Jitendra Singodiya MBA Foreign Trade

Principle Documents 1. Commercial Invoice An invoice is very important as it contains the names of the exporter, importer, and the consignee, and the description of goods. It has to be signed by the exporter. Other documents are prepared by deriving information from the invoice. It is required to be presented before different authorities for different purposes.

2. Packing List This statement gives the packing details of goods in a prescribed format. It is a very useful document for customs at the time of examination and for warehouse keeper of the buyer to maintain a record of inventory and to effect delivery. 3. Certificate of Origin This certificate issued by the local Chamber of Commerce indicates that the goods, which are being exported, are actually manufactured in a specific country mentioned therein. It is sent by the exporter to the importer and is useful for the clearance of the goods from the customs authority of the importing country. Generalized System of Preference Certificate of Origin It indicates that the goods being exported have originated/ manufactured in a particular country. Country and is mainly useful for taking advantage of a preferential duty concession, if available. It is issued by government-authorized agencies like The Directorate General of Foreign Trade and its regional offices, Development Commissioners, Export Promotion Councils etc. 4. Bills of Exchange It is an instrument in writing, containing an order, signed by the maker, directing a certain person to pay a certain sum of money only to the order of a person to the bearer of the instrument. It is commonly known as a draft. 5. Inspection Certificate It is required by some importers and countries in order to get the specifications of the goods shipped attested. The attestation is usually performed by a government agency or by independent testing organizations.

Jitendra Singodiya MBA Foreign Trade

6. Insurance Certificate This document, obtained from the freight forwarder, is used to assure the consignee that insurance will cover the loss or damage to the cargo during transit (marine/air insurance). A marine insurance policy/certificate is a document associated with transit of goods in trade, whereby the insurer undertakes to indemnify the assured against damage for loss of goods due to risks/hazards in transit, to the extent and in the manner mentioned in this document. In a OF contract of sale, the seller has to take the requisite insurance cover to protect his own as well as the buyer's interests in case of damage or loss of goods. The insurance policy/certificate must be, such as to satisfy the conditions of the letter of credit/ sale contract, and roust coder all risks specified therein, or which are considered to be normally associated with trade in a particular product.

7. Bill of Lading + This document is issued by the shipping company acknowledging the receipt of the goods mentioned in the bill, for shipment on board of the vessel. The B/L is the legal document to be referred in case of any dispute over the shipment. It contains: The shipping companys name and address 8. Bill of Lading can. be of various types as discussed below :

Jitendra Singodiya MBA Foreign Trade

1) Received for Shipment B/L: It is issued by the shipping company when goods have been given into the custody of the shipping company but have not yet been placed on board the ship. 2) On Board Shipped B/L: It certifies that the goods have been received on board the ship. 3) Clean B/L: It indicates a clean receipt. In other words, it implies that there was no defect in the apparent order and condition of the goods at the time of receipt or shipment of goods by the shipping company, as the case may be. 4) Claused or Dirty B/L: This bill bears a superimposed clause of annotation, which expressly declares a defective condition of the goods. The clause may state "package number 20 broken" or "bale number 20 hook-damaged". By superimposing such clauses on the B/L, the shipping company limits its responsibility at the time of delivery of goods at the destination. It is very important to note that only a clean B/L is acceptable for negotiation of documents with the bank. 5) Combined B/L: It covers several modes of transport for performing the complete journey from the exporting country to the importer's warehouse. For example, part of the journey may be completed by ship while subsequent parts may be undertaken by road, rail and air. 6) Through B/L: It covers goods being transshipped enroute but where the first carrier had the responsibility as the principal carrier for all stages of the journey. For example, goods may be shipped from Bombay to Dubai and transshipped from Dubai to port in Latin America. 7) Trans-shipment B/L: It has similar characteristic as the Through B/L except that in this case the first carrier acts only as an agent for effecting Trans-shipment of cargo. 8) Charter Party B/L: It covers shipment on a chartered ship. The contract or the letter of credit will specify the nature of bill of lading that the exporter has to procure for the importer. Generally, the importers insist on the "clean on-board shipped" bill of lading, with the prohibition of the trans-shipment of goods. Air Way Bill - This receipt issued by an airlines company or its agent for carriage of goods is a contract between the owner of the goods and the carrier. It should indicate freight pre-paid or freight to collect. The first three digits of the Airway Bill Number represent the code, which identifies the carrier.

9. Shipping Advise Depending upon the terms of sale on a specific stipulation in the contract, and immediately after shipping the goods, the exporter has to inform the foreign buyer of the fact of shipment. This is usually done in the form of a `shipment advice' giving invoice number; description of goods, quantity, number of packages, marks and numbers, name of the carrier, bill of lading/airway bill number and date, expected time of arrival of the carrier at the port of destination, etc. This enables the foreign buyer to arrange insurance coverage in respect of goods in transit and also for making advance arrangements for the clearance of the goods at the port of destination.

Jitendra Singodiya MBA Foreign Trade

Auxiliary Documents 1. Proforma Invoice Proforma Invoice, as the name suggests, is a Proforma of the invoice. It is prepared by an exporter and sent to the importer for necessary acceptance. It suggests to a buyer what the actual invoice would look like and is sent to him when he is ready to purchase the goods. 2. Shipping Instruction- It is used to send shipping instructions to the shipping company or the shipping agent regarding shipment of export cargo. This facilitates the preparation of bill of lading and other documents by the shipping agent. Also known as Cargo Declaration Form, it usually contains information about country of origin, marks on cases, number of packages, name and address of the consignee, exporter's name and address, invoice value, steamer freight payable etc. 3. Insurance Declaration

4. Intimation for inspection - (Application for Export Inspection) For obtaining the certificate as required under the provisions of Export (Quality Control and Inspection) Act, 1963, the exporter has to submit an application in the prescribed form (in duplicate) submitting the original to Export Inspection Agency and duplicate to the Export Inspection Council, seven days in advance of the expected date of shipment. The application form contains details of shipment including technical requirement including specifications as stipulated in the export contract. Upon receipt of the application, the goods are inspected and certificate issued, if found in order.

5. Shipping Order - For booking space, the exporter has to apply to the shipping company either directly or through a freight broker. If the space is available, the shipping company will issue to the broker/shipper a document called a shipping order, instructing the Commanding Officer of the ship that the goods from the shipper concerned, as per details given, should be received on board the vessel. The original is given to the shipper and duplicate is sent to the Commanding Officer of the ship.
6. Mates Receipt - When the cargo is loaded on the ship, the Commanding Officer of the ship will issue a receipt called the Mate Receipt'. This includes information about the name of the vessel, berth, date of shipment, description of packages, marks and numbers, condition of the cargo at the time of receipt on board the ship etc. The mate receipt is first handed over to the port authorities for payment of port dues and then to the shipping company for obtaining the Bill of Lading. 7. Application for Certificate of Origin
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Jitendra Singodiya MBA Foreign Trade

8. Letter to Bank for negotiation/ collection of Documents.

Regulatory Documents1. Shipping Bill/Bill of Entry It is a requisite for seeking the permission of customs to export goods .It contains a description of export goods by sea/air. It contains a description of export goods, number and kind of packages, shipping marks, and number numbers, value of goods, the name of the vessel, the country of destination, etc. On the other hand, importers have to submit copies of document called Bill of Entry for customs clearance. Later, a copy has to be given to the bank for verification. 2. ARE-1 Form This form is an application for the removal of excisable goods from the factory premises for export purposes. The ARE-1 form has multiple copies which are distributed to Different authorities, including Customs, Range office of Excise, Refund office of Excise, etc. 3. Exchange Declaration Form (GR/SDF Form) The RBI has prescribed has prescribed a GR form (SDF) , a PP form, and SOFTEX forms to declare the export transactions. The GR form contains: a) Name and address of the exporter and description of goods. b) Name and address of the authorized dealer through whom proceeds of the exports have been or will be realized. c) Details of commission and discount due to foreign agent or buyer. d) The full export value, giving break up of FOB, Freight, Insurance, Discount, and Commission, etc. The consignees name and address the port of loading and port of discharge Shipping marks and particulars Number of packages and the goods Gross weight and net weight Freight details and name of the vessel Signature of the shipping companys agent

Jitendra Singodiya MBA Foreign Trade

4. Freight Payment Certificate 5. Insurance premium certificate.

6. Port Trust copy of shipping bill (Dock Challan) Also known as Port Trust Copy of the shipping bill in Bombay and Export Application Form in ports other than Calcutta, Dock Challan is a document prescribed by the port authorities. When the cargo is brought at the dock gate, the shipper has to submit this document along with the Vehicle Ticket (in duplicate) to the Gate Inspector. At the gate, documents are checked to ensure that only goods duly passed by Customs are brought to the docks for shipment.
7. Receipt of payment of port charges. 8. Vehicle ticket

10. Consular Invoice This invoice is needed to be submitted for certification to the embassy of the country concerned .Its main purpose is to enable the importers country to collect accurate and authenticated information about the value, volume, quantity, source etc. of the import for assessing import duties and for statistical purposes. It helps the importer to get goods cleared through customs without any undue delay.