Table of Contents

Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Topic Acknowledgement Completion Certificate by Company Declaration by the student Executive Summary CH:1 Introduction Objective of the study Scope of the Project Limitations of the Project Company Profile & Organization Chart CH:2 Theoretical Background Process / Methodology CH:3 Data Analysis & Interpretation CH:4 Findings Suggestions / Recommendations Bibliography Annexure (Questionnaire) Page No.

13. 14. 15. 16.

Acknowledgement
I Jomy John (1st Year MBA IB) want to thank Mr. N.K. Mishra for giving me the opportunity of doing the summer internship. I would also like to thank my coordinator Ms. Monika Tickoo for guiding me through my project. Would also thank the entire faculty for their valuable guidance. Lastly I would like to thank Sea-Wave-the organization who taught me the basic intricacies of work.

CERTIFICATE

DECLARATION BY THE STUDENT

EXECUTIVE SUMMARY
This project work turned out to be enriching & during the tenure of this project, I gained insight into procedure for export-import & documentation. This project is mainly divided into two parts. I first portion I included the first procedure of export-import as per new EXIM policy. It started with general procedure for Export-Import, which include each & every step required for importer & exporter like file of application, application for grant of IEC No., filing of profile of Importer-Exporter. After that I have given important points of Import policy & Export policy which are required to be understood by Exporter & Importer. Second part deal with documentation. Consequent upon comfortable balance of payment position of the country, increasing necessity importer for export production & globalization Indian economy, the government is liberalizing import regime as well as export regime from time to time. Registration with regional licensing authority is the pre-requisite of import of goods. This portion also includes pre-shipment finance & post-shipment finance, declaration form, transportation documents, documents for custom clearance of goods & other documents. I also enclosed some documents in Annexure.

Introduction
Import & Export is one of the most lucrative business activities in India. The Government also provides various incentives to the exporters for earning valuable foreign exchange for the country for meeting their requirements for improving modern technology and essential inputs. Besides, the income for export business is fully exempt under Income Tax Act 1961. Refund of Central Excise and Customs Duty is made available under the Duty Drawback Scheme of the Government.

Foreign Exchange Regulation have been substantially liberalized for Exporters. Needs for establishing offices abroad by the exporters have been eased. Export Credit available at concessional rate of interest. Interest Tax on the export credit has been abolished. Import policy has also been liberalizes substantially for exportoriented imports. Delhi customs have introduced EDI system of computerized processing of import and export transactions.

Objective of the study

Scope of the Project

Limitations of the Project

The project report may or may not facilitate the useful information for some other person due to time limitation. All the data has been rounded for the ease of calculation.

Company Profile & organizational chart

Part 1
General procedure of Export-Import
Indian exporter & importer have to follow the following procedure according to the EXIM Policy 2010-11. I have tried to include each & every aspect, which are necessary to be followed be exporter & importer.  Filing of profile of importer & exporter: Each Importer & Exporter shall be required to file importer & exporter profile once with the licensing authority in given format under this EXIM Policy.  Application for Grant of IEC Number : An application for grant of IEC number shall be made by the Registered/Head Office of the applicant and apply to the nearest Regional Authority of Directorate General Foreign Trade, the Registered office in case of company and Head office in case of others, falls in the Aayaat Niryaat Form - ANF2A and shall be accompanied by documents prescribed therein. In case of STPI/ EHTP/ BTP units, the Regional Offices of the DGFT having jurisdiction over the district in which the Registered/ Head Office of the STPI unit is located shall issue or amend the IECs. Only one IEC would be issued against a single PAN number. Any proprietor can have only one IEC number and in case there are more than one IECs allotted to a proprietor, the same may be surrendered to the Regional Office for cancellation.  Duplicate Copy of IEC Number : Where an IEC Number is lost or misplaced, the issuing authority may consider requests for grant of a duplicate copy of IEC number, if accompanied by an affidavit.

 Surrender of IEC Number: If an IEC holder does not wish to operate the allotted IEC number, he may surrender the same by informing the issuing authority. On receipt of such intimation, the issuing authority shall immediately cancel the same and electronically transmit it to DGFT for onward transmission to the Customs and Regional Authorities.  Filing of Application: Every application for an Import/Export license/ certificate/ Authorization/ permission or any other purpose should be complete in all respects as required under the relevant provisions of the Policy/Procedures and shall be signed by the applicant as defined in paragraph 9.9of the Policy. An incomplete application is liable to be rejected giving specific reason for rejection. However in case of manual applications, the applicant would furnish a soft copy of the application in MS word format.  Application Fee for IEC Code Number: Application Fee : Rs 250.00 Mode of Payment : In Demand Draft/ Pay Order from any designated bank in favour of Zonal Joint Director General of Foreign Trade or Payment through EFT ( Electronic Fund Transfer by Nominated Bank by DGFT Like HDFC Bank, ICICI Bank, State Bank of India, UTI Bank, Punjab National Bank, Central Bank etc) or Application fee can deposited by TR6 Challan with Duplicate Copy in any branch of Central Bank of India and TR6 Challan need to be submit along with IEC Code Application.  Territorial Jurisdiction of Regional Authorities: Every application, unless otherwise specified, shall be submitted to the Regional Authority of Directorate General Foreign Trade, as per the territorial jurisdiction of the Regional authorities indicated in Policy and Handbook of Procedure Volume-I.

 Guidelines for Application of IEC Code Number: Mandatory Requirements to apply for IEC Code Number
  

Covering letter Fill Part A, B & D of the application form. Application must be accompanied by documents as per details given below: 1 Bank Certificate from the bank on Bank letter head as per proforma (Part B) given in the application. a. In case of Proprietorship firms, please furnish i) Date of Birth of individual ii) Number of IECs held along with their details b. In case of Companies, please furnish i) Extract of Board of Resolution. ii) MOA with Form 32 and ROC in case of change in Directors. c. In case of others i) Notorised Partnership Deed showing dates of formation. ii) No Objection Certificate from other partners/HUF. 3.2 Self certified copy of Permanent Account Number (PAN) issued by income Tax Authorities. 3.3 Two copies of passport size photographs of the applicant. The photograph pasted on the banker certificate must be attested by the banker with Seal and Signature of the applicant.

 

The application must be submitted in Duplicate. Each individual page of the application must be signed by the applicant. Self addressed envelope stamped with Rs. 25 (Local Address) & for others Rs.30/-. These documents may be kept secured in a file cover.

IMPORT POLICY  General Procedure for Licensing of Restricted Goods: Wherever an import license, including customs clearance permit (CCP), is required under the Policy, the procedure contained hereunder shall apply.  Import of Second hand Goods/Waste: The following items may be imported without a license: i. Any form of metallic waste, scrap, seconds and defectives, other than those which are of a value below the value specified for any such items by a notification issued in this behalf, and excluding hazardous, toxic waste, radioactive contaminated waste/scrap containing radio active material; Waste paper; Deleted Woollen rags/ synthetic rags/ shoddy wool in completely mutilated form subject to the condition that mutilation must conform to the requirements as specified by the customs authorities. PET bottle waste/scrap; Import of all types of ships may be made without a license on the basis of guidelines issued by Ministry of Shipping and as per the age/residual life norms prescribed by the Ministry of Shipping.

ii. iii. iv.

v. vi.

Provided import of metal scrap originating from a country affected by rebellion or war, the exporter shall furnish the following documents to the Customs at the time of clearance of goods: i. Pre-shipment inspection certificate from any of the Inspection & Certification agencies given in Appendix-32A to the effect that the consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radioactive contaminated or any other explosive material

in any form either used or otherwise. Simultaneously these agencies will also certify that the imported item(s) is actually a metallic waste/scrap/ seconds/defective as per the internationally accepted parameters for such a classification. ii. A copy of the contract between the importer and the exporter stipulating that the consignment does not contain any type of arms, ammunition, mines or shells, cartridges, radioactive contaminated, or any other explosive material in any form either used or otherwise.

 Import of Second Hand Capital Goods: Import of second hand capital goods, which are not more than 10 years old, shall be allowed freely. However, the same shall not be transferred, sold or otherwise disposed off within a period of two years from the date of import, except with the prior permission of the Director General of Foreign Trade.

 Restricted Items Required By Hotels, Restaurants, Travel Agents, Tour Operators And Other Specified Categories : Items mentioned as restricted for imports in ITC(HS) required by hotels, restaurants, travel agents and tour operators may be allowed against a licence. Import licence shall be granted on the recommendation of the Director General, Tourism, Government of India.

 Hotels, including tourist hotels, recognised by the Director General of Tourism, Government of India or a State Government shall be entitled to import licences upto a value of 25% of the foreign exchange earned by them from foreign tourists during the preceding licensing year. Such licences shall be granted for the import of essential goods related to the hotel and tourism industry.

 Travel agents, tour operators, restaurants, and tourist transport operators and other units for tourism, like adventure/wildlife and convention units, recognised by the Director General of Tourism, Government of India, shall be entitled to import licences up to a value of 10% of the foreign exchange earned by them during the preceding licensing year. Such licences shall be granted for the import of essential goods related to the travel and tourism industry, including office and other equipment required for their own professional use.  Import of motor vehicles, including tourist coaches and airconditioning units for the vehicles, shall be permitted within the entitlement of the licence.  The import entitlement under above paragraph of any one licensing year can be carried forward, either in full or in part, and added to the import entitlement of the two succeeding licensing years.  Import of Other Restricted Items: ITC(HS) contains the list of restricted items. An application for import of such items may be made, in the form given in Appendix8 to the Director General of Foreign Trade along with documents prescribed therein.  Restricted Items Licence: Restricted item licence (RIL) may be granted by the Director General of Foreign Trade or any other licensing authority authorised by him in this behalf. The DGFT/ licensing authority may take the assistance and advice of a licensing committee. The licensing committee will consist of representatives of technical authorities and Departments/ Ministries concerned.  Gifts of Consumer or Other Goods: In terms of the provisions contained in above paragraph of the Policy, an application for grant of Customs Clearance Permit for import as gifts of items appearing as restricted for imports in ITC (HS) shall be made to the Director General of Foreign Trade in

the form given in Appendix-8 along with documents prescribed therein. However, where the recipient of a gift is a charitable, religious or an educational institution registered under a law relating to the registration of societies or trusts or otherwise approved by the Central or a State Government and the gift sought to be imported has been exempted from payment of customs duty by the Ministry of Finance, such import shall be allowed by the customs authorities without a Customs Clearance Permit.  Import under Govt. to Govt. Agreements: Import of goods under Government to Government agreements may be allowed without a licence or Customs Clearance Permit on production of necessary evidence to the satisfaction of the Customs authorities.  Import of Cheque Books/ Ticket Forms etc. Indian branches of foreign banks, insurance companies and travel agencies may import cheque books, bank draft forms and travelers cheque forms without a Customs Clearance Permit. Similarly, airlines/shipping companies operating in India, including persons authorised by such airlines/shipping companies, may import passenger ticket forms without a Customs Clearance Permit.  Import of Reconditioned/ Second Hand Aircraft Spares: Air India, Indian Airlines, Vayudoot, Pawan Hans Ltd. and scheduled domestic private airlines, private sector/public sector companies and State Governments operating executive/ training aircraft or those engaged in the aerial spraying of crops and non scheduled airlines and charter service operators will be eligible to import, without a licence, reconditioned/second hand aircraft spares on the recommendation of the Director General of Civil Aviation, Government of India.

 Import of Replacement Goods: Goods or parts thereof on being imported and found defective or otherwise unfit for use or which have been damaged after import may be exported without a licence, and goods in replacement thereof may be supplied free of charge by the foreign suppliers or imported against a marine insurance or marine-cum-erection insurance claim settled by an insurance company. Such goods shall be allowed clearance by the customs authorities without an import licence provided that: o The shipment of replacement goods is made within 24 months from the date of clearance of the previously imported goods through the Customs or within the guarantee period in the case of machines or parts thereof where such period is more than 24 months; and No remittance shall be allowed except for payment of insurance and freight charges where the replacement of goods by foreign suppliers is subject to payment of insurance and/or freight by the importer and documentary evidence to this effect is produced at the time of making the remittance. The importer shall also have the option to claim refund of payment, if any, already made to the foreign supplier, instead of obtaining replacement of goods referred to above.

In such cases where the goods have been found short-shipped, short-landed or lost in transit prior to actual import and/or detected as such at the time of customs clearance, import of replacement goods will be permitted on the strength of the certificate issued by the customs authorities without an import licence. This procedure shall also apply to cases in which shortshipment of goods is certified by the foreign supplier and he has agreed to replace the goods free of cost.  Transfer of Imported Goods: Goods, which are importable without restriction, can be transferred by sale or otherwise by the importer freely. Transfer of imported goods, which are subject to Actual User condition under the Policy and have become surplus to the needs of the

Actual user shall be made only with the prior permission of the licensing authority concerned. The following information along with supporting documents shall be furnished with the request for grant of permission for transfer, to the licensing authority concerned: Reasons for transfer of imported material; Name, address, Importer Exporter Code No. and industrial licence/ registration, if any, of the transferee; Description, quantity and value of the goods imported and those sought to be transferred; Copies of import licence and bills of entry relating to the imports made; Terms and conditions of the transfer as agreed upon between buyer and the seller. Prior permission of the licensing authority shall not, however, be necessary for transfer or disposal of goods, which were imported with Actual User condition, provided such goods are freely importable without Actual User condition on the date of transfer. Prior permission of the licensing authority shall also not be required for transfer or disposal of imported goods after a period of two years from the date of import.  Import of Overseas Office Equipment: On the winding up of overseas offices, set up with the approval of the Reserve Bank of India, used office equipment and other items may be imported without a licence.  Labels, Price Tags And Like Articles For Export Products: Supplies, made by foreign buyers or procured by the exporters on the advice of foreign buyers, of labels, price tags, hangers, PVC boxes, inlay cards, printed bags, stickers and trimming materials like buttons ,belts shoulder pads, buckles, eyelets, hooks and

eyes and rivets to be attached to the goods against specific orders placed by foreign buyers on Indian exporters, may be imported without a licence.

Export Policy  Application for Grant of Export Licence / Certificate / Permission: RAs may also issue, on application, Free Sale and Commerce Certificate for export of items not covered under Drugs & Cosmetics Act, 1940, which have usage in hospitals, nursing homes and clinics, for medical and surgical purposes and are not prohibited for export. Validity of such certificate shall be two years from date of issue unless otherwise specified. An application for grant of Free Sale and Commerce Certificate may be made to RA concerned  Export of Items under State Trading Regime (STR): An application for export of items mentioned in ITC (HS) under STR regime may be made to DGFT.

 Exports of Samples / Exhibits: An application for export of samples or exhibits, which are restricted for export, may be made to DGFT.

 Free of Cost Exports: Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakh or 2% of average annual export realisation during preceding three licensing years whichever is higher.

 Conversion of E.P. copy of shipping bill from one Scheme To Another: If Customs Authorities, after recording reasons in writing, permit conversion of an E.P. copy of any scheme-shipping bill on which benefit of that scheme has not been availed, exporter would be entitled to benefit under scheme in which shipment is subsequently converted.

 Offsetting of Export Proceeds : Subject to specific approval of RBI, any payables, or equity investment made by an Autorisation holder under any export promotion scheme, can be used to offset receipts of his

Export proceeds. In such cases, offsetting would be equal to realisation of export proceeds and exporter would have to submit following additional documents: a) Appendix-22D in lieu of Bank Realisation Certificate. b) Specific permission of RBI  Quality Certification : It has been a constant endeavor to promote quality standards in export product / units manufacturing export product. For ISO 9000 (Series) and for ISO 14000 (Series), the Agencies accredited with National Accreditation Board for Certification Bodies (NABCB) under Quality Council of India shall be deemed to be authorized under this Policy.

 Issuance of scrips against lost EP copy of the Shipping Bills and / or original Bank Realisation Certificate: a) A duplicate / certified copy of concerned document issued by Customs Authority / Bank in lieu of original; b) An application fee equivalent to 2% of relevant entitlement. However, no fee shall be charged when such document is lost by Government agencies and a documentary proof to this effect is submitted; c) An affidavit by exporter about loss of document and an undertaking to surrender it immediately to concerned RA, if found subsequently; d) An indemnity bond by exporter to effect that he would indemnify Government for financial loss if any on account of duty credit issued against lost Shipping Bills/ BRC. Customs Authority, before allowing clearance, shall ensure that benefit / duty credit against such shipping bill has not been availed.

Claim against lost Shipping Bill / BRC shall be preferred within a period of six months from date of release of duplicate copy of Shipping Bill / on date of realization of export proceeds. Any application received thereafter shall be rejected.

 Export Promotion Council (EPC)/ Commodity Boards (CB): A list and product category of EPCs, including CB is given Appendix-2. Commodity board function as EPCs for products allotted to them. EPC is authority issuing RCMC.

 Non-Profit, Autonomous and Professional Bodies : EPCs are non-profit organizations registered under Companies Act or Societies Registration Act. EPCs shall be autonomous and shall regulate their own affairs. However, if Central Government frames uniform bylaws for constitution and / or for transaction of business for EPCs, they shall adopt the same with such modifications as Central Government may approve having regard to special nature or functioning of such EPC. Concerned Administrative Ministry would interact with Managing Committee of EPC concerned at least twice a year.

Part-2
Registration of exporters Once all the research and analysis is done its time to get registered with the various government authorities.
 Registration with Reserve Bank of India (RBI):

Prior to 1997, it was necessary for every first time exporter to obtain IEC number from Reserve Bank of India (RBI) before engaging in any kind of export operations. But now this job is being done by DGFT.

 Registration with Director General of Foreign Trade (DGFT) : For every first time exporter, it is necessary to get registered with the DGFT (Director General of Foreign Trade), Ministry of Commerce, Government of India. DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required for the purpose of export as well as import. No exporter is allowed to export his good abroad without IEC number. However, if the goods are exported to Nepal, or to Myanmar through Indo-Myanmar boarder or to China through Gunji, Namgaya, Shipkila or Nathula ports then it is not necessary to obtain IEC number provided the CIF value of a single consignment does not exceed Indian amount of Rs. 25, 000 /-. Application for IEC number can be submitted to the nearest regional authority of DGFT. Application form which is known as "Aayaat Niryaat Form - ANF2A" can also be submitted online at the DGFT web-site: http://dgft.gov.in.

Registration with Export Promotion Council: Registered under the Indian Company Act, Export Promotion Councils or EPC is a non-profit organisation for the promotion of various goods exported from India in international market. EPC works in close association with the Ministry of Commerce and Industry, Government of India and act as a platform for interaction between the exporting

community and the government. So, it becomes important for an exporter to obtain a registration cum membership certificate (RCMC) from the EPC. An application for registration should be accompanied by a self certified copy of the IEC number. Membership fee should be paid in the form of cheque or draft after ascertaining the amount from the concerned EPC. The RCMC certificate is valid from 1st April of the licensing year in which it was issued and shall be valid for five years ending 31st March of the licensing year, unless otherwise specified.

Registration with Commodity Boards: Commodity Board is registered agency designated by the Ministry of Commerce, Government of India for purposes of export-promotion and has offices in India and abroad. At present, there are five statutory Commodity Boards under the Department of Commerce. These Boards are responsible for production, development and export of tea, coffee, rubber, spices and tobacco.

 Registration with Income Tax Authorities: Goods exported out of the country are eligible for exemption from both Value Added Tax and Central Sales Tax. So, to get the benefit of tax exemption it is important for an exporter to get registered with the Tax Authorities.

Export financing Export activity gets liberal financing at the concessional rate from the commercial banks. The export financing is available at the preshipment & post-shipment stage.

Export finance

Pre-Shipment finance

Post-Shipment finance

Packing credit

Advance against duty drawback

Export bill finance Advance against red clause L/C

Back to Back L/C

Pre-shipment finance: Pre Shipment Finance is issued by a financial institution when the sellers want the payment of the goods before shipment. The main objectives behind preshipment finance or pre export finance are to enable exporter to:
y y y y y y

Procure raw materials. Carry out manufacturing process. Provide a secure warehouse for goods and raw materials. Process and pack the goods. Ship the goods to the buyers. Meet other financial cost of the business.

Packing credit : Export Packing Credit are of 2 forms 1. Pre-shipment Credit (Packing Credit) 2. Post-Shipment Credit These are available to the exporters, for financing purchase, processing, manufacturing or packing of goods prior to shipment. This would mean any loan or advance extended to you by the bank on the basis of: a) Letter of Credit opened in your favor or in favor of some other person, by an overseas buyer; b) a confirmed and irrevocable order for the export of goods from India; c) any other evidence of an order or export from India having been placed on the exporter or some other person, unless lodgement of export order or Letter of Credit with the bank has been waived. Packing Credit is granted for a period depending upon the circumstances of the individual case, such as the time required for procuring, manufacturing or processing (where necessary) and shipping the relative goods. Packing credit is released in one lump sum or in stages, as per the requirement for executing the orders/LC.

The pre-shipment / packing credit granted has to be liquidated out of the proceeds of the bill dawn for the exported commodities, once the bill is purchased/discounted etc., thereby converting pre-shipment credit into postshipment credit. Post Shipment Packing Credit It runs from the date of extending credit, after shipment of goods to the date of realization of export proceeds and includes any loan / advance granted on the security of any duty drawback allowed by the Govt. from time to time. Post-shipment credit has to be liquidated by the proceeds of export bills received from abroad in respect of goods exported. The exporter has the following options at post-shipment stage: i. To get export bills purchased /discounted / negotiated; ii. To get advances against bills for collection; iii. To receive advances against duty drawback receivable from Govt. The exporter has the option to avail of pre-shipment and post-shipment credit either in rupee or in foreign currency. However, if the pre-shipment credit has been availed in foreign currency, the post-shipment credit has necessarily to be under EBR Scheme since foreign currency pre-shipment credit has to be liquidated in foreign currency.  Red Clause L/C: A specific type of letter of credit in which a buyer extends an unsecured loan to a seller. Red Clause Letters of Credit permit documentary credit beneficiaries to receive funds for any merchandise outlined in the letter of credit. These letters are commonly used by beneficiaries who act as purchasing agents for buyers in another country.

 Back to Back Facility: When a second set of credit is issued on the basis of a parent credit the second credit will be termed as back to back credit. As the name indicates, it is a credit issued with the backing or against the security of another credit. The original credit

which is offered as security for issuing a back to back credit is called as overriding credit. The practical purpose of this credit is that when a LC is issued by an ultimate buyer in favour of a particular beneficiary who may not be the actual supplier or manufacturer, he will issue another credit with near identical terms in favour of the actual supplier offering the main credit issued in his favour as security & will be able to obtain reimbursement by presenting the documents received under back to back credit under the main LC. Thus, it is basically a credit issued by a middleman in favour of the actual manufacturer.

Post-shipment finance: Post Shipment Finance is a kind of loan provided by a financial institution to an exporter or seller against a shipment that has already been made. This type of export finance is granted from the date of extending the credit after shipment of the goods to the realization date of the exporter proceeds.

Advance against duty draw-back: The Customs Duty Drawback can also be paid in advance immediately on presentation of Customs certified shipping bill under the Duty Drawback Credit Scheme, 1976.Only specified (eligible) banks are allowed to make payment of drawback in advance under this scheme. The advance is interest free although the-banks may charge reasonable amount to cover their administrative expenses.

Export bill finance: Export bills are used in terms of sale contract/
order may be discounted or purchased by the banks. It is used in indisputable international trade transactions and the proper limit has to be sanctioned to the exporter for purchase of export bill facility.

Export Documentation Export documents have to be prepared for various purposes: a) Declaration of exports as per exchange control regulation of the country. b) Transportation of goods c) Customs clearance of the goods d) Other purposes

a) Declaration form y GR Form: It is known as Guaranteed Remittance form. This form has been prescribed by the RBI and FEMA to ensure that the foreign exchange receipts in respect of exports are repatriated to India. This has to be prepared in duplicate. Both the copies have to be submitted to the customs authority at the port of shipment. Customs authorities will clarify the value declared by the exporter on both the copies of GR form & will also record the assessed value. The original will be sent to RBI directly and return the duplicate copy to the importer. The duplicate copy is submitted by the exporter to the negotiation bank along with their documents after the shipment. The negotiation bank sends the duplicate copy to the RBI after the export proceeds have been realized.

SDF form: It is known as special declaration form. A document submitted to customs authorities by exporters verifying that shipping bills are accurate and complete. An exporter confirms on form SDF that the amount paid by the buyer is the same as the full export value stated on the shipping bill. Also called statutory declaration form.

PP form: It is known as Post Parcel form. This form is also in duplicate and should be used when exports are made to any country by post parcel.

SOFTEX form: This form is used when computer software is being exported in non-physical form. This form has to be send in triplicate.

b) Transportation Documents: In international trade the goods move from the warehouse of the exporter to the warehouse of the importer. The goods may move by land, water or air or a combination of one or more of these modes. In international trade such transport documents are more in number and it is very important to know significance of each type of document and its nomenclature etc. one of the important aspects to be remembered with regard to any transport document is that it must show the name of the carrier. y Bill of Lading: It is a document wherein the shipping company gives its official receipt for the goods shipped in its vessel and at the same time contracts to carry them to the port of destination. Bill of Lading serves three main purposes 1) As a document of title to the goods. 2) As a receipt from the shipping company. 3) As a contract for the shipping of goods. A unique feature of the Bill of Lading is that it belongs to the restricted class of documents which possess some of the qualities of a negotiable instrument. Hence it is called as Quasi Negotiable.

Mate Receipt: A mate receipt is a receipt by the commanding officer of the ship when the cargo is loaded on the ship. It contains information about the name of the vessel, date of shipment, description of the packages, shipping marks, condition of the cargo at the time of receipt on board the ship, etc.

c) Combined Transport Document: This document is issued when the movements of goods involve more than one mode of transport. Hence this is called as intermobile transport document or combined transport document. In simple words it is defined as a document evidencing contract for performance and procurement of performance of combined transport. Thus in multimodal transport document the carriers take the liability for safe conduct of transport of goods by various modes of transport from the place of receipt of goods to the place of delivery. In most receipts it has the characteristics of a Bill of Lading. It is a document evidencing receipt of goods and not shipment on board. It is also a negotiable document and issued in sets. Documents for custom clearance of goods  Shipping Bill: The shipping bill is the main document on the basis of which the customs permission for export is given. The shipping bill contains particulars of goods exported, the name of the vessel, the port at which goods are to be discharged, description of goods, quantity, total weights, exported name and address etc. There are three types of shipping bill 1) shipping bill for free goods i.e goods for which there is no export duty. 2) Dutiable shipping bill i.e for the goods where there is export duty. 3) Duty drawback shipping bill i.e for the goods for claiming the duty drawback against goods exported.

 Commercial invoice: An invoice is the sales bill for merchandise and contains particulars of goods such as price, quantity, total value, terms of sale, name and address of the importer, destination, etc.

 Customs invoice: Customs invoice is generally required by countries like USA, CANADA, etc. This invoice is to be drawn in specific form to be supplied by the consular office of the importers country. This facilitates entry of merchandise into importers country at preferential tariff rates etc.

 Bill of Exchange : It is the most popular method of payment in foreign trade transaction. It is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum of money, to or to the order of a specific person, or bearer.

 Packing List: As the name indicates, it is a document which shows the nature and number of packages with distinctive number of marks. This is generally needed by the importer where he is importing different types or sizes or merchandise so that he may identify the nature of goods in each package. This may also be used when an importer is importing goods for ultimate direct distribution to various suppliers etc. It is also used by customs for checking the goods on random basis or otherwise. Thus packing list is mainly to facilitate easy identification of goods in each package by the importer or customs etc.

 Certificate of inspection: As the name indicates, it is a document certifying having inspected the goods. This certificate is generally desired by the importer so that he can be sure that the right type of goods ordered are being send by the exporter. In India certain goods statutorily subjected to quality control and pre-shipment inspection. For this purpose the agency called Export inspection Council was created. EIC in turn has nominated certain agencies to issue the inspection certificate in respect of certain types of goods. Sometimes, the importer may also nominate a person to issue such a certificate.

 Weight Note: It is a document certifying the weight of the goods. Generally it is given by the exporter which may at times be countersigned by an independent agency. Generally it gives the weight of each article or bunch of articles. It may also give the net weight as well as the gross weight. This certificate is generally required in case of bulk goods like iron ore, food items, etc. There can be requirements in a Letter of Credit for submission of a combined packing list cum weight certificate.

 Certificate of origin: The certificate of origin indicates the country where the goods were originally produced/manufactured. Generally in a certificate of origin of goods by manufacturer/exporter on the basis of which an independent agency like Chamber of Commerce, Export Promotion Council, Trade Association or any other body which is authorized in this behalf issues a certificate of origin of goods. This document may form part of the invoice itself or may be a separate document. In many of the countries, permission to import is refused unless a certificate of origin is produced. Further, this is also used to determine the concessional tariff rates applicable to the goods.

Various types of letter of credit

1. Irrevocable credit: It is a definite undertaking of the issuing bank and cannot be amended or cancelled without the agreement of the issuing bank, the confirming bank and the beneficiary.

2. Payment credit: It is sight credit, which will be paid at sight basis against presentation of requisite documents to the designated paying bank. In a payment credit, beneficiary may or may not be called upon to draw a draft. In many countries, because of stamp duties even on sight drafts, it has become increasingly customary not to call for drafts under credits available by sight payment. Further credit issuing bank will provide reimbursement instructions in the credit itself and the negotiating bank may claim reimbursement simultaneously while forwarding the documents to the issuing bank.

3. Deferred payment credit: It is a usance credit where payment will be made by designated bank on respective due dates, determined in accordance with stipulations of the credit without the drawing of drafts. In a way it is an extended payment credit. Under deferred payment credit, no draft will be called upon to be drawn, but it must specify the maturity at which payment is to made and how such maturity is to be determined.

4. Acceptance credit: It is similar to deferred payment credit except for the fact that in this credit drawing of a usance draft is a must. Under this credit, drafts must be drawn on the specified bank for specified tenor, and the designated bank will accept the draft and honour the same, by making payment on the due dates.

5. Negotiation credit: It can be a sight credit or a usance credit. Draft is usually drawn in a negotiation credit. The draft can be drawn as per credit terms. In a negotiation credit the nomination can be restricted to a specific bank or it may allow free negotiation in which case it is

called as Freely Negotiable Credit whereby any bank who is willing to negotiate can do so. Under a negotiation credit if the bank nominated as a negotiating bank refuses to negotiate, then the responsibility of a issuing bank would be to pay as per of that credit. However, if the draft is drawn at a tenor the issuing bank can pay less discount. In other words in all circumstances under a negotiation credit, responsibility of the issuing bank is to pay and it cannot say that it is of the negotiating bank.

6. Confirmed credit: It is a credit to which another bank has added its confirmation or guarantee. This is to say in a confirmed credit, the beneficiary will have a firm undertaking of not only the bank issuing the credit, but also of another bank. Thus there is double under taking in such credit and it is more favorable to beneficiary. The bank which adds its confirmation is called as confirming bank and it becomes a party to the contract of credit. Generally the confirmation to a credit is desired by beneficiary from a bank known to him preferably the one located in his country so that his risk become localized and he can deal easily with a local bank rather than deal with a bank abroad which has issued the credit. But this type of credit a bit costlier to the parties concerned, since there would be a charges of confirming bank. Credit will be confirmed by another bank only when it is advised to do so by the issuing bank. When a confirming bank effects payment to the beneficiary, the payment made by them will always be without recourse.

7. Sight credit: It states that the payment will be made by the bank at sight, on demand or on presentation. Such credit is called sight credit. But it is not necessary that drawing of a draft is always needed. That is, in case of sight payment credit, payment can be made only on presentation of specified documents. On the other hand, in sight negotiation credit, the draft must be drawn.

8. Usance credit: Usance credit calls for drawing of drafts at a stated usance period requiring acceptance and payment by drawee at the end of such usance period. This type of credit is also referred as Term Credit. Examples of this this type is acceptance credits and usance negotiation credits.

9. Restricted credit: It means the credit issuing bank restricts negotiation of documents under this credit to a particular nominated bank. Beneficiary will be advised to negotiate the documents through this bank with whom credit is restricted. In this connection it is pertinent to note that failure of the beneficiary to seek and to secure negotiation from the nominated bank under a documentary credit which allows negotiation, does not affect the undertaking of the issuing bank or the confirming bank, nor does it constitute non-compliance with the documentary credit terms provided that complying documents are presented by the beneficiary within the validity of the documentary credit.

10.

Fixed credit: It is available for fix amount and period. In this type of credit, the credit gets exhausted, once it is utilized for the stipulated amounts or after the stated validity date.

11.

Revolving credit: It is one where, under the terms and conditions of the credit, the amount is revived or reinstated without requiring specific amendment to the credit. The amount under the credit can revolve in relation to time or value. The basic principle of revolving credit is that after drawing is made the credit reverts to its original amount for reuse by beneficiary. There are two types of revolving credit. In the first type of revolving credit, credit gets reinstated immediately after a drawing is made. In the second type of revolving credit, the credit reverts to original amount only after it is confirmed by the issuing bank. Bankers should remember that revolving credit has some inherent drawbacks for the reason that they would not know how much they are commiting themselves under such credits and may lose control over the applicant and may be lending name and money for an indefinite amount and period. However they may be issued only where necessary with explicit stipulations on the ceiling for aggregate drawings, total period for which the credit will be available, etc.

12.

Installment credit: It calls for full value of goods to be shipped but stipulates that the shipments be made in specific quantities at stated period or interval. Such credits are termed as installment credit. Since, this credit is for shipment in specifically stated installment, it is called as installment credit. This credit differs from simple credit which may allow part shipments in the same sense that the part shipments under installment credit are made in specific quantities, and at specified intervals, whereas in case of simple credit permitting partial shipments there would be no specific stipulation with regard to quantity and time. The credit also differs from revolving credit in the sense that the amount of credit does not revert to the original sum for reuse by the beneficiary.

13.

Transit credit: In a normal credit, the credit issuing bank would be from the country of the buyer and the credit will be advised to the beneficiary in another country through a local bank. But in transit credit the services of a bank in a third country would be utilized. This generally happens when an issuing bank has no correspondent relation with any bank in the beneficiary country. This type of credit will also be issued by small countries whose credit may not be rapidly acceptable in other country. In such cases the bank may request a bank in a third country to issue the credit on its behalf.

14.

Reimbursement credit: Generally credits issued are denominated in the currency of either the applicants country or the beneficiarys country. But when a credit is issued in a currency of a third country, it is referred to as Reimbursement credit. This is so called because under such credit, reimbursement comes through the bank of a third country. Sometimes a credit whereby a paying bank is reimbursed in a manner other than by debit to vostro account of the issuing bank or by credit to nostro account of the paying bank held with the issuing bank is also referred to as reimbursement credit. But they are not considered as pure reimbursement credit.

15.

Transferable credit: As the name indicates, it is a credit which can be transferred by the original beneficiary in favour of a second beneficiary or several second beneficiaries. Such credit can be transferred only once and subject only to the original terms and condition of the credit excepting the amount of credit, unit prices, percentage of insurance terms, period of validity and shipment. Further the first beneficiary can also substitute his name for that of the applicant. The purpose of these credits is that the first beneficiary who is a middleman can earn his commission by substituting his invoices, etc. the first beneficiary can hide the name of the actual supplier to the buyer and vice versa.

16.

Red clause credit: This anticipatory credit contains a clause providing for payment in advance for purchasing raw materials/ processing and/ or packing the goods.

17.

Green clause credit: It is an extended version of red clause credit in the sense that it not only provides for advance towards purchase, processing and packing, but also for warehousing and insurance charges at port when the goods are stored pending availability of ship/ shipping space. Generally money under this credit is advanced after the goods are put in bonded warehouse etc. upto a period ship or shipping pace is available. In such cases, warehouse warrants are given security.

18.

Standby letter of credit: As the very name suggest, it is not an ordinary letter of credit but it is sort of standby or back-up credit. These credits are very much in use in certain countries like USA. These credits are generally used as substitute for performance guarantee or for security repayment of loans. The documents generally called for under such credit are a simple statement of claim or proof of delivery of goods or certificate of non-performance. This type of letter of credit is issued mostly by banks in countries where, by law there are precluded from issuing guarantees. Even through standby credit is mere substitutes for guarantee it has developed as an all purpose financial support instrument embracing wider range of uses than the normal demand guarantee and is issued to cover situations of non-performance. No transport document is called for under this credit.

Data analysis & interpretation

Findings

Bibliography Books of reference: 1. Export marketing 2. Export (do it yourself) 3. Export-Import procedure and documentation. By N.G.Kale By M.Ahmed By Michael Vaz By M.I.Mahajan

Annexure