finance: The exporter applies to the bank to secure pre-shipment finance to meet his working capital requirements. Production/ procurement of goods: Incase of manufacturer exporter he himself will undertake the production of goods and incase of a merchant exporter he will make purchases from the open market or place the order with the domestic manufacturer.

 Packing and marking: this plays a very important role in export business. It must ensure proper protection of the goods and the quality and durability of the packing material used. The specifications laid down by the EIC must be taken into account. Is necessary assistance can be obtained from the IIP. Packing must be followed by marking. Marking is usually in the form of triangles and rectangles in which the exporters name, importers name, name of the country of origin, net eight of goods, warning signs such as handle with care etc are mentioned. Pre-shipment inspection: The exporter has to obtain an inspection certificate from the EIC whether asked by the importer or not.

 Central excise Clearance: Goods meant for exports are exempted from the payment of excise duty. Excise clearance is obtained by two methods a) excise under rebate and b) export under bond ECGC cover: The exporter must take out an appropriate ECGC policy to cover himself from credit risk. Marine Insurance Policy: In order to protect himself from the perils of the high sea the exporter has to procure a marine insurance policy Appointment of C & F agent: Shipment of goods from India is a technical job which requires the services of clearing and forwarding agent.

Shipment Stage
Reservation of space in the ship: The exporter has to contact the shipping company well in advance for booking the space in the vessel for shipment or his consignment. Necessary information such as date of shipment, gross and net weight, particulars of the importer and that of his own arrival and departure date of the vessel. When the shipping company accepts the exporters request it issues a shipping order containing instructions regarding loading and shipment.

 Arrangement of internal transport from the factory or warehouse to the port of shipment: Preparation and processing of shipping documents: 1. shipping bill 2. commercial invoive 3. letter of credit 4. certificate of origin 5. GR form 6. ARE-1 form

6. Packing List 7. Valuation certificate 8. Declaration of duty drawback 9. certificate of inspection 10. marine insurance policy 11. railway concession form 12. Weightment certificate.. All the above documents except the original of GR , Shipping bill and one copy of commercial invoice is returned back to the forwarding agent after verification.

 Customs Clearance: 1. Carting Order: The C and F agent brings the carting order from the port trust authorities to carry or cart the goods inside the dock. After obtaining the carting order the cargo can be moved into the appropriate shed inside the docks. 2.LET EXPORT ORDER: the customs examiner inspects the goods and if satisfied issues the let export order. It implies that clearance is procured from the customs to export the goods.

3. LET SHIP ORDER: The Customs preventive officer then issues the let ship order that is actual loading of the goods into the ship. The goods when loaded are then checked by the mate who issues the mates receipt. 4. Payment of Port dues: The C & F Agent pays the port dues and collects the mates receipt from the superintendent of the port trust 5. Obtaining the BILL OF LADING: The c& F agent surrenders the mates receipt and obtains the Bill of Lading from the shipping company.

Post Shipment Stage

Submission of documents by the agent to the exporter Shipment advice to the importer Presentation of documents to the bank for the purpose of negotiation Dispatch of Documents Documentary Bill of Exchange Letter of Indemnity Realization of export Proceeds Processing GR Form.

IMPORT PROCEDURE
Obtaining IEC from the DGFT Procurement of license Preliminary Negotiations Procurement of Quota Obtaining Foreign exchange Placing indent Appointment of c& F agent Receipt of shipment advice Receipt of documents Obtaining Delivery order

Clearing of Goods Payment of C & F charges Making the payment Follow up