International Business Prof. Samir V. Charania 6.

Documentation

Chapter 6: Documentation
6.1 Invoice
Invoice is a fundamental & basic document of prime importance. It is the exporter’s bill for
sale of goods. It contains name of exporter, importer, consignee, description of goods, No. &
kind of packages, shipping mark, port of loading, port of discharge (destination) & Many
other details of the transaction. It is required to be signed by the exporter or his agent.
The invoice is normally prepared first & several other documents are prepared by deriving
information from this invoice.
Legalization of Invoice: refers to further certification of commercial invoice by other
designated organization. Some countries government insists on producing legalized
document at the time of custom clearance of said countries. Example: Many Middle East
countries require that invoice is to be certified by Consulate of importing country. This is
known as Legalization of documents. An exporter needs to file the required documents with
the embassy of buyer’s country. Exporter is required to pay necessary charges for the same.
6.2 Packing List
The Packing List is a consolidated statement in a prescribed format, detailing how the goods
have been packed. It is informative and itemizes the material in each individual package,
such as a drum, box, or carton. It is a very useful document for customs at the time of
examination and for the warehouse keeper of the buyer to maintain a record of inventory
and to effect delivery. The packing list will have many details common to those in an invoice.
However, it does not indicate the unit rate and the value of the goods. Subject to the
instructions of the buyer, a specific number of copies of the packing list is prepared.
6.3 Certificate of Origin
The Certificate of Origin is a very useful document in export-import trade. This certificate
indicates that the goods, which are being exported, are actually manufactured in a specific
country mentioned therein. This certificate is sent by the exporter to the importer. It is
useful for the clearance of the goods from the customs authority of the importing country.
However, it is worth noting that the certificate of origin is required by some countries only.
Normally, the certificate of origin is issued by the local Chamber of Commerce. The Indian
Merchant's Chambers, the Indo-Arab Chamber of Commerce, the local Chambers of
Commerce at different places like Mumbai are some of the chambers regularly approached
by exporters for obtaining the certificate of origin. In many cases, a statement of origin
printed on the company letterhead will also suffice.
6.4 Generalized System of Preference Certificate of Origin
As its name indicates, the Generalized System of Preference (GSP) certificate of origin
certifies that the goods being exported have originated/been manufactured in a particular
country. It is mainly useful for taking advantage of a preferential duty concession, if
available. When imports from certain countries are favourably treated in the matter of levy
of import duties, the customs authorities of the concerned importer country insist upon
some proof of the fact that the goods are genuine products of such countries. For this, the
GSP certificate is sent to the importer by the exporter. Products will be considered to have
originated in India if they have been either wholly produced in India or produced there
wholly or partly from imported materials, which have undergone sufficient working or
processing in India to be regarded as having originated there. The GSP certificate is normally
issued by government-authorized agencies, some of which are:
 The Directorate General of Foreign Trade and its regional offices

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 Development Commissioners
 Export Promotion Councils
 Export Inspection Councils (and its field offices called Export Inspection Agencies)
 Textile Committee, Mumbai and its field offices
 Central Silk Board
6.5 Shipping Bill/Bill of Entry
The Shipping Bill is a requisite for seeking the permission of customs to export goods by seal
air. It contains a description of export goods, the number and kind of packages, shipping
marks and numbers, value of goods, the name of the vessel, the country of destination, etc.
On the other hand, importers have to submit copies of a document called Bill of Entry for
customs clearance. Later, a copy has to be given to the bank for verification.
6.6 ARE-I Form
The ARE-I Form is an application for the removal of excisable goods from the factory
premises, for export purposes. For example, if you are exporting a ball-point pen or a
magazine, on which there is no excise applicable, you do not need to fill in this form.
The ARE-l form has multiple copies, which are distributed to different authorities, including
Customs, Range office of Excise, and Refund office of Excise. Earlier, this form was known as
AR-4 or AR-4A.
6.7 Mate's Receipt
After the cargo is cleared from the customs examination and other formalities are over, it is
handed over to the shipping company for loading. The Mate's Receipt is issued by the
captain of the ship. It contains the name of the vessel, shipping line, port of loading, port of
discharge, shipping marks and numbers, packing details, description of goods, gross weight,
container number, and seal number. The mate's receipt is exchanged for the Bill of Lading.
6.8 Exchange Declaration Form (GR/SDF Form)
One of the main functions of the Central Bank is to control and monitor the foreign
exchange reserves of the country. Since exports directly relate to the country's foreign
exchange earnings, it becomes essential for nations to regulate-an export transaction.
The Reserve Bank of India (RBI) has prescribed a GR form (SDF), a PP form, and SOFTEX
forms to declare the export transactions. The GR form contains the following:
 Name and address of the exporter and description of goods
 Name and address of the authorized dealer through whom proceeds of exports have
been or will be realized
 Details of commission and discount due to foreign agent or buyer
 The full export value, giving break up of FOB, freight, insurance, discount, and
commission, etc.
 It should clearly be indicated whether the export is on “Outright sale basis” of “on
Consignment basis”
 An exporter has to mention the duration within which he will realise full export value for
transaction. If the shipment is on D/A terms then an exporter has to bring Forex within
that duration.
Distribution/Disposal of Copies of GR Form
 GR forms, covering the export of goods, should be completed by the exporter in
duplicate, and both copies should be submitted to customs at the time of shipment.
 Customs will verify all particulars of all goods and the value will be declared in the GR
form.
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 After the shipment has been sent, the original of the G R form will be retained by the
customs for onward submission to the RBI.
 The duplicate copy of the GR form will be returned to the exporter through the
concerned clearing agent.
 An exporter is under obligation to submit the duplicate copy of GR, as soon as possible,
but not later than 21 days from the date of shipment, to his authorized dealer
(banker).
 Banker will also verify the particulars mentioned in duplicate copy of GR
 When amount is realized from overseas buyer, the banker will endorse duplicate copy
of GR form
 This Duplicate copy will be forwarded to Reserve Bank of India (RBI). It is termed as
“Release of GR.”
 RBI will compare all particulars of original with duplicate & an endorsement thereon.
Once RBI is satisfied as to realization of Export value, the transaction will be treated as
over.
6.9 Statutory Declaration Form (SDF)
Some offices in the customs department are now computerized. To meet the requirements
of electronic data interchange system, the G R form has been replaced online by a new form
known as Statutory Declaration Form (SDF). This is prepared in duplicate and submitted to
customs at the time of shipment. The SDF bears cross-references of the shipping bill
number. Over a period, it is estimated that the GR Form will be completely replaced by the
SDF.
6.10 Post Parcel Form When goods are exported by post, then instead of the G R form, the
exporter has to fill up a Post Parcel (PP) form in triplicate. This PP form needs to be signed in
original by the banker. Therefore, an exporter has to first submit the form to his banker for
the necessary counter signature. The bank will return the original form to the exporter for
submitting it to the post office along with the parcel.
The concerned post office shall forward the PP form to the office of the RBI after the goods
have been dispatched. The duplicate copy of the PP form will be kept by the authorized
dealer to whom the exporter should submit relevant documents for collection/negotiation.
The time limit prescribed is 21 days.
6.11 SOFTEX Forms
The declaration in SOFTEX form, in respect of export of computer software and
audio/video/television software, shall be submitted in triplicate to the designated official at
the Department of Electronics of Government of India at the Software Technology Parks of
India (STPIs) or at the Free Trade Zones (FTZs) or Export Processing Zones (EPZs) in India.
After certifying all three copies of the SOFTEX form, the designated official shall forward the
original directly to the nearest office of the RBI and return the duplicate to the exporter. The
triplicate shall be retained by the designated official as part of record.
6.12 Bills of Exchange
The Bill of Exchange is commonly known as a draft. 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 in the form of a demand.
There are two types of bills of exchange-Sight Draft and Usance Draft
a) Sight Draft

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When the drawer, that is, exporter expects the drawee, that is, importer to make the
payment immediately upon the draft-being presented to him, the draft involved is called a
Sight Draft. In this case, the buyer cannot take delivery of the goods/ documents without
making the payment. The corresponding terms of payment is referred to as Delivery against
Payment (D/P).
b) Usance Draft
When the exporter has agreed to give credit to the foreign buyer, he draws the Usance Bills
of Exchange. A draft may be drawn according to the period of credit, namely 30 days or 60
days after it is presented to the drawee (importer), who will retire the documents by
accepting the draft by writing his signature and date. On the due date, the importer will
make the payment to the bank. The bank will then forward the money to the exporter's
bank. In case the full payment is received in advance, a bill of exchange need not be drawn.
6.13 Inspection Certificate
The Inspection Certificate is required by some importers and countries in order to attest the
specifications of the goods shipped. The attestation is usually performed by a government
agency or by independent testing organizations.
6.14 Bill of Lading
The Bill of Lading (B/L) is a document issued by the shipping company or its agent. The B/L is
the legal document to be referred in case of any dispute over the shipment. It acknowledges
the receipt of the goods mentioned in the bill for shipment on board of the vessel. It is also
an undertaking to deliver the goods in the like order and condition as received, to the
consignee or his order, provided the freight and other charges specified in the B/L have
been duly paid. The B/L is generally made out in sets of three originals. All originals are duly
signed by the master of the ship or the agent of the shipping company and all the originals
are equally valid for taking the delivery of the goods. Once anyone origi- nal is utilized, the
other originals become null and void. All the original B/L should bear the stamp duty.
Utmost care should be exercised to ensure that the full set of original B/L is obtained by the
exporter from the shipping company and no original copy passes into wrong hands. Extra
copies of B/L marked as 'NON NEGOTIABLE COPY' are also issued for records. These copies
cannot be utilized for taking the delivery of goods.
It contains the following information:
 The shipping company's name and address
 The consignee's name and address
 The port of loading and the port of discharge
 Shipping marks and particulars
 Number of packages shipped on board with date-rubber stamp
 Description of packages and the goods
 Gross weight and net weight
 Freight details and name of the vessel
 Signature of the shipping company's agent
6.15 Bank Realization Certificate
This certificate is prepared in triplicate. It is required for claiming export benefits. After
necessary verification/certification of FOB value, the bank passes on the original copy with
relevant copy of attested invoice to the exporter. Duplicate copy of the certificate is sent to
the licensing authority concerned. Bank retains the triplicate copy of the certificate for its
record.
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For exports on consignment/approval basis, the certificate is issued after the realization of
export sale proceeds.
This certificate has to be filled on Form No.1 & contains the following details
 Invoice number & date
 Shipping Bill number & date
 B/L or AWB Number & date
 Description of goods
 Destination of goods
 Invoice value
 Freight, insurance & Commission amount, if any
 Amount actually realized in free foreign exchange
 Date of realization of export proceeds
 GR/PP Form number
This certificate must be accompanied with copies of invoice & custom attested shipping bill
616 Airway Bill
The Airway Bill is a contract between the owner of the goods and the carrier or its agent.
The receipt issued by an airlines company or its agent for carriage of goods is called an
airway bill. The goods delivered to the consignee mentioned in the AWB after identifying
himself as the party named in the airway bill as the party named in the airway bill as
consignee/receiver against payment of charges, if any. It is therefore, desirable to consign
the goods in the name of a foreign correspondent bank as it will enable you to retain the
control over the goods until the payment is made/documents are accepted for payment.
The first three digits of the Airway Bill Number normally represent the code, which identifies
the carrier.
Examples of airline codes:
125 – British Airways
074 – KLM Royal Dutch Airlines
176 – Emirates Airlines
The airway bill should indicate freight prepaid or freight to collect. Other charges related to
shipment are also mentioned on the airway bill.
6.17 Insurance Certificate
The Insurance Certificate is used to assure the consignee that insurance will cover the loss
or damage to the cargo during transit (marine/air insurance). This can be obtained from the
freight forwarder

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