“EXPORT AND IMPORT DOCUMENTATION AND

PROCEDURE”

SUMMER TRAINING REPORT

Roll No:- 361

Batch:- 2009-2011(IV)

In partial fulfillment of the requirements for Master Of Management Studies (MMS) two Year
Full Time Degree Course.

Rajiv Gandhi Institute of Technology,

Dept. of Management Studies

(Affiliated to University of Mumbai)

Year 2010

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 DECLARATION

I declare that this report entitled ‘Export and Import Documentation and Procedure ’ is my
original work and not copied from elsewhere nor submitted s before for any degree, diploma or
course to any Institute or University and due acknowledgement has been given in the
bibliography to all sources be they printed, electronic or personal.

Name of the Student: - FENALI BHAGAT

Roll No :- 361

Signature :-

Date:-

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 ACKNOWLEDGEMENT

I EXPRESS MY SINCERE THANKS TO DR.UDHAV BHOSALE, PRINCIPAL OF

RAJIV GANDHI INSTITUTE OF TECHNOLOGY AND MANAGEMENT FOR HIS
VALUABLE SUGGESTIONS AND TO PREPARE THIS PROJECT.

HERE, I WOULD LIKE TO TAKE THIS OPPORTUNITY TO THANK THOSE

PEOPLE WITHOUT THE HELP OF WHOM IT WOULD NOT HAVE BEEN
POSSIBLE TO COMPLETE THIS PROJECT SUCCESSFULLY.

I WOULD LIKE TO EXPRESS MY SINCERE THANKS TO MR. SUNIL LULLA FOR

GIVING ME AN OPPORTUNITY TO WORK IN EROS INTERNATIONAL MEDIA
LIMITED.

I WOULD ALSO LIKE TO THANK MR. FAROOQ GANDHI AND MR. ANAND
SHANKAR AND MRS. SUNDARI RAMAMURTHY FOR PROVIDING ME WITH THE
CURRENT INFORMATION REGARDING THE TOPIC “EXPORT AND IMPORT
DOCUMENTATION AND PROCEDURE”, AND IN EXPLAINING THE CONCEPTS
AND CLEARING ALL THE DOUBTS REGARDING THE PROJECT.

FINALLY IT IS MY FOREMOST DUTY TO THANK ALL OUR RESPONDENTS WHO

HELPED ME TO COMPLETE THE PROJECT IN SOME OR THE WAY WITHOUT
WHICH THE PROJECT MIGHT NOT HAVE BEEN SUCCESSFUL.

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 CONTENTS

Particulars Page No

1.) Introduction
a) Importance / Significance of the topic studied
b) Objectives / Scope of the study

2.) Review of Literature

Conceptual / Theoretical background of the topic

3.) About the organisation

4.) Findings and Analysis

5.) Conclusion

6.) Bibliography

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 EROS INTERNATIONAL LTD.
CHAPTER 1:- INTRODUCTION
IMPORTANCE / SIDNIFICANCE OF SUBJECT STUDIED.
INTRODUCTION ON EXPORTS & IMPORTS

Definition :-

As per Sec 2(e) of the Indian Foreign Trade Act(1992), the term ‘EXPORT’ may be defined as,
“an act of taking out of India any goods by land , sea or air with proper transaction of money.”

“EXPORTER”, means a person who exports or intends to export and holds an Importer-
Exporter Code number (IEC) unless otherwise specifically exempted.

“Manufacturer Exporter”, means a person who export goods manufactured by him or intends to
export such goods.

“Merchant Exporter”, means a person engaged in trading activity and exporting or intending to
export goods.

“IMPORTER” means a person who imports or intends to import and holds an Importer-Exporter
Code Number.

Since 4th July, 1991 the government of India has made major changes in the Trade policy. The
First five year Foreign Trade Policy,2009-14 reinforces the directions set by these Trade Policy
Reforms.

The fundamental feature of the policy is freedom. It substantially eliminates licensing,

quantitative restrictions and other regulatory and discretionary controls both for imports and
exports.

All goods may be exported freely without any restriction except in cases where they are
regulated by the provisions of the modified Foreign Trade Policy 2009-14.

The item- wise Export and Import Policy shall be , as specified in the book titled “ITC (HS)
Classifications of Export and Import Items” published and notified by the Director General of
Foreign Trade as amended from time to time.

Any goods, export or import of which is restricted under ITC (HS) may be exported or imported
only in accordance with an Authorization or in terms of a public notice issued in this regard.

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WHY NEED TO EXPORT?

There are many good reasons for exporting:-

 The first and the primary reason for export is to earn foreign exchange. The foreign
exchange not only brings profit for the exporter but also improves the economic
condition of the country

 The companies that export their goods are believed to be more reliable than their
counterpart domestic companies assuming that exporting company has survive the test
in meeting international standards.

 Free exchange of ideas and cultural knowledge opens up immense business and trade
opportunities for a company.

 As one starts visiting customers to sell one’s goods, he has an opportunity to start
exploring for newer customers, state-of-the-art machines and vendors in foreign lands.

 By exporting goods, an exporter also becomes safe from offset lack of demand for
seasonal products.

 In the age of globalization and liberalizations, Export has become most lucrative
business in India.

 Also if the product is successful in domestic market then it would be successful in

international market&

 A unique product may have little competition and the demand for it may be high.

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 OBJECTIVES OF EXPORT
The objectives of export are as follows:-

 Conduct research on foreign market.

 Overseas design and product must be studied properly and considered carefully.

 Specific laws dealing with international trade and foreign business must be studied.

 Price is an important factor.

 Identify what you want to achieve from exporting.

 List activities you need to undertake to achieve these objectives.

 It includes mechanisms for reviewing and measuring progress.

 Helps you remain focused on your goals.

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SWOT ANALYSIS OF EXPORTS

SWOT analysis is a useful method of summaries all the information generated during the export
planning. SWOT stands for strengths, weakness, opportunities and threats, which helps to isolate
the strong and weak areas within an export strategy. SWOT also indicates the future
opportunities or threats that may exist in the chosen markets and is instrumental in strategy
formulation and selection.

Strengths

Business strengths are its resources and capabilities that can be used as a basis for developing a
competitive-advantage. Examples of such strengths include:

 Patents
 Strong brand names.
 Good reputation among customers.
 Cost advantages from proprietary know-how.
 Exclusive access to high grade natural resources.
 Favorable access to distribution networks.

Weaknesses

The absence of certain strengths may be viewed as a weakness. For example, each of the
following may be considered weaknesses:

 Lack of patent protection.

 A weak brand name.
 Poor reputation among customers.
 High cost structure.
 Lack of access to the best natural resources.
 Lack of access to key distribution channels.

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Opportunities

The external environmental analysis may reveal certain new opportunities for profit and growth.
Some examples of such opportunities include:

 An unfulfilled customer need.

 Arrival of new technologies.
 Loosening of regulations.
 Removal of international trade barriers.

Threats

Changes in the external environmental also may present threats to the firm. Some examples of
such threats include:

 Shifts in consumer tastes away from the firm's products

 Emergence of substitute products.
 New regulations.
 Increased trade barriers

A SWOT analysis can be very subjective, and is an excellent tool for indicating the negative
factors first in order to turn them into positive factors.

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 2. REVIEW OF LITERATURE

Conceptual and theoretical background of the subject studied

EXPORT DOCUMENTS & PROCEDURE

EXPORT LICENCE

Application for export license:-

An exporter must classify the item by identifying what is called as ITC (HS) classifications.
Export license is only issued for the goods mentioned in the schedule 2 of ITC (HS)
classifications of Export and Import items. Application to the Director General of Foreign Trade
(DGFT) is to be given.

EXPORT ORDERING
An order is a commercial transaction which is not only important to the exporter and importer,
but it is also of concern to their respective countries, since it affects the balance of payment
position of both the countries.

The exporter is required to produce copies of export order to various Government departments/
Financial institutions e.g. obtaining export licenses when the product is covered under the
restricted items or canalized items for exports, availing post- shipment finance and other
incentives and dealings with inspection authorities, insurance underwriters, customs offices and
exchange control authorities etc. for various purposes.

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EXPORT PROCESS
The export process has three stages: feasibility analysis; planning foreign market entry; and
Implementation. The steps in these stages are outlined below:-

Feasibility analysis
 Analyze domestic performance.
 Assess the firm’s capacities.
 Consider the demographics, social, political, and economic factors of target markets.
 Confer with international trade experts (e.g. in the fields of marketing, finance, legal,
 and logistics).
 Select target markets

Planning foreign market entry planning

 Conduct market research into the industry sector.
 Evaluate market research.
 Decide how the product will be marketed.
 Comply with target country licensing, standards and certification requirements.
 Apply for the necessary patent, trademark, and copyright protection.
 Identify taxes, tariffs, duties, quotas, or other non-tariff trade barriers.
 Establish pricing schedule.
 Seek financing.

Implementation
 Determine methods of distribution.
 Implement marketing plan.
 Choose sales representatives, or sales methods.
 Negotiate sales contract.
 Produce finished product.
 Obtain insurance cover.
 Complete the required paperwork.
 Package and label the product.
 Ship the product.

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EXPORT PROCESS

In India custom clearance is a complex and time taking procedure that every exporter face in his
export business. Physical control is still the basis of custom clearance in India where each
consignment is manually examined in order to impose various types of export duties. High
import tariffs and multiplicity of exemptions and export promotion schemes also contribute in
complicating the documentation and procedures. So, a proper knowledge of the custom rules and
regulation becomes important for the exporter. For clearance of export goods, the exporter or
export agent has to undertake the following process:-

Registration
Any exporter who wants to export his goods need to obtain PAN based Business Identification
Number (BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for
clearance of export goods. The exporters must also register themselves to the authorized foreign
exchange dealer code and open a current account in the designated bank for credit of any
drawback incentive.

Registration in the case of export under export promotion schemes:

All the exporters intending to export under the export promotion scheme need to get their
licenses / DEEC book etc.

Processing of Shipping Bill - Non-EDI (Electronic Data Interchange):-

In case of Non-EDI, the shipping bills or bills of export are required to be filled in the format as
prescribed in the Shipping Bill and Bill of Export (Form) regulations, 1991. An exporter need to
apply different forms of shipping bill/ bill of export for export of duty free goods, export of
dutiable goods and export under drawback etc.

Processing of Shipping Bill - EDI:

Under EDI System, declarations in prescribed format are to be filed through the Service Centers
of Customs. A checklist is generated for verification of data by the exporter/CHA. After
verification, the data is submitted to the System by the Service Center operator and the System
generates a Shipping Bill Number, which is endorsed on the printed checklist and returned to the
exporter/CHA. For export items which are subject to export cess, the TR-6 challans for cess is
printed and given by the Service Center to the exporter/CHA immediately after submission of
shipping bill. The cess can be paid on the strength of the challan at the designated bank. No copy
of shipping bill is made available to exporter/CHA at this stage.

Quota Allocation
The quota allocation label is required to be pasted on the export invoice. The allocation number
of AEPC (Apparel Export Promotion Council) is to be entered in the system at the time of
shipping bill entry. The quota certification of export invoice needs to be submitted to Customs
along-with other original documents at the time of examination of the export cargo. For
determining the validity date of the quota, the relevant date needs to be the date on which the full
consignment is presented to the Customs for examination and duly recorded in the Computer
System.

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Arrival of Goods at Docks:
On the basis of examination and inspection goods are allowed enter into the Dock. At this stage
the port authorities check the quantity of the goods with the documents.

System Appraisal of Shipping Bills:

In most of the cases, a Shipping Bill is processed by the system on the basis of declarations made
by the exporters without any human intervention. Sometimes the Shipping Bill is also processed
on screen by the Customs Officer.

Customs Examination of Export Cargo:

Customs Officer may verify the quantity of the goods actually received and enter into the system
and thereafter mark the Electronic Shipping Bill and also hand over all original documents to the
Dock Appraiser of the Dock who many assign a Customs Officer for the examination and
intimate the officers’ name and the packages to be examined, if any, on the check list and return
it to the exporter or his agent.
The Customs Officer may inspect/examine the shipment along with the Dock Appraiser. The
Customs Officer enters the examination report in the system. He then marks the Electronic Bill
along with all original documents and check list to the Dock Appraiser. If the Dock Appraiser is
satisfied that the particulars entered in the system conform to the description given in the original
documents and as seen in the physical examination, he may proceed to allow "let export" for the
shipment and inform the exporter or his agent.

Stuffing / Loading of Goods in Containers

Exporter or export agent will hand over the exporter’s copy of the shipping bill signed by the
Appraiser “Let Export" to the steamer agent. The agent then approaches the proper officer for
allowing the shipment. The Customs Preventive Officer supervising the loading of container and
general cargo in to the vessel may give "Shipped on Board" approval on the exporter’s copy of
the shipping bill.

Drawl of Samples:
Where the Appraiser Dock (export) orders for samples to be drawn and tested, the Customs
Officer may proceed to draw two samples from the consignment and enter the particulars thereof
along with details of the testing agency in the ICES/E system. There is no separate register for
recording dates of samples drawn. Three copies of the test memo are prepared by the Customs
Officer and are signed by the Customs Officer and Appraising Officer on behalf of Customs and
the exporter or his agent. The disposal of the three copies of the test memo is as follows:-

 Original – to be sent along with the sample to the test agency.

 Duplicate – Customs copy to be retained with the 2nd sample.
 Triplicate – Exporter’s copy.

The Assistant Commissioner/Deputy Commissioner if he considers necessary, may also order for
sample to be drawn for purpose other than testing such as visual inspection and verification of
description, market value inquiry, etc.

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Amendments:
Any correction/amendments in the check list generated after filing of declaration can be made at
the service center, if the documents have not yet been submitted in the system and the shipping
bill number has not been generated. In situations, where corrections are required to be made after
the generation of the shipping bill number or after the goods have been brought into the Export
Dock, amendments is carried out in the following manners.

1. The goods have not yet been allowed "let export" amendments may be permitted by the
Assistant Commissioner (Exports).
2.  Where the "Let Export" order has already been given, amendments may be permitted
only by the Additional/Joint Commissioner, Custom House, in charge of export section.

In both the cases, after the permission for amendments has been granted, the Assistant
Commissioner / Deputy Commissioner (Export) may approve the amendments on the system on
behalf of the Additional /Joint Commissioner. Where the print out of the Shipping Bill has
already been generated, the exporter may first surrender all copies of the shipping bill to the
Dock Appraiser for cancellation before amendment is approved on the system.

Export of Goods under Claim for Drawback:

After actual export of the goods, the Drawback claim is processed through EDI system by the
officers of Drawback Branch on first come first served basis without feeling any separate form.

Generation of Shipping Bills:

The Shipping Bill is generated by the system in two copies- one as Custom copy and one as
exporter copy. Both the copies are then signed by the Custom officer and the Custom House
Agent.

SHIPMENT OF GOODS
The export consignment can be send either by sea, post or air. The exporter should first
scrutinize and check the contents of the contract and the LC terms, particularly whether any part
shipment, transshipment etc. is allowed. He should also follow the delivery schedule and the
instructions given by the buyer about the marking, labeling & packing etc.

Exports by Sea

Exports by sea is the most traditional forms of exporting goods to overseas markets.

Sea and Air freight

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In recent years the use of air freight has come into prominence and the air companies’ claim
quite high in certain circumstances,that while air freight cost more than sea freight, the
advantages of the air freight in reducing the period of storage and transit make up for the
difference in cost. However, sea freight is still most popular form of transporting goods to
overseas customers, chiefly because of the high volume that can be carried and the relatively low
freight costs. When time is not of primary importance , sea freight is the normal method of
transportation to overseas countries.

Freight costs

High freight charges will result in high prices being charged for consumer products. Thus it is in
the interest of the exporter to keep sea and air freight as low as possible. The exporter can avail
the facility of Ocean Freight Rebate Discount offered by conference lines.

Exports by Post

When goods are required to be send abroad by parcel post, the exporter can book the goods from
any post office in India subject to provision of Imports and Export Trade Regulations and
Exchange Control Regulations.

Exports by Air

Certain type of goods which are perishable/seasonable or high in cost but low in bulk can be
exported by Air. Shipping by Air has many advantages like:-

1) Lesser packing charges are involved as there would be less handling of goods in transit.
2) There is likely to be less risk of pilferage, damage, &
3) It ensures faster delivery of goods which in turn leads to quicker payments resulting into
lower stock and quicker turnover.

For sending the cargo by air, the exporters are required to get the shipping documents scrutinized
and assessed by the customs authorities at the first instance and then present the cargo along with
these documents to customs office in the city. The proof of exportation is known as ‘Air Way
Bill’ issued by the Air Line.

Reservation of Space

The exporter should contact the Shipping Company or its agent, well in advance for the space
required for the consignments, on a particular steamer. The exporter should give all the
particulars of the consignments like type of cargo, gross and net weight of packages and total
packages, dimensions of each packages, port of loading and destination and the approximate date
of shipment and the name of the steamer. The exporter can get the necessary information about
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arriving and sailing of the ships from their shipping agents. When the request of an exporter for
the reservation of space is accepted, the shipping company or its agent will issue “shipping
order” containing the instructions regarding loading and shipment of the consignment and a copy
of which is send to the commanding officer of that particular vessel.

EXPORT DOCUMENTS
.

Export order

The exporter is required to produce copies of export order to various government departments /
Financial institutions e.g. obtaining export licenses when the product is covered under the
restricted items or canalized items for exports, availing post- shipment finance and other
incentives and dealing with inspection authorities, insurance underwriters, customs offices and
exchange control authorities etc. for various purposes.

Order Acceptance

The Order Acceptance is another important commercial document prepared by the exporter
confirming the acceptance of order placed by the importer. The order acceptance normally
covers the name and the address of the consignee, port of shipment, country of final destination,
the description of goods, quantity, price each and total amount of order, terms of delivery, details
of freight and insurance, mode of transport, packing and marking details, terms of payment etc.

Letter of Credit

Letter of credit is a document issued by the importers bank in the favour of the exporter giving
him the authority to draw bills up to a particular amount(as per the contract price) covering a
specified shipment of goods and assuring him of payment against the delivery of shipping
documents. The operations of Letter of credit have been regulated and are governed by the
Articles of “Uniform Customs and Practice for Documentary Credits” i.e. UCP500 and/or UCP
2002 (Supplement to UCP 500 for Electronic Presentation) of International Chamber of
Commerce, Paris.

The exporter should carefully scrutinize the contents, terms and conditions of the L/C and
prepare and submit all the documents called for by the buyer to get immediate payment of his
bill drawn on the buyer from the negotiating bank.

Mate’s Receipt

Mate’s Receipt is issued by the Chief of Vessel after the cargo is loaded, and it contains the
name of the shipping line, vessel, port of loading, port of discharge, place of delivery, marks and

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numbers, number and kind of containers, description of goods, container status, gross weight,
condition of cargo at the time of its receipt on board the vessel and the shipping bill number and
date. The mates receipt is of transferable nature and must be presented immediately at the
shipping company’s office to be exchanged into Bill of Lading.

Transport Documents

The following documents are used in export business as transport documents.

 Ocean Freight: various types of Bill of Lading

 Air Freight : Airway Bill/ Air consignment note
 Rail/Road : Railway Receipt / consignment note
 Post : Post Parcel Receipt
 Courier : Courier Receipt/ Way Bill

Bill of Lading

The Bill of Lading is a document issued by the shipping company or its agent acknowledging the
receipt of goods mentioned in the bill for shipment on board the vessel undertaking to deliver the
goods in the like order and condition as received, to the consignee or his order of assignee,
provided the freight and other charges specified in the Bill of Lading have been duly paid. The
exporter or his shipping agent has to fill up this form with relevant details such as the name of
the consignor, date and place of shipment, name and destination of the vessel, the description,
quantity and destination of goods, marks and numbers, invoice number, GR number, gross and
net weight, number of packages and amount of freight etc. Bills of Lading is usually made out in
sets of four.

Airway Bill/ Air Consignment Note

Airway Bill or Air Consignment Note is the receipt issued by the airline company for the
carriage of goods under certain terms and conditions. Airway Bill is generally issued in three
copies. One copy each for the carrier, consignee and the consigner.

Post Parcel Receipt

Post parcel receipt evidences the receipt of goods for exports by the post office. If the post parcel
is sent directly in the name of the buyer, the buyer can take immediate possession of the goods
sent by the exporter.

Bill of Exchange

Bill of Exchange is also known as ‘draft’. A bill of exchange is an instrument in writing

containing an unconditional order, signed by the maker, directing a certain person to pay a from

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certain sum of money only to or to the order of a person or to the bearer of the instrument. A bill
of exchange contains an order from the creditor to the debtor to pay a specified amount to a
person mentioned therein. The maker of a bill is called ‘Drawer’, the person who is directed to
pay is called the ‘Drawee’. The person who is entitled to receive the money is called the ‘Payee’.

When the exporter expects the importer to make immediate payment upon the presentation of the
draft, that draft is called a ‘Sight draft’ or ‘Draft drawn at first sight’ or ‘On demand’ or ‘On
presentation’. When the draft is drawn for payment at a date later than presentation, it is called a
‘Usance Draft’ or ‘Usance Bill’ or ‘Demand Draft’.

The Bill of Exchange or Draft is drawn in a set of two. Each one bears a reference to the other.
When any of the drafts is paid ,- if it is a sight draft and accepted – when it is a usance draft by
the drawee, the second draft becomes null and void.

Insurance Policy/ Certificate

In the International trade, when the goods are in transit they are exposed to marine perils. Marine
Insurance is intended to protect the insured against the risk of loss or damage to goods in transit
due to marine perils. Marine Insurance Policy is a contract whereby the Insurer in considerstion
of payment of a premium by the insured agrees to indemnify the latter against loss incurred by
him in respect to goods exposed to ‘perils of the sea’. Marine Insurance Certificate is a document
which gives details of the shipment insured.

As soon as the goods are ready for shipment, the exporter has to buy an Insurance Policy unless
otherwise advised by the importer. The exporter should buy the policy for the CIF value plus
10% to cover other expenses which the importer might have to incur in anticipation of safe
arrival of goods.

Certificate of Origin

The exporter should obtain a certificate of origin from an recognized Chamber of Commerce,
Export Promotion Council or Government Department.

Manufacturer’s Certificate

It is required in addition to the Certificate of Origin for few countries to show that the goods
shipped have actually been manufactured and is available.

Packing list/ Note

It shows the details of goods contained in each parcel / shipment.

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Export Declaration Forms

As per the Exchange Control Regulations , exporters are required to submit declaration in the
following prescribed forms to the prescribed authority before any export of goods from India is
made.

GR Form – For exports to all countries made otherwise than post.

PP Form – For exports to all countries by parcel post, except when made on ‘value payable’ or

‘cash on delivery’ basis.

Form SDF - To be used for declaring exports in the case of specified customs offices and

Specified categories of shipping bills under EDI system.

Form SOFTEX- To be used gor declaring software exports through data communication links

And receipt of royalty on the software packages/products exported.

Certificate of Inspection

Certificate of Inspection is Issued by the Inspection Agency concerned, certifying that the
consignment has been inspected as required under the Export, Quality Control & Inspection Act,
1963.

Antiquity Measurement

It is issued by Archaeological Survey of India in case of antiques.

Certificate of Measurement

Freight can be charged either on the basis of weight or measurement. When it is charged on
weight basis, the weight declared by the exporter is accepted. A certificate of measurement from
the Indian Chamber of Commerce may be obtained by the exporter and given to the shipping
company for calculation of necessary freight.

Transshipment Bill

It is used for goods imported into a customs port/airport intended for transshipment.

Transshipment Permit

It is the permission for transshipment of goods from the vessel on which the same are booked
originally to another for export.

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Shipping Order

It is issued by the Shipping (Conference) Line which intimates the exporter about the
reservation of space of shipment of cargo through the specific vessel from a specified port and on
a specified date.

Cart/ Lorry Ticket

It is prepared for admittance of the cargo through the port gate and includes the shipper's name,
cart/ lorry No., marks on packages, quantity, etc.

Dock Challan /Export Application

Export Application is required at Cochin, Mumbai and Chennai port for payment of port charges
and instead of Export Application, Dock Challan is used at Kolkata port.

Export Cargo Ticket

It is used only at Cochin port which gives details like name of the vessel, export application
number, Transit shed number, shipper’s name, shipping bill number and dateand the description
of cargo.

Shippers Declaration Form

The exporter has to submit this declaration to the Customs Authorities regarding the value, sort,
specifications, quantity and description of goods being exported.

Commercial Invoice

It is issued by the exporter for the full realisable amount of goods as per trade term. It is a prima
facie evidence of the contract of sale and purchase.

Consular Invoice

It is mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand,
Burma, Iraq, Ausatralia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the
prescribed format and is signed/ certified by the counsel of the importing country located in the
country of export. This is the most important document which needs to be submitted for
certification to the Embassy of the country concerned.

Customs Invoice

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It is mainly needed for the countries like USA, Canada, etc. It is prepared on a special form
being presented by the Customs authorities of the importing country. It facilitates entry of goods
in the importing country at preferential tariff rate.

Legalised Invoice

This shows the seller's genuineness before the appropriate consulate or chamber or commerce/
embassy.

Certified Invoice

It is required when the exporter needs to certify on the invoice that the goods are of a particular
origin or manufactured/ packed at a particular place and in accordance with specific contract.
Sight Draft and Usance Draft are available for this. Sight Draft is required when the exporter
expects immediate payment and Usance Draft is required for credit delivery.

Shut Out Advice

It is a statement of packages which are shut out by a ship and is prepared by the concerned shed
and is sent to the exporter.

Short Shipment Form

It is an application to the customs authorities at port which advises short shipment of goods and
required for claiming the return.

Shipping Advise

A shipping advise is used to inform the overseas customer about the shipment of goods. There is
no particular form of shipping advise.

Shipping Bill

It is an important document required by the Customs Authorities for allowing shipment. The
shipping bills are of following types:-

 Duty-free shipping bill:-

This type of shipping bill is printed on white paper and used for the goods for which
neither duty nor cess is applicable.

 Dutiable shipping bill:-

It is used for goods subject to export duty/cess which is either entitled or not entitled for
drawback.

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  Drawback Shipping Bill:-

If the export of goods is simultaneously by duty free and/or subject to export

duty/cess, this type of shipping bill is compulsorily to be used whether alone or
alongwith any shipping bill. This type of shipping bill is printed on the Green
paper.

 Shipping Bill for Shipment Ex-bond:-

In case of goods re-export and kept in bond, this type of shipping bill is used
which is pronted on yellow paper.

Freight Declaration

It is to be attached to the export documents if the importer agrees to pay the freight.

Health Certificate

Health certificate is required for exports of food products, seeds, animal meat products etc. this
certificate is issued by the Health Department of exporting country.

Certificate of Value

Though the value is indicated in the Commercial Invoice.

Certificate of Exports and Realisation

After shipment, the exporters should get their exports certified by an authorized dealer in foreign
exchange. While presenting the export documents to an authorized dealer, he should fill in and
give to the bank a declaration in the prescribed form known as ‘Bank Certificate of Export and
realisation’. The exporter will get this certificate from the negotiating bank only after the
realization of proceeds.

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Foreign Accounts & Currency Management
Exporters are allowed to open foreign currency accounts in India and abroad. They can deposit
upto 50% & 70% in case of EOUs/EPZ units of their total foreign exchange receipts in those
accounts. For this purpose two types of accounts are permitted:-

1. Foreign Currency Accounts – FCA

2. Exchange Earners’ Foreign Currency Accounts – EEFC
3. Escrow accounts.
4. Other FC accounts.

Foreign Currency Accounts – FCA

The Reserve Bank of India has granted general permission to Indian residents to open, hold, and
maintain with an authorized dealer in India a Foreign Currency Account, to be known as a
Resident Foreign Currency RFC Account, out of foreign exchange received by the way of –

1. Pension or any other superannuation or other monetary benefits from their employer
outside India; or
2. Foreign exchange on conversion of any foreign security or immovable property situated
outside India or inherited from a person who was resident outside India and repatriated to
India; or
3. Received as acquired gift or inheritance from a person who was resident outside India
and repatriated to India; or
4. Foreign exchange acquired or received before the 8th day of July, 1947 or any income
arising or accruing thereon which is held outside India by any person in pursuance of a
general or special permission granted by the Reserve Bank.
5. The proceeds of life insurance policy claims/ maturity/ surrender values settled in foreign
currency from an insurance company in India

Types of accounts

By an Individual – a person may open in the form of current or savings or term deposit account.

By others- Either Current Account or Term Deposit Account.

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 Exchange Earners Foreign Currency Account –EEFC

A person resident in India may open with, an Authorised Dealer bank in India , an account in
foreign currency called the EEFC Accounts.

The limits of eligible credits to the EEFC accounts are 100% for

 Status Holder Exporter.

 a resident in India for professional services rendered in his personal capacity and
 100% Export Oriented Units, units in Export Processing Zones(EPZs), Software
Technology Parks(STPs), and Electronic Hardware Technology Parks(EHTPS), and 50%
resident in India.

This account shall be maintained only in the form of non –interest bearing current account
and no credit facilities shall be permitted against the security of balances held in EEFC
accounts by the Authorised Dealer Banks.

The eligible credits represent inward remittances through normal banking chain.

Payments received in foreign exchange by a unit in DTA for supplying goods to a unit in
SEZs out of its foreign currency accounts are to be treated as eligible foreign exchange
earnings for the purpose of credit to the EEFC account.

Authorized dealer banks will permit their exporter constituents to extend trade related loans /
advances to overseas importers out of their EEFC balances without any ceiling subject to
compliance of provisions of Notification No. FEMA3/2000-RB dated 3rd May,2000 as
amended from time to time.

Authorized dealer banks will permit exporters to repay packing credit advances whether
availed in rupee or in foreign currency from balances in their EEFC account and/or rupee
resources to the extent exports have actually taken place. The balance in EEFC a/cs will be
exempt from SLR & CRR requirements.

Escrow Accounts

Under a Counter trade proposal involving adjustment of value of goods imported into India
against the value of exports from India in terms of an arrangement voluntarily entered into
between the Indian party and the overseas party, there is a need for escrow account to be
opened with a bank in India.

24
 Other FC Accounts-

Other Foreign Currency Accounts which are permissible to be opened in India are-

Foreign Currency Accounts by airline /shipping cos.

Foreign Currency Accounts of overseas cos. executing projects in India

Foreign Currency Accounts of overseas buyers.

TAX DRAWBACK ON EXPORTS OF GOODS

The Duty Drawback Scheme is administered by the Directorate of Drawback in the Ministry of
Finance. Drawback admissible on exports is worked out and disbursed to the exporters by the
concerned Commissioners of Customs/Central Excise incharge of the Port/Airport/Land customs
Station or Foreign Post office.

Definition

Rule 2 of the customs, central excise duties and service tax drawback rules,1995, as amended by
the Customs, Central Excise Duties and Service Tax Drawback Rules, 2006 defines:-

 “drawback” in relation to any goods manufactured in India and exported, means the
rebate of duty or tax , as the case may be, chargeable on any imported materials or
excisable materials used or taxable services used as input services in the manufacture of
such goods;
 ‘excisable material’ means any material produced or manufactured in India subject to a
duty of excise under the Central Excise and Salt Act,1944
 ‘export’, with its grammatical variations and cognate expressions, means taking out of
India to a place outside India or taking out from a place in Domestic Tariff Area (DTA)
to a special economic zone and includes loading of provisions or store or equipment for
use on board a vessel or aircraft proceeding to a foreign port.
 ‘imported material’ means any material imported into India and on which duty is
chargeable under the Customs Act,1962
 “manufacture” includes processing of or any other operation carried out on goods and
the term manufacture shall be construed accordingly.

25
Drawback - where admissible

Subject to the provisions of:-

 The Customs Act, 1962(52 of 1962) and the rules made thereunder,
 The Central Excise and Salt Act,1944 (1 of 1944) and the rules made thereunder,
 These rules, a drawback may be allowed on the export of goods at such amount, or at
such rates, as may be determined by the Central Government.

A drawback will be allowed on the export of goods of such amount or as such rates, as may be
determined by the Central Government.

Categories of Drawback

All Industry Rates-

Under Rule 3 of the drawback rules, the Central Government notifies from time to time rate or
amount of duty drawback in respect of certain classes of goods. These are commonly known as
‘All Industry Rates’. These rates are published normally once in a year, following the changes in
the duties of Customs/Excise in the Finance Act. The All Industrial Rates are determined either
in specific terms or in terms of percentage of FOB value of the export product.

Items and Rates-

The items and drawback rates are announced in the month of June/July every year and amended
from time to time and notified in the Gazette of India- Part I- Section-I. All manufactures /
exporters having regular production of product for which brand rate is being sought for and who
are corporate bodies having a detailed accounting system subject to audit under the Company
Law are eligible for this scheme.

Central Excise Duties Drawback Rules,1995-

Where the central government has notified “All Industry Rate” in respect of an export product
listed in Annexure to the Drawback Rules, any manufacturer or exporter of such goods may
apply under Rule 6 of the Customs and Central Excise Duty Drawback Rules, 1971 to the central
government for the determination of Brand Rates.

Special Brand Rate-

In respect of any goods, the manufacturer or exporter finds that the amount of drawback is less
than four times of the duty paid on the materials or components used in the production or
manufacture of the said goods, make an application to the Central Government for fixation of
appropriate amount or rate of drawback.

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On receipt of application from such manufacturer/exporter the Central Government will, after
making such inquiry as it deem fit , allow payment to drawback to such exporter at such amount
or rate of drawback , which infact is less than four-fifth of such amount or rate determined upon
application by the manufacturer or exporter.

However no drawback claim will be allowed-

 If the said goods, except tea chests used as packing material for export of blended
tea, have been taken into use after manufacture;
 If the said goods are manufactured or produced using imported materials or
exicasble materials in respect of which duties have not been paid:
 On jute batching oil used in manufacture of export goods, namely, jute( including
Bimlipatam jute or mesta fibre) yarn, twist, twine, thread, cords and ropes:

If the said goods being packing materials have been used in or in relation to the export of:-

 Jute yarn (including Bimlipatam jute or mesta fibre) yarn, twist, twine, thread,
cords and ropes in which jute yarn predominates in weight.
 Jute fabrics (including Bimlipatam jute or mesta fibre),in which jute predominates
in weight.
 Jute manufacturers not elsewhere specified (including Bimlipatam jute or mesta
fibre),in which jute predominates in weight.
 On any of the goods falling within heading 1006 or 2523 of the first schedule to
the Custom Tariff Act,1975 (51 of 1975).

Manner and time for claiming drawback on goods exported other than by post-

For claiming drawback on goods exported, there is no specific form. Triplicate copy of the
Shipping Bill for export of goods under a claim for drawback shall be deemed to be a claim for
drawback. Such claim for drawback should be accompanied by following documents:-

1. Copy of export contract or letter of credit, as the case may be,

2. Copy of packing list,
3. Copy if AR4 form, where ever applicable,
4. Insurance certificate where ever necessary, and
5. Copy of communication regarding rate of drawback where the drawback claim is
for a rate determined by the Commisioner of Central Excise or the Commissioner
of Customs and Central Excise.

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Payment of Drawback

The Payment of Drawback is made by the Customs House/ Central Excise Collectorate having
jurisdiction over the port/land/airport customs stations through which the exports are affected.

The payment of drawback will be made either by cheque or by credit in the exporters account
maintained with the Customs House.

Promotional Measures for Exports

Assistance to states for developing export infrastructure and allied activities (ASIDE)

ASIDE is formulated to involve the states in the export effort by providing assistance to the state
governments for development of infrastructures for the development and growth of exports. The
funds allocated under this scheme are utilized for :-

1. Creation of new Export promotional industrial parks /zones,

2. Setting up of electronics and other related infrastructure,
3. Meeting of capital outlay in EPIPs/ EPZs/SEZs.and,
4. Development of minor ports and jetties to serve export purpose.

Export promotion capital goods (EPCG) scheme

EPCG scheme covers manufacturer-exporters with or without supporting manufactures /

vendors, merchant exporters tied to supporting manufacturers and service providers.

Zero duty EPCG scheme

Zero duty EPCG scheme allows import of capital goods for pre-production and post- production
at zero custom duty, subject to an export obligation equivalent to 6 times the duty saved on
capital goods imported under EPCG scheme to be fulfilled in 6 years reckoned from
Authorization issue date.

Concessional 3% Duty EPCG Scheme

It allows import of capital goods for pre-production & post- production at 3% customs duty,
subject to an export obligation equivalent to 8 times of duty saved on capital goods imported
under EPCG scheme.

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Duty Entitlement Passbook Scheme (DEPB)

The objective of DEPB is to neutralize incidence of customs duty on import content of export
product. Neutralization shall be provided by the way of grant of duty credit against export
product. Credit shall be available against such export products and at such rates as may be
specified by DGFT by the way of public notice. Prohibited items of exports mentioned in ITC
(HS) Book shall not be entitled for credit. DEPB holder shall have an option to pay additional
customs duty in cash as well. Additional customs duty / Excise duty and Special additional duty
paid in cash or through debit under DEPB may also be adjusted as CENVAT Credit or Duty
Drawback as per DoR rules. In respect of products where rate of credit entitlement comes to 10%
or more, amount of credit against each such product shall not exceed 50% of Present Market
Value (PMV) of the export product.

Application for DEPB

An application grant of credit under DEPB may be made to RA concerned in Form ANF 4G
alongwith prescribed documents. Agency commission shall be allowed for DEPB entitlement
upto 12.5% of FOB value only.

Duty Exemption and Remission Scheme

Duty exemption scheme enables duty free import of inputs required for export production. Duty
exemption schemes consist of –

1. Advance Authorisation and,

2. Duty Free Import Authorisation (DFIA)

This scheme enables post – export replenishment / remission of duty on inputs used in export
product. Duty remission schemes consist of duty entitlement passbook scheme (DEPB) and duty
drawback scheme (DBK).

Goods exported under Advance Authorisation / DFIA/ DEPB may be re – imported in same form
subject to DoR specified conditions.

Advance Authorisation

An Advance Authorisation is issued to allow duty free import of inputs, which are physically
incorporated in export product. In addition fuel, oil, energy, catalysts which are consumed/
utilized to obtain export product may also be allowed. Advance authorization is issued for inputs
and exports items given under SION. These can also be issued on the basis of Adhoc norms or
self declared norms. However, advance authorization for import of raw sugar, can be issued
either to a manufacturer exporter or merchant exporter tied to supporting manufacturers. In case
where CENVAT Credit facility on inputs have been availed of the exported goods, even after the
completion of the export obligation, the goods imported against advance authorization shall be

29
utilized only in the manufacture of dutiable goods whether within the same factory or outside, for
which the authorization holder shall produce a certificate from either Jurisdictional Central
Excise Stupdt.or Chartered Accountant, at the option of the exporter, at the time of filling
application for EODC to RA concerned. It necessitates exports with a minimum value addition
of 15%, except for items in Gems & Jewellery sector. Exports to SEZ Units/ supplies to
Developers/ Co- developers, irrespective of currency of realization, would also be covered.
Advance Authorisation shall be issued in accordance with Policy and procedure in force on
Authorisation issue date. Validity period of Advance Authorisation for import shall be as
prescribed in Handbook of Procedures, Vol. 1.

Duty Free Import Authorisation (DFIA)

DFIA is issued to allow duty free import of inputs, fuel, oil, energy sources, catalyst which are
required for production of export production of export product.

Export Oriented Units (EOUs), Electronic Hardware Technology Parks (EHTPs), Software
Technology Parks (STPs) and Bio-Technology Parks (BTPs).

Units undertaking to export their production of goods and services, may set up under the EOU
Scheme, STP Scheme, EHTP Scheme, BTP Scheme for manufacture of goods including repair,
re-making, reconditioning, re-engineering, and rendering of services. Trading units are not
permitted.

An EOU/EHTP/STP/BTP unit may export all kinds of goods and services except that are
prohibited in ITC (HS). State trading regime shall not apply to EOU manufacturing units. They
may not import/ procedure from DTA without payment of duty certain specified goods for
creating a central facility. Gems & Jewellery EOUs may source gold/silver/platinum through
nominated agencies on outright/loan purchase basis, shall export within 90 days from release.
Procurement and export of spares / components upto 5% of FOB value of exports may be
allowed to same consignee of export article. Second hand capital goods, without any age limit,
may also be imported duty free. Units can sell upto 50% of production in DTA & can sell to
other EOU/BTP/EHTP/STP/SEZ.

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PROJECT EXPORTS & SERVICE EXPORTS

Contracts for export of goods against the payment to be received partly or fully beyond the
period statutorily prescribed for realization of export proceeds are treated as deferred payment
exports. Trunkey projects involve rendering of services like designing, civil construction and
erection and commissioning of plant/factory along with supply of machinery, equipment and
materials. Payment in respect of goods supplied under both turnkey and civil construction
contracts may be received on ‘cash’ basis.

Service contracts for export of consultancy, technical and other services by Indian companies /
firms, also supply of some associated mechanicals wherewithals, consumables and spares. Indian
exporters of services have to normally undertake overseas contracts on “cash” terms and do not
require prior clearance of Reserve Bank. Individuals/ firms/ companies executing service
contracts in computer software should however repatriate to India income equivalent to atleast
30% of contract value and the balance 70% of contract value could be retained for meeting
contract related expenses abroad.

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Deemed Exports
“Deemed Exports” refers to those transactions in which goods supplied do not leave the country
and the payment for such supplies is received either in Indian rupees or in free foreign exchange.

Categories of Supply:-

 Supply of goods against Advance Authorisation/DFIA, EOUs or STPs or EHTPs

or BTPs and to EPCG Authorisation holders.
 Supply of goods to projects financed by multilateralor bilateral agencies funds as
notified by Department of Economic Affairs(DEA).
 Supply of capital goods, including in unassembled/disassembled condition as well
as plants, machines, accessories, tools, dies and such goods which are used for
installation purposes.
 Supply of goods to power projects and refineries;
 Also to projects funded by UN agencies; and
 To nuclear power projects through competitive bidding as opposed to ICB.

Benefits of Deemed Exports:-

o Supply of goods against Advance Authorisation/ DFIA,

o Deemed Export Drawback,
o Exemption from terminal excise duty where supplies are made against ICB. In
other cases refund will be given.
o Suppliers are entitled to Advance Authorisation /DFIA for immediate supplies
o Supply of goods will be eligible for refund of Terminal Excise Duty provided
recipient of goods does not avail CENVAT Credit/rebate on such goods.
o Simple interest @6% p.a. will be payable on delay in refund of duty drawback
and terminal excise duty under deemed export scheme, if the case is not settled
within 30 days of receipt of complete application.

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 IMPORT PROCEDURE & DOCUMENTATION

With the globalisation of Indian economy and consequent upon comfortable balance of payment
position Government of India has liberalised the Import Policy and practically all Controls on
imports have been lifted. Imports may be made freely except to the extent they are regulated by
the provisions of Import Policy or by any other law for the time being in force.

Import Export Policy

The present import policy and procedures in respect of various commodities/category of

importers, are, inter alia, contained in the following publications issued by the Ministry of
Commerce and revised from time to time:

Import – Export Policy, 1997-2002 as modified upto 31.3.1999 Handbook of Import- Export
Procedures (Vol 1.), 1997-2002 as modified upto 31.3.2000

Handbook of Import-Export Procedures(Vol.2) Duty Exemption Scheme: Input- Output and

Value Addition Norms,1997-2002. ITC (HS) Classification of Import and Export Items.

Registration with Regional Licensing Authority:

Registration with Regional Licensing Authority is a pre-requisite for import of goods. The
Customs will not allow clearance of goods unless:

The importer has to obtain IE Code Number from Regional Licensing Authority. However, no
such registration is necessary for persons importing goods from/ to Nepal provided Value of a
single Consignment does not exceed Rs. 25000/-

Obtaining IEC Code Number

An application for grant of IEC Code Number should be made in the prescribed Performa given
at Appendix 3.I. The application duly signed by the applicant should be supported by the
following documents:

Bank Receipt (in duplicate)/demand draft for payment of the fee of Rs.1000/- Certificate from
the Banker of the applicant firm as per Annexure1 to the form. Two copies of passport size
photographs of the applicant duly attested by the banker of the applicant.

A copy of Permanent Account Number issued by Income Tax Authorities, if PAN has not been
allotted, a copy of the letter of legal authority may be furnished. If there is any non-resident
interest in the firm and NRI investment is to be made with repatriable benefits, full particulars
thereof along with a photocopy of RBI's approval. If there is NRI investment without repatriation

33
benefit, a simple declaration indicating whether it is held with the general/specific permission of
the RBI on the letter head of the firm should be furnished. In case of specific approval, a copy
may also be furnished.

Declaration by the applicant that the proprietors/partners/directors of the applicant

firm/company, as the case may be, are not associated as proprietor/partners/directors with any
other firm/company the IEC No. is allotted with a condition that can be exported only with the
prior approval of the RBI.

IMPORT DOCUMENTS
Import order

An import order is a commercial transaction which is not only important to the importer and the
exporter, but is also of concern to their respective countries, since it affects the balance of
payment position of both the countries. The importer is required to produce copies of import
order to various Government departments / financial institutions.

Order acceptance

Order acceptance is another important commercial document prepared by the exporter

conforming the order received from the overseas importer. The exporter gives his confirmation
to the order placed by the importer and commits the shipment of products covered at the agreed
price during a specified time.

Letter of credit

At the request of the importer his bank issues a letter of credit in the favour of the exporter
through its correspondents in the country of the exporter giving him the authority to draw bills
upto a particular amount covering a specified shipment of goods and assuring him of payment
against the delivery of shipping documents.

Transport documents

The following documents are used in import business as transport documents.

 Ocean Freight: various types of Bill of Lading

 Air Freight : Airway Bill/ Air consignment note
 Rail/Road : Railway Receipt / consignment note
 Post : Post Parcel Receipt
 Courier : Courier Receipt/ Way Bill

Bill of Exchange

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 Bill of Exchange is also known as ‘draft’. A bill of exchange is an instrument in writing
containing an unconditional order, signed by the maker, directing a certain person to pay a from
certain sum of money only to or to the order of a person or to the bearer of the instrument. A bill
of exchange contains an order from the creditor to the debtor to pay a specified amount to a
person mentioned therein. The maker of a bill is called ‘Drawer’, the person who is directed to
pay is called the ‘Drawee’. The person who is entitled to receive the money is called the
‘Payee’.

When the exporter expects the importer to make immediate payment upon the presentation of the
draft, that draft is called a ‘Sight draft’ or ‘Draft drawn at first sight’ or ‘On demand’ or ‘On
presentation’. When the draft is drawn for payment at a date later than presentation, it is called a
‘Usance Draft’ or ‘Usance Bill’ or ‘Demand Draft’.

The Bill of Exchange or Draft is drawn in a set of two. Each one bears a reference to the other.
When any of the drafts is paid ,- if it is a sight draft and accepted – when it is a usance draft by
the drawee, the second draft becomes null and void.

Insurance Policy/ Certificate

In the International trade, when the goods are in transit they are exposed to marine perils. Marine
Insurance is intended to protect the insured against the risk of loss or damage to goods in transit
due to marine perils. Marine Insurance Policy is a contract whereby the Insurer in consideration
of payment of a premium by the insured agrees to indemnify the latter against loss incurred by
him in respect to goods exposed to ‘perils of the sea’.

Marine Insurance Certificate is a document which gives details of the shipment insured.

Certificate of Origin

Many countries require a certificate from the overseas supplier the origin of goods and certified
by the Chamber of Commerce or any other recognized authority in the exporters country.

Packing list / Note

It includes the date of packing, connecting invoice number, order number, details of shipping.

Certificate of Inspection

It is issued by the Inspection authorities in the exporters country certifying that the goods have
been inspected under the recognized quality control standards, and satisfies the condition relating
to quality control and inspection as applicable.

Certificate of Measurement

35
Freight can be charged either on the basis weight or measurement. When it is charged on weight
basis, the weight declared by the overseas buyer is accepted. This certificate contains the name
of the vessel, the port of destination, description of goods, quantity, length, breadth, depth etc of
the packages.

Commercial Invoice

An invoice is a document drawn by the exporter on his overseas importer which contains
detailed description of the goods consigned, the consigners name, the consignees name, the name
of the steamer, the number and date of bill of lading etc. It is a prima facie evidence of the
contract of sale and purchase.

Freight Declaration

It is required to be obtained from the overseas supplier, in both the cases, when the importer
agrees to pay the freight or the overseas supplier pays the freight.

Bill of Entry

The bill of entry is a document prepared by the importer or his clearing agent in the prescribed
form under the Bill of entry regulations, 1971

Bill of entry for goods imported for home consumption (white coloured) – this kind of Bill of
Entry is used when imported goods are cleared from port on custom duty

Bill of entry for warehouse (yellow coloured) - this kind of bill of entry is used where the duty is
not paid but the imported goods are transferred to customs recognized bonded warehouses.

Bill of entry for ex-bond clearance for home consumption (green coloured) – this kind of bill of
entry is used where the importer intends to clear the dutiable goods from a bonded warehouse.

Interest on Import Bills

The RBI has permitted authorized dealers to make remittances on account of interest accured on
the usance bills under normal interest rate paid on sight bills for a specific period not extending
six months from date of shipment in respect of imports under ‘cash’ licenses, without prior
approval of Reserve Bank.

Import Follow-Up

To ensure that foreign exchange released for import of goods is properly utilized, the authorized
dealers will verify ‘documentary evidence of import’in the form of either postal wrappers or
customs bill of entry.

36
One of the copies of bill of entry is called the Exchange control copy and will be designated as
such by means of a notation on the top of the form. This copy has to be submitted to the
authorized dealers by the importer within 90 days from the date of remittance.

Customs Clearance Procedure for Imported Goods

Customs Administration

Under the Ministry of Finance, there are two independent Boards of Revenue i.e Central board of
direct taxes and central board of excise and customs. The two main wings of the custom house
are ‘appraising’ for collection of revenue and prevention for prevention of smuggling.

Import Manifest

In terms of sec 30 of the customs act 1962 the person in charge of a conveyance carring imported
goods should handover within 24 hrs of arrival of the conveyance, an Import manifest to the
customs. This manifest is a complete list of all items the conveyance carries on board , including
those transshipped and those to be carried to the subsequent ports of call.

Entry in the Import Department of the Customs House

On receipt of the information regarding the arrival of the goods the importers or their agents have
to make an entry by filling a bill of entry , in the prescribed form,in the import department of the
customs house. the date of presentation is an important date as the rate of duty applicable to the
imported goods will be the rate which is in force on the date of presentation.

Presentation of Bill of Entry for Appraisal

After the bill of entry is noted in the import department, the same should be presented to the
Appraising counters along with the following necessary documents :-

1) Import license, if necessary

2) Exporters invoice
3) Copy of letter of credit
4) Original bill of lading and its non-negotiable copy
5) Two copies of packing list
6) Weight specifications
7) Manufacturers test certificate
8) Certificate of origin
9) Delivery order issued by shipping company or its agent
10) Freight and insurance amount certificate if the import is on FOB terms
11) A declaration from importer that he has not paid any commission to agents in India
12) Customs declaration
13) Catalogue / drawings etc. for machinery imported.

37
In addition to above following documents are also to be submitted, wherever necessary:

1) If the spare parts are imported- exporters invoice showing unit price and extended total of
each item
2) If the second hand machinery is imported- chartered engineers certificate
3) If steel is imported – manufacturers analysis certificate
4) If chemicals and allied products are imported- literature showing chemical consumption
5) If textiles items are imported- textiles commissioners endorsement/certificate.

Clearance of Goods

After payment of duty the importer should obtain the duplicate copy of bill of entry on which
order for examination of the goods is given by Customs and get the goods examined. If the
description of goods is found to be correct, on the basis of declared and accepted particulars, the
clearance of goods is allowed by the appraiser. This procedure where assessment is completed
and duly recovered, prior to the examination of goods is known as “second check procedure”.
The Appraiser after initial scrutiny of documents returns the bill of entry to the importers with an
order of examination of goods before the assessment of duty, is known as “first check
procedure”.

Warehousing the Goods

Under the customs act provision has been made to allow importers to warehouse the goods
pending clearance. For this purpose importers have to present a bill of entry termed “bill of entry
for warehousing”. This is required to be presented to the Bonds department along with the bond
for twice the amount of duty payable.

Customs Duty

Following types of customs duty are levied on goods imported into or exported outside india:

Basic Duty

Basic duty is levied on all goods imported into India as prescribed in first schedule of customs
tariff act. This schedule is amended from time to time to modify, alter or vary the nature of duty.
This duty is levied as a percentage of value of goods imported or at a specified rate.

Auxiliary Duty

This duty is levied in addition to the basic duty prescribed under the finance act every year. But,
this duty has been withdrawn with effect from 28th February, 1993.

Additional or Countervailing Duty

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This duty is levied on the total cost of imported goods at the rate equal to excise duty on like
goods when manufactured in India. This duty is levied to protect the domestic industry.

Specific Duty

This duty is levied in order to counter balance the excise duty leviable on the imports going into
the production of such goods produced in India.

IMPORT PROMOTION SCHEMES

Export promotion capital goods (EPCG)

Zero duty EPCG scheme

This scheme allows import of capital goods for production, pre-production, post-production, at
zero custom duty, subject to an export obligation equivalent to 6 times the duty saved on capital
goods imported under EPCG scheme to be fulfilled in 6 years reckoned from Authorisation
issued date. This scheme will be available for exporters of engineering and electronic products,
basic chemical & pharmaceuticals, apperals & textiles, plastics , handicrafts, chemicals & allied
products and leather & leather products. This zero duty scheme will be in operation till
31.3.2011

Concessional 3% duty EPCG scheme

This scheme allows import of capital goods for production, pre-production, post-production, at
3% custom duty, subject to an export obligation equivalent to 8 times of duty saved on capital
goods and imported under EPCG scheme to be fulfilled in 8 years.

In case of agro units and units in cottage or tiny sector import of capital goods at 3% custom duty
shall be allowed subject to fulfillment of EO equivalent to 6 times of duty saved on capital goods
imported in 12 years from the authorization date.

For SSI units, import of capital goods at 3% Customs duty shall be allowed subject to fulfillment
of EO equivalent to 6 times of duty saved on capital goods in 8 years provided the landed c.i.f.
value of such imported capital goods under this scheme does not exceed Rs 50 lakhs and total
investment in plant& machinery after after such imports does not exceed SSI limit.

In respect of EPCG Authorisations with a duty saved amount of Rs 100 crores o more EO will be
fulfilled in 12 years. Capital goods shall include spares, jigs, fixtures, dies and moulds. However
import of motor cars, sports utility vehicles shall be allowed only to hotels, travel agents, tour
operators and companies operating golf resorts.

39
Import of restricted items of imports mentioned under ITC (HS) shall only be allowed under
EPCG Scheme after approval from the EFC at Headquarters.

EPCG scheme covers manufacturers- exporters with or without supporting

manufacturers/vendors, merchant exporters tied to supporting manufacturers and service
providers.

Duty Exemption & Remission Scheme & Advance Authorisation Scheme

This scheme enables duty free import of inputs required for export production. Duty Exemption
Schemes consist of :-

1. Advance authorization and

2. Duty Free Import Authorization (DFIA)

A duty remission scheme enables post- export replenishment / remission of duty on inputs used
in export product. It consist of:-

1. Duty Entitlement Passbook Scheme (DEPB) and,

2. Duty Drawback (DBK) scheme.

Advance Authorisation

An advance authorization is issued to allow duty free import of inputs, which are physically
incorporated in export production. In addition, fuel, oil, energy, catalyst which are
consumed/utilized to obtain export product, may be allowed. DGFT, by means of Public notice
may exclude any products from the purview of Advance Authorization.

Duty free import of mandatory spares upto 10% CIF value of authorization which are required to
be exported/ supplied with resultant product are allowed under Advance Authorization. Advance
Authorization is issued for inputs and export items given under SION. These can be issued on
the basis of Adhoc norms or self declared norms. Advance Authorisation can be issued either to
a manufacturer exporter or merchant exporter tied to supporting manufactures for:-

i. Physical exports (including exports to SEZ) and /or

ii. Intermediate supplies
iii. Supply of goods that are mentioned in the purview of “deemed exports” of foreign trade
policy,
iv. Supply of ‘stores’ on board of foreign going vessel/aircraft.

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In case of Authorisation for import of Tea, minimum value addition under Advance
Authorisation shall be 50%.

Prohibited items of import mentioned in ITC(HS) shall not be imported under Advance
Authorisation.

Duty Free Import Authorisation (DFIA) Scheme

This scheme allows duty free import of inputs, fuel, oil, energy sources, catalyst which are
required for production of export product. DGFT , by means of public notice , may exclude any
products from the purview of DFIA. This scheme came in force from 1st May, 2006.

Provisions of “Advance Authorisation Scheme” shall be applicable in case of DFIA. However,

these Authorisations shall be issued only for products for which Standard Input and Output
Norms (SION) have been notified. In case of actual user DFIA and where CENVAT credit
facility on inputs have been availed for the exported goods, even after completion of export
obligation, the goods imported against such DFIA shall be utilized in the manufacture of dutiable
goods whether within the same factory or outside.

Provisions of “Advance Release Orders (ARO)” and “Invalidation Letter”, “Back – to – Bank
Inland Letter of Credit”, “Prohibited Items” and “Admissibility of Drawback” above shall be
applicable for DFIA holder.

A minimum 20% value addition shall be required for issuance of such authorisation except for
items in Gems and Jewellery sector. Authorisation holder may transfer DFIA or duty free inputs
except fuel and any other items notified by DGFT.

CENVAT credit facility shall be applicable for inputs either imported or procured indigenously.
An application in Form ANF 4H along with the documents therein, shall be submitted to RA
concerned. Split Authorisations of DFIA subject to a minimum of CIF value of Rs 10 lakhs each
and multiples thereof may also be issued, on request at the time of seeking transferability. A fee
of Rs 1000/- each shall be paid for each split authorisation.

Goods imported against transferable DFIA, which are found defective or unfit for use, may be
re-exported as per DoR guidliness. Original DFIA holder shall maintain a true and proper
account of consumption and utilization of duty free imported / domestically procured goods
against each authorisation as prescribed in Appendix 23 of Handbook of Procedures ,Vol 1.DFIA
are sought to be transferred after fulfillment of E.O.

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Duty Entitlement Passbook (DEPB) Scheme

The objective of DEPB to neutralise the incidence of customs duty on import content of export
product. Neutrilisation shall be provided by the way of grant of duty credit against export
product. Duty credit under this scheme is calculated by taking into account deemed import
content of the said export product as per SION.

Credit may be utilized for payment of Customs Duty on freely imported items and/or restricted
items. DEPB scrip’s can also be utilized for payment of duty against imports under EPCG
scheme. Futhur, DEPB Scrips can also be utilized for payment of duty against imports under
EPCG Scheme. Prohibited items of exports mentioned in ITC(HS) Book shall not be entitled for
DEPB credit except for exports effected under transitional facility wherever allowed, in terms of
paragraph 1.5 of FTP. DEPB holder shall have option to pay additional customs duty in cash as
well.

Validity period for DEPB for import shall be prescribed in Handbook of Procedures, Vol1.
DEPB or items against it are freely transferable. In respect of products where rate of credit
entitlement under DEPB Scheme comes to 10% or more, amount of credit against each export
product shall not exceed 50% of the present market value of export product. Agency
Commission shall be allowed for DEPB entitlement upto 12.5% of FOB value.

Form ANF 4C prescribes form regarding fixation of DEPB rates. All applications for fixation of
DEPB rates shall be routed through concerned EPCs which shall verify the FOB value of exports
as well as international price of inputs covered under SION. To encourage diversification and to
promote exports of new products, DEPB committee would be empowered to notify provisional
DEPB rates. However, such DEPB rates would be valid for a limited period of time during which
exporter would furnish data on export and import for regular fixation of rates.

Import of items requirements by Hotels, Restaurants, Travel Agents and Tour Operators

Items mentioned as restricted for imports in ITC(HS) required by hotels, restaurants, travel
agents, and tour operators may be allowed against an Authorisation, based on recommendation
of Director General, Tourism, Government of India.

Hotels, including tourist hotels, recognized by Director General of Tourism, Government of

India or a State Government shall be entitled to import Authorisation upto a value of 25% of
foreign exchange earned by them and foreign tourists during preceding licensing year, for import
of essential goods related to hotel and tourism industry.

42
Government of India shall be entitled to import authirisation upto a value of 10% of foreign
exchange earned by them during the preceding licensing year, for import of essential goods
which are restricted for imports related to travel and tourism industry, including office and other
equipment required for their own professional use. Duty credit scrip may be used for import of
any capital goods including spares, office equipment and professional equipment, office
furnitures and consumables that are otherwise freely importable under ITC (HS). Duty Credit
scrip may also be used for import of consumables including food items and alcoholic beverages.
An application for grant of an authorisation may be made in the form ANF 2B to DGFT through
Director of Tourism, GOI who will forward application to RA concerned along with their
recommendations.

Import of Samples, Gifts and Other Goods

No authorisation shall be required for imports of bonafide technical and trade samples of items
mentioned as restricted in ITC (HS) except vegetable seeds, bees and new drugs by any importer.
However, samples of tea not exceeding Rs.2000 (CIF) in one consignment shall be allowed
without an authorisation by any person concerned with tea industry.

Duty free import of samples upto Rs. 100000 for all exporters shall be allowed as per the terms
and conditions of customs notification.

Exports of bonafide trade and technical samples of freely exportable item shall be allowed
without any limit.

Import under Lease Financing shall be available under EPCG scheme, EOU/SEZ scheme.

Import/export of exhibits, including construction and decorative materials required for temporary
stands of foreign /Indian exhibitors at exhibitions, fair or similar show or display for a period six
months on re-export/ re-import basis, shall be allowed without an Authorisation on submission of
a certificate from an officer of a rank or an officer of Indian Trade Promotion Organisation
(ITPO) duly authorized by its chairman, to the effect that such exhibition, fair or similar show or
display has been sponsored by DoC or ITPO and is being held in public interest.

An application for grant of Customs Clearance Permit (CCP) for import as gifts of items
appearing as restricted for imports in ITC (HS) shall be made to the DGFT as in Form ANF 2B
along with the documents prescribed therein.

Bonafide household goods and personal effects may be imported as a part of passenger baggage
as per limits, terms and conditions thereof in Baggage Rules notified by Ministry of Finance.

Capital goods, equipments, components, parts and accessories, whether imported or indigenous,
except those restricted under ITC (HS) may be sent abroad for repairs, testing, quality
improvement and up gradation or standardization of technology and re-imported without an
authorisation.

43
Goods imported, in accordance with FTP, may be exported in same or substantially same form
without an Authorisation provided that item to be imported or exported is not restricted for
import or export in ITC (HS).

Transfer of Imported Goods

Freely importable goods can be transferred by sale or otherwise by importer freely. Transfer of
imported goods, which are subject to Actual user condition and have surplus to needs of Actual
user shall be made only with prior permission of RA concerned. Following documents along
with supporting documents shall be furnished with request for grant of permission for transfer, to
RA concerned:-

1. Reasons for transfer of imported materials

2. Name, address, IEC number and industrial authorisation registration, if any, of transferee
3. Description, quantity and value of goods imported and those sought to be transferred
4. Copies of import authorisation and bills of entry relating to imports made
5. Terms and conditions of transfer as agreed upon between buyer and seller.

Duty free import of R&D equipment for pharmaceuticals and Bio-technology sector

Duty free import of goods upto 25% of FOB value of exports during preceding licensing year,
shall be allowed. The eligible unit may furnish an application given in Appendix 15A to RA
concerned duly countersigned by Chartered Accountant.

Duty free imports of goods specified in list 28A of customs notification no 21/2002 dated
1.3.2002, upto 1% of FOB value of exports made during the preceding licensing year, shall be
allowed to agro chemicals sector unit having export turnover of Rs. 20 crore or above during
preceding licensing year.

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 CHAPTER 3:- ABOUT THE ORGANISATION

PROFILE
Established in 1977, Eros has over three decades of market leadership in creating a global platform for
Indian cinema. The Company has an enviable distribution network that spans across 50 countries and
has offices in India, UK, USA, Dubai, Australia, Fiji, Isle of Man and Singapore. Eros has built a successful
business model by combining the release of a portfolio of 30-40 new films every year with the
exploitation of a valuable film library of over 1,900 film titles, making it undisputedly one of the largest
content owners in the business.

VISION

Eros International is at an inflection point, having created the world’s leading integrated studio
of Indian filmed entertainment. It is our vision to leverage and build on our competitive market
position in the rapidly growing Indian media and entertainment sector so as to become the
gateway of Indian content worldwide and that of Hollywood content in India.

EVOLUTION

The business of Eros was founded in India in 1977 by Arjan Lulla, with a view to export Indian
films and tap into the video boom of 1970s and 1980s.

Kishore Lulla took over the reins of the business from his father, Arjan Lulla, in the 80s to
expand business in the UK. Kishore infused Eros with a vision and strategic direction to make it
a leading Indian media company in the International market. He was instrumental in propelling
Indian entertainment into the mainstream exhibition and distribution arena and international

45
platforms like Cannes Film Festival, BAFTA among others.

EROS PRODUCTS

Ayngaran
Eros acquired 51% of the Ayngaran business in October 2007. Ayngaran are market leaders in
the Tamil filmed entertainment.

EyeQube
Eros set up a state-of-the-art visual effects facility in Mumbai of which internationally renowned

B4U
Eros continues to hold 24% stake in the B4U group, the leading premium Bollywood movie and
music channels operating globally

Hollywood alliances
Eros has set up a joint venture with Universal Music in India to tap new talent and give them a
music as well as film platform to showcase their talents. This has never been done before and
also there is the potential to explore mixing of the new Indian talent with Universal’s
international artists to create music of wider appeal.

46
EROS BOARD AND MANAGEMENT

Kishore Lulla
Chairman & Chief Executive Officer

Vijay Ahuja
Vice Chairman & President – International

Jyoti Deshpande
Chief Operating Officer & Commercial Director

Sunil Lulla
Executive Director & President – India

Dilip Thakkar
Senior Non-Executive Director

Naresh Chandra
Senior Non-Executive Director

47
Chapter 4:- FINDINGS & ANALYSIS

EXPORT PRODUCTS IN EROS INTERNATIONAL MEDIA LIMITED

1) DIGITAL BETACAM

2) AUDIO CD

3) COMPACT DISCS

4) HARD DISC DRIVE

Eros International Media Limited sources all Indian film content for the Eros Group and exploits
such content across formats within India, Nepal and Bhutan. As of December 31, 2009, we have
various rights to over 1,000 films, which include Hindi, Tamil, Marathi and other regional
language films, including films, such as Mughal-e-Azam, Om Shanti Om, Lage Raho Munnabhai
and Love Aaj Kal, Alladin, God Tussi Great Ho. We own rights to certain English language
films for home entertainment distribution within India.

We exploit and export Indian film content within India, Nepal and Bhutan and Shrilanka, UK,
USA, Dubai, Sydney, Nairobi, Singapore, Malaysia, New Zealand, Johannesburg through
multiple formats, such as theatres, home entertainment, principally in the form of digital versatile
discs (DVDs), video compact discs (VCDs) and audio compact discs (CDs).

48
OUR LATEST RELEASES

GOD TUSSI GREAT HO

OM SHAANTI OM

VEER

PAATHSHALA

HOUSEFULL

DRONA

NAMESTEY LONDON

LOVE AAJ KAL

ALLADIN

AND MANY MORE.

OUR FORTHCOMING RELEASES

MILENGE MILENGE

KHATTA MEETHA

ROCKSTAR

GOLMAL 3

DESI BOYS and many more.

49
There is proper filling and maintaining of all the documents related to exports and imports done
in our company. There is amendment of the rules and procedures set by the Director General of
Foreign Trade.

The export – Import documentation and procedure plays an important role in international
market. Thus, without proper registration and documentation foreign trade will not be carried out
properly. The exporter and importer have to be registered and should obtain an ICE number.

The shipping documents have to be made and counter signed by a CA or an Authorized Dealer;
they are to be made in triplet and freight and packing charges duly paid on it.

The policy of the government to encourage manufacturers and exporters to attain internationally
accepted standards of quality for their products. The government extends support and assistance
to trade and industry to launch a nationwide programme on quality awareness and promote the
concept of total quality management.

With the objective of promoting exports of branded products, the Government of India has
constituted a Committee for identification of such products and upon recognition of such brands
by the committee, the “Rewards and Benefits” shall become available for exports of such brands.

Also, if the industry and government work in tandem, then the Indian exports will become
globally competitive.

50
CHAPTER:- 5 CONCLUSION

HISTORY OF INDIA’S FOREIGN TRADE

On the eve of Independence in 1947, foreign trade of India was typical of a colonial and
agricultural economy. Trade relations were mainly confined to Britain and other Commonwealth
countries. Exports consisted chiefly of raw materials and plantation crops while imports
composed of light consumer goods and other manufactures.

Over the last 60 years, India’s foreign trade has undergone a complete change in terms of
composition and direction. The exports cover a wide range of traditional and non-traditional
items while imports consist mainly of capital goods, petroleum products, raw materials, and
chemicals to meet the ever-increasing needs of a developing and diversifying economy. For
about 40 years (1950-90, foreign trade of India suffered from strict bureaucratic and
discretionary controls. Similarly, foreign exchange transactions were tightly controlled by the
Government and the Reserve Bank of India. From 1947 till mid-1990s, India, with some
exceptions, always faced deficit in its balance of payments, i.e. imports always exceeded exports.

This was characteristic of a developing country struggling for reconstruction and modernization
of its economy. Imports galloped because of increasing requirements of capital goods, defence
equipment, petroleum products, and raw materials. Exports remained relatively sluggish owing
to lack of exportable surplus, competition in the international market, inflation at home, and
increasing protectionist policies of the developed countries. Beginning mid-1991, the
Government of India introduced a series of reforms to liberalise and globalise the Indian
economy. Reforms in the external sector of India were intended to integrate the Indian economy
with the world economy.

India’s approach to openness has been cautious, contingent on achieving certain preconditions to
ensure an orderly process of liberalization and ensuring macroeconomic stability. This approach
has been vindicated in recent years with the growing incidence of financial crises elsewhere in
the world. All the same, the policy regime in India in regard to liberalization of the foreign sector
has witnessed very significant change.

51
DGFT or Directorate General of Foreign Trade is a government organization in India
responsible for the formulation of Exim guidelines and principles for Indian Importers and
Indian Exporters of the country. Before 1991, DGFT was known as the Chief Controller of
Imports & Exports (CCI&E).

DGFT is responsible for implementing the Foreign Trade Policy or Exim Policy with the main
objective of promoting Indian exports.

The Reserve Bank of India and the Government of India, issued various notifications, rules,
orders for foreign exchange management.

On 1st June 2000, the Foreign Exchange Management Act, 1999 (FEMA) has replaced the
Foreign Exchange Regulation Act, 1973 (FERA).

The objective of FERA was to conserve foreign exchange reserves whereas the objective of
FEMA is to facilitate external trade & payments & to promote orderly maintenance of the
foreign exchange market in India.

52
CHAPTER 6:- BIBLIOGRAPHY

BOOKS

IMPORT DO IT YOURSELF –M.I.MAHAJAN

EXPORT DO IT YOURSELF – M.I.MAHAJAN

EXPORT INCENTIVES ASSISTANCE & FACILITIES- ANITA KUMARI

FOREIGN EXCHANGE MANAGEMENT MANUAL – D.T.KHILANI

INTERNET

www.infodrive.com

www.eximpolicy.com

www.dateyvs.com/customs07.htm

www.nic.in/eximpol.com

www.wikipedia.org

www.erosentertainment.com

www.erosplc.com

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