Export Trade Documents and Its Purpose

Export invoice:

Export invoice is a seller’s bill for merchandise. It is a basic document in export transaction.
The invoice contains information about the description of goods, value of goods, terms of
shipment, marks and numbers of packages, etc. It also contains date, name and address of
both buyer and seller, name of shipping vessel, port of destination, terms of delivery and
payments, etc. The exporter may design his own form. Some countries ask for a particular
type of form.The contents of the invoice must correspond exactly to the description in letter
of credit. If no specific proforma is prescribed then it can be in a generic form. Some
importing countries insist on a particular type of invoice.The United Nations Key Layout has
now been accepted in preparing a standard invoice. The information requirements of this
document have been determined after examining a number of forms of invoices used by
leading export organisations. A series of discussions were held with the representatives of the
Department of Customs and Central Excise and Federation of Custom House Agent’s
Association in India. This proforma which will be acceptable to many countries will also
facilitate processing of export documents at various stages.
(b) Packing List:

A packing list is a consolidated statement of the contents of a number of cases or packs. It

gives a detail of the nature of goods which are being exported and the form in which these are
sent. The description is given in such a manner as to permit checks of the contents by the
customs on arrival at the port of destination as well as by the recipient.Packing list should
contain information such as invoice number and date, names of exporter and importer,
country of origin and country of final destination, marks and number of containers,
description of goods, quantity, etc. It is a relatively simpler document and required
information can be reproduced from master document.
(c) Certificate of Origin:

A certificate of origin, as the name indicates, is a certificate which specifies the country of the
production of goods. The customs law of a country may require this certificate before
clearance of goods and assessment of duty. Some countries may offer preferential tariff to
Indian goods and the importing country would like to see that this concession is allowed on
those goods only. This certificate may also be required when goods of a particular type are
banned from certain countries.The Federation of Indian Chambers of Commerce and
Industry, Export Promotion Councils and various other trade organisations have been
authorized by the Government of India to issue a certificate of origin. The Chambers of
Associations issue these certificates on their printed forms.

(d) Mate’s Receipt:

When the cargo is loaded on the ship, the Commanding Officer of the ship issues a receipt
known as mate’s receipt.The mate’s receipt indicates name of the vessel, berth, date of
shipment, description of packages, marks and numbers, condition of the cargo at the time of
its receipt etc. The port of loading and discharge is also given in this receipt.The mate’s
receipt is first handed over to port trust authorities for payment of dues by the exporter. After
paying the dues the exporter or his agent will collect this receipt from port authorities. The
shipping agent prepares bill of lading on the basis of mate’s receipt.

(e) Bill of Lading:

A bill of lading is a document issued by the shipping company acknowledging the receipt of
goods mentioned therein and undertaking to deliver them in the like order and condition, as
received, to the consignee or his order.

A bill of lading serves the following purposes:

 It is a document of title to the goods

 It is a receipt from the shipping company, receiving the goods.
 It is a contract for the transportation of goods.

Each shipping company has its own bill of lading. These forms can be had from shipping
companies or their agents. A bill of lading contains information about date and place of
shipment, port of loading and port of destination, marks and numbers, kind of packages,
description of goods, gross weight and measurement, freight etc. If the exporter has paid the
freight then it is marked ‘freight paid’, if on the other hand the freight is to be collected from
the consignee then bill of lading is marked ‘freight collect’.A bill of lading is freely
transferable by practice and custom. If, however, the bill requires that goods should be
delivered to a particular named person and does not include reference to his assignees, the bill
of lading is not transferable.The consignor or consignee can make the bill of lading
transferable either by a special endorsement or by blank endorsement. In blank endorsement
the goods are delivered to the bearer. The holder may, however, convert the blank
endorsement to special endorsement by inserting the name of a person to whom delivery is to
be made. It is then called endorsement in full.At present a number of shipping companies are
issuing Standard Bill of Lading as recommended by International Chamber of Shipping. The
standard bill included in aligned series can be reproduced from the master bill. The shippers
prepare bill of lading on the blank forms of the shipping companies and present them for
signature at the shipping company’s office. The bill of lading is issued in exchange for mate’s
receipt.
(f) Shipping Bill:

It is a document on the basis of which customs permission for exports is given. The shipping
bill contains contents such as name and address of the exporter and consignee, invoice
number and date, import, export code number, RBI code number, particulars of goods
exported, name of the vessel, port at which goods are to be discharged, number and kind of
packets, quantity and value of goods.The shipping bill is prepared by the clearing and
forwarding agent and presented to the shed superintendent for getting carting order. The
preventive officer of the customs, after being satisfied, endorses the shipping bill with ‘Let
Ship’ order.The Customs Public Notice No. 39 suggests a uniform shipping bill for all
categories of exports i.e. dutiable, free and drawback claims. Since all the columns are not
printable on one side of A4 size paper, some contents have been printed on the backside of
the form. Some declarations which are material to the transaction have also been given in the
standard form.

(g) Cart Ticket:

Cart ticket is prepared by the exporter giving details of the cargo to be exported. It has the
name of the ship, number of packages, shipping bill number, port of destination and the
number of vehicle carrying the cargo. The cart ticket is handed over by the driver of the
vehicle at the entry of the port. The gate keeper will check the cargo as shown in the ticket. If
satisfied, the gate keeper will allow the vehicle to enter.

(h) Airway Bill:

It is a receipt issued by an airline for the carriage of goods. Every airline issues its own bill
for receiving the goods. Airway bill is non-transferrable so it does not carry the same validity
as a bill of lading in sea transport.

(i) Letter of Credit:

In an export trade, the exporter would like to ensure that there is no risk of non-payment.
Usually, the exporter asks the importer to send a letter of credit to him. A letter of credit
popularly known as L/C is an undertaking by its issuer (usually importer’s bank) that the bills
of exchange drawn by the foreign dealer on the importer will be honoured on presentation for
specified amount. L/ C is simply a guarantee by the bank to the foreign dealer (exporter) that
their bills upto a specified amount would be honoured.
There are three parties to a letter of credit:

 The opener or importer-the buyer who opens the credit.

 The issuer-the bank that issues the letter of credit
 The beneficiary-the exporter in whose favour the letter of credit is opened.

(j) Bill of Exchange:

A bill of exchange, popularly known as bill, as defined under Section 5 of the Indian
Negotiable Instruments Act, means “an instrument in writing containing an unconditional
order, signed by the maker, directing a certain person to pay a certain sum of money only to,
or to order of a certain person, or to the bearer of the instrument.”Payment through a bill of
exchange is a common method of payment in international trade. An exporter draws a bill on
an importer calling upon him to pay a specified sum of money on an appointed date. The bill
will be sent to the importer who will sign it by giving his consent. A banker of the importer
may also accept the bill on behalf of his client.

There are three parties to the bill of exchange:

 The drawer (exporter):

The person who executes the bill and the payment is due to him.

 The drawee (importer):

The person on whom the bill is drawn and is expected to make the payment as per the
terms of the document.

 The payee (exporter or his bank):

The party which receives the payment of the bill.
An exporter may dispose of the bill by discounting it with bank, placing it for collection. If it
is not discounted then it is sent to the bank along-with the documents attached, with the
instructions to send them abroad for collection.It is a common practice to deliver it to the
banker along-with the bill the documents of title to the goods such as bill of lading, invoice,
certificate of origin, insurance policy etc. The banker is instructed to deliver the documents to
the importer against acceptance or payment of bill.In case the documents are to be released
against acceptance of the bill, bill is called documents against acceptance bill. But where the
documents are to be released only against payment, it is called documents against payment
bill. Where no documents of title to the goods are enclosed to the bill, it is called a clean bill.

(k) Certificate of Inspection:

To ensure proper quality of goods, exportable goods are inspected before being despatched
for export. Export Inspection Council of India (EIC) issues such certificate in India. Some
countries have made this certificate compulsory for goods being imported.When goods are
ready for despatch, the exporter will request EIC to send persons for inspection of goods. The
inspectors check the goods against prescribed quality standards. If they are satisfied with the
quality then goods are packed in the presence of inspection staff and a certificate to this effect
is issued. This certificate is a part of documents being sent to the importer.