Documentation

lnuLx
SL8lAL
nuM8L8 CCn1Ln1 ACL nuM8L8
1 ln18CuuC1lCn 6
2 PCW 1C SL1 u An LxC81 C8CAnlSA1lCn 8
3 PCW CnL 8LClnS 1C uC LxC81 14
4 LxC81 SALLS CCn18AC1 1L8MS CCnCl1lCnS 17
3 1L8MS Cl SPlMLn1 lnCC1L8MS 20
6 8CCLSSlnC An LxC81 C8uL8 27
7 llnAnClAL 8lSk lnvCLvLu ln lC8LlCn 18AuL 28
8 LxC81 uCCuMLn1S 29
9 CC18Cl 33
10 CuALl1? CCn18CL 8LSPlMLn1 lnSLC1lCn 37
11 SPllnC AnC CuS1CMS lC8MALl1lLS 60
12 SALLS 1AxLS LxLM1lCn 8CCLuu8L 66
13 ML1PCuS Cl 8LCLlvlnC A?MLn1S ACAlnS1 LxC81S 68
14 1PL LL11L8 Cl C8Lul1 71
13 8LA8A1lCn Anu Su8MlSSlCn Cl uCCuMLn1S lC8 8Ank nLCC1lA1lCnC8 u8CPASL 88
16 SPlMLn1 1P8CuCP CCu8lL8S 91
17 CuS1CM 8CCLuu8L lC8 LxC81 unuL8 Lul S?S1LM 92
18 1PL LCCC CCvL8 112

ln18CuuC1lCn
lndla has a mlsslon Lo capLure 2 of Lhe global share of Lrade by 2010 up from Lhe presenL level of less
Lhan 1 LxporL ls one of Lhe lucraLlve buslness acLlvlLles ln lndla 1he governmenL also provldes varlous
promoLlonal schemes Lo Lhe exporLers for earnlng valuable forelgn exchange for Lhe counLry and for
meeLlng Lhelr requlremenLs for lmporLlng modern Lechnology and essenLlal lnpuLs 8esldes Lhe lncome
from exporL buslness ls also exempLed Lo Lhe speclfled exLenL under Lhe lncome 1ax AcL 1961 8efund
of CenLral Lxclse and CusLom uuLy on exporL ls also made under Lhe uuLy urawback Scheme and oLher
exporL promoLlon schemes of Lhe CovernmenL
LxporLs can be of goods or servlces whlch can be moved physlcally from one counLry Lo anoLher or can
be rendered
hyslcal LxporLs lf Lhe goods physlcally go ouL of Lhe counLry or servlces are rendered ouLslde Lhe
counLry Lhen lL ls called as physlcal exporL 1he lorelgn 1rade deflnes exporLs as Laklng ouL of lndla any
goods by land sea alr AlLhough Lhe acL does noL Lerm Lhem as hyslcal LxporLs" we have Lo puL
phrase Lo dlsLlngulsh lL from ueemed LxporLs" whlch ls sales ln lndla buL consldered as exporLs for
llmlLed purpose
1?LS Cl LxC81L8S
LxporLers can be baslcally classlfled lnLo Lwo groups
1 ManufacLurer LxporLer As Lhe exporLer has Lhe faclllLy Lo manufacLurer Lhe producL he lnLends Lo
exporL and hence he exporLs Lhe producLs manufacLured by hlm
2 MerchanL LxporLer An exporLer who does noL have Lhe faclllLy Lo manufacLure an lLem 8uL he
procures Lhe same from oLher manufacLurers or from Lhe markeL and exporLs Lhe same
An exporLer can be boLh a manufacLurer exporLer as well as a merchanL exporLer he can exporL producL
manufacLured by hlm or he can exporL lLems boughL from Lhe markeL
Cnce lL ls declded Lo exporL lL ls mandaLory on your parL Lo follow cerLaln procedures rules and
regulaLlons as prescrlbed by varlous regulaLory auLhorlLles such as uCl1 88l and CusLoms 1hese
procedures rules and regulaLlons are lald down ln Lhe Lxlm ollcy 200409 Lxchange ConLrol Manual
CusLoms AcL eLc Accordlngly LxporL documenLs are requlred Lo be prepared keeplng ln vlew of Lhe
requlremenL of Lhe forelgn buyers and our regulaLory auLhorlLles

PCW 1C SL1 u An LxC81 C8CAnlSA1lCn
1he proper selecLlon of organlzaLlon depends upon
1 AblllLy Lo ralse flnance
2 CapaclLy Lo bear Lhe rlsk
3 ueslre Lo exerclse conLrol over Lhe buslness
4 naLure of regulaLory framework appllcable Lo anyone
Cn close evaluaLlon of once capaclLy wlLh regard Lo above four varlables exporL organlzaLlon cam ls seL
up as proprleLorshlp buslness parLnershlp flrm prlvaLe llmlLed company or publlc llmlLed company
CPCCSlnC A8C8lA1L MCuL Cl CL8A1lCnS
?ou can choose any of Lhe followlng modes of operaLlons
1 MerchanL LxporLer le buylng Lhe goods from Lhe markeL or from Lhe manufacLurer and Lhen selllng lL
Lo forelgn buyers
2 ManufacLurer LxporLer le manufacLurlng Lhe goods yourself for exporL
3 Sales AgenL / Commlsslon AgenL / lndenLlng AgenL le acLlng on behalf of Lhe seller and charglng Lhe
Commlsslon
4 8uylng AgenL le acLlng on behalf of Lhe buyer and charglng Commlsslon
3 Servlce provlder le provldlng servlce from lndla Lo anoLher counLry
nAMlnC 1PL 8uSlnLSS
WhaLever form of buslness organlzaLlon has been flnally declded namlng Lhe buslness ls an essenLlal
Lask for every exporLer 1he name and sLyle should be sofL aLLracLlve shorL and meanlngful Cpen a
currenL accounL ln Lhe name of Lhe organlsaLlon ln whose name you lnLend Lo exporL lL ls advlsable Lo
open Lhe accounL wlLh a bank whlch ls auLhorlsed Lo deal ln lorelgn Lxchange

S18uC1u8L Cl An LxC81 C8CAnlSA1lCn
1 markeLlng manager for generaLlng sales
2 Commerclal manager for looklng acLlvlLles of Lhe execuLlon of Lhe orders
3 sLaff personnel for carrylng ouL Lhe dayLoday acLlvlLles namely
o reparaLlon of pre shlpmenL documenLs
o CoordlnaLlng wlLh clearlng agenLs on Lhe progress of Lhe shlpmenL Lo be made
o CoordlnaLlng wlLh Lhe ware houseC exclse deparLmenL regardlng packlng and clearance of Lhe goods
for exporL
o reparaLlon of posL shlpmenL documenLs foe banks
o lollowup wlLh Lhe bank on dlspaLch of documenLs recelpL of paymenL avallmenL of bank loans eLc
4 1o look lnLo Lhe requlremenL of llcenses clalmlng of exporL beneflLs fllllng of documenLs wlLh Lhe
CovernmenL AuLhorlLles ln ulscharge of LxporL CbllgaLlons lf any flllng of reLurns Lo Lhe varlous
CovernmenL Agencles whlch are mandaLory prepare and keep an lnformaLlon bank of varlous
LransacLlon of Lhe company Lhelr domesLlc as well as lnLernaLlonal compeLlLors
3 An offlce boy for dolng leg work
6 A clearlng and forwardlng agenL Lo handle Lhe documenLs and Lhe goods ln Lhe cusLoms premlses ln
Lhe porLs of ladlng
uependlng upon Lhe slze of Lhe buslness Lhe numbers of personnel under each caLegory may lncrease
lor example lf a company ls LransacLlng subsLanLlal volume of buslness ln more Lhan one producL 1hen
lL ls necessary Lo have markeLlng manager for each producL so LhaL Lhe person can concenLraLe on a
parLlcular Lrade Lo enhance Lhe buslness

8LClS18A1lCn Wl1P 8LClCnAL LlCLnClnC Au1PC8l1lLS C81AlnlnC lMC81L8 LxC81L8 CCuL (lLC)
nuM8L8
1he CusLoms AuLhorlLles wlll now allow Lhe exporLer Lo exporL or lmporL goods lnLo or from lndla unless
he holds a valld lLC number 8efore applylng for lLC number lL ls necessary Lo open a bank accounL ln
Lhe name of Lhe company wlLh any commerclal bank auLhorlzed Lo deal ln forelgn exchange 1he duly
slgned appllcaLlon form should be supporLed by Lhe followlng documenLs
1 8ank recelpL ( ln dupllcaLe ) / uemand urafL for paymenL of Lhe fees of 8s 1000/
2 CerLlflcaLe from Lhe banker of Lhe appllcanL flrm as per Annexure 1 Lo Lhe form glven
3 Cne copy of An number lssued by lncome 1ax AuLhorlLles duLy aLLesLed by Lhe appllcanL
4 Cne copy of assporL Slze phoLographs of Lhe appllcanL duly aLLesLed by Lhe banker Lo Lhe appllcanL
3 ueclaraLlon by Lhe appllcanL LhaL Lhe proprleLor/parLners/dlrecLors as Lhe case may be of Lhe appllcanL
company are noL assoclaLed as proprleLor/parLners/dlrecLors ln any oLher flrm whlch has been cauLlon
llsLed by Lhe 88l Where Lhe appllcanL declares LhaL Lhey are assoclaLed as proprleLor/parLners/dlrecLors
ln any oLher flrm whlch has been cauLlon llsLed by Lhe 88l Lhey wlll be alloLLed lLC no buL wlLh an
addlLlonal condlLlon LhaL Lhey can exporL only wlLh 88l's prlor approval and Lhey should approach 88l
for Lhe purpose
6 Lach lmporLer/exporLer shall be requlred Lo flle lmporLer/exporLer proflle once wlLh Lhe llcenslng
auLhorlLy shall enLer Lhe lnformaLlon furnlshed ln Appendlx 2 ln Lhelr daLabase so as Lo dlspense wlLh
changes ln Lhe lnformaLlon glven ln Appendlx2 lmporLer/exporLer shall lnLlmaLe Lhe same Lo Lhe
llcenslng auLhorlLy

ALlCA1lCn lC8 C81AlnlnC An lLC nuM8L8
lor obLalnlng lLC number apply ln Lhe prescrlbe form along wlLh Lhe documenLs llsLed above Lo 8eglonal
Llcenslng AuLhorlLy (Cfflce of Lhe 8eglonal uCl1) 1he reglsLered offlce or Lhe head offlce may apply for
alloLmenL of lLC no
Whenever Lhere ls a change ln Lhe name address or consLlLuLlon of Lhe holder of lLC no such change
should be lnLlmaLed wlLhln 30 days Lo Lhe concern auLhorlLles
lLC cerLlflcaLe wlll be lssued ln Lhe form (copy enclosed) A copy of lLC no ls also endorsed Lo Lhe
concerned banker
vALlul1?
1he lLC no alloLLed Lo a lndlvldual/flrm/company wlll be valld for all lLs branches/dlvlslons
unlLs/facLorles as lndlcaLed ln Lhe lLC no lmporL/LxporL of any commodlLy by LhaL flrm/company 1here
belng no daLe of explry Lhe lLC once alloLLed ls valld Llll lL ls revoked 8uL lf no lmporL or exporL ls
affecLed ln Lhe prevlous flnanclal year Lhe same wlll be made lnoperaLlve Powever Lhls can be made
operaLlve by a formal requesL Lo Lhe uCl1
luLn1l1? CA8u (lor conducLlng LransacLlons wlLh Lhe offlce of uCl1)
As lL ls noL always posslble for Lhe Lop man or dlrecLors promoLers of Lhe company Lo vlslL uCl1
frequenLly 1here ls a provlslon of lssuance of ldenLlLy cards Lo Lhe proprleLors/parLners/dlrecLors and
Lhelr auLhorlzed represenLaLlves An appllcaLlon of lssuance of an ldenLlLy card may be made ln Lhe form
(Appendlx3) 1he documenL/ Llcense/CerLlflcaLe/ermlsslons may be dellvered Lo Lhe ldenLlLy card
holder and offlclals of Lhe Llcenslng AuLhorlLy (uCl1)shall noL be responslble for any loss eLc ln case of
loss of an ldenLlLy card a dupllcaLe card may be lssued on Lhe basls of an ll8 affldavlL ln addlLlon Lo
obLalnlng Lhe lLC no Lhe exporLer ls also requlred Lo obLaln 8uslness ldenLlflcaLlon no(8ln) lor Lhls
exporLer ls requlred Lo conLacL uCl1 onllne on web slLe 1he llcenslng auLhorlLy lssues 8ln ln
coordlnaLlon wlLh cusLoms auLhorlLles 1hls 8ln ls requlred Lo be menLloned on Lhe shlpplng bllls aL Lhe
Llme of cusLoms clearance of Lhe exporL cargo

8CMC (8eglsLraLlonCumMembershlp CerLlflcaLe) 8LClS18A1lCn Wl1P LxC81 8CMC1lCn
CCunClLS
ln order Lo enable Lhe exporLer Lo obLaln beneflLs/concesslons under Lhe lorelgn 1rade ollcy Lhe
exporLer ls requlred Lo reglsLer hlmself wlLh an approprlaLe exporL promoLlon agency by obLalnlng
reglsLraLloncummembershlp cerLlflcaLe (8CMC) lf Lhe exporL producL ls LhaL lL ls noL covered by any
LC 8CMC ln respecL Lhereof may be lssued by llLC An appllcaLlon for reglsLraLlon should be
accompanled by a self cerLlfled copy of Lhe lmporLerLxporLer Code number lssued by Lhe reglonal
llcenslng auLhorlLy concerned and bank cerLlflcaLe ln supporL of Lhe appllcanLs flnanclal soundness 1he
8CMC shall be valld for 3 years endlng 31sL March of Lhe llcenslng year

8LClS18A1lCn Wl1P SALLS 1Ax Au1PC8l1lLS
Coods LhaL are Lo be shlpped ouL of Lhe counLry for exporL are ellglble for exempLlons from boLh Sales
1ax and CenLral Sales 1ax lor Lhls purpose exporLer should geL hlmself reglsLered wlLh Lhe Sale 1ax
AuLhorlLy of ls sLaLe afLer followlng Lhe procedures prescrlbed under Lhe Sales 1ax AcL appllcable Lo hls
sLaLe

PCW CnL 8LClnS 1C uC LxC81
8efore enLerlng lnLo Lhe venLure of exporLs one musL look for Lhe producL Lo be exporLed and Lhe
markeL where he lnLends Lo exporL

ln case of a manufacLurer obvlously he would llke Lo exporL Lhe producL he manufacLures as ls or wlLh
posslble modlflcaLlon as may be requlred by Lhe markeL Powever ln case of a merchanL exporLer or a
Lrader one has Lo ldenLlLy Lhe producL Lo exporL lf Lhe exporLer ls already ln Lhe Lrade ln Lhe domesLlc
markeL and ls famlllar wlLh Lhe producL lL would be an advanLage Lo exporL Lhe sald producL of whlch he
has reasonable knowledge

8efore selecLlng a producL one musL slmulLaneously made a sLudy and flnd ouL Lhe prospecLlve markeL
lor flndlng ouL Lhe markeL for Lhe selecLed producL Lhe followlng meLhods wlll help
- CeL sLaLlsLlcal lnformaLlon as Lo lmporLs of Lhe producL by varlous counLrles and Lhelr growLh
prospecLs ln Lhe respecLlve counLrles
- Approach Lhe chamber of commerce for Lhelr guldance Lo flnd ouL Lhe markeL
- Approach Lhe LxporL romoLlon Councll deallng ln Lhe producL of selecLlon Lo geL more lnformaLlon
1he rellmlnary
Cnce you are ready wlLh Lhe producL you wlsh Lo exporL and have found Lhe markeL for Lhe same you
are ready Lo proceed furLher lollowlng sequences can be followed
1 Any one who wlshes Lo exporL musL flrsL of all geL an lmporLer LxporLer Code number (lL Code)1hls
can be obLalned by maklng a formal appllcaLlon Lo Lhe offlce of Lhe 8eglonal ulrecLoraLe Ceneral of
lorelgn 1rade (uCl1)
- CeL yourself reglsLered wlLh Lhe relaLed LxporL romoLlon Councll and become a member Also
arrange Lo obLaln 8eglsLraLlonCumMembershlp CerLlflcaLe (8CMC) from Lhe councll 1hls has Lwln
ob[ecLlves
o under Lhe lorelgn 1rade ollcy lL ls mandaLory LhaL an exporLer geLs hlm reglsLered wlLh Lhe LxporL
romoLlon Councll Lo avall of varlous exporL faclllLles
o 8elng a member you wlll have access Lo all Lhe lnformaLlon relaLlng Lo Lhe producL LhaL could be made
avallable by Lhe councll
o Many forelgn buyers send Lhelr enqulrles for Lhe lmporLs Lo Lhe LxporL romoLlon Councll Pence you
wlll have few cusLomers lnLeresLed ln your producL
2 lf you are a manufacLurer flnd ouL Lhe provlslons under Lhe LxlM ollcy of geLLlng Lhe raw maLerlals
duLy free
3 CeL famlllar wlLh Lhe exclse formallLles as goods meanL for exporL can be cleared wlLhouL paymenL of
C Lxclse duLy on Lhe flnlshed producL sub[ecL Lo compllance of cerLaln formallLles
4 undersLand Lhe local governmenL regulaLlons ln relaLlons Lo Lhe exporL of Lhe producL
3 CeL lnformaLlon of Lhe governmenL's regulaLlons of Lhe lmporLlng counLry as Lo resLrlcLlons on Lhe
quanLlLy producL speclflcaLlon packlng regulaLlons cusLoms regulaLlons requlremenL of speclflc
documenLs/lnformaLlon eLc
6 AvallablllLy of vessels/Alrllnes Lhe LransporL charges frequency of operaLlon eLc
7 1o look for a CusLom Pouse AgenL (CPA) (also know as frelghL forwarders or clearlng agenLs) for
handllng Lhe documenLs/cargo ln Lhe cusLoms
8 lf Lhe producL ls covered under any quoLa regulaLlon flnd ouL Lhe agency/councll who ls handllng Lhe
quoLa dlsLrlbuLlon for Lhe producL and Lhe avallablllLy of quoLa for exporLs

llnulnC A CuS1CMS
Cnce you have selecLed Lhe markeL Lhe nexL sLep ls Lo flnd a prospecLlve cusLomer 1hls you can geL
1 lrom Lhe dlrecLory of lmporLers of Lhe counLry you lnLend Lo exporL Lo
2 8y wrlLlng Lo Lhe Lmbassy of lndla ln LhaL counLry for asslsLance
3 8y wrlLlng Lo Lhe chamber of commerce of LhaL counLry
4 8y means of parLlclpaLlon ln a lalr/LxhlblLlon abroad elLher dlrecLly or Lhrough Lhe LxporL romoLlon
Councll
3 8y parLlclpaLlng ln lnLernaLlonal falr lf organlzed locally
6 1hrough Lhe personal conLacLs ln LhaL counLry 8y Lhese processes one can only have Lhe llsL of
cusLomers Cne has Lo dlalogue or correspond wlLh Lhese cusLomers by sendlng samples geLLlng
feedback from Lhe cusLomers eLc Lo ulLlmaLely selecL Lhe cusLomer wlLh whom Lo deal wlLh lL ls
necessary Lo know Lhe flnanclal sLandlng of Lhe company whlch can be obLalned Lhrough Lhe bank
channel or Lhrough Lhe offlce of LCCC

nLCC1lA1lnC CCn18AC1
Cnce Lhe prospecLlve cusLomer ls found Lhe buslness deal has Lo be concluded 1he followlng aspecLs
may be consldered before enLerlng lnLo a flnal conLracL wlLh Lhe buyer
1 CredlL WorLhlness of Lhe CusLomer
2 AvallablllLy of Lhe SLeamer/Alrllnes and Lhe frequency
3 1he frelghL charges
4 1he full producL speclflcaLlon
3 1he quanLlLy rlce
6 1erms of aymenL
7 1ype of packlng and marklngs on Lhe packages
8 Mode of shlpmenL ShlpmenL schedule
9 1olerance of quanLlLy Lo be shlpped
10 uocumenLaLlon requlremenL for Lhe cusLomer
11 uocumenLaLlon requlremenL of Lhe governmenL of lmporLlng counLry
12 Compllance of Lhe local governmenLal rules and regulaLlons
8efore enLerlng lnLo conLracL one should Lake noLe of Lhe above facLors Whlle Lhese are lndlcaLlve Lhe
requlremenLs wlll vary from counLry Lo counLry producL Lo producL and buyer Lo buyer

LxC81 SALLS CCn18AC1 1L8MS CCnul1lCnS
very ofLen exporLers do noL enLer lnLo any formal conLracL and flnallze Lhe Lrade deal Lhrough Lhe
exchange of leLLers cable Lelex eLc lL ls however expedlenL LhaL Lhe parLles (exporLers lmporLers)
lncorporaLe all lmporLanL Lerms condlLlons of Lhelr Lrade deal ln a separaLe documenL or conLracL LhaL
wlll avold dlspuLes arlslng ouL of uncerLalnLy or amblgulLy LxporL conLracL may be senL ln dupllcaLe
along wlLh Lhe roforma lnvolce Lo Lhe overseas buyer
nA1u8L Cl ln1L8nA1lCnAL 18AuL CCn18AC1S
1here are cerLaln pecullar characLerlsLlcs of lnLernaLlonal Lrade conLracL whlch are noL presenL ln Lhose
for sales of goods ln Lhe domesLlc markeL
Whereas Lhe parLles Lo a domesLlc Lrace conLracL normally needs only agree on Lhe elemenLs whlch are
necessary for Lhelr parLlcular Lrade LransacLlons llke prlce descrlpLlon quallLy and quanLlLy of goods
dellvery Lerms eLc Lhe slLuaLlon wlll be qulLe dlfferenL when Lhe buyer and Lhe seller Lo sale/purchase
conLracL belong Lo dlfferenL counLrles 1he parLles Lo all lnLernaLlonal Lrade conLracLs provlde all Lhelr
relaLlve rlghLs and obllgaLlons ln several ways
lor example Lhey may agree Lo adopL elLher Lhe Law of Lhe counLry of Lhe buyer or LhaL of Lhe seller
1he Lraders are normally relucLanL Lo leave Lhe deLermlnaLlon of Lhe rlghLs and obllgaLlons by
lmpllcaLlons under Lhe legal sysLem of elLher's counLry 1hey prefer Lo make expllclL provlslons regardlng
Lhe rlghLs and obllgaLlons by lncludlng a seL of deLalled and preclse Lerms and condlLlons ln Lhelr
conLracL
LxC81 Cl SAMLLSCll1S
LxporLs of bonaflde Lrade and Lechnlcal samples of freely exporLable lLems shall be allowed wlLhouL any
llmlL Coods lncludlng edlble lLems of value noL exceedlng 8s 100000/ ln a llcenslng year may be
exporLed as a glfL Powever lLems menLloned as resLrlcLed for exporLs ln l1C (PS) shall noL be exporLed
as a glfL wlLhouL a llcence/cerLlflcaLe/permlsslon excepL ln Lhe case of edlble lLems

S1AnuA8u CCn18AC1 lC8MS
noLwlLhsLandlng Lhe efforLs made by varlous naLlonal/lnLernaLlonal organlzaLlons llke Lhe unlLed
naLlons Commlsslon on Lhe lnLernaLlonal 1rade Law Lhere ls sLlll no perfecLlon or a devlce whlch would
glve Lhe parLles an accuraLe and compleLe ldea of each oLhers undersLandlng of varlous Lrade Lerms Lhe
commerclal pracLlces and Lhe rlghLs and Lhe obllgaLlons vlsvls each oLher so LhaL Lhe
mlsundersLandlngs are pracLlcally ellmlnaLed
neverLheless Lhe lndlan Councll of ArblLraLlon publlshed ln 1966 a bookleL on SLandard ConLracL lorms
and Model ArblLraLlon Clause for use ln lorelgn 1rade ConLracLs" lL was revlsed and reprlnLed ln 1969
and 1977 lL can be referred Lo by exporLer for varlous clause Lo be lncorporaLed ln Lhe LxporL ConLracL
Ln1L8lnC ln1C An LxC81 CCn18AC1
ln order Lo avold dlspuLes lL ls necessary Lo enLer lnLo an exporL conLracL wlLh Lhe overseas buyer lor
Lhls purpose exporL conLracL should be carefully drafLed lncorporaLlng comprehenslve buL ln preclse
Lerms all relevanL and lmporLanL condlLlons of Lhe Lrade deal
1here should noL be any amblgulLy regardlng Lhe exacL speclflcaLlons of goods and Lerms of sale
lncludlng exporL prlce mode of paymenL sLorage and dlsLrlbuLlon meLhods Lype of packaglng porL of
shlpmenL dellvery schedule eLc 1he dlfferenL aspecLs of an exporL conLracL are enumeraLed as under
- roducL SLandards and SpeclflcaLlons
- CuanLlLy
- lnspecLlon
- 1oLal value of ConLracL
- 1erms of uellvery
- 1axes uuLles and Charges
- erlod of uellvery/ShlpmenL
- acklng Labellng and Marklng
- 1erms of aymenL AmounL/Mode Currency
- ulscounLs and Commlsslons
- Llcenses and ermlLs
- lnsurance
- uocumenLary 8equlremenLs
- CuaranLee
- lorce Ma[eure of Lxcuse for nonperformance of conLracL
- 8emedles
- ArblLraLlon clause
lL wlll noL be ouL of place Lo menLlon here Lhe lmporLance of arblLraLlon clause ln an exporL conLracL
CourL proceedlngs do noL offer a saLlsfacLory meLhod for seLLlemenL of commerclal dlspuLes as Lhey
lnvolve lnevlLable delays cosLs and LechnlcallLles Cn Lhe oLher hand arblLraLlon provldes an economlc
expedlLlous and lnformal remedy for seLLlemenL of commerclal dlspuLes ArblLraLlon proceedlngs are
conducLed ln prlvacy and Lhe awards are kepL confldenLlal 1he ArblLraLor ls usually an experL ln Lhe
sub[ecL maLLer of Lhe dlspuLe 1he daLes for arblLraLlon meeLlngs are flxed wlLh Lhe convenlence of all
concerned 1hus arblLraLlon ls Lhe mosL sulLable way for seLLlemenLs of commerclal dlspuLes and lL may
lnvarlably be used by buslnessmen ln Lhelr commerclal deallngs

A88l18A1lCn
ArblLraLlon clause recommended by Lhe lndlan Councll of ArblLraLlon"All dlspuLes or dlfferences
whaLsoever arlslng beLween Lhe parLles ouL of / relaLlng Lo Lhe meanlng consLrucLlon and operaLlon or
effecL of Lhls conLracL or Lhe breach Lhereof shall be seLLled by arblLraLlon ln accordance wlLh Lhe rules
of ArblLraLlon of Lhe lndlan Councll of ArblLraLlon and Lhe award made ln pursuance Lhereof shall be
blndlng on Lhe parLles" (or any oLher arblLraLlon clause LhaL may be agreed upon beLween Lhe parLles)

1L8MS Cl SPlMLn1S lnCC1L8MS
1he lnCC1L8MS (lnLernaLlonal Commerclal 1erms) ls a unlversally recognlzed seL of deflnlLlon of
lnLernaLlonal Lrade Lerms such as lC8 Cl8 Cll developed by Lhe lnLernaLlonal Chamber of
Commerce (lCC) ln arls lrance lL deflnes Lhe Lrade conLracL responslblllLles and llablllLles beLween
buyer and seller lL ls lnvaluable and a cosLsavlng Lool 1he exporLer and Lhe lmporLer need noL undergo
a lengLhy negoLlaLlon abouL Lhe condlLlons of each LransacLlon Cnce Lhey have agreed on a commerclal
Lerms llke lC8 Lhey can sell and buy aL lC8 wlLhouL dlscusslng who wlll be responslble for Lhe frelghL
cargo lnsurance and oLher cosLs and rlsks
1he lnCC1L8MS was flrsL publlshed ln 1936 lnCC1L8MS 1936 and lL ls revlsed perlodlcally Lo keep
wlLh changes ln Lhe lnLernaLlonal Lrade needs 1he compleLe deflnlLlon of each Lerm ls avallable from
Lhe currenL publlcaLlon lnCC1L8MS 2000 under lnCC1L8MS 2000 Lhe lnLernaLlonal commerclal
Lerms are grouped lnLo L l C and u deslgnaLed by Lhe flrsL leLLer of Lhe Lerm relaLlng Lo Lhe flnal leLLer
of Lhe Lerm Lg LxWexworks comes under grouped 'L'
1he purpose of lncoLerms ls Lo provlde a seL of lnLernaLlonal rules for Lhe lnLerpreLaLlon of Lhe mosL
commonly used Lrade Lerms ln forelgn Lrade 1hus Lhe uncerLalnLles of dlfferenL lnLerpreLaLlons of such
Lerms ln dlfferenL counLrles can be avolded or aL leasL reduced Lo a conslderable degree 1he scope of
lncoLerms ls llmlLed Lo maLLers relaLlng Lo Lhe rlghLs and obllgaLlons of Lhe parLles Lo Lhe conLracL of sale
wlLh respecL Lo Lhe dellvery of goods lncoLerms deal wlLh Lhe number of ldenLlfled obllgaLlons lmposed
on Lhe parLles and Lhe dlsLrlbuLlon of rlsk beLween Lhe parLles
ln lnLernaLlonal Lrade lL would be besL for exporLers Lo refraln wherever posslble from deallng ln Lrade
Lerms LhaL would hold Lhe seller responslble for Lhe lmporL cusLoms clearance and/or paymenL of
lmporL cusLoms duLles and Laxes and/or oLher cosLs and rlsks aL Lhe buyer's end for example Lhe Lrade
Lerms uLC (uellvery Lx Cuay) and uu (uellvered uuLy ald)
CulLe ofLen Lhe charges and expenses aL Lhe buyer's end may cosL more Lo Lhe seller Lhan anLlclpaLed
1o overcome losses hlre a rellable cusLoms broker or frelghL forwarder ln Lhe lmporLlng counLry Lo
handle Lhe lmporL rouLlnes
Slmllarly lL would be besL for lmporLers noL Lo deal ln LxW (Lx Works) whlch would hold Lhe buyer
responslble for Lhe exporL cusLoms clearance paymenL of exporL cusLoms charges and Laxes and oLher
cosLs and rlsks aL Lhe seller's end
MC8L CLA8lllCA1lCn Cn lnCC1L8MS
LxW +Lhe named place
Lx Works Lx means from Works means facLory mlll or warehouse whlch are Lhe seller's premlses
LxW applles Lo goods avallable only aL Lhe seller's premlses 8uyer ls responslble for loadlng Lhe goods
on Lruck or conLalner aL Lhe sellers premlses and for Lhe subsequenL cosLs and rlsks ln pracLlce lL ls noL
uncommon LhaL Lhe seller loads sLhe goods on Lruck or conLalner aL Lhe sellers pre4mlses wlLhouL
charglng loadlng fee n Lhe quoLaLlon lndlcaLe Lhe named place (sellers premlses) afLer Lhe acronym
LxW for example LxW kobe and LxW San AnLonlo
1he Lerm LxW ls commonly used beLween Lhe manufacLurer (seller) and exporLLrader(buyer) and Lhe
exporLLrader resells on oLher Lrade Lerms Lo Lhe forelgn buyers Some manufacLurers may use Lhe Lerm
Lx lacLory whlch means Lhe same as Lx Works
lCA +Lhe named polnL of deparLure
lree Carrler 1he dellvery of goods on Lruck rall car or conLalner aL Lhe speclfled polnL(depoL) of
deparLure whlch ls usually Lhe sellers premlses or a named rallroad sLaLlon or a named cargo Lermlnal
or lnLo Lhe cusLody of Lhe carrler aL sellers expense 1he polnL(depoL) aL orlgln may or may noL be a
cusLoms clearance cenLre 8uyer ls responslble for Lhe maln carrlage/frelghL cargo lnsurance and oLher
cosLs and rlsks
ln Lhe alr shlpmenL Lechnlcally speaklng goods placed ln Lhe cusLody of an alr carrler are consldered as
dellvery on board Lhe plane ln pracLlce many lmporLers and exporLers sLlll use Lhe Lerm lC8 ln Lhe alr
shlpmenL 1he Lerm lCA ls also used ln Lhe 8C/8C (roll on/roll off) servlces
ln Lhe exporL quoLaLlon lndlcaLe Lhe polnL of deparLure (loadlng) afLer Lhe acronym lCA for example
lCA Pong kong and lCA SeaLLle Some manufacLurers may use Lhe former Lerms lC1 (lree on 1rucks)
and lC8 (lree on 8all) ln selllng Lo exporLLraders
lAS +Lhe named porL of orlgln
lree Alongslde Shlp Coods are placed ln Lhe dock shed or aL Lhe slde of Lhe shlp on Lhe dock or llghLer
wlLhln reach of lLs loadlng equlpmenL so LhaL Lhey can be loaded aboard Lhe shlp aL seller's expense
8uyer ls responslble for Lhe loadlng fee maln carrlage/frelghL cargo lnsurance and oLher cosLs and rlsks
ln Lhe exporL quoLaLlon lndlcaLe Lhe porL of orlgln(loadlng)afLer Lhe acronym lAS for example lAS new
?ork and lAS 8remen 1he lAS Lerm ls popular ln Lhe breakbulk shlpmenLs and wlLh Lhe lmporLlng
counLrles uslng Lhelr own vessels
lC8 +Lhe named porL of orlgln)
lree on 8oard 1he dellvery of goods on Lhe board Lhe vessel aL Lhe named porL of orlgln (Loadlng) aL
seller's expense 8uyer ls responslble for Lhe maln carrlage/frelghL cargo lnsurance and oLher cosLs and
rlsks ln Lhe exporL quoLaLlon lndlcaLe Lhe porL of orlgln (loadlng) afLer Lhe acronym lC8 for example
lC8 vancouver and lC8 Shanghal
under Lhe rules of Lhe lnCC1L8MS 1990 Lhe Lerm lC8 ls used for ocean frelghL only Powever ln
pracLlce many lmporLers and exporLers sLlll use Lhe Lerm lC8 ln Lhe alr frelghL ln norLh Amerlca Lhe
Lerm lC8 has oLher appllcaLlons Many buyers and sellers ln Canada and Lhe uSA deallng on Lhe open
accounL and conslgnmenL basls are accusLomed Lo uslng Lhe shlpplng Lerms lC8 Crlgln and lC8
desLlnaLlon
lC8 Crlgln means Lhe buyer ls responslble for Lhe frelghL and oLher cosLs and rlsks lC8 uesLlnaLlon
means Lhe seller ls responslble for Lhe frelghL and oLher cosLs and rlsks unLll Lhe goods are dellvered Lo
Lhe buyer's premlses whlch may lnclude Lhe lmporL cusLom clearance and paymenL of lmporL cusLoms
duLles and Laxes aL Lhe buyer's counLry dependlng on Lhe agreemenL beLween Lhe buyer and seller ln
lnLernaLlonal Lrade avold uslng Lhe shlpplng Lerms lC8 Crlgln and lC8 uesLlnaLlon whlch are noL parL
of Lhe lnCC1L8MS (lnLernaLlonal Commerclal 1erms)
Cl8 +Lhe named porL of desLlnaLlon
CosL and lrelghL 1he dellvery of goods Lo Lhe named porL of desLlnaLlon (dlscharge) aL Lhe sellers
expenses 8uyer ls responslble for Lhe cargo lnsurance and oLher cosLs and rlsks 1he Lerm Cl8 was
formerly wrlLLen as Cl Many lmporLers and exporLers worldwlde sLlll use Lhe Lerm Cl
ln Lhe exporL quoLaLlon lndlcaLe Lhe porL of desLlnaLlon (dlscharge) afLer Lhe acronym Cl8 for example
Cl8 karachl and Cl8 Alexandrla under Lhe rules of Lhe lnCC1L8MS 1990 Lhe Lerm CosL and lrelghL ls
used for ocean frelghL only Powever ln pracLlce Lhe Lerm CosL and lrelghL (Cl) ls sLlll commonly used
ln Lhe alr frelghL
Cll +named porL of desLlnaLlon
CosL lnsurance and lrelghL 1he cargo lnsurance and dellvery of goods Lo Lhe named porL of desLlnaLlon
(dlscharge) aL Lhe seller's expense 8uyer ls responslble for Lhe lmporL cusLoms clearance and oLher
cosLs and rlsks
ln Lhe exporL quoLaLlon lndlcaLe Lhe porL of desLlnaLlon (dlscharge) afLer Lhe acronym Cll for example
Cll usan and Cll Slngapore under Lhe rules of Lhe lnCC1L8MS 1990 Lhe Lerm Clll ls used for ocean
frelghL only Powever ln pracLlce many lmporLers and exporLers sLlll use Lhe Lerm Cll ln Lhe alr frelghL
C1 +Lhe named place of desLlnaLlon
Carrlage ald 1o 1he dellvery of goods Lo Lhe named porL of desLlnaLlon (dlscharge) aL Lhe sellers
expenses 8uyer assumes Lhe cargo lnsurance lmporL cusLom clearance paymenL of cusLom duLles and
Laxes and oLher cosLs and rlsks ln Lhe exporL quoLaLlon lndlcaLe Lhe porL of desLlnaLlon (dlscharge)
afLer Lhe acronym C1 for example C1 Los Angeles and C1 Csaka
Cl + Lhe named place of desLlnaLlon)
Carrlage and lnsurance ald 1o 1he dellvery of goods and Lhe cargo lnsurance Lo Lhe named place of
desLlnaLlon (dlscharge) aL seller's expense 8uyer assumes Lhe lmporLer cusLoms clearance paymenL of
cusLoms duLles and Lexes and oLher cosLs and rlsks
ln Lhe exporL quoLaLlon lndlcaLe Lhe place of desLlnaLlon (dlscharge) afLer Lhe acronym Cl for example
Cl arls and Cl ALhens
uAl + Lhe names polnL aL fronLler
uellvered AL lronLler 1he dellvery of goods Lo Lhe speclfled polnL aL Lhe fronLler aL sellers expense
8uyer ls responslble for Lhe lmporL cusLom clearance paymenL of cusLom duLles and Laxes and oLher
cosLs and rlsks
ln Lhe exporL quoLaLlon lndlcaLe Lhe polnL aL fronLler (dlscharge) afLer Lhe acronym uAl for example
uAl 8uffalo and uAl Welland
uLS +named porL of desLlnaLlon
uellvered Lx Shlp 1he dellvery of goods on board Lhe vessel aL Lhe named porL of desLlnaLlon
(dlscharge) aL sellers expense 8uyer assumes Lhe unloadlng free lmporL cusLoms clearance paymenL of
cusLoms duLles and Laxes cargo lnsurance and oLher cosLs and rlsks
ln Lhe exporL quoLaLlon lndlcaLe Lhe orL of desLlnaLlon (dlscharge) afLer Lhe acronym uLS for example
uLS Pelslnkl and uLS SLockholm
uLC + Lhe named porL of desLlnaLlon
uellvered Lx Cuay 1he dellvery of goods Lo Lhe Cuay (Lhe porL) aL Lhe desLlnaLlon aL buyers expense
Seller ls responslble for Lhe lmporLer cusLoms clearance paymenL of cusLoms duLles and Laxes aL Lhe
buyers end 8uyer assumes Lhe cargo lnsurance and oLher cosLs and rlsks ln Lhe exporL quoLaLlon
lndlcaLe Lhe orL of desLlnaLlon (dlscharge) afLer Lhe acronym uLC for example uLC Llbrevllle and uLC
MapuLo
uuu + Lhe named polnL of desLlnaLlon
uellvered uuLy unpald 1he dellvery of goods and Lhe cargo lnsurance Lo Lhe flnal polnL aL desLlnaLlon
whlch ls ofLen Lhe pro[ecL slLe or buyers premlses aL sellers expense 8uyer assumes Lhe lmporL cusLoms
clearance paymenL of cusLoms duLles and Laxes 1he seller may opL noL Lo lnsure Lhe goods aL hls/her
own rlsks
ln Lhe exporL quoLaLlon lndlcaLe Lhe polnL of desLlnaLlon (dlscharge) afLer Lhe acronym uuu for example
uuu La az and uuu n'd[amena
uu + Lhe named polnL of desLlnaLlon)
uellvered uuLy ald 1he seller ls responslble for mosL of Lhe expenses whlch lnclude Lhe cargo
lnsurance lmporL cusLom clearance and paymenL of cusLom duLles and Laxes aL Lhe buyers end and
Lhe dellvery of goods Lo Lhe flnal polnL of desLlnaLlon whlch ls ofLen Lhe pro[ecL slLe or buyers premlse
1he seller may opL noL Lo lnsure Lhe goods aL hls/her own rlsk ln Lhe exporL quoLaLlon lndlcaLe Lhe
polnL of desLlnaLlon (dlscharge) afLer Lhe acronym uu for example uu 8u[umbura and uu Mbabane

L"Lerm"l"Lerm C"Lerm "u"Lerm lncoLerms 2000 llke lLs lmmedlaLe predecessor groups Lhe
Lerm ln four caLegorles denoLed by Lhe flrsL leLLer ln Lhe LhreeleLLer abbrevlaLlon
1 under Lhe L"1L8M (LxW) Lhe seller only makes Lhe goods avallable Lo Lhe buyer aL Lhe seller's own
premlses lL ls Lhe only one of LhaL caLegory
2 under Lhe l"1L8M (lCA lAS lC8) Lhe seller ls called upon Lo dellver Lhe goods Lo a carrler
appolnLed by Lhe buyer
3 under Lhe C"1L8M (Cl8 Cll C1 Cl) Lhe seller has Lo conLracL for carrlage buL wlLhouL
assumlng Lhe rlsk of loss or damage Lo Lhe goods or addlLlonal cosL due Lo evenLs occurrlng afLer
shlpmenL or dlscharge
4 under Lhe u"1L8M (uAl uLC uLS uuu uu) Lhe seller has Lo bear all cosLs and rlsks needed Lo
brlng Lhe goods Lo Lhe place of desLlnaLlon
All Lerms llsL Lhe seller's and buyer's obllgaLlons 1he respecLlve obllgaLlons of boLh parLles have been
grouped under up Lo 10 headlngs where each headlng on Lhe seller's slde mlrrors" Lhe equlvalenL
poslLlon of Lhe buyer Lxamples are uellvery 1ransfer of rlsks and ulvlslon of cosLs 1hls layouL helps Lhe
user Lo compare Lhe parLles respecLlve obllgaLlons under each lncoLerms

8CCLSSlnC An LxC81 C8uL8
?ou should noL be happy merely on recelvlng an exporL order ?ou should flrsL acknowledge Lhe exporL
order and Lhen proceed Lo examlne carefully ln respecL of
1 lLems
2 SpeclflcaLlon
3 reshlpmenL lnspecLlon
4 aymenL condlLlons
3 Speclal packaglng
6 Labellng and markeLlng requlremenLs
7 ShlpmenL and dellvery daLe
8 Marlne lnsurance
9 uocumenLaLlon requlremenL eLc
lf you are saLlsfled on Lhese aspecLs a formal conflrmaLlon should be senL Lo Lhe buyer oLherwlse
clarlflcaLlon should be soughL from Lhe buyer before conflrmlng Lhe order AfLer conflrmaLlon of Lhe
exporL order lmmedlaLe sLeps should be Laken for procuremenL/manufacLure of Lhe exporL goods ln Lhe
meanwhlle you should proceed Lo enLer lnLo a formal exporL conLracL wlLh Lhe overseas buyer
8efore accepLlng any order necessary homework should have been done as Lo avallablllLy of Lhe
producLlon capaclLy raw maLerlal eLc lL would be ln Lhe lnLeresL of Lhe exporLer Lo look lnLo enLerlng
lnLo forward conLracL Lo safeguard agalnsL exchange raLe flucLuaLlons Lnsure LhaL Lhe mode of paymenL
ls also agreed upon ln case of shlpmenL agalnsL leLLer of credlL Lhe buyer should be advlsed Lo open Lhe
credlL well ln advance before effecLlng Lhe shlpmenL

llnAnClAL 8lSkS lnvCLvLu ln lC8LlCn 18AuL
As an exporLer whlle selllng goods abroad you encounLer varlous Lypes of rlsks 1he ma[or rlsks whlch
you have Lo undergo are as follows
10 CredlL 8lsk
11 Currency 8lsk
12 Carrlage 8lsk
13 CounLry 8lsk
?ou can proLecL yourself agalnsL Lhe above rlsks by lnlLlaLlng approprlaLe sLeps
CredlL 8lsks
?ou can cover your credlL rlsk agalnsL Lhe forelgn buyer by lnslsLlng upon openlng a leLLer of credlL ln
your favour AlLernaLlvely one can avall of Lhe faclllLy offered by varlous credlL rlsk agencles A speclflc
lnsurance cover can also be obLalned from LCCC (LxporLs CredlL CuaranLee CorporaLlon) Lo cover your
counLry rlsk besldes coverlng credlL rlsk
Currency 8lsks
As regards coverlng Lhe currency rlsk due Lo Lhe exchange raLe flucLuaLlons you can requesL your
banker Lo book a forward conLracL
Carrlage 8lsk
1he carrlage rlsk can be covered by Laklng an approprlaLe general lnsurance pollcy
CounLry 8lsk
LCCC provldes cover Lo proLecL Lhe exporLer from counLry rlsks A deLalled procedure how an exporLer
can geL hlmself proLecLed agalnsL Lhe above rlsks are glven ln separaLe chapLers laLer

LxC81 uCCuMLn1S

Any exporL shlpmenL lnvolved varlous documenLs requlred by varlous auLhorlLles such as cusLoms
exclse 88l lnspecLlon and accordlng dependlng upon Lhe requlremenLs Lhere are caLegorlzed lnLo 2
caLegorles namely commerclal documenLs and regulaLory documenLs
A Commerclal uocumenLs Commerclal documenLs are requlred for effecLlng physlcal Lransfer of
goods and Lhelr LlLle from Lhe exporLer Lo Lhe lmporLer and Lhe reallsaLlon of exporL sale proceeds CuL
of Lhe 16 commerclal documenLs ln Lhe exporL documenLaLlon framework as many as 14 have been
sLandardlsed and allgned Lo one anoLher 1hese are proforma lnvolce commerclal lnvolce packlng llsL
shlpplng lnsLrucLlons lnLlmaLlon for lnspecLlon cerLlflcaLe of lnspecLlon of quallLy conLrol lnsurance
declaraLlon cerLlflcaLe of lnsurance maLes recelpL blll of ladlng or comblned LransporL documenL
appllcaLlon for cerLlflcaLe orlgln cerLlflcaLe of orlgln shlpmenL advlce and leLLer Lo Lhe bank for
collecLlon or negoLlaLlon of documenLs Powever shlpplng order and blll of exchange could noL be
broughL wlLhln Lhe fold of Lhe Allgned uocumenLaLlon SysLem
1 Commerclal lnvolce Commerclal lnvolce ls an lmporLanL and baslc exporL documenL lL ls also known
as a uocumenL of ConLenLs as lL conLalns all Lhe lnformaLlon requlred for Lhe preparaLlon of oLher
documenLs lL ls acLually a sellers blll of merchandlse lL ls prepared by Lhe exporLer afLer Lhe execuLlon
of exporL order glvlng deLalls abouL Lhe goods shlpped lL ls essenLlal LhaL Lhe lnvolce ls prepared ln Lhe
name of Lhe buyer or Lhe conslgnee menLloned ln Lhe leLLer of credlL lL ls a prlma facle evldence of Lhe
conLracL of sale or purchase and Lherefore musL be prepared sLrlcLly ln accordance wlLh Lhe conLracL of
sale
ConLenLs of Commerclal lnvolce
1 name and address of Lhe exporLer
2 name and address of Lhe conslgnee
3 name and Lhe number of vessel or lllghL
4 name of Lhe porL of loadlng
3 name of Lhe porL of dlscharge and flnal desLlnaLlon
6 lnvolce number and daLe
7 LxporLers reference number
8 8uyers reference number and daLe
9 name of Lhe counLry of orlgln of goods
10 name of Lhe counLry of flnal desLlnaLlon
11 1erms of dellvery and paymenL
12 Marks and conLalner number
13 number and packlng descrlpLlon
14 uescrlpLlon of goods glvlng deLalls of quanLlLy raLe and LoLal amounL ln Lerms of lnLernaLlonally
accepLed prlce quoLaLlon
13 SlgnaLure of Lhe exporLer wlLh daLe
Slgnlflcance of Commerclal lnvolce
1 lL ls Lhe baslc documenL useful ln preparaLlon of varlous oLher shlpplng documenLs
2 lL ls used ln varlous exporL formallLles such as quallLy and preShlpmenL lnspecLlon exclse and cusLoms
procedures eLc
3 lL ls also useful ln negoLlaLlon of documenLs for collecLlon and clalm of lncenLlves
4 lL ls useful for accounLlng purposes Lo boLh exporLers as well as lmporLers
3 lnspecLlon CerLlflcaLe 1he cerLlflcaLe ls lssued by Lhe lnspecLlon auLhorlLy such as Lhe exporL
lnspecLlon agency 1hls cerLlflcaLe sLaLes LhaL Lhe goods have been lnspecLed before shlpmenL and LhaL
Lhey conflrm Lo accepLed quallLy sLandards
6 Marlne lnsurance pollcy Coods ln LranslL are sub[ecL Lo rlsk of loss of goods arlslng due Lo flre on shlp
perlls of sea LhefL eLc marlne lnsurance proLecLs losses lncldenLal Lo voyages and ln land LransporLaLlon
Marlne lnsurance pollcy ls one of Lhe mosL lmporLanL documenL used as collaLeral securlLy because lL
proLecLs Lhe lnLeresL of all Lhose who have lnsurable lnLeresL aL Lhe Llme of loss 1he exporLer ls bound
Lo lnsure Lhe goods ln case of Cll quoLaLlon buL he can also lnsure Lhe goods ln case of lC8 conLracL aL
Lhe requesL of Lhe lmporLer buL Lhe premlum paymenL wlll be made by Lhe exporLer 1here are dlfferenL
Lypes of pollcles such as
- SLClllC CLlC? 1hls pollcy ls Laken Lo cover dlfferenL rlsks for a slngle shlpmenL lor a regular
exporLer Lhls pollcy ls noL advlsable as he wlll have Lo Lake a separaLe pollcy every Llme a shlpmenL ls
made so Lhls pollcy ls Laken when exporLs are ln frequenL
- lloaLlng ollcy 1hls ls Laken Lo cover all shlpmenLs for some monLhs 1here ls no Llme llmlL buL Lhere
ls a llmlL on Lhe value of goods and once Lhls value ls crossed by several shlpmenLs Lhen lL has Lo be
renewed
- Cpen ollcy 1hls pollcy remalns ln force unLll cancelled by elLher parLy le lnsurance company or Lhe
exporLer
- Cpen Cover ollcy 1hls pollcy ls generally lssued for 12 monLhs perlod for all shlpmenLs Lo one or
more desLlnaLlons 1he open cover may speclfy Lhe maxlmum value of conslgnmenL LhaL may be senL
per shlp and lf Lhe value exceeded Lhe lnsurance company musL be lnformed by Lhe exporLer
- lnsurance remlum ulffers upon producL Lo producL and a number of such oLher facLors such as
dlsLance of voyage Lype and condlLlon of packlng eLc remlum for alr conslgnmenLs are lowered as
compared Lo conslgnmenLs by sea
4 Consular lnvolce Consular lnvolce ls a documenL requlred malnly by Lhe LaLln Amerlcan counLrles llke
kenya uganda 1anzanla MaurlLlus new Zealand Myanmar lraq AusLralla ll[l Cyprus nlgerla Chana
Culnea Zanzlbar eLc 1hls lnvolce ls Lhe mosL lmporLanL documenL whlch needs Lo be submlLLed for
cerLlflcaLlon Lo Lhe Lmbassy of Lhe lmporLlng counLry concerned 1he maln purpose of Lhe consular
lnvolce ls Lo enable Lhe auLhorlLles of Lhe lmporLlng counLry Lo collecL accuraLe lnformaLlon abouL Lhe
volume value quallLy grade source eLc of Lhe goods lmporLed for Lhe purpose of assesslng lmporL
duLles and also for sLaLlsLlcal purposes ln order Lo obLaln consular lnvolce Lhe exporLer ls requlred Lo
submlL Lhree coples of lnvolce Lo Lhe ConsulaLe of Lhe lmporLlng counLry concerned 1he ConsulaLe of
Lhe lmporLlng counLry cerLlfles Lhem ln reLurn for fees Cne copy of Lhe lnvolce ls glven Lo Lhe exporLer
whlle Lhe oLher Lwo are dlspaLched Lo Lhe cusLoms offlce of Lhe lmporLers counLry for Lhe calculaLlon of
Lhe lmporL duLy 1he exporLer negoLlaLes a copy of Lhe consular lnvolce Lo Lhe lmporLer along wlLh oLher
shlpplng documenLs
Slgnlflcance of Consular lnvolce for Lhe LxporLer
1 lL faclllLaLes qulck clearance of goods from Lhe cusLoms ln exporLers as well as lmporLers counLry
2 CerLlflcaLlon of goods by Lhe ConsulaLe of Lhe lmporLlng counLry lndlcarer LhaL Lhe lmporLer has
fulfllled all procedural and llcenslng formallLles for lmporL of goods
3 lL also assures Lhe exporLer of Lhe paymenL from Lhe lmporLlng counLry
Slgnlflcance of Consular lnvolce for Lhe lmporLer
1 lL faclllLaLes qulck clearance of goods from Lhe cusLoms aL Lhe porL desLlnaLlon and Lherefore Lhe
lmporLer geLs qulck dellvery of goods
2 1he lmporLer ls assured LhaL Lhe goods lmporLed are noL banned for lmporLed ln hls counLry
Slgnlflcance of Consular lnvolce for Lhe CusLoms Cfflce
1 lL makes Lhe Lask of Lhe cusLoms auLhorlLles easy
2 lL faclllLaLes qulck calculaLlon of duLles as Lhe value of goods as deLermlne by Lhe ConsulaLe ls
consldered for Lhe purpose
3 CerLlflcaLe of Crlgln 1he lmporLers ln several counLrles requlre a cerLlflcaLe of orlgln wlLhouL whlch
clearance Lo lmporL ls refused 1he cerLlflcaLe of orlgln sLaLes LhaL Lhe goods exporLed are orlglnally
manufacLured ln Lhe counLry whose name ls menLloned ln Lhe cerLlflcaLe CerLlflcaLe of orlgln ls requlred
when
1 1he goods produced ln a parLlcular counLry are sub[ecL Lo' preferenLlal Larlff raLes ln Lhe forelgn
markeL aL Lhe Llme lmporLaLlon
2 1he goods produced ln a parLlcular counLry are banned for lmporL ln Lhe forelgn markeL
1ypes of Lhe CerLlflcaLe of Crlgln
(a) nonpreferenLlal CerLlflcaLe of Crlgln nonpreferenLlal cerLlflcaLe of orlgln ls requlred ln general by
all counLrles for clearance of goods by Lhe lmporLer on whlch no preferenLlal Larlff ls glven lL ls lssued
by
1 1he auLhorlsed Chamber of Commerce of Lhe exporLlng counLry
2 1rade AssoclaLlon Cf Lhe exporLlng counLry
(b) CerLlflcaLe of Crlgln for avalllng Concesslons under CS CerLlflcaLe of orlgln requlred for avalllng of
concesslons under Cenerallsed SysLem of references (CS) exLended by cerLaln counLrles such as
lrance Cermany lLaly 8LnLLux counLrles uk AusLralla !apan uSA eLc 1hls cerLlflcaLe can be
obLalned from speclallsed agencles namely
1 LxporL lnspecLlon Agencles
2 !L ulrecLor Ceneral of lorelgn 1rade
3 CommodlLy 8oards and Lhelr reglonal offlces
4 uevelopmenL Commlssloner PandlcrafLs
3 1exLlle CommlLLees for LexLlle producLs
6 Marlne roducLs LxporL uevelopmenL AuLhorlLy for marlne producLs
7 uevelopmenL Commlssloners of LZs
(c) CerLlflcaLe for avalllng Concesslons under CommonwealLh references (CW) CerLlflcaLe of orlgln for
Lhe purpose of CommonwealLh reference ls also known as Comblned CerLlflcaLe of Crlgln and value lL
ls requlred by Lwo member counLrles le Canada and new Zealand of Lhe CommonwealLh lor
concesslon under CommonwealLh preferences Lhe cerLlflcaLes or orlgln have Lo be submlLLed ln speclal
forms obLalnable from Lhe Plgh Commlsslon of Lhe counLry concerned

(d) CerLlflcaLe for avalllng Concesslons under oLher SysLems of reference CerLlflcaLe of orlgln ls also
requlred for Larlff concesslons under Lhe Clobal SysLem of 1rade references (CS1) 8angkok
AgreemenL(8A) and SAA8C referenLlal 1radlng ArrangemenL (SA1A) under whlch lndla granLs and
recelves Larlff concesslons Cn lmporLs and exporLs LxporL lnspecLlon Councll (LlC) ls Lhe sole auLhorlLy
Lo prlnL blank CerLlflcaLes of Crlgln under 8A SAA8C and SA1A whlch can be lssued by such agencles as
LCs uCs of LZs LlC ALuA MLuA llLC eLc
ConLenLs of CerLlflcaLe of Crlgln
1 name and logo of chamber of commerce
3 name and address of Lhe conslgnee
4 name and Lhe number of vessel of lllghL
6 name of Lhe porL of dlscharge and place of dellvery
8 acklng and conLalner descrlpLlon
9 1oLal number of conLalners and packages
10 uescrlpLlon of goods ln Lerms of quanLlLy
11 SlgnaLure and lnlLlals of Lhe concerned offlcer of Lhe lssulng auLhorlLy
12 Seal of Lhe lssulng auLhorlLy

Slgnlflcance of Lhe CerLlflcaLe of Crlgln
1 CerLlflcaLe of orlgln ls requlred for avalllng of concesslons under Cenerallsed SysLem of references
(CS) as well as under CommonwealLh references (CW)
2 lL ls Lo be submlLLed Lo Lhe cusLoms for Lhe assessmenL of duLy clearance of goods wlLh concesslonal
duLy
3 lL ls requlred when Lhe goods produced ln a parLlcular counLry are banned for lmporL ln Lhe forelgn
markeL
4 lL helps Lhe buyer ln adherlng Lo Lhe lmporL regulaLlons of Lhe counLry
3 SomeLlmes ln order Lo ensures LhaL goods boughL from some oLher counLry have noL been reshlpped
by a seller a cerLlflcaLe of orlgln lS requlred
6 8lll of Ladlng 1he blll of ladlng ls a documenL lssued by Lhe shlpplng company or lLs agenL
acknowledglng Lhe recelpL of goods on board Lhe vessel and underLaklng Lo dellver Lhe goods ln Lhe llke
order and condlLlon as recelved Lo Lhe conslgnee or hls order provlded Lhe frelghL and oLher charges as
speclfled ln Lhe blll have been duly pald lL ls also a documenL of LlLle Lo Lhe goods and as such ls freely
Lransferable by endorsemenL and dellvery
8lll of Ladlng serves Lhree maln purposes
1 As a documenL of LlLle Lo Lhe goods
2 As a recelpL from Lhe shlpplng company and
3 As a conLracL for Lhe LransporLaLlon of goods
1ypes of 8lll of Ladlng
1 Clean 8lll of Ladlng A blll of ladlng acknowledglng recelpL of Lhe goods apparenLly ln good order and
condlLlon and wlLhouL any quallflcaLlon ls Lermed as a clean blll of ladlng
2 Claused 8lll of Ladlng A blll of ladlng quallfled wlLh cerLaln adversere marks such as goods
lnsufflclenLly packed ln accordance wlLh Lhe Carrlage of Coods by Sea AcL ls Lermed as a claused blll of
ladlng
3 1ranshlpmenL or 1hrough 8lll of Ladlng When Lhe carrler uses oLher LransporL faclllLles such as rall
road or anoLher sLeamshlp company ln addlLlon Lo hls own Lhe carrler lssues a Lhrough or LranshlpmenL
blll of ladlng
4 SLale 8lll of Ladlng A blll of ladlng LhaL has been held Loo long before lL ls passed on Lo a bank for
negoLlaLlon or Lo Lhe conslgnee ls called a sLale blll of ladlng
3 lrelghL ald 8lll of Ladlng When frelghL ls pald aL Lhe Llme of shlpmenL or ln advance Lhe blll of
landlng ls marked frelghL pald Such blll of ladlng ls known as frelghL blll of ladlng
6 lrelghL CollecL 8lll of ladlng When Lhe frelghL ls noL pald and ls Lo be collecLed from Lhe conslgnee on
Lhe arrlval of Lhe goods Lhe blll of ladlng ls marked frelghL collecL and ls known as frelghL collecL blll of
ladlng
ConLenLs of 8lll of Ladlng
1 name and logo of Lhe shlpplng llne
2 name and address of Lhe shlpper
3 name and Lhe number of vessel
10 ConLalner sLaLus and seal number
11 Cross welghL ln kg and volume ln Lerms of cublc meLers
12 AmounL of frelghL pald or payable
13 Shlpplng blll number and daLe
14 SlgnaLure and lnlLlals of Lhe Chlef Cfflcer
Slgnlflcance of 8lll of Ladlng for LxporLers
1 lL ls a conLracL beLween Lhe shlpper and Lhe shlpplng company for carrlage of Lhe goods Lo Lhe porL of
desLlnaLlon
2 lL ls an acknowledgemenL lndlcaLlng LhaL Lhe goods menLloned ln Lhe documenL have been recelved on
board for Lhe urpose of shlpmenL
3 A clean blll of ladlng cerLlfles LhaL Lhe goods recelved on board Lhe shlp are ln order and good
condlLlon
4 lL ls useful for clalmlng lncenLlves offered by Lhe governmenL Lo exporLers
3 1he exporLer can clalm damages from Lhe shlpplng company lf Lhe goods are losL or damaged afLer Lhe
lssue of a clean blll of ladlng
Slgnlflcance of 8lll of Ladlng for lmporLers
1 lL acLs as a documenL of LlLle Lo goods whlch ls Lransferable endorsemenL and dellvery
2 1he exporLer sends Lhe blll of ladlng Lo Lhe bank of Lhe lmporLer so as Lo enable hlm Lo Lake Lhe
dellvery of goods
3 1he exporLer can glve an advance lnLlmaLlon Lo Lhe forelgn buyer abouL Lhe shlpmenL of goods by
sendlng hlm a nonnegoLlable copy of blll of ladlng
Slgnlflcance of 8lll of Ladlng for Shlpplng Company
1 lL ls useful Lo Lhe shlpplng company for collecLlon of LransporL charges from Lhe lmporLer lf noL
collecLed from Lhe exporLer
7 Alrway 8lll An alrway blll also called an alr conslgnmenL noLe ls a recelpL lssued by an alrllne for Lhe
carrlage of goods As each shlpplng company has lLs own blll of ladlng so each alrllne has lLs own alrway
blll Alrway 8lll or Alr ConslgnmenL noLe ls noL LreaLed as a documenL of LlLle and ls noL lssued ln
negoLlable form
ConLenLs of Alrway 8lll
2 name of Lhe alrporL of deparLure and desLlnaLlon
3 1he names and addresses of Lhe conslgnor conslgnee and Lhe flrsL carrler
9 AmounL of frelghL pald or payable
10 SlgnaLure and lnlLlals of Lhe lssulng carrler or hls agenL
lmporLance of Alrway 8lll lL ls a conLracL beLween Lhe alrllnes or hls agenL Lo carry goods Lo Lhe
desLlnaLlon lL ls Lhe documenL of lnsLrucLlons for Lhe alrllne handllng sLaff lL acLs as a cusLoms
declaraLlon form Slnce lL conLalns deLalls abouL frelghL lL also represenLs frelghL blll
7 ShlpmenL Advlce Lo lmporLer AfLer Lhe shlpmenL of goods Lhe exporLer lnLlmaLes Lhe lmporLer
abouL Lhe shlpmenL of goods glvlng hlm deLalls abouL Lhe daLe of shlpmenL Lhe name of Lhe vessel Lhe
desLlnaLlon eLc Pe should also send one copy of nonnegoLlable blll of ladlng Lo Lhe lmporLer
8 acklng LlsL 1he exporLer prepares Lhe packlng llsL Lo faclllLaLe Lhe buyer Lo check Lhe shlpmenL lL
conLalns Lhe deLalled descrlpLlon of Lhe goods packed ln each case Lhelr gross and neL welghL eLc 1he
dlfference beLween a packlng noLe and a packlng llsL ls LhaL Lhe packlng noLe conLalns Lhe parLlculars of
Lhe conLenLs of an lndlvldual pack whlle Lhe packlng llsL ls a consolldaLed sLaLemenL of Lhe conLenLs of a
number of cases or packs
9 8lll of Lxchange 1he lnsLrumenL ls used ln recelvlng paymenL from Lhe lmporLer 1he lmporLer may
prefer blll of exchange Lo LC as lL does noL lnvolve blocklng of funds A blll of exchange ls drawn by Lhe
exporLer on Lhe lmporLer Lo make paymenL on demand aL slghL or afLer a cerLaln perlod of Llme
- 8/L ls a means Lo collecL paymenL
- 8/L ls a means Lo demand paymenL
- 8/L ls a means Lo exLenL Lhe credlL
- 8/L ls a means Lo promlse Lhe paymenL
- 8/L ls an offlclal acknowledgemenL of recelpL of paymenL
- llnanclal documenLs perform Lhe funcLlon of obLalnlng Lhe flnance collecLlon of paymenL eLc
- 2 seLs Lach one bearlng Lhe excluslon clause maklng Lhe oLher parL of Lhe drafL lnvalld
- SlghL 8/L
- usance 8/L
- lL ls known as drafL
- lmmedlaLe paymenL SlghL drafL
- 1here are Lwo coples of drafL Lach one bears reference Lo Lhe oLher parL A8 when any one of Lhe
drafL ls pald Lhe second drafL becomes null and vold
arLles Lo blll of exchange
1 1he drawer 1he exporLer / person who draws Lhe blll
2 1he drawee 1he lmporLer / person on whom Lhe blll ls drawn for paymenL
3 1he payee 1he person Lo whom paymenL ls made generally Lhe exporLer / suppller of Lhe goods
8 Auxlllary uocumenLs 1hese documenLs generally form Lhe baslc documenLs based on whlch Lhe
commerclal and or regulaLory documenLs are prepared 1hese documenLs also do noL have any flxed
formaLs and Lhe number of such documenLs wlll wary accordlng Lo lndlvldual requlremenLs
1 roforma lnvolce 1he sLarLlng polnL of Lhe exporL conLracL ls ln Lhe form of offer made by Lhe
exporLer Lo Lhe forelgn cusLomer 1he offer made by Lhe exporLer ls ln Lhe form of a proforma lnvolce lL
ls a quoLaLlon glven as a reply Lo an lnqulry lL normally forms Lhe basls of all Lrade LransacLlons
ConLenLs of roforma lnvolce
- name and address of Lhe exporLer
- name and address of Lhe lmporLer
- Mode of LransporLaLlon such as Sea or Alr or MulLlmodal LransporL
- name of Lhe porL of loadlng
- name of Lhe porL of dlscharge and flnal desLlnaLlon
- rovlslonal lnvolce number and daLe
- LxporLers reference number
- 8uyers reference number and daLe
- name of Lhe counLry of orlgln of goods
- name of Lhe counLry of flnal desLlnaLlon
- Marks and conLalner number
- number and packlng descrlpLlon
- uescrlpLlon of goods glvlng deLalls of quanLlLy raLe and LoLal amounL ln Lerms of lnLernaLlonally
accepLed prlce quoLaLlon
- SlgnaLure of Lhe exporLer wlLh daLe
lmporLance of roforma lnvolce
- lL forms Lhe basls of all Lrade LransacLlons
- lL may be useful for Lhe lmporLer ln obLalnlng lmporL llcence or forelgn exchange
2 lnLlmaLlon for lnspecLlon Whenever Lhe conslgnmenL requlres Lhe preshlpmenL lnspecLlon
necessary appllcaLlon ls Lo be made Lo Lhe concerned lnspecLlon agency for conducLlng Lhe lnspecLlon
and lssue of cerLlflcaLe Lhereof
3 ueclaraLlon of lnsurance Where Lhe conLracL Lerms requlre LhaL Lhe lnsurance Lo be covered by Lhe
exporLer Lhe shlpper has Lo glve deLalls of Lhe shlpmenL Lo Lhe lnsurance company for necessary
lnsurance cover 1he deLalled declaraLlon wlll cover
- name of Lhe shlpper exporLer
- name address of buyer
- ueLalls of goods such as packages quanLlLy value ln forelgn currency as well as ln lndlan 8s LLc
- name of Lhe vessel AlrcrafL
- value for whlch lnsurance Lo be covered
4 AppllcaLlon of Lhe CerLlflcaLe Crlgln ln case Lhe exporLer has Lo obLaln CerLlflcaLe of Crlgln from Lhe
concerned auLhorlLles an appllcaLlon has Lo be made Lo Lhe concerned auLhorlLy wlLh requlred
documenLs Whlle Lhe slmple lnvolce copy wlll do for geLLlng CC from Lhe chamber of commerce ln
respecL of obLalned Lhe same from Lhe offlce of Lhe 1exLlle CommlLLee or LxporL romoLlon Councll Lhe
documenLs requlremenL are dlfferenL
3 MaLes 8ecelpL MaLes recelpL ls a recelpL lssued by Lhe Commandlng Cfflcer of Lhe shlp when Lhe
cargo ls loaded on Lhe shlp 1he maLes recelpL ls a prlma facle evldence LhaL goods are loaded ln Lhe
vessel 1he maLes recelpL ls flrsL handed over Lo Lhe orL 1rusL AuLhorlLles AfLer maklng paymenL of all
porL dues Lhe exporLer or hls agenL collecLs Lhe maLes recelpL from Lhe orL 1rusL AuLhorlLles 1he
maLes recelpL ls freely Lransferable lL musL be handed over Lo Lhe shlpplng company ln order Lo geL Lhe
blll of ladlng 8lll of ladlng ls prepared on Lhe basls of Lhe maLes recelpL
1ypes of MaLes 8ecelpLs
- Clean MaLes 8ecelpL 1he Commandlng Cfflcer of Lhe shlp lssues a clean maLes recelpL lf he ls
saLlsfled LhaL Lhe goods are packed properly and Lhere ls no defecL ln Lhe packlng of Lhe cargo or
package
- Cuallfled MaLes 8ecelpL 1he Commandlng Cfflcer of Lhe shlp lssues quallfled maLes recelpL when
Lhe goods are noL packed properly and Lhe shlpplng company does noL Lake any responslblllLy of
damage Lo Lhe goods durlng LranslL
ConLenLs of MaLes 8ecelpL
1 name and logo of Lhe shlpplng llne
2 name and address of Lhe shlpper
3 name and Lhe number of vessel
11 Cross welghL ln kg and volume ln Lerms of cublc meLers
12 Shlpplng blll number and daLe
13 SlgnaLure and lnlLlals of Lhe Chlef Cfflcer
Slgnlflcance of MaLes 8ecelpL
1 lL ls an acknowledgemenL of goods recelved for exporL on board Lhe shlp
2 lL ls a Lransferable documenL lL musL be handed over Lo Lhe shlpplng company ln order Lo geL Lhe blll
of ladlng
3 8lll of ladlng whlch ls Lhe LlLle of goods ls prepared on Lhe basls of Lhe maLes recelpL
4 lL enables Lhe exporLer Lo clear porL LrusL dues Lo Lhe orL 1rusL AuLhorlLles
CbLalnlng MaLes 8ecelpL
1he goods are Lhen loaded on board Lhe shlp for whlch Lhe MaLe or Lhe CapLaln of Lhe shlp lssues MaLes
8ecelpL Lo Lhe orL SuperlnLendenL
6 Shlpplng order lL ls lssued by Lhe Shlpplng/Conference Llne lnLlmaLlng Lhe exporLer abouL Lhe
reservaLlon of space for shlpmenL of cargo whlch Lhe exporLer lnLends Lo shlp ueLalls of Lhe vessel poeL
of Lhe shlpmenL and Lhe daLe on whlch Lhe goods are Lo be shlpped are menLloned 1hls order enables
Lhe exporLer Lo make necessary arrangemenLs for cusLoms clearance and loadlng of Lhe goods
7 Shlpplng lnsLrucLlons aL Lhe preshlpmenL sLage when Lhe documenLs are Lo senL Lo Lhe CPA for
cusLoms clearance necessary lnsLrucLlons are Lo be glve wlLh relevance Lo
1 1he exporL promoLlon scheme under whlch goods are Lo be exporLed
2 name of Lhe speclflc vessel on whlch Lhe goods are Lo be loaded
3 lf goods are Lo be lCL or LCL
4 lf frelghL amounL are Lo be pald / collecLed
3 lf shlpmenL are covered under A8L1 procedure
6 lnsLrucLlons for obLalnlng 8lll of Ladlng eLc
8 8ank leLLer for negoLlaLlon of documenLs aL Lhe posL shlpmenL sLage Lhe exporLer has Lo submlL Lhe
documenLs Lo a bank for negoLlaLlon or dlscounLlng or collecLlon for forwardlng Lhe same Lo Lhe
cusLomer and also for reallzaLlon of exporL proceeds 1he bank leLLer ls Lhe seL of lnsLrucLlon for Lhe
bank as Lo how Lo handle Lhe documenLs by Lhem and by Lhe bank aL Lhe buyer's counLry whlch may
lnclude
1 name and address of Lhe buyer
2 ueLalls of varlous documenLs belng senL and Lhe number of Lhe coples Lhereof
3 name and address of Lhe buyer's bank lf avallable
4 lf Lhe documenLs are senL L/C or on open Lerms
3 lf Lhe proceeds are Lo ad[usLed agalnsL any preshlpmenL packlng credlL loan
6 lf Lhe blll amounL ls Lo be ad[usLed agalnsL any forward exchange cover
7 ln case of credlL blll who has Lo bear Lhe lnLeresL elLher exporLer or lf Lhe same ls Lo be collecLed from
Lhe buyer
8 lnsLrucLlons ln case nonaccepLance/nonpaymenL by Lhe buyer

C 8egulaLory uocumenL 8egulaLory preshlpmenL exporL documenLs are prescrlbed by Lhe dlfferenL
governmenL deparLmenLs and bodles ln order Lo comply wlLh varlous rules and regulaLlons under Lhe
relevanL laws governlng exporL Lrade such as exporL lnspecLlon forelgn exchange regulaLlon ex porL
Lrade conLrol cusLoms eLc CuL of 9 regulaLory documenLs four have been sLandardlsed and allgned
1hese are shlpplng blll or blll of exporL exchange conLrol declaraLlon (C8 from) exporL appllcaLlon dock
challan or porL LrusL copy of shlpplng blll and recelpL for paymenL of porL charges
1 Shlpplng 8lll Shlpplng blll ls Lhe maln cusLoms documenL requlred by Lhe cusLoms auLhorlLles for
granLlng permlsslon for Lhe shlpmenL of goods 1he cargo ls moved lnslde Lhe dock area only afLer Lhe
shlpplng blll ls duly sLamped le cerLlfled by Lhe cusLoms Shlpplng blll ls normally prepared ln flve
coples
1 CusLoms copy
2 urawback copy
3 LxporL promoLlon copy
4 orL LrusL copy
3 LxporLers copy
1ypes of Shlpplng 8lll
8ased on Lhe lncenLlves offered by Lhe governmenL cusLoms auLhorlLles have lnLroduced Lhree Lypes of
shlpplng bllls
1 urawback Shlpplng 8lll urawback shlpplng blll ls useful for clalmlng Lhe cusLoms drawback agalnsL
goods exporLed
2 uuLlable Shlpplng 8lll uuLlable shlpplng blll ls requlred for goods whlch are sub[ecL Lo exporL duLy
3 uuLyfree Shlpplng 8lll uuLyfree shlpplng blll ls useful for exporLlng goods on whlch Lhere ls no
exporL duLy
ln order Lo faclllLaLe easy recognlLlon and qulck processlng followlng colours have been provlded Lo
dlfferenL klnds of shlpplng bllls
1ypes of goods 8y Sea 8y Alr
urawback shlpplng blll Creen Creen
uuLlable shlpplng blll ?ellow lnk
uuLylree shlpplng blll WhlLe lnk
ConLenLs of Shlpplng 8lll
2 name and address of Lhe lmporLer
3 name of Lhe vessel masLer or agenLs and flag
4 name of Lhe porL aL whlch goods are Lo be dlscharged
3 CounLry of flnal desLlnaLlon
6 ueLalls abouL packages descrlpLlon of goods marks and numbers quanLlLy and deLalls of each case
7 lC8 prlce and real value of goods as deflned ln Lhe Sea CusLoms AcL
8 WheLher lndlan or forelgn merchandlse Lo be reexporLed
9 1oLal number of packages wlLh LoLal welghL and value
Slgnlflcance of Shlpplng 8lll
a) Shlpplng blll ls Lhe maln cusLoms documenL requlred by Lhe cusLoms auLhorlLles for granLlng
permlsslon for Lhe shlpmenL of goods
b) 1he cargo ls moved lnslde Lhe dock area only afLer Lhe shlpplng blll ls duly sLamped le cerLlfled by
Lhe cusLoms
c) uuly endorsed shlpplng blll ls also necessary for Lhe collecLlon of exporL lncenLlves offered by Lhe
governmenL
d) lL ls useful Lo Lhe CusLoms Appralser whlle deLermlnlng Lhe acLual value of goods exporLed
2 A8L 1 form (CenLral exclse) Lhls form A8L1 ls prescrlbed under CenLral Lxclse rules for exporL of
goods ln case goods meanL for exporL are cleared dlrecLly from Lhe premlses of a manufacLurer Lhe
exporLer can avall Lhe faclllLy of exempLlon from paymenL of Lermlnal exclse duLy 1he goods may be
cleared for exporL elLher under clalm for rebaLe of duLy pald or under bond wlLhouL paymenL of duLy ln
boLh Lhe evenLs Lhe goods are Lo be cleared under form A8L1 whlch wlll show Lhe deLalls of Lhe goods
belng exporLed Lhe relevanL duLy lnvolved and lf Lhe duLy ls pald or goods belng cleared under bond
deLalls of goods belng sealed elLher by Lhe exporLer or CenLral Lxclse offlclals eLc
3 Lxchange ConLrol declaraLlon lorm (C8//SCl1Lx) under Lhe exchange conLrol regulaLlons all
exporLers musL declare Lhe deLalls of shlpmenL for monlLorlng by Lhe 8eserve 8ank of lndla lor Lhls
purpose 88l has prescrlbed dlfferenL forms for dlfferenL Lypes of shlpmenLs llke C8l forms eLc
1hese declaraLlon forms musL be presenLed Lo Lhe cusLoms offlclals aL Lhe Llme of passlng of exporL
documenLaLlon under Lhe Lul processlng of shlpplng blll ln Lhe cusLoms Lhese forms have been
dlspensed wlLh and a new form Sul has Lo be submlLLed Lo Lhe cusLoms ln Lhe place of above forms
4 LxporL AppllcaLlon Lhls ls Lhe appllcaLlon Lo be made Lo Lhe cusLoms offlclals before shlpmenL of
goods 1he prescrlbed form of Lhe appllcaLlon ls Lhe Shlpplng 8lll/8lll of LxporL ulfferenL Lypes are
requlred for shlpmenL llke exbond duLy free goods and duLlable goods and for exporL under dlfferenL
exporL promoLlon schemes such as clalms for duLy drawback eLc
3 vehlcle 1lckeL/CarL 1lckeL/CaLe ass eLc before Lhe goods are belng Laken lnslde Lhe porL for loadlng
necessary permlsslon has Lo be obLalned for movlng Lhe vehlcle lnLo Lhe cusLoms area 1hls permlsslon
ls granLed by Lhe orL 1rusL AuLhorlLy 1hls documenL wlll conLaln Lhe deLall of Lhe exporL cargo name
and address of Lhe shlppers lorry number marks and number of Lhe packages drlver's llcence deLalls
eLc
6 8ank CerLlflcaLe of 8eallsaLlon Lhls ls Lhe form prescrlbed under Lhe lorelgn 1rade ollcy whereln Lhe
negoLlaLlng bank declares Lhe fob value of exporLs and for Lhe daLe of reallsaLlon of Lhe exporL proceeds
1hls cerLlflcaLe ls requlred fore obLalnlng Lhe beneflL under varlous schemes and Lhls value of fob ls
reckoned as fob value of exporLs
u CLher uocumenL
1 8lack LlsL CerLlflcaLe lL cerLlfles LhaL Lhe shlp/alrcrafL carrylng Lhe cargo has noL Louched Lhe parLlcular
counLry on lLs [ourney or LhaL Lhe goods are noL from Lhe parLlcular counLry 1hls ls requlred by cerLaln
naLlons who have sLralned pollLlcal and economlcal relaLlons wlLh Lhe so called 8lack LlsLed CounLrles"
2 Language CerLlflcaLe lmporLers ln Lhe Luropean CommunlLy requlre a language cerLlflcaLe along wlLh
Lhe CS cerLlflcaLe ln respecL of handloom coLLon fabrlcs classlflable under nAMLx code 3309
Cenerally four coples of language cerLlflcaLe are prepared by Lhe concerned auLhorlLy who lssues CS
cerLlflcaLe 1hree coples are handed over Lo Lhe exporLer A copy ls senL along wlLh Lhe oLher documenLs
for reallsaLlon of exporL proceeds
3 lrelghL aymenL CerLlflcaLe ln mosL of Lhe cases Lhe 8/L or AW8 wlll menLlon Lhe LransporLaLlon and
oLher relaLed charges Powever lf Lhe exporLer does noL wanL Lhese deLalls Lo be dlsclosed Lo Lhe buyer
Lhe shlpplng company may lssue a separaLe cerLlflcaLe for paymenL of Lhe frelghL charges lnsLead of
declarlng on Lhe maln LransporL documenLs 1hls documenL showlng Lhe frelghL paymenL ls called Lhe
frelghL cerLlflcaLe
4 lnsurance remlum CerLlflcaLe Lhls ls Lhe cerLlflcaLe lssued by Lhe lnsurance Company as
acknowledgemenL of Lhe amounL of premlum pald for Lhe lnsurance cover 1hls cerLlflcaLe ls requlred by
Lhe bank for arrlvlng aL Lhe fob value of Lhe goods Lo be declared ln Lhe bank cerLlflcaLe of reallsaLlon
3 Comblned CerLlflcaLe of Crlgln and value Lhls cerLlflcaLe ls requlred by Lhe CommonwealLh CounLrles
1hls cerLlflcaLe ls prlnLed ln a speclal way by Lhe CommonwealLh CounLrles 1hls cerLlflcaLe should
conLaln speclal deLalls as Lo Lhe orlgln and value of goods whlch are useful for deLermlnlng lmporL duLy
All oLher deLalls are generally Lhe same as LhaL of Commerclal lnvolce such as name of Lhe exporLer and
Lhe lmporLer quallLy and quanLlLy of Lhe goods eLc
6 CusLoms lnvolce Lhls ls requlred by Lhe counLrles llke Canada uSA for lmposlng preferenLlal Larlff
raLes
7 Legallzed lnvolce Lhls ls requlred by Lhe cerLaln LaLln Amerlcan CounLrles llke Mexlco lL ls [usL llke
consular lnvolce whlch requlres cerLlflcaLlon from ConsulaLe or auLhorlsed mlsslon sLaLloned ln Lhe
exporLer's counLry
Speclal rovlslon under unlform CusLoms and pracLlce for uocumenLary CredlL uC300 for Commerclal
lnvolce
1 ArLlcle37 Commerclal lnvolce
2 MusL appear on Lhelr face Lo be lssued by Lhe beneflclary named ln Lhe credlL
3 MusL be made ouL ln Lhe name of Lhe appllcanL
4 need noL be slgned
3 8anks may refuse Commerclal lnvolce lssued for amounLs ln excess of Lhe amounL permlLLed by Lhe
credlL excepL oLherwlse sLaLed
6 1he descrlpLlon of Lhe goods ln Lhe commerclal lnvolce musL correspond wlLh Lhe descrlpLlon of Lhe
credlL ln all oLher documenLs Lhe goods may be descrlbed ln Lhe Ceneral ln general Lerms noL
lnconslsLenL wlLh descrlpLlon ln Lhe credlL ln all documenLs goods may be descrlbed ln general Lerms
noL lnconslsLenL wlLh Lhe uescrlpLlon of Lhe goods ln Lhe credlL

reShlpmenL uocumenLs
1 Shlpplng blll
2 LxporL order/Sales conLracL/urchase order
3 LeLLer of CredlL
4 Commerclal lnvolce
3 acklng llsL
6 CerLlflcaLe of orlgln
7 CuaranLeed 8emlLLance (C8/Sul//SCl1Lx)or Sul
8 CerLlflcaLe of lnspecLlon
9 varlous declaraLlons requlred as per cusLom procedure
Lxchange ConLrol ueclaraLlon lorm all exporLs Lo whlch Lhe requlremenL of declaraLlon apply musL be
declared on approprlaLe forms as lndlcaLed below unless Lhe conslgnmenL ls of samples and of 'no
Commerclal value'
1 C8 lC8M Lo be compleLed ln dupllcaLe for exporLs oLherwlse Lhan by posL lncludlng exporL of
sofLware ln physlcal form le magneLlc Lape/dlscs and paper medla
2 Sul lC8M Lo be compleLed ln dupllcaLe and appended Lo Lhe Shlpplng 8lll for exporL declare Lo Lhe
cusLoms offlces noLlfled by Lhe CenLral CovernmenL whlch have lnLroduced Lul sysLem for processlng
Shlpplng 8lll
3 lC8M Lo be compleLed ln dupllcaLe for exporL by posL
4 SCl1x Lo be compleLed ln LrlpllcaLe for exporL of sofLware oLherwlse Lhan ln Lhe physlcal form le
magneLlc Lapes/dlscs and paper medla
1hese forms are avallable for sale ln 8eserve 8ank of lndla
LxporL declaraLlon forms have uLmosL lmporLance and are blndlng on Lhe exporLers lL ls Lherefore
necessary LhaL enough care ls Laken whlle declarlng exporLs on Lhese forms wlLh speclal reference on
Lhe followlng polnLs
1 name and address of Lhe auLhorlsed dealer Lhrough whom proceeds of exporLs have been or wlll be
reallzed should be speclfled ln Lhe relevanL column of Lhe form
2 ueLalls of commlsslon and dlscounL due Lo forelgn agenL or buyer should be correcLly declared
oLherwlse dlfflculLles may arlse aL Lhe Llme of remlLLance of such commlsslon
3 lL should be clearly lndlcaLed ln Lhe form wheLher Lhe exporL ls on 'ouLrlghL sale basls' or 'on
conslgnmenL basls' and lrrelevanL clauses musL be sLuck ouL
4 under Lhe Lerm 'analysls of full exporL value' a break up of full exporL value of goods under lC8
value frelghL and lnsurance should be furnlshed ln all cases lrrespecLlve of Lhe Lerms of conLracL
3 All documenLs relaLlng Lo Lhe exporL of goods from lndla musL pass Lhrough Lhe medlum of an
auLhorlsed dealer ln forelgn exchange ln lndla wlLhln 21 days of shlpmenL
6 1he amounL represenLlng Lhe full exporL value of goods musL be reallzed wlLhln slx monLhs from daLe
of shlpmenL
ulsposal of Coples of LxporL uocumenLaLlon lorm
1 C8 forms coverlng exporL of goods oLher Lhan [ewellery should be compleLed by Lhe exporLer ln
dupllcaLe and boLh Lhe coples should be submlLLed Lo cusLoms aL Lhe porL of ShlpmenL CusLoms wlll
glve Lhelr runnlng serlal number on boLh Lhe coples of Lhe C8 forms afLer verlfylng Lhe parLlculars and
admlLLlng Lhe correspondlng shlpplng blll 1he value declared by Lhe exporLer wlll also be verlfled by Lhe
cusLoms and Lhey wlll also record Lhe assessed value uupllcaLe copy wlll be reLurned Lo Lhe exporLer
and Lhe orlglnal wlll be remalned by Lhe cusLoms for onward submlsslon Lo Lhe 8eserve 8ank uupllcaLe
form of Lhe C8 form wlll agaln be presenLed Lo Lhe cusLoms aL Lhe Llme of acLual shlpmenL AfLer
examlnaLlon of goods and cerLlfylng Lhe quanLlLy passed for shlpmenL Lhe dupllcaLe copy wlll agaln be
reLurned Lo exporLer for submlsslon Lo an auLhorlsed dealer Powever an excepLlon Lo submlsslon of C8
forms Lo Lhe CusLoms auLhorlLles have been made ln case of deep sea flshlng
2 (a) forms are Lo be flrsL presenLed Lo an auLhorlsed dealer for counLerslgnaLure 1he form wlll be
counLerslgned by Lhe auLhorlsed dealer only lf Lhe posL parcel ls addressed Lo hls branch or
correspondenL bank ln Lhe counLry or lmporL 1he concerned overseas branch or correspondenL ls Lo be
lnsLrucLed Lo dellver Lhe posL parcel agalnsL paymenL or accepLance of relevanL blll as Lhe case may be
(b) lor posL parcel addressed dlrecLly Lo Lhe conslgnee Lhe auLhorlsed dealer wlll counLerslgn Lhe form
provlded
(l) an lrrevocable leLLer of credlL for Lhe full value of exporL has been opened ln favour of exporLer and
has been advlsed Lhrough auLhorlsed dealer concerned or
(ll) Lhe full value of shlpmenL has been recelved ln advance by Lhe exporLer Lhrough an auLhorlsed
dealer or
(lll) Cn recelpL of full value of shlpmenL declared on Lhls form Lhe auLhorlsed dealer wlll forward Lo 88l
Lhe dupllcaLe copy along wlLh Lhe cerLlfled copy of shlpper's lnvolce
(lv) 1he auLhorlsed ls saLlsfled on Lhe basls of sLandlng and Lrack record of Lhe exporLer and
arrangemenLs made for reallsaLlon of Lhe exporL proceed LhaL he cold do so lf Lhe auLhorlsed dealer ls
noL saLlsfled abouL sLandlng eLc of Lhe exporLer Lhe appllcaLlon ls re[ecLed no reference ls enLerLalned
by Lhe 8eserve 8ank ln such cases
(c) 1he orlglnal form counLerslgnaLure wlll be reLurned Lo Lhe exporLer by Lhe auLhorlsed dealer and
Lhe dupllcaLe wlll be reLalned by hlm Crlglnal form should Lhen be submlLLed Lo Lhe posL offlce along
wlLh Lhe parcel 1he posL offlce Lhrough Lhe goods have been dlspaLched wlll forward Lhe orlglnal Lo 88l
1he exporL of compuLer sofLware may be underLaken ln physlcal form le sofLware prepared on
magneLlc Lape and paper medla as well as ln nonphyslcal form by dlrecL daLa Lransmlsslon Lhrough
dedlcaLed earLh sLaLlons/saLelllLe llnks 1he exporL of compuLer sofLware ln physlcal form ls sub[ecL Lo
normal declaraLlon on C8/ form and regulaLlons appllcable Lhere Lo wlll also be appllcable Lo such
exporLs Powever exporL of nonphyslcal form should be declared on SCl1Lx lorm 8esldes compuLer
sofLware exporL of vldeo / 1v SofLware and all oLher Lypes of sofLware producLs / packages should also
be declared on Lhe SCl1Lx forms Slnce exporL of sofLware ls fraughL wlLh many rlsks and speclal
guldellnes have been framed for handllng such exporLs

CC18Cl

1 CcLrol ls Lhe local Lax levled by Lhe clvlc body on goods enLerlng lnLo Lhe clLy
2 1here are Lhree procedures for clearlng goods whlch are meanL for exporL
rocedure 1 LxporL on paymenL of ocLrol duLy and refund Lhereof afLer exporL
ay Lhe CcLrol uuLy and apply for refund of paymenL made
1 AL CcLrol naka form 8 ls lssued wlLh cash recelpL for Lhe paymenL of CcLrol uuLy
2 Cargo ls moved Lo Lhe docks
3 AL uocks CcLrol offlcer prepares form"C" endorses Shlpplng 8lll number SLeamers name
4 AfLer shlpmenL exporLer prepares clalm for refund by submlLLlng followlng documenLs
3 Coverlng LeLLer for refund of CcLrol uuLy
6 Crlglnal recelpL of CcLrol pald
7 Crlglnal lorm 8
8 Crlglnal lorm C
9 lnvolce under whlch maLerlal was boughL Lo Lhe clLy
10 LxporL lnvolce lssued by Lhe LxporLer Lo Lhe lmporLer
11 LxporL romoLlon Copy of Shlpplng 8lll hoLo Copy
12 8lll of Ladlng or Alrway 8lll Copy

rocedure 2 LxporL wlLhouL paymenL of CcLrol uuLy
n lorm rocedure
1 repares form n ln 3 coples
2 Checklng of documenLs Shlpplng 8lll CarLlng order LxporL lnvolce by CcLrol offlcer
3 under Laklng LhaL Lhe goods wlll be cleared for exporL wlLhln 7 days of clearance Lhrough Lhe ocLrol
posL
4 CcLrol offlcer aL uocks wlll endorse Lhe Shlpplng 8lll number shlpmenL deLalls on n form
3 roof of exporL n form wlLh above endorsemenL Lo be submlLLed Lo Lhe Pead Cfflce along wlLh
coples of Shlpplng 8lll 8lll of Ladlng LxporL lnvolce eLc
rocedure 3
L (LxporL romoLlon) lorm
1 8eglsLraLlon form + lLC / 8CMC + CA CerLlflcaLe
2 number wlll be alloLLed
3 lees 8s 300/
uocumenLs Checked
1 lacLory Challan cum lnvolce
2 A8L 1
3 L forms 3 coples
4 LxporL order
3 Shlpplng 8lll
ConslgnmenL 8emoved Lo uocks and roof of LxporL Lo be glven Lo CcLrol auLhorlLles
1 Company's LeLLer
2 L form
3 LC
4 8lll of Ladlng
3 Shlpplng 8lll 623 Servlce charge
8ar Codlng
1 lL ls Lhe endeavor of Lhe CenLral CovernmenL Lo enhance exporL compeLlLlveness of Lhe lndlan
producLs and Lo promoLe subsLanLlally
2 Compllance wlLh prevalenL lnLernaLlonal besL pracLlces
3 naLlonal Lask force has recommended adopLlon of 8arcodlng for all lndlan producLs wlLhln flve years
4 8ar codlng uslng lnLernaLlonal Symbologles / numberlng sysLems would enable Llmely and accuraLe
capLure of producL lnformaLlon and lLs communlcaLlon across Lhe supply chaln ahead of physlcal
producL flow
3 WlLh Lhe ulLlmaLe ob[ecLlve of faclllLaLlng adopLlon of 8arcodlng for all producLs uslng lnLernaLlonal
Symbologles numberlng sysLems all exporLs of flnlshed and packaged lLems meanL for reLall sale shall
lncorporaLe barcodes from a daLe Lo be noLlfled by uCl1
MA8lnL lnSu8AnCL CLlC?
Coods ln LranslL are sub[ecL Lo rlsks of loss of goods arlslng due Lo flre on Lhe shlp perlls of sea LhefLs
eLc Marlne lnsurance proLecLs losses lncldenLal Lo voyages and ln land LransporLaLlon
Marlne lnsurance ollcy ls one of Lhe mosL lmporLanL documenL used as collaLeral securlLy because lL
proLecLs Lhe lnLeresL of all Lhose who have lnsurable lnLeresL aL Lhe Llme of loss 1he exporLer ls bound
Lo lnsure Lhe goods ln case of Cll quoLaLlon buL he can also lnsure Lhe goods ln case of lC8 conLracL aL
Lhe requesL of Lhe lmporLer buL Lhe premlum paymenL wlll be made by Lhe exporLer
1here are dlfferenL Lypes of pollcles such as
Speclflc ollcy 1hls pollcy ls Laken Lo cover dlfferenL rlsks for a slngle shlpmenL lor a regular exporLer
Lhls pollcy ls noL advlsable as he wlll have Lo Lake a separaLe pollcy every Llme Lhe shlpmenL ls made so
Lhls pollcy ls Laken when exporLs are lnfrequenL
lloaLlng ollcy 1hls pollcy ls Laken Lo cover all shlpmenLs for same monLhs 1here ls no Llme llmlL buL
Lhere ls a llmlL on Lhe value of goods and once Lhls value ls crossed by several shlpmenLs Lhen lL has Lo
be renewed
Cpen ollcy 1hls pollcy remalns ln force unLll cancelled by elLher parLy le lnsurance company or Lhe
exporLer
Cpen Cover ollcy 1hls pollcy ls generally lssued for 12 monLhs perlod for all shlpmenLs Lo one or all
desLlnaLlons 1he open cover may speclfy Lhe maxlmum value of conslgnmenL LhaL may be senL pre shlp
and lf Lhe value exceeded Lhe lnsurance company musL be lnformed by Lhe exporLer
lnsurance remlum ulffers upon from producL Lo producL and a number of oLher such facLors such as
dlsLance of voyage Lype and condlLlon of packlng eLc remlum for alr conslgnmenLs are lower as
compared Lo conslgnmenLs by sea
1he lnsurance ollcy normally ConLalns
1 1he name and address of Lhe lnsurance company
2 1he name of Lhe assured descrlpLlon of Lhe rlsk covered
3 A descrlpLlon of Lhe conslgnmenL
4 1he sum lnsured Lhe daLe of lssue
3 1he place where clalms are payable LogeLher wlLh deLalls of Lhe agenL Lo whom clalms may be dlrecLed
Any oLher deLalls as appllcable

CuALl1? CCn18CL Anu 8LSPlMLn1 lnSLC1lCn
8eallzlng Lhe lmporLance of Lhe need for supplylng quallLy goods as per lnLernaLlonal sLandards Lhe
CovernmenL of lndla has lnLroduced Compulsory CuallLy ConLrol and reShlpmenL lnspecLlon of over
1030 lLems of exporL under LxporL (CuallLy ConLrol and reShlpmenL lnspecLlon) AcL 1963
AL presenL Lhe exporL lLems LhaL are sub[ecLed Lo compulsory lnspecLlon lncludes food and agrlculLural
producLs chemlcals englneerlng colr [uLe and fooLwear
Compulsory reshlpmenL lnspecLlon
1 loods and AgrlculLure llshery
2 Mlneral Cre
3 Crganlc lnorganlc Chemlcals
4 8efecLorles 8ubber roducLs
3 looL wear looL wear componenLs
6 Ceramlc roducLs esLlcldes
7 LlghL Lng roducLs
8 SLeel roducLs
9 !uLe roducLs
10 Colr Colr roducLs
LxempLlon from compulsory reshlpmenL lnspecLlon
1 SLaLus Pouses
2 CerLlflcaLlon by unlLs lCC approved by LlA
3 LuC/LZ/SLZ
4 llrm LeLLer from Lhe overseas buyer
3 Speclfled producLs such as Lng/llshery average level of 8s13 Crfor Lhe lasL Lhree years no compllanL
lor monlLorlng preshlpmenL lnspecLlon CovL of lndla has seL up LxporL lnspecLlon Councll (LlC) 1he
LlC has seL up 3 LxporL lnspecLlon Agencles (LlA) 1he LlAs are locaLed one each aL Mumbal CalcuLLa
Cochln uelhl and Chennal 1he LlAs has a neLwork of nearly 60 offlces LhroughouL lndla Lach LlA ls
glven cerLaln [urlsdlcLlon for lnspecLlon purpose lor lnsLance LlA of Mumbal has [urlsdlcLlon over
MaharashLra Cu[araL and Coa
SysLems of CuallLy ConLrol
lor Lhe purpose of preshlpmenL lnspecLlon LlC has recognlzed Lhree sysLems of lnspecLlon namely
1 SelfCerLlflcaLlon
2 lnrocess CuallLy ConLrol
3 ConslgnmenL Wlse lnspecLlon
SelfCerLlflcaLlon
under Lhls sysLem compleLe auLhorlLy ls glven Lo Lhe manufacLurlng unlLs Lo cerLlfy Lhelr own producLs
and lssue cerLlflcaLes for exporL 1he manufacLurlng unlLs whlch have been recognlzed under Lhls
scheme have Lo pay a nomlnal yearly fee aL Lhe raLe of 01 of lC8 prlce sub[ecL Lo mlnlmum of
8s2300/ and maxlmum of 8s1 lakh ln a year Lo Lhe concerned LlA
lnrocess CuallLy ConLrol (lCC)
ln Lhls sysLem companles/unlLs ad[usLed as havlng adequaLe level of quallLy conLrol rlghL from raw
maLerlal sLage Lo Lhe flnlshed producL sLage lncludlng packaglng are ellglble Lo geL Lhe lnspecLlon
cerLlflcaLe on a formal requesL by Lhe exporLer Cver 800 unlLs all over lndla are operaLlng under Lhls
sysLem
ConsLanL vlgll and survelllance are kepL on unlLs approved under lCC and selfcerLlflcaLlon sysLem
unlLs approved under Lhe above Lwo sysLems are ofLen known as LxporL worLh unlLs" because of Lhelr
conslsLenL sLandards of quallLy
ConslgnmenL wlse lnspecLlon
under Lhls sysLem each and every conslgnmenL ls sub[ecL Lo compulsory lnspecLlon 1he exporLer has Lo
follow a cerLaln procedure such as
1 Pe has Lo make an appllcaLlon Lo LxporL lnspecLlon Agency wlLh cerLaln documenLs
2 1he LlA depuLes lnspecLor Lo lnspecL Lhe goods
3 AfLer Lhe lnspecLlon Lhe goods are repacked wlLh LlA seal
4 1he lnspecLor Lhen makes a reporL Lo uepuLy ulrecLor of LlA
3 1he uy ulrecLor of LlA Lhen lssues lnspecLlon CerLlflcaLe ln LrlpllcaLe lf Lhe lnspecLlon reporL ls
favorable
6 lf Lhe lnspecLlon reporL ls noL favorable a re[ecLlon noLe ls lssued
o lL ls Lo be noLed LhaL goods marked wlLh lSl/ACMA8k/8lS14000/lSC 9000 are noL requlred Lo be
lnspecLed by any agency
o Cverseas buyer may depuLe hls own lnspecLlon Leam Lo lnspecL Lhe goods
o lnspecLlon of LexLlle goods ls conducLed by 1exLlle CommlLLee ln respecL of Lhose exporLers who are
reglsLered wlLh Lhe LexLlle commlLLee
norms
1 AdequaLe 1esLlng laclllLy
2 8aw MaLerlal 1esLlng rocess ConLrol
3 AfLer Sales Servlces MalnLalnlng roducL CuallLy
4 ConLrol on boughL ouL componenLs
3 MeLeorologlcal ConLrol kC
6 lndependenL CuallLy AudlL Pouses
lumlgaLlon lor ensurlng LhaL no lnsecLs or bacLerla are carrled wlLh Lhe exporL cerLaln Lypes of exporL
producLs are fumlgaLed before shlpmenL 1he fumlgaLlon ls carrled ouL ln Lhe porL of shlpmenL

SPllnC Anu CuS1CMS lC8MALl1lLS
(As per Lhe revalllng Law le lCA 62)
1he shlpmenL of exporL cargo has Lo be made wlLh prlor permlsslon of and under Lhe close supervlslon
of Lhe cusLom auLhorlLles 1he goods cannoL be loaded on board Lhe shlp unless a formal permlsslon ls
obLalned from Lhe cusLom auLhorlLles 1he cusLom auLhorlLles granL Lhls permlsslon only when lL ls belng
saLlsfled LhaL Lhe goods belng exporLed are of Lhe same Lype and value as have been declared by Lhe
exporLer or hls Cl agenL and LhaL Lhe duLy has been properly deLermlned and pald lf any
1he cusLom procedure can be brlefly explalned as follows
1 Submlsslon of uocumenLs 1he exporLer or hls agenL submlLs Lhe necessary documenLs along wlLh Lhe
shlpplng blll Lo Lhe CusLom Pouse 1he documenLs lnclude
2 A8L1 (Crlglnal and dupllcaLe)
3 Lxclse gaLe pass (Crlglnal and dupllcaLe LransporLers' copy
4 roforma lnvolce
3 acklng LlsL
6 C8l form (Crlglnal and dupllcaLe)
7 CusLoms lnvolce (where requlred ln Lhe lmporLlng counLry)
8 Crlglnal leLLer of credlL/conLracL
9 ueclaraLlon form ln LrlpllcaLe
10 CuallLy CerLlflcaLe
11 urchase memo
12 Labels
13 Llcence (lf any requlred) lncludlng advance llcence copy
14 8allway recelpL/lorry way blll
13 lnspecLlon CerLlflcaLe by LxporL lnspecLlon Agency

1 verlflcaLlon of uocumenLs 1he CusLoms Appralser verlfles Lhe documenLs and appralses Lhe value of
goods Pe Lhen makes an endorsemenL of LxamlnaLlon Crder" on Lhe dupllcaLe copy of shlpplng blll
regardlng Lhe exLenL of physlcal examlnaLlon of Lhe goods aL Lhe docks All documenLs are reLurned back
Lo Lhe agenL or exporLer excepL
o Crlglnal Copy of C8 Lo be forwarded Lo 88l
o Crlglnal copy of shlpplng blll
o Cne copy of commerclal lnvolce
2 CarLlng Crder 1he exporLer's agenL has Lo obLaln Lhe carLlng order from Lhe orL 1rusL AuLhorlLles
CarLlng Crder ls Lhe permlsslon Lo brlng Lhe goods lnslde Lhe docks 1he carLlng order ls lssued by Lhe
superlnLendenL of orL 1rusL CarLlng Crder ls lssued only afLer verlfylng Lhe endorsemenL on Lhe
dupllcaLe copy of shlpplng blll 1he CarLlng Crder enables Lhe exporLer's agenL Lo carL goods lnslde Lhe
docks and sLore Lhem ln proper sheds
3 SLorlng Lhe Coods ln Lhe Sheds AfLer securlng Lhe carLlng order Lhe goods are moved lnslde Lhe
docks 1he goods are Lhen sLored ln Lhe sheds aL Lhe docks
4 LxamlnaLlon of Coods 1he exporLer's agenL Lhen approaches Lhe cusLoms examlner Lo examlne Lhe
goods 1he cusLoms examlner examlnes Lhe cargo and records hls reporL on Lhe dupllcaLe copy of Lhe
shlpplng blll 1he cusLoms examlner Lhen slngs Lhe LeL LxporL Crder"
3 LeL LxporL Crder 1he LeL LxporL Crder ls Lhen shown Lo Lhe CusLoms revenLlve Cfflcer along wlLh
oLher documenLs 1he CC ls ln charge of supervlslon of loadlng operaLlons on Lhe vessel lf CC flnds
everyLhlng ln order he endorses Lhe dupllcaLe copy of shlpplng blll wlLh Lhe LeL Shlp Crder" 1hls order
helps Lhe exporLer/shlpper Lo load Lhe goods on Lhe shlp
6 Loadlng Coods 1he goods are Lhen loaded on Lhe shlp 1he CC supervlses Lhe loadlng operaLlons
AfLer loadlng ls compleLed Lhe Chlef MaLe (Cargo Cfflcer) of Lhe shlp lssues Lhe MaLe's 8ecelpL" 1he
MaLe's 8ecelpL ls senL Lo Lhe orL 1rusL Cfflce 1he Cl agenL pays Lhe porL LrusL dues and collecLs Lhe
maLe's recelpL 1he Cl agenL Lhen approaches Lhe CC and geLs Lhe cerLlflcaLlon of shlpmenL of goods
on A8 lorms and oLher documenLs
7 CbLalnlng 8lll of Ladlng 1he MaLe's 8ecelpL ls Lhen handed over Lo Lhe shlpplng company (on whose
vessel Lhe goods are loaded) 1he shlpplng company lssues blll of ladlng 1he 8lll of Ladlng ls lssued ln
o 3 negoLlable coples of 8lll of Ladlng
o 10 Lo 12 nonnegoLlable coples of 8lll of Ladlng
1he negoLlable coples have LlLle Lo goods whereas nonnegoLlable coples do noL have LlLle Lo goods buL
are used for record purpose
8CCLuu8L Cl LxClSL CLLA8AnCL
1he common procedure of exclse clearance under bond" and under rebaLe" ls dlscussed as follows
1 reparlng of lnvolce 1he exporL goods have Lo be cleared from Lhe facLory under lnvolce 1he lnvolce
conLalns deLalls llke name of Lhe exporLer value of goods exclse duLy chargeable eLc 1he lnvolce ls Lo
be prepared ln LrlpllcaLe ln case of exporL under 8ond Lhe lnvolce should be marked as lor LxporL
wlLhouL paymenL of duLy" ln addlLlon Lo Lhe lnvolce a prescrlbed for A8L 1 has Lo be flled ln by
exporLer
2 lllllng up of A8L1 form (Annexure20) 1he A8L1 form needs Lo be fllled ln four coples A flfLh
(CpLlonal) may be fllled ln by Lhe exporLer whlch can be used aL Lhe Llme of clalmlng oLher exporL
lncenLlves 1he A8L1 coples have dlsLlncL color for Lhe purpose of verlflcaLlon and processlng
3 AppllcaLlon Lo AsslsLanL Commlssloner of CenLral Lxclse (ACCL) 1he exporLer has Lo make an
appllcaLlon Lo ACCL regardlng Lhe removal of goods from Lhe facLory/warehouse for exporL purpose
4 lnformaLlon Lo 8ange SuperlnLendenL of CenLral Lxclse (8SCL) 1he ACCL wlll lnform Lhe 8SCL under
whose [urlsdlcLlon Lhe goods are lnLended Lo be cleared for exporL
3 uepuLaLlon of lnspecLor 1he 8SCL wlll Lhen depuLe an lnspecLor Lo clear Lhe goods elLher aL Lhe
facLory or warehouse and ln cerLaln cases aL Lhe porL
6 rocesslng of A8L1 lorm 1he Lxclse Cfflcer/lnspecLor wlll make endorsemenL on all coples of A8L1
1he handllng of A8L1 lorm ls done as follows
o 1he lnspecLor reLurns Lhe orlglnal and dupllcaLe coples Lo Lhe exporLer
o 1he LrlpllcaLe copy ls senL Lo offlcer (ACCL or MarlLlme Commlssloner (MCCL) Lo whom bond was
execuLed or leLLer of underLaklng (Lu1) was glven 1hls copy can also be handed over Lo Lhe exporLer ln
a Lamper proof sealed cover Lo be submlLLed Lo ACCL/MCCL
o 1he 4Lh copy wlll be reLalned by Lhe exclse lnspecLor
o 1he 3Lh copy ls also handed over Lo Lhe exporLer
o AL Lhe Llme of exporL orlglnal dupllcaLe and Lhe 3Lh copy (opLlonal) wlll be submlLLed Lo cusLoms
offlcer 1he cusLoms offlcer wlll examlne Lhese coples and Lhen exporL wlll be allowed
o 1he cusLoms offlcer wlll Lhen make endorsemenL of exporL on all coples of A8L1 Pe wlll clLe shlpplng
blll number and daLe and oLher parLlculars of exporL on A8L1
o 1he orlglnal copy and qulnLupllcaLe (opLlonal) wlll be reLurned Lo Lhe exporLer 1he dupllcaLe copy wlll
be senL dlrecLly Lo Lhe ACCLMCCL le exclse offlcer wlLh whom bond was execuLed wlll geL 2 coples
one from 8SCL (or exclse lnspecLor) when goods are cleared from facLory and oLher CusLom Cfflcer afLer
exporL 1hls wlll enable hlm Lo keep Lrack Lo ensure LhaL all goods cleared from facLory or warehouse
wlLhouL paymenL of duLy are acLually exporLed ln case of exporL afLer paymenL of duLy under clalm of
rebaLe Lhe baslc procedure ls same as above excepL LhaL Lhe LrlpllcaLe copy (by exclse lnspecLor) and
dupllcaLe copy(by cusLoms offlcer)wlll be senL Lo Lhe offlcer Lo whom rebaLe clalm ls flled lf clalm of
rebaLe ls by elecLronlc submlsslon Lhese coples well be senL Lo exclse rebaLe audlL secLlon aL Lhe place
of exporL
7 8efund or 8elease of 8ond 1he exporLer should make an appllcaLlon Lo Lhe exclse offlcer for refund or
release of bond 1he appllcaLlon musL be supporLed by orlglnal copy of A8L1 form 1he exclse offlcer
crosschecks Lhe orlglnal copy of A8L1 form and Lhe dupllcaLe and LrlpllcaLe coples of A8L1 form whlch
he had recelved earller lf Lhe coples maLch Lhen refund ls glven or Lhe bond ls released
lAC1C8? S1ulllnC Cl CA8CC
Clearance of goods Lo docks lf Lhe goods meanL for exporL ls of a small quanLlLy whlch may noL be
sufflclenL Lo make one full conLalner Lhe cargo ls sald Lo be less Lhan conLalner load (LCL) cargo Such
cargo has Lo be Laken Lo Lhe docks where Lhe goods wlll be consolldaLed (comblnlng Lhe cargo of oLher
exporLers Lo make up quanLlLy for a full conLalner) by Lhe agenL and loaded lnLo a conLalner Pere Lhe
examlnaLlon of Lhe cargo ls done aL Lhe docks(1here are also lnland conLalner depoLs approved by Lhe
cusLoms where Lhe goods can be consolldaLed and sLuffed lnLo Lhe conLalner by Lhe agenL under Lhe
supervlslon of Lhe cusLoms offlcer)
lf Lhe goods meanL for exporL ls of sufflclenL quanLlLy Lo make up a full conLalner Lhe exporLer has Lhe
opLlon Lo Lake Lhe goods Lo Lhe docks and geL Lhem examlned and sLuffed lnLo a separaLe conLalner An
exporLer geLs Lhe beneflL on Lhe frelghL amounL for a full conLalner (Cenerally called box raLe)
AlLernaLlvely he can have a conLalner alloLLed Lo hlm and geL Lhe same Lo hls Mllls remlses 1he goods
meanL for exporLs can be sLuffed lnLo Lhe conLalner under Lhe supervlslon of Lhe reglonal CenLral Lxclse
AuLhorlLy Pere Lhe exporLer has Lo
1 CbLaln permlsslon from Lhe CusLoms for geLLlng Lhe conLalner Lo hls mllls premlses for sLufflng (Pouse
SLufflng)
2 lnform Lhe CLxclse AuLhorlLles aL leasL 24 hours before brlnglng Lhe conLalner for loadlng
1he CLxclse AuLhorlLy wlll supervlse Lhe loadlng seal Lhe conLalner and cerLlfy Lhe lnvolce as dlrecLed ln
Lhe permlsslon glven by Lhe cusLom auLhorlLles A speclal Lock ls used Lo lock Lhe doors of Lhe conLalner
Samples from Lhe goods wlll be drawn lf necessary as requlred under Lhe cusLoms permlsslon Such
samples wlll be sealed and forwarded along wlLh Lhe conLalner 1he examlner ln Lhe docks may arrange
Lo send Lhe sample for LesLlng 1hen Lhe conLalner ls moved Lo Lhe dock for loadlng Cenerally such
conLalnerlzed goods are noL sub[ecL Lo furLher examlnaLlon ln Lhe cusLoms 1hey wlll be dlrecLly Laken
for loadlng

SALLS 1Ax LxLM1lCn 8CCLuu8L
LxporL good are exempLed from Lhe paymenL of sales Lax 1he exporLer can clalm exempLlon from sales
Lax (on purchases or sales for exporL purpose) provlde Lhe exporLer ls reglsLered wlLh Lhe Sales1ax
ueparLmenL lf Lhe exporLer ls noL reglsLered wlLh Lhe sales Lax deparLmenL he cannoL uLlllze Lhe faclllLy
of sales Lax exempLlon 1herefore lL ls necessary for Lhe exporLer Lo geL hls organlzaLlon reglsLered wlLh
sales Lax deparLmenL
l 8eglsLraLlon rocedure
1 AppllcaLlon 1he exporLer musL apply Lo Lhe Sales 1ax Cfflcer (S1C) under whose [urlsdlcLlon Lhe head/
reglsLered offlce of Lhe exporLer ls locaLed
2 uepuLaLlon of lnspecLor 1he S1C may depuLe an lnspecLor Lo vlslL Lhe offlce of Lhe exporLer and
lnspecL
o 8elevanL books showlng sales/ purchases
o arLnershlp ueed or Memorandum and ArLlcles of AssoclaLlon along wlLh lncorporaLlon CerLlflcaLe
o CLher 8elevanL documenLs
3 lnspecLlon 1he lnspecLor vlslLs Lhe offlce of Lhe exporLer and lnspecLs Lhe necessary books and oLher
documenLs
4 8eporL by lnspecLor 1he Sales 1ax lnspecLor makes a reporL Lo Lhe S1C for reglsLraLlon or oLherwlse
1he S1C verlfles Lhe lnspecLor reporL 1he S1C before granLlng Lhe S1 8eg number may cal Lhe exporLer
for necessary clarlflcaLlons lf requlred
3 SecurlLy 8ond 1he S1C normally requlres Lhe exporLer Lo provlde a securlLy bond from anoLher flrm
whlch ls reglsLered wlLh Lhe Sales 1ax ueparLmenL
6 CranLlng of Sales 1ax 8eg number AfLer compleLlng necessary formallLles Lhe S1C granLs Sales 1ax
8eg number Lo Lhe exporLer
ll LxempLlon rocedure
1 CbLalnlng lorm 'P' Lhe reglsLered exporLers need Lo apply Lo Lhe concerned S1C for obLalnlng lorm
'P' Lhe exporLer should submlL
o A copy of LeLLer of CredlL
o A copy of LeLLer of CredlL /LxporL Crder
o Copy of Lhe lnvolce where goods are already purchased for exporL purchase
o A copy of shlpplng blll duLy cerLlfled by cusLoms
1he exporLer has Lo afflx Lhe prescrlbed courL fee sLamp on each of Lhe lorm 'P' lssued 1he S1C Lhen
afflxes Lhe exporLer's company sLamp on Lhe lorm 'P'
1 lllllng Lhe deLalls ln lorm 'P' AfLer exporL of goods Lhe exporLer fllls Lhe relevanL deLalls ln 'lorm P'
1he lorm 'P' needs Lo be prepared ln LrlpllcaLe
1he exporLer reLalns one copy and oLher Lwo coples are senL Lo Lhe seller from whom Lhe exporLer
purchased Lhe goods for exporL purpose 1he seller Lhan sends on copy of lorm 'P' Lo S1C along wlLh
Lhe 8eLurn of Sales 1ax 1he oLher copy ls reLalned by seller 1he S1C may lssue refund order Lo Lhe
exporLer

ML1PCuS Cl 8LCLlvlnC A?MLn1 ACAlnS1 LxC81S
8efore we proceed Lo undersLand Lhe concepL of LeLLer of CredlL leL us undersLand Lhe varlous Lypes of
paymenL meLhods avallable agalnsL exporL
ML1PCuS Cl A?MLn1
1here are Lhree meLhods of paymenL dependlng upon Lhe Lerms of paymenL and each meLhod of
paymenL lnvolves varylng degrees of rlsks for Lhe exporLer 1he meLhods are
2 aymenL ln advance
3 uocumenLary 8llls
4 LeLLer of CredlL
3 Cpen AccounL
6 CounLer 1rade
A A?MLn1 ln AuvAnCL
1hls meLhod does noL lnvolve any rlsk of bad debLs provlded enLlre amounL has been recelved ln
advance AL Llmes a cerLaln per cenL ls pald ln advance say 30 and Lhe resL on dellvery 1hls meLhod of
paymenL ls deslrable when
1 1he flnanclal poslLlon of Lhe buyer ls weak or credlL worLhlness of Lhe buyer ls noL known
2 1he economlc/ pollLlcal condlLlons ln Lhe buyer's counLry are unsLable
3 1he seller ls noL wllllng Lo assume credlL rlsk as un Lhe case of open accounL meLhod
Powever Lhls ls Lhe mosL unpopular meLhods as a forelgn buyer would noL be wllllng Lo pay advance of
shlpmenL unless
1 1he goods are speclflcally deslgned for Lhe cusLomer and
2 1here ls heavy demand for Lhe goods (a seller's markeL slLuaLlon)

8 uCCuMLn1A8? 8lLLS
under Lhls meLhod Lhe exporLer agrees Lo submlL Lhe documenLs Lo hls bank along wlLh Lhe blll of
exchange 1he mlnlmum documenLs requlred are
1 full seL of blll of ladlng
2 commerclal lnvolce
3 Marlne lnsurance pollcy and oLher documenL lf requlred
1here are Lwo maln Lypes of documenLary bllls
1 uocumenLs agalnsL aymenL
2 uocumenLs agalnsL AccepLance
uocumenLs agalnsL paymenL (u/) 1he documenLs are released Lo Lhe lmporLer agalnsL paymenL 1hls
meLhod lndlcaLes LhaL Lhe paymenL ls made agalnsL SlghL urafL necessary arrangemenLs wlll have Lo be
made Lo sLore Lhe goods lf a delay ln paymenL occurs
1he rlsk lnvolved LhaL Lhe lmporLer may refuse Lo accepL Lhe documenLs and Lo pay agalnsL Lhem 1he
reason for nonaccepLance may be pollLlcal or commerclal ones ln lndla LCCC covers losses arlslng ouL
of such rlsks under Lhls sysLem as compared Lo u/A Lhe exporLer has cerLaln advanLages
1 1he documenL remaln ln Lhe hands of Lhe bank and Lhe exporLer does noL lose possesslon or Lhe
ownershlp of goods Llll paymenL ls made
2 CLher reason may lnclude LhaL Lhe exporLer may noL be able Lo allow credlL and walL for paymenL
uocumenLs AgalnsL accepLance (u/A) 1he documenL are released agalnsL accepLance of Lhe 1lme urafL
le credlL allowed for a cerLaln perlod say 90 days Powever Lhe exporLer need noL walL for paymenL Llll
blll ls meL on due daLe as he can dlscounL Lhe blll wlLh Lhe negoLlaLlng bank and can avall of funds
lmmedlaLely afLer shlpmenL of goods
ln case of u/A as compared Lo u/ bllls Lhe rlsk lnvolved ls much graLer as Lhe lmporLer has already
Laken possesslon of goods whlch may or may noL be ln hls cusLody on Lhe maLurlLy daLe of Lhe blll lf Lhe
lmporLer falls Lo pay on due daLe Lhe exporLer wlll have Lo sLarL clvll proceedlngs Lo recelve hls
paymenL lf all oLher alLernaLlves falls 1he rlsk lnvolved can be lnsured wlLh LCCC
C LL11L8 Cl C8Lul1 (L/C)
1hls meLhod of paymenL has become Lhe mosL popular form ln recenL Llmes lL ls more secured as
company Lo oLher meLhods of paymenL (oLher Lhan advance paymenL)
A leLLer of credlL can be deflned as an underLaklng by lmporLer's bank sLaLlng LhaL paymenL wlll be
made Lo Lhe exporLer lf Lhe requlred documenLs are presenLed Lo Lhe bank wlLhln Lhe varleLy of Lhe
L/C"

1PL LL11L8 Cl C8Llu1
lnLroducLlon
1he cycle of a buslness LransacLlon can be sald Lo be compleLe prlma facle when Lhe buyer has recelved
Lhe producL he deslres Lo buy and Lhe seller geLs hls paymenL ln due conslderaLlon of Lhe producL
supplled
Whlle Lhe seller ls keen Lo recelve Lhe paymenL for hls supplles Lhe buyer ls equally keen LhaL he geLs
whaL he wanLs by Lhe paylng for Lhe same
1ough Lhere are many merlL and demerlLs ln each of Lhe dlfferenL mode of paymenLs we have dlscussed
earller ln relaLlon elLher Lo Lhe buyer or Lo Lhe seller we shall now deal ln deLall abouL Lhe mode of
paymenL under Lhe uocumenLary CredlL
Cenerally Lhough exporLers are complacenL once Lhey geL Lhe leLLer of CredlL on hand feellng LhaL Lhelr
paymenL ls secured leL me say lL ls as much a dublous lnsLrumenL as ls a safe lnsLrumenL
lf one does noL undersLand Lhe lmpllcaLlons of Lhe Lerms and condlLlon of a leLLer of credlL Lhe
provlslons under uC 300 how cooperaLlve are Lhe exporLer's bank and how good are Lhe L/C openlng
bank and Lhe relmbursemenL bank he ls sure Lo land ln Lrouble aL once sLage or anoLher
1here are ample cases of frauds under Lhe LeLLer of CredlL More and more lngenlous meLhods are
adopLed Lo clrcumvenL Lhe provlslons of uC 300 by falr or foul means Pence even Lhe safeLy and
securlLy under Lhe LeLLers of CredlL may prove Lo be no beLLer Lhan a mlrage for a man ln Lhe deserL
Pence sufflclenL care ls Lo be Laken by Lhe exporLer Lo ensure LhaL lnsLrumenL ls recelved ln order and
Lhe condlLlons of Lhe L/C can be well complled wlLh and Lhere are no clauses of amblgulLy

WhaL ls a uocumenLary CredlL?
1o say ln slmple language Lhls ls an underLaklng by a 8ank assoclaLed wlLh Lhe buyer Lo make Lhe
paymenL for Lhe supply of goods by a seller sub[ecL Lo compllance of varlous requlremenLs LhaL may be
speclfled ln Lhe documenL of underLaklng by Lhe 8ank 1hls documenL ls known as uocumenLary CredlL
A uocumenLary CredlL ls also called a LeLLer of CredlL (L/C)
CCn1Ln1S Cl A LL11L8 Cl C8Lul1
A leLLer of credlL ls an lmporLanL lnsLrumenL ln reallzlng Lhe paymenL agalnsL exporLs So needless Lo
menLlon LhaL Lhe leLLer of credlL when esLabllshed by Lhe lmporLer musL conLaln all necessary deLalls
whlch should Lake care of Lhe lnLeresL of lmporLer as well as LxporLer LeL us see shaL a leLLer of credlL
should conLaln ln Lhe lnLeresL of Lhe exporLer 1hls ls only an lllusLraLlve llsL
1 name and address of Lhe bank esLabllshlng Lhe leLLer of credlL
2 leLLer of credlL number and daLe
3 1he leLLer of credlL ls lrrevocable
4 uaLe of explry and place of explry
3 value of Lhe credlL
6 roducL deLalls Lo be shlpped
7 orL of loadlng and dlscharge
8 Mode of LransporL
9 llnal daLe of shlpmenL
10 ueLalls of goods Lo be exporLed llke descrlpLlon of Lhe producL quanLlLy unlL raLe Lerms of shlpmenL
llke Cll lC8 eLc
11 1ype of packlng
12 uocumenLs Lo be submlLLed Lo Lhe bank upon shlpmenL
13 1olerance level for boLh quanLlLy and value
14 lf L/C ls resLrlcLed for negoLlaLlon
13 8elmbursemenL clause

8CCLuu8L lnvCLvLu ln 1PL LL11L8 Cl C8Lul1
1he followlng are Lhe sLep ln Lhe process of openlng a leLLer of credlL
1 LxporLer's 8equesL 1he exporLer requesLs Lhe lmporLer Lo lssue LC ln hls favor LC ls Lhe mosL secured
form of paymenL ln forelgn Lrade
2 lmporLer's 8equesL Lo hls 8ank 1he lmporLer requesLs hls bank Lo open a L/C Pe May elLher pay Lhe
amounL of credlL ln hls currenL accounL wlLh Lhe bank
3 lssue of LC 1he lssulng bank lssues Lhe L/C and forwards lL Lo lLs correspondenL bank wlLh also requesL
Lo lnform Lhe beneflclary LhaL Lhe L/C has been opened 1he lssulng bank may also requesL Lhe advlslng
bank Lo add lLs conflrmaLlon Lo Lhe L/C lf so requlred by Lhe beneflclary
4 8ecelpL of LC Lhe exporLer Lakes ln hls possesslon Lhe L/C Pe should see lL LhaL Lhe L/C ls conflrmed
3 ShlpmenL of Coods 1hen exporLer supplles Lhe goods and presenLs Lhe full seL of documenLs along
wlLh Lhe drafL Lo Lhe negoLlaLlng bank
6 ScruLlny of uocumenLs 1he negoLlaLlng bank Lhen scruLlnlzes Lhe documenLs and lf Lhey are ln order
makes Lhe paymenL Lo Lhe exporLer
7 negoLlaLlon 1he exporLer's bank negoLlaLes Lhe documenL agalnsL Lhe leLLer of credlL and forwards
Lhe exporL documenLs Lo Lhe L/C openlng bank or as per Lhelr lnsLrucLlons
8 8eallzaLlon of paymenL 1he lssulng bank wlll relmburse Lhe amounL (whlch ls pald Lo Lhe exporLer) Lo
Lhe negoLlaLlng bank
9 uocumenL Lo lmporLer Lhe lssulng ln Lurn presenLs Lhe documenLs Lo Lhe lmporLer and deblLs hls
accounL for Lhe correspondlng amounL
ln order Lo have unlformlLy and Lo avold dlspuLes Lhe lCC arls has evolved unlform cusLoms and
pracLlces of documenLary credlL (uCuC) ln shorL known as uC 300 effecLlve from 1196 1hese are
rules have been adopLed by more Lhan 130 counLrles 1hey provlde Lhe comprehenslve and pracLlcal
worklng ald Lo banker lawyer lmporLers exporLers LxporLers LransporLers execuLlves lnvolved ln
lnLernaLlonal Lrade
noLe as soon as an L/C ls recelved ensure LhaL Lhe same ls auLhenLlcaLed Meanlng LhaL Lhe genulneness
of Lhe L/C ls cerLlfled by Lhe Advlslng 8ank by an endorsemenL wlLh Lhe marklng 'Au1PLn1lCA1Lu' C8
LLSL 1PL L/C lS Cl nC uSL
ulfferenL 1ype of uocumenLary CredlLs
1here are varlous Lypes of uocumenLary CredlL opened by a bank ln favour of lL's cusLomer dependlng
upon Lhe requlremenL LeL us Lalk abouL few Lypes of uocumenLary CredlL whlch are ln common use
1 8evocable / lrrevocable uocumenLary CredlL A 8evocable uocumenLary CredlL can be revoked
(cancelled) by Lhe buyer aL hls own dlscreLlon and Lhls does noL requlre Lhe consenL of Lhe seller 1he
rlsk facLor here ls LhaL Lhe L/C may be cancelled even afLer Lhe shlpmenL ls done and before Lhe
beneflclary presenL Lhe documenLs Lo Lhe bank for clalmlng Lhe relmbursemenL Pence a revocable L/C
ls as goods as no L/C obvlously no seller wlll enLerLaln a revocable L/C ConLrary Lo Lhls an lrrevocable
uocumenLary CredlL once esLabllshed and advlsed Lo Lhe beneflclary cannoL be revoked or cancelled
unllaLerally by Lhe buyer wlLhouL Lhe consenL of Lhe beneflclary (Seller)A Seller musL always ask for an
lrrevocable LeLLer of CredlL
2 8esLrlcLed/ unresLrlcLed uocumenLary CredlL A uocumenLary CredlL sLlpulaLes Lhe name of Lhe bank
who ls auLhorlzed Lo negoLlaLe Lhe documenL for clamlng Lhe relmbursemenL ln Lhls case Lhe
beneflclary ls obllged Lo negoLlaLe Lhe documenLs only Lhrough Lhe speclfled bank le negoLlaLlon of
documenL ls resLrlcLed Lo LhaL parLlcular bank Cn Lhe conLrary lf no speclflc bank ls nomlnaLed for
negoLlaLlon lL may say 'negoLlaLlon by any bank' whlch means Lhe beneflclary ls free no negoLlaLe Lhe
documenL Lhrough Lhe bank of hls cholce 1hls ls beneflclal because he can negoLlaLe Lhe documenLs
Lhrough hls own bank where he ls havlng an accounL Slnce Lhe bank ls noL allen Lo hlm he wlll noL face
any pracLlcal/procedural dlfflculLy ln negoLlaLlng Lhe documenL lL ls suggesLed Lo have an unresLrlcLed
L/C or L/C whlch may be resLrlcLed Lo Lhe bank of Lhe beneflclary's cholce

1 Conflrmed/unconflrmed uocumenLary CredlL Conflrmed uocumenLary CredlL ls one ln whlch Lhe
beneflclary has Lhe opLlon Lo have Lhe L/C conflrmed by a bank ln Lhe beneflclary counLry le Lhe bank
who conflrms Lhe L/C Lakes Lhe responslblllLy of maklng Lhe flnal paymenL Lo Lhe beneflclary upon
negoLlaLlon of Lhe documenL ln sLrlcL compllance wlLh Lhe Lerms and condlLlons of Lhe LeLLer of CredlL
8y Lhls process Lhe flnal paymenL wlll be made ln Lhe beneflclary's counLry by Lhe bank whlch conflrms
Lhe L/C lmmedlaLely upon negoLlaLlon of Lhe documenLs 1he beneflclary do noL sLand Lhe rlsk of walLlng
for Lhe documenL Lo reach Lhe openlng bank who wlll have Lhe flnal say so Lo Lhe compllance under Lhe
L/C before maklng Lhe paymenL lurLher Lhe paymenL ls also made lmmedlaLely afLer negoLlaLlon and
wlLhouL recourse Lo Lhe beneflclary le Lhe paymenL once made by Lhe conflrmed bank cannoL be
revoked Moreover lf Lhe lmporLlng counLry's regulaLlon changes and Lhe money ls noL allowed Lo be
repaLrlaLed Lhls wlll ellmlnaLe Lhe rlsk Cn Lhe conLrary ln an unconflrmed L/C Lhe negoLlaLlng bank
only accepLs Lhe documenLs and pays for Lhe same wlLh recourse le lf as and when Lhe documenLs
reach Lhe openlng bank and Lhe openlng flnd some dlscrepancy ln Lhe documenLs lL may refuse Lo make
Lhe paymenL or seek clarlflcaLlon for Lhe appllcanL before relmbursemenL 1he beneflclary ls fully aL Lhe
mercy of Lhe openlng bank for paymenL lL ls suggesLed Lo ask for a Conflrmed L/C
2 WlLh 8esource and WlLhouL (Sans) 8esource LeLLer of CredlL 1he revocable or lrrevocable LC can
furLher be classlfled as wlLh resource and wlLhouL resource LC
o WlLh resource LC ln Lhls Lype Lhe exporLer ls held llable Lo Lhe paylng/ negoLlaLlng bank lf Lhe drafL
drawn agalnsL LC ls noL honored by Lhe lmporLer/lssulng bank 1he negoLlaLlng bank can make Lhe
exporLer Lo pay Lhe amounL along wlLh Lhe lnLeresL whlch lL has already pald Lo Lhe beneflclary
o WlLhouL (Sans) 8esource LC ln Lhe case of sans (wlLhouL) resource leLLer of credlL Lhe negoLlaLlng
bank has no recourse Lo Lhe exporLer buL only Lo Lhe lssulng bank or Lo Lhe conflrmlng bank
normally Lhe negoLlaLlng bank makes advance paymenL Lo Lhe exporLer ln resource of leLLer of credlL
elLher by dlscounLlng bllls agalnsL leLLer of credlL or by purchaslng Lhe bllls of exchange ln such an
lnsLance lf Lhe lssulng bank falls Lo make paymenL or dlshonor Lhe leLLer of credlL Lhen Lhe negoLlaLlng
bank cannoL geL Lhe money back from Lhe exporLer or hold hlm llable Lo pay Lhe amounL Powever ln
Lhe case of wlLh resource leLLer of credlL Lhe negoLlaLlng bank can ask Lhe exporLer Lo pay back Lhe
money along wlLh cerLaln oLher expenses lor Lhe exporLer sans 8esource leLLer of credlL ls more safe as
compared Lo WlLh 8esource leLLer of credlL
1 1ransferable/nonLransferable uocumenLary CredlL ln a Lransferable L/C Lhe beneflclary can Lransfer
Lhe L/C opened ln hls name ln favor of a Lhlrd parLy who may effecL Lhe shlpmenL and negoLlaLe Lhe
documenLs and clalm paymenL under Lhe sald L/C
2 8evolvlng uocumenLary CredlL Where an exporLer ls havlng a regular shlpmenL for a parLlcular
cusLomer and Lhe value of each shlpmenL may also be of more or less equal value and Lhen one can call
for a 8evolvlng uocumenLary CredlL 1he sallenL feaLure of Lhls L/C ls LhaL Lhe buyer opens an L/C whlch
can Lake care of shlpmenLs say may be for a perlod of one year on a monLhly basls
lor eg an exporLer enLers lnLo a conLracL for supply of 3000 palrs of 1rousers valued
approxuS$73000/ Lo be shlpped every monLh 1he buyer can open an L/C for a value of uS$73000/
wlLh valldlLy for 12 monLhs sLlpulaLlng shlpmenL every monLh for a value of uS$ 73000/and by addlng a
clause Lo make 12 shlpmenL of llke value Lhe L/C sLands replenlshed for Lhe full value of Lhe L/C afLer
each shlpmenL ls made Lhe documenLs are negoLlaLed for whlch paymenL are also made lmmedlaLely for
Lhe value of Lhe shlpmenL 1he maln beneflL ln Lhls L/C ls LhaL Lhe buyer Lhe bank and Lhe exporLer are
saved from Lhe rouLlne of openlng one L/C every monLh Lhe anxleLy of nonrecelpL of Lhe L/C on Llme
Lhe amendmenLs LhaL may be warranLed every Llme Lhe bank charges for openlng number of L/Cs eLc
A revolvlng uocumenLary CredlL may have cumulaLlve effecL le lf a parLlcular shlpmenL ls noL made
Lhen Lhe value ls added Lo Lhe value for fuLure uLlllzaLlon ln an auLomaLlc 8evolvlng CredlL Lhe bank ls
llable for Lhe LoLal amounL coverlng Lhe enLlre shlpmenL and where lL ls nonauLomaLlc lLs responslblllLy
ls resLrlcLed Lo Lhe value of one shlpmenL ln auLomaLlc 8evolvlng CredlL Lhe value of Lhe credlL ls
auLomaLlcally replenlshed by an amendmenL
Where Lhere are conLlnuous shlpmenLs llke Lhe one sLaLed above one can call for a 8evolvlng LeLLer of
CredlL
1 Asslgnable uocumenLary CredlL ln Lhls Lype of L/C Lhe beneflL ls shared beLween Lhe flrsL beneflclary
and Lhe parLles whose names are asslgned on Lhe L/C 1he asslgnee ls noL a parLy Lo Lhe leLLer of credlL
buL he only derlves Lhe beneflL as per Lhe L/C Lhls ls more beneflclal Lo Lhe asslgnee because he recelves
hls parL of Lhe money once Lhe documenLs are negoLlaLed by Lhe flrsL beneflclary ln whose name Lhe L/C
ls opened Calls for an L/C as necessary
2 SLand by LeLLer of CredlL 1hls ls almed aL provldlng a securlLy Lo a seller ln case Lhe buyer falls Lo
perform hls parL 1hus Lhls L/C ls used ln case of nonperformance whlle Lhe oLher Lypes of L/Cs are
generally for some performance Such credlLs are paylng on flrsL presenLaLlon and Lhe only documenL
requlred Lhereln ls a slmple declaraLlon of nonperformance along wlLh Lhe sLaLemenL of clalm 1hls Lype
of L/C ls malnly common ln uSA
A sLandby uocumenLary CredlL ls generally common on open accounL Lradlng where Lhe seller may
expecL some securlLy for geLLlng hls paymenL 1hls ls noL permlLLed ln lndla
1 8ed Clause LC 1he red clause LC ls Lhe usual lrrevocable LC wlLh furLher auLhorlLles Lhe negoLlaLlng
bank Lo make advance Lo Lhe beneflclary for Lhe purpose of processlng Lhe exporL goods 1hus Lhe red
LC enables Lhe exporLer Lo obLaln packlng credlL faclllLy for Lhe purpose of processlng Lhe goods lL ls
called a redcause LC because lL ls generally prlnLed/ Lyped ln red lnk
2 Creen Clause LC 1he Creen LC ln addlLlon Lo permlLLlng packlng credlL advance also provldes for Lhe
sLorlng faclllLles aL Lhe porL of shlpmenL Creen LCs ls exLenslvely used ln AusLrallan wool credlLors
3 8ackLo8ack LC 8ackLo 8ack LC ls a domesLlc leLLer of credlL lL ls a anclllary credlL creaLed by a bank
based on a conflrmed exporL LC recelved by Lhe dlrecL exporLers 1he dlrecL exporLer keep Lhe orlglnal
LC (recelved from lssulng bank) wlLh Lhe negoLlaLlng or some oLher bank ln lndla as a securlLy and
obLalns anoLher LC ln favour of domesLlc suppller 1hrough Lhls rouLe Lhe domesLlc suppller galns dlrecL
access Lo a preshlpmenL loan based on Lhe recelpL of domesLlc or backLoback LC
4 uocumenLary LC MosL of Lhe LC ls documenLary LC aymenL ls belng made by Lhe bank agalnsL
dellvery of Lhe full seL of documenLs as lald down by Lhe Lerms of credlL 1he lmporLanL documenLs
requlred Lo be submlLLed by Lhe exporLer under documenLary LC lncludes Lhe followlng
3 8lll of Ladlng /Alrway 8lll or any oLher LransporL documenL
6 Commerclal lnvolce
7 lnsurance ollcy
8 Shlpplng 8lll
9 CerLlflcaLe of Crlgln
10 Comblned lnvolce and CerLlflcaLe of value and Crlgln
11 CS/CW cerLlflcaLe
12 acklng LlsL
13 CerLlflcaLe of CuallLy lnspecLlon
14 8lll of Lxchange
13 Any oLher documenL lf requlred
A leLLer of credlL may call for some or mosL of Lhe above documenLs and may also call for some oLher
documenLs speclflc Lo Lhe shlpmenL
1 1raveler's LC 1raveler's LC ls lssued Lo Lhe person who lnLends Lo make a [ourney abroad 1he
correspondenL/ agenL of Lhe bank honors all Lhe cheques drawn on Lhls credlL by lLs holder up Lo Lhe
amounL menLloned ln LC 1raveler's LC has more advanLages as compared Lo Lraveler's cheques ln case
of cheque Lhe holder can wlLhdraw up Lo Lhe amounL of Lhe cheque Agaln he has Lo carry a number of
cheque ln case of Lraveler's LC Lhe holder can draw any amounL up Lo Lhe llmlL menLloned ln Lhe LC
and he need Lo carry only one paper of LC
1ypes of aymenLs under a uocumenLary CredlL
aymenL under a documenLary credlL can be of Lhe followlng Lypes
1 paymenL aL SlghL ln Lhls mode Lhe paymenL ls made by Lhe L/C openlng bank or lLs nomlnaLed bank
or by a conflrmlng bank on presenLaLlon of Lhe documenLs ln full conformlLy wlLh Lhe L/C 1he L/C may
or may noL call for drafL aL slghL for Lhe full value of Lhe documenLs
2 ueferred aymenL Scheme ln Lhls case Lhe paymenL ls Lo be made aL a fuLure daLe as sLlpulaLed ln Lhe
L/C Pere generally nC drafL ls requlred as Lhe due daLe of paymenL ls deflned ln Lhe L/C ln case of a
conflrmed L/C Lhe flnal paymenL ls made by Lhe conflrmed bank on due daLe and by Lhe lssulng bank or
lLs nomlnaLed bank lf Lhe L/C ls noL conflrmed
3 AccepLance CredlL 1hls Lype of credlL requlres a usance drafL Lo be drawn on a nomlnaLed or
accepLlng bank 1he paymenL ls made by Lhe nomlnaLed/accepLlng bank on Lhe due daLe as per
lnsLrucLlons of Lhe negoLlaLlng bank ln case of a conflrmed L/C Lhe paymenL on due daLe ls made by Lhe
negoLlaLlng bank (conflrmlng bank)
4 negoLlaLlon CredlL Pere Lhe paymenL ls made by Lhe negoLlaLlng bank upon negoLlaLlon of Lhe
documenLs lf lL prepares Lo Lake Lhe rlsk and wlll recourse Lo Lhe beneflclary lf Lhe credlL ls conflrmed
Lhen Lhe negoLlaLlon bank ls obllged Lo make Lhe paymenL upon submlsslon of a clean documenL by Lhe
beneflclary
LxpecL ln Lhe case of conflrmed L/C Lhere ls always a Llme lag beLween Lhe daLe of negoLlaLlon of Lhe
documenL and Lhe daLe of recelpL of Lhe paymenL 1hls ls a grey area lf Lhe bank acLs swlfLly and
wlLhouL pre[udlce one geLs paymenL wlLhln a week's Llme lf Lhe paymenL ls delayed beyond Lhls Llme
Lhough an exporLer has every rlghL Lo ask for compensaLlon ln acLual pracLlce no [usLlce ls done Lo Lhe
exporLer for Lhe delayed paymenL very rarely on perslsLenL approach by Lhe exporLer/Lhelr banker
does a defaulLlng bank comes forward Lo compensaLe for Lhe delayed paymenL Cenerally Lhe exporLer
has Lo forego loL of money ln correspondence Lhrough Lhe negoLlaLlng bank because every
communlcaLlon of Lhe bank ls charged Lo Lhe exporLer lL ls no surprlse many exporLer suffer Lhls loss
sllenLly
leaLure of a uocumenLary CredlL
A documenLary credlL ls a documenL ln wrlLlng lssue by Lhe bank on behalf of lLs cusLomer (1he 8uyer)
uocumenLary CredlL musL sLlpulaLe Lhe 1ype of CredlL as deLalled above and lnLer alla wlll also sLlpulaLe
Lhe
lollowlng deLalls
1 Lhe name of Lhe 8ank lssulng Lhe uocumenLary CredlL(1he L/C Cpenlng 8ank)
2 Lhe name and address of Lhe buyer on whose behalf Lhe credlL ls lssued(1he AppllcanL)
3 Lhe name and address of a bank ln Lhe counLry of Lhe seller Lhe credlL Lhrough Whom Lhe L/C ls Lo be
advlsed Lo Lhe seller
4 1he name and address of Lhe Seller (8eneflclary)
3 1he Maxlmum value Lhe openlng bank underLakes Lo pay Lo Lhe 8eneflclary
6 1he daLe of lssue of Lhe credlL
7 1he Lxplry uaLe of Lhe L/C
8 1he valldlLy uaLe for shlpmenL
9 1he ueLalls of Lhe producL Lo be shlpped(uescrlpLlon)
10 ueLalls of documenL requlred for clalmlng Lhe paymenL from Lhe Cpenlng bank
11 1he name and address of Lhe bank auLhorlzed Lo negoLlaLe Lhe documenLs
12 1he 8elmbursemenL Clause
As soon as an L/C ls recelved ensure LhaL Lhe L/C ls auLhenLlcaLed lf Lhe L/C recelved ln mall Lhe
slgnaLures are goL Lo be verlfled by Lhe advlslng bank ln case of Lelex/swlfL Lhe bank should endorse on
Lhe documenL auLhenLlcaLed and Lhen only Lhe L/C ls a valld documenL
Whlle Lhe above deLalls are Lhe mlnlmum LhaL a uocumenLary CredlL may have ln acLual pracLlce Lhere
can be oLher sLlpulaLlons muLually agreeable Lo Lhe buyer seller and Lhe openlng bank as also Lhe
negoLlaLlng bank
1he guldellnes for Lhe lnLerpreLaLlon and usage of LeLLer of CredlL are governed by Lhe uC 300
(unlform CusLoms racLlce for uocumenLary CredlL) publlshed by Lhe lnLernaLlonal Chamber of
Commerce (lCC) 1he uC 300 covers all Lhe procedural aspecLs relaLlng Lo Lhe LransacLlons under a
LeLLer of CredlL Pence one ls suggesLed Lo be famlllar wlLh all Lhe 49 ArLlcles as deLalled ln Lhe uC 300
of 1994
Whlle all Lhe elemenLs and evenLs LhaL one may encounLer ln each and every organlzaLlon can noL be
explalned Lhe uC 300 has aLLempLed Lo Lake care mosL of Lhe querles LhaL one may encounLer
normally
1he lCC unlform CusLoms and racLlce was flrsL publlshed ln 1993 1aklng lnLo Lhe conslderaLlon of Lhe
varlous developmenLs ln Lhe LransacLlons under Lhe uocumenLary CredlL Lhe lCC has been revlewlng
Lhese rules and updaLlng Lhe same As Llme changes and Lhe lnLernaLlonal LransacLlons faces new
aspecLs aLLempLs wlll be made Lo geL Lhe uC 300 revlsed
ScruLlny of leLLer of credlL
Mere recelpL of leLLer of credlL ls no guaranLee of paymenL 1here are many lfs and buLs before Lhe
documenLs are submlLLed Lo Lhe bank agalnsL Lhe leLLer of credlL for reallzaLlon of proceeds from Lhe
openlng bank As soon as Lhe leLLer of credlL ls recelved a Lhrough scruLlny ls Lo be underLaken Lo ensure
LhaL
1 llrsL and foremosL LhaL Lhe credlL ls properly auLhenLlcaLed by Lhe advlslng bank
2 1he leLLer of credlL has been opened ln accordance wlLh Lhe Lerms of Lhe conLracL
3 1he name and address of Lhe beneflclary has been spelL properly
4 1he deLalls of producL descrlpLlon quallLy and value are ln order
3 1he valldlLy of shlpmenL and explry are correcL
6 1he documenLs LhaL are requlred can be submlLLed
7 1here ls sufflclenL of Lolerance of quanLlLy and value
8 1he unlL prlce and Lhe Lerms of conLracL are correcL
9 1he Lerms and condlLlons sLlpulaLed can be complled wlLh
10 1haL Lhe credlL ls avallable for negoLlaLlon wlLhouL resLrlcLlon
11 ln case of exporLs requlres Lhe credlL Lo be conflrmed by Lhe local Lhen necessary clause ls
lncorporaLed by Lhe openlng bank on Lhe credlL
12 LasL buL noL Lhe leasL Lhe credlL has a relmburslng clause enabllng Lhe negoLlaLlon bank Lo geL
relmbursemenL of Lhe money pald Lo Lhe exporLer agalnsL Lhe documenLs
1here are only few suggesLlons 1he requlremenL may dlffer for dlfferenL exporLer and Lhe scruLlny has
be done relaLlve Lo Lhe requlremenL
AMLnuMLn1S 1C 1PL C8Lul1
Cn scruLlny of Lhe leLLer of credlL lf Lhe exporLer flnds LhaL some change are requlred Lo be made ln Lhe
credlL he should lmmedlaLely requesL Lhe buyer Lo make necessary change ln Lhe leLLer of credlL and
Lhe openlng bank lssued necessary amendmenL ln Lhls respecL Any oral and wrlLLen agreemenL by Lhe
lmporLer abouL change ln Lhe credlL dlrecLly Lo Lhe exporLer should noL be accepLed as lL ls noL valld
under Lhe credlL Any change musL be advlsed by Lhe lmporLer Lhrough Lhe openlng bank only as a sorL
of amendmenL Lo Lhe orlglnal credlL
uCCuMLn1A8? C8Lul1 ln CLnL8AL
Cf all Lhe varlous Lype of paymenLs Lhe mosL safesL as far as Lhe exporLer ls concerned ls Lo geL an
advance paymenL ln full for Lhe value of shlpmenL Lo be effecLed Cbvlously Lhls puLs Lhe buyer LoLally
aL Lhe mercy of Lhe seller and unless Lhe buyer feels unavoldable he wlll noL be prepared Lo make
advance paymenL Pence of Lhe resL of Lhe modes of paymenL Lhe besL ls calllng for a uocumenLary
CredlL for any shlpmenL now leL us see how we can Lake care of Lhe lnLeresL of Lhe exporLer whlle an
L/C ls esLabllshed
lL ls suggesLed LhaL Lhe exporLer glves Lhe full deLalls as Lo Lhe varlous requlremenLs Lo Lhe buyer for
lncorporaLlon ln Lhe L/C Lhls wlll avold Lhe necessary of asklng for amendmenLs and wlll save boLh Llme
and money 8ear ln mlnd every amendmenL cosLs you badly Care are should be Laken Lo ensure LhaL
Lhere are nC spelllng mlsLakes omlsslon and commlsslon of or" or such small Lhlngs A dlscrepancy ls
a dlscrepancy and Lhere ls noLhlng llke mlnor dlscrepancy or ma[or dlscrepancy as far as Lhe bank ls
concerned A bank sLrlcLly deals ln documenLs and Lhe documenLs are expecLed Lo be cenL percenL ln
llne wlLh deLalls glve ln Lhe uocumenLary CredlL Lnsure LhaL Lhe valldlLy for shlpmenL and for
negoLlaLlon of documenLs can be complled wlLh lf noL posslble call for amendmenL exLendlng Lhe
valldlLy as requlred
unless Lhe L/C speclfles Lhe Lolerance for Lhe quanLlLy and value Lhe exporLer should follow Lhe quanLlLy
and value as sLlpulaLed ln Lhe L/C 1here ls provlslon for a Lolerance of Lhe quanLlLy up Lo 3 percenL more
or less Lhan sLlpulaLed ln Lhe L/C even lf Lhe L/C does noL speclfy Lolerance excluslvely and unless
Lolerance ls prohlblLed 0 speclflcally Powever Lhe value of documenLs on no accounL could exceed Lhe
llmlLs of Lhe L/C
Check Lhe descrlpLlon of Lhe producL properly Lhe raLes lf speclfled and quanLlLy of each of Lhe lLems
Ask for amendmenL where you cannoL copy wlLh Lhe Lerms Make sure LhaL all Lhe documenLs as called
for by Lhe CredlL can be submlLLed wlLhouL any excepLlon
1he lasL buL noL Lhe leasL ls Lhe 8elmbursemenL clause (CeLLlng Lhe funds for Lhe shlpmenL made) An
L/C wlLhouL Lhls clause ls no L/C lf Lhere ls no provlslon as Lo from where Lhe exporLer ls golng Lo geL
pald for Lhe whole exerclse of Lhe L/C ls fuLlle 1he openlng bank may speclfy Lhe relmbursemenL
clauses as follows
1 1he negoLlaLlng bank Lo send Lhe documenLs Lo Lhe openlng bank who wlll upon recelpL of Lhe
documenLs arrange for relmbursemenL as clalmed by Lhe negoLlaLlon bank
2 1he negoLlaLlng bank can clalm relmbursemenL dlrecLly from a nomlnaLed bank (say A8C 8ank new
?ork) elLher upon negoLlaLlon of documenLs or afLer a perlod of days of negoLlaLlon sub[ecL Lo Lhe
documenLs belng submlLLed by Lhe beneflclary ls sLrlcLly ln conformlLy wlLh Lerms and condlLlon of Lhe
leLLer of credlL
l for one prefer Lhe relmbursemenL clause as ln b) so LhaL on one hand my bank sends Lhe documenLs Lo
Lhe openlng bank and aL Lhe same Llmes clalms Lhe relmbursemenL from nomlnaLed bank
1hese are some of Lhe aspecLs one should Lake care Lo ensure LhaL Lhe L/C esLabllshed ln hls favor ls ln
order and LhaL he can comply wlLh all Lhe provlslon Lhereof Powever one ls advlsed Lo make a checkllsL
and Lake a noLe of each and every condlLlon of Lhe L/C for compllance aL Lhe rlghL Llme
A81lLS 1C LL11L8 Cl C8Lul1
1 AppllcanL Lhe buyer or lmporLer of goods
2 lssulng 8ank lmporLer's bank who lssues Lhe L/C
3 8eneflclary Lhe parLy Lo whom Lhe L/C ls addressed 1he seller or suppller of goods
4 Advlslng 8ank lssulng bank's branch or correspondenL bank ln Lhe exporLer's counLry Lo whlch Lhe L/C
ls senL for onward Lransmlsslon Lo Lhe beneflclary
3 Conflrmlng 8ank Lhe bank ln beneflclary's counLry whlch guaranLees Lhe credlL on Lhe requesL of Lhe
lssulng bank (Many a Llmes Lhe advlslng bank and conflrmlng bank are one and Lhe same)
6 negoLlaLlon 8ank Lhe bank Lo whom Lhe beneflclary presenL hls documenLs for aymenL u under L/C
7 8elmburslng 8ank Lhe bank whlch wlll relmburse Lhe negoLlaLlng bank for Lhe value of Lhe credlL
Where an L/C sLlpulaLes LhaL Lhe negoLlaLlon ls resLrlcLed Lo a speclflc bank whlch ls noL Lhe Advlslng
8ank or Where Lhe L/C ls noL resLrlcLed and Lhe seller deslres Lo negoLlaLe Lhe documenL whlch ls noL
Lhe advlslng bank Lhen we have a separaLe negoLlaLlng 8ank
Where Lhe openlng bank prefers Lo advlse Lhe L/C Lhrough lLs own branch ln Lhe beneflclary counLry or
Lhrough anoLher bank of lLs cholce Lhen Lhe L/C may be advlsed Lo Lhe beneflclary dlrecLly by Lhls bank
or lf lL lnsLrucLed Lo advlse Lhe L/C Lhrough Lhe buyer's nomlnaLed bank Lhen lL does so Pere we have
Lwo advlslng bank
As far as posslble one should resLrlcL Lhe lnvolvemenL of Lhe number of Lhe banks Lo Lhe mlnlmum
More Lhe number of Lhe banks more Lhe Llme ln Lhe Lransmlsslon of Lhe L/C ln addlLlon Lo mulLlpllclLy
of bank charges
SLClAL nC1L
1hough one may sLrongly feel LhaL a LeLLer of CredlL ls Lhe safesL mode of paymenL one wlll face
lnnumerous pracLlcal dlfflculLles ln so far as compllance wlLh Lhe Lerms and condlLlons of Lhe L/C slnce
several documenLs are lnvolved Lhere are every posslble of dlscrepancy ln Lhe documenLs elLher
beLween dlfferenL documenLs or beLween Lhe documenL or beLween Lhe documenL and Lhe L/C Lhe
negoLlaLlng bank sofL pedal some of Lhe dlscrepancles whlch Lhey feel may noL be polnLed ouL by Lhe
openlng bank as dlscrepancy Lo favour lLs cusLomer ln Lhe llke manner Lhe openlng bank Lo safeguard
Lhe lnLeresL of Lhe buyer would llke Lo ensure LhaL Lhe documenL submlLLed agalnsL a LeLLer of CredlL
are sLrlcLly ln full conformlLy of Lhe L/C
lor masLery of Lhe operaLlon under Lhe LeLLer of CredlL one ls advlsed Lo compleLely sLudy Lhe varlous
arLlcles of Lhe uC 300 so LhaL one can be clear ln hls mlnd as Lo Lhe varlous provlslons avallable under
Lhe uocumenLary CredlL whlch wlll sLand good whlle negoLlaLlng Lhe documenLs wlLh Lhe bank Whlle
Lhe arLlcles of uC 300 come safeguard Lhe lnLeresL of boLh Lhe buyer and Lhe seller Lhere are cerLaln
elemenLs whlch may be ouLslde Lhe deflnlLlon of Lhe uC 300 Also Lhere ls cerLaln flexlblllLy provlslons
ln Lhe uC 300 whlch one mlghL llke Lo explolL Lo hls favour
So ln splLe of Lhe L/C belng Lhe safesL meLhod Lo ensure Lhe paymenL unless boLh Lhe buyer and Lhe
seller follow Lhe buslness eLhlcs Lhere ls every chance LhaL one geLs cheaLed by Lhe oLher As a prudenL
exporLer one should be very careful ln selecLlng hls cusLomer aparL from Laklng oLher safeLy measures
lf Lhe cusLomer ls Loo good and you have been deallng wlLh Lhem for a long Llme one may relax and
Lerm Lhe L/C as Lhe besL meLhod Lo recelve paymenL lf Lhe cusLomer Lurns ouL Lo be unscrupulous Lhen
he can play havoc 1hls ls appllcable Lo boLh Lhe seller and Lhe buyer 1here are books on fraudulenL us
of Lhe uocumenLary CredlLs SomeLlmes lL may be Lhe buyer who ls aL Lhe recelvlng end and some Llme
lL may be Lhe oLher way
A sLudy of such book as above may help one Lo Lake adequaLe care 8uL Lhe braln ls always worklng ln
mulLl dlrecLlons lL wlll be no surprlse lf one comes across newer and newer dublous meLhods belng
adopLed by Lhe conLracLlng parLles

1C1AL CL8A1lCn unuL8 1PL LL11L8 Cl C8Lul1
1he unconflrmed L/C
1 1he 8uyer makes an appllcaLlon Lo hls bank Lo open an L/C
2 Cpenlng bank esLabllshes Lhe L/C
3 Cpenlng bank advlses Lhe L/C Lhrough hls assoclaLe or Lhrough Lhe bank nomlnaLed by Lhe
beneflclary
4 1he 8ank ln Lhe beneflclary counLry whlch recelves Lhe L/C sends Lhe Crlglnal L/C Lo Lhe cusLomer
elLher dlrecLly or Lhrough Lhe bank Speclfled ln Lhe L/C
3 1he buyer complles wlLh Lhe L/C requlremenLs and submlLs Lhe relevanL documenLs 1o Lhe bank for
clalmlng relmbursemenL
6 1he negoLlaLlng bank negoLlaLes and sends Lhe documenLs Lo Lhe openlng bank or as ulrecLed
MeanLlme pays Lhe beneflclary
7 Advlses Lhe openlng bank or Lhe relmbursemenL bank Lhe deLalls of hls AccounLs and Lhe nomlnaLed
bank where Lhe proceeds are Lo be credlLed
8 Cnce Lhe credlL ls recelved Lhe nomlnaLed bank advlses Lhe negoLlaLlng bank of Lhe credlL 1hus Lhe
negoLlaLlng bank geLs Lhe credlL for Lhe L/C documenLs
1he Conflrmed L/C
All Lhe sLeps from 1Lo6 as far as Lhe beneflclary are concerned slnce Lhe paymenL ls made Lo Lhe
beneflclary wlLhouL recourse Powever Lhe negoLlaLlng bank may have Lo follow Lhe subsequenL sLeps
slnce he has Lo recelve hls money from Lhe openlng bank

8LA8A1lCn Anu Su8MlSSlCn Cl uCCuMLn1S lC8 8Ank nLCC11lA1lCn /u8CPASL
uocumenL agalnsL exporLs should normally be reallzed Lhrough an auLhorlzed dealer forelgn exchange
Powever paymenL of exporL can be recelved dlrecLly from Lhe overseas buyer ln Lhe form of bank drafL
pay order banker's cheque personal cheque forelgn currency noLes forelgn currency Lraveler's cheque
eLc WlLhouL any moneLary llmlL provlded Lhe exporLer's Lrack record ls good he ls a cusLomer of Lhe
auLhorlzed dealers Lhrough whom documenLs are Lo be negoLlaLed and prlma facle Lhe lnsLrumenL of
paymenL represenLs exporL proceeds reallzaLlon 1ake care Lo submlL varlous documenLs ln a proper
manner and wlLhln Lhe prescrlbed Llme schedule Apply Lo Lhe 8eserve 8ank for exLenslon of Llme ln
case you feel Lhere ls llkely Lo be a delay ln reallzlng exporL proceeds
1he followlng are Lhe sLeps ln reallzlng exporL proceeds
1 Approachlng a 8ank AfLer dlspaLch of Lhe goods elLher by sea or by alr Lhe exporLer should approach
hls bank (auLhorlzed dealer) wlLh a formal requesL Lo reallze sale proceeds from Lhe forelgn buyer lL ls
obllgaLory Lo submlL Lhe shlpplng documenLs Lo an auLhorlzed dealer wlLhln 21 days of Lhe daLe of
shlpmenL (sub[ecL Lo cerLaln excepLlons) ln lndla Lhe exporLers have Lo reallze Lhe full value of exporLs
wlLhln 180 days from Lhe daLe of shlpmenL (unless Lhe paymenL Lerms offered are deferred paymenL
Lerms") Where lL ls noL posslble Lo reallze Lhe sale proceeds wlLhln Lhe prescrlbed perlod Lhe exporLer
should apply for exLenslon ln prescrlbed form L1x (ln dupllcaLe) Lo 88l
2 Submlsslon of uocumenLs Lo Lhe 8ank 1he exporLer should submlL Lhe followlng documenLs
o 8lll of Lxchange
o lull seL of 8lll of Ladlng
o Commerclal lnvolce Coples
o CerLlflcaLe of Crlgln
o lnsurance ollcy
o lnspecLlon CerLlflcaLe
o acklng LlsL
o C8 (dupllcaLe copy Lo forward lL Lo 88l)
o 8ank CerLlflcaLe
o CLher relevanL documenLs
1he above documenLs need Lo be submlLLed ln Lwo compleLe seLs because lL ls cusLomary Lo dlspaLch
Lwo seLs of documenLs one afLer Lhe oLher 1hls ls because lf one seL ls mlsplaced or delayed ln LranslL
Lhe lmporLer can geL aL leasL Lhe oLher seL and clear Lhe goods
2 verlflcaLlon of uocumenLs 1he bank wlll verlfy Lhe documenLs Lo flnd
3 WheLher Lhe requlred documenLs are ln order
4 WheLher Lhe requlred documenLs are aLLesLed by cusLoms and oLher auLhorlLles
3 LeLLer of lndemnlLy lf Lhe exporLer wanLs lmmedlaLe paymenL from hls bankers Lhen hls bankers may
provlde advance paymenL only when Lhe exporLer slgns an lndemnlLy leLLer 1he lmpllcaLlons of an
lndemnlLy leLLer ls LhaL ln Lhe evenL of refusal of paymenL by Lhe lssulng bank ln respecL of LC Lhen Lhe
negoLlaLlng bank can ask Lhe exporLer Lo pay back Lhe money advanced along wlLh necessary charges
Common uocumenL ulscrepancles
1 CredlL Lxplred
2 LaLe shlpmenL
3 resenLed afLer permlLLed Llme from daLe of lssue of shlpplng documenLs
4 ShorL ShlpmenL
3 CredlL AmounL Lxceeded
6 underlnsured
7 uescrlpLlon of goods on lnvolce dlffer from LhaL of credlL
8 Mark and numbers dlffer beLween documenLs
9 8lll of ladlng lnsurance documenLs 8lll of Lxchange noL endorsed correcLly
10 Absence of uocumenLs called for under credlL
11 lnsurance cerLlflcaLe submlLLed lnsLead of pollcy
12 WelghL ln dlfferenL documenL dlffers
13 Class of 8lll of ladlng no accepLablecharLer parLy or Pouse 8/L
14 lnsurance cover expressed ln currency oLher Lhan LhaL of credlL
13 Absence of slgnaLure where requlred on documenLs
16 8lll of exchange noL drawn as per Lenor sLaLed ln credlL
17 8lll of exchange drawn on wrong parLy
18 lnsurance rlsks covered noL belng Lhose speclfled ln credlL
19 Absence of frelghL pald sLaLemenL on 8/L ln Cl8 of Cll shlpmenL
20 8lll of ladlng doses noL carry shlpped on broad sLamp
21 AmounL shown on lnvolce and blll of exchange dlffer
22 ShlpmenL noL make Lo porL speclfled
23 1ransshlpmenL/parL shlpmenL underLaken where expressly forbldden
- ulscounLlng of bllls Lhe bank may dlscounL or negoLlaLe Lhe bllls drawn agalnsL LC and make
lmmedlaLe paymenL Lo Lhe exporLer lf so requlred
- ulspaLch of documenLs before Lhe submlsslon of documenLs for negoLlaLlon/collecLlon Lhe bank
examlnes Lhem Lhoroughly wlLh reference Lo Lhe Lerms and condlLlons of Lhe buyer's order LeLLer of
credlL and Lhe laws relaLlng Lo forelgn exchange conLrol lf any scruLlny Lhe documenLs are ln order Lhe
bank dlspaLches Lhem Lo lLs overseas branch/correspondenL branch as early as posslble 1he overseas
branch of Lhe bank Lhen submlLs Lhe documenL Lo Lhe lmporLer's bank and Lhe lmporLer's bank hands lL
over Lo Lhe lmporLer
SPlMLn1 1P8CuCP CCu8lL8S
ln addlLlon Lo Lhe exporLer by sea alr rall or road exporLs are also allowed by courler under Lhe courler
lmporLs or exporLers (clearance) 8egulaLlon AcL 1998
1hese regulaLlons shall apply for clearance of goods carrled by auLhorlzed courler on ouLgolng fllghLs on
behalf of exporLs Conslgner for a commerclal conslderaLlon
LxporL 1erms condlLlons
LxporL of any lLem can be affecLed by courler excepL Lhe followlng
1 Coods whlch are sub[ecL Lo cess
2 Coods proposed Lo be exporLed wlLh clalm of duly drawback
3 Coods proposed Lo be exporLed under uL8 LCC AL (Advance Llcense)
4 Where Lhe value of goods ls more Lhan 8s 230000/
3 Coods where welghL of lndlvldual packeL ls more Lhan 32 kg

CuS1CM 8CCLuu8L lC8 LxC81 unuL8 Lul S?S1LM
lL ls broughL Lo Lhe noLlce of all exporLers lmporLers CPAs 1rade and Ceneral ubllc LhaL Lhe
compuLerlzed processlng of Shlpplng 8llls under Lhe lndlan CusLoms Lul (LlecLronlc uaLa lnLerchange)
SysLem (LxporLs) wlll commence wef1`3092004 1he compuLerlzed processlng of shlpplng bllls
would be ln respecL of Lhe followlng caLegorles
1 uuLy lree whlLe shlpplng bllls
2 uuLlable shlpplng bllls (Cess)
3 uLLC Shlpplng 8llls
4 LCC Shlpplng 8llls
3 uL8 Shlpplng 8llls
6 ul8C Shlpplng 8llls
7 100 LCu Shlpplng 8llls
8 8e exporL !obblng Shlpplng 8llls
9 urawback Shlpplng 8llls
10 CLher nlLl Shlpplng 8llls
1he procedure Lo be followed ln respecL of flllng of shlpplng bllls under Lhe lndlan cusLoms Lul SysLem
LxporLs aL ClSMulund shall be as follows

2 uA1A Ln18? lC8 SPllnC 8lLLS
21 LxporLers/CPAs are requlred Lo reglsLer Lhelr lL codes CPAs Llcence nos and Lhe 8ank A/C no(for
credlL of urawback amounL) ln Lhe CusLoms CompuLer SysLems before an Lul Shlpplng 8lll ls flled
22 LxporLers/CPAs would be requlred Lo submlL aL Lhe SL8vlCL CLn18L Lhe followlng documenLs
1 A declaraLlon ln Lhe speclfled formaL
2 Sul declaraLlon
3 CuoLa/lnspecLlon CerLlflcaLe
4 urawback/uLLC/ul8C/uL8 ueclaraLlons eLc as appllcable
23 1he formaLs should be duly compleLed ln all respecLs and should be slgned by Lhe exporLer or hls
auLhorlzed CPA lorms whlch are lncompleLe or unslgned wlll noL be accepLed for daLa enLry
24 lnlLlally daLa enLry for Shlpplng 8llls wlll be allowed Lo be made only aL Lhe Servlce cenLre AfLer Lhe
exporLers/CPAs become conversanL wlLh Lhe Lul procedures Lhe opLlon of 8emoLe Lul SysLem would
also be made avallable ln Lhe 8emoLe Lul sysLem (8LS) LxporLers/CPAs can elecLronlcally flle Lhelr
shlpplng bllls from Lhelr offlces
23 1he schedule of charges Lo be levled for daLa enLry aL Lhe Servlce CenLre ls as follows
Charges for S/8llls havlng up Lo flve lLems 8s60/
Charges for addlLlonal block of flve lLems 8s10/
AmendmenL fees (for a block of flve lLems) 8s10/
rlnLlng of a S/8lll for 8emoLe Lul SysLem 8s20/
26 1he Servlce CenLre operaLors shall carefully enLer Lhe daLa on Lhe basls of declaraLlons made by Lhe
CPAs/LxporLers AfLer compleLlon of daLa enLry Lhe checkllsL wlll be prlnLed by Lhe uaLa LnLry CperaLor
and shall be handed over Lo Lhe LxporLers/CPAs for conflrmaLlon of Lhe correcLness 1hereafLer Lhe
CPA/LxporLers wlll make correcLlons lf any ln Lhe checkllsL and reLurn Lhe same Lo Lhe operaLor duly
slgned 1he operaLor shall make Lhe correspondlng correcLlons ln Lhe daLe and shall submlL Lhe shlpplng
blll 1he operaLor shall noL make any amendmenL afLer generaLlon of Lhe checkllsL and before
submlsslon ln Lhe sysLem unless Lhe correcLlons made by Lhe CPAs/LxporLers are clearly lndlcaLed on
Lhe checkllsL agalnsL Lhe respecLlve flelds and duly auLhenLlcaLed by CPA/LxporLers slgnaLure
27 1he sysLem auLomaLlcally generaLes Lhe S/8lll number 1he operaLor shall endorse Lhe same on Lhe
checkllsL ln clear and bold flgures lL should be noLed LhaL no copy of Lhe S/8lll would be avallable aL Lhls
sLage
28 1he declaraLlons would be accepLed aL Lhe servlce cenLre from 1000 hrs Lo 1630 hrs ueclaraLlons
recelved up Lo 1630 hrs wlll be enLered ln Lhe compuLer sysLem on Lhe same day
29 1he valldlLy of Lhe S/8lll ln Lul SysLem ls flfLeen days only AfLer explry of flfLeen days from Lhe daLe
of flllng of shlpplng blll Lhe exporLer has Lo flle Lhe declaraLlon afresh
3 8CCLuu8L lC8 C81
31 under Lhe revlsed Lul procedure Lhere would be no C81 rocedure LxporLers(lncludlng CPAs)
would be requlred Lo flle a declaraLlon ln Lhe form Sul lL would be flled aL Lhe sLage of goods arrlval"
Cne copy of Lhe declaraLlon would be aLLached Lo Lhe orlglnal copy of Lhe S/8lll generaLed by Lhe sysLem
and reLalned by Lhe cusLoms1he second copy would be aLLached Lo Lhe dupllcaLe S/8 (Lhe exchange
conLrol copy) and surrendered by Lhe exporLer Lo Lhe auLhorlzed dealer for collecLlon/negoLlaLlons
32 1he exporLers are requlred Lo obLaln a cerLlflcaLe from Lhe bank Lhrough whlch Lhey would be
reallzlng Lhe exporL proceeds lf Lhe exporLer wlshes Lo operaLe Lhrough dlfferenL banks for Lhe purpose
a cerLlflcaLe would have Lo be obLalned from each of Lhe banks 1he cerLlflcaLes would be submlLLed Lo
cusLoms and reglsLered ln Lhe sysLem 1hese would have Lo be submlLLed once a year for conflrmaLlon
or whenever Lhe bank ls changed
33 ln Lhe declaraLlon form Lo be fllled by Lhe exporLers for Lhe elecLronlc processlng of exporL
documenLs Lhe exporLers would need Lo menLlon Lhe name of Lhe bank and Lhe branch code as
menLloned ln Lhe cerLlflcaLe from Lhe bank 1he cusLoms wlll verlfy Lhe deLalls ln Lhe declaraLlon wlLh
Lhe lnformaLlon capLured ln Lhe sysLem Lhrough Lhe cerLlflcaLes reglsLered earller
34 ln Lhe case of S/8s processed manually Lhe exlsLlng arrangemenL of flllng C81 forms would
conLlnue
- CC18Cl 8CCLuu8LS CuC1A ALLCCA1lCn Anu C1PL8 CL81lllCA1lCn
11 1he processlng of S/8s lnvolvlng allocaLlon of readymade garmenLs quoLa by Lhe Apparel LxporL
romoLlon Councll (ALC) wlll change wlLh Lhe lnLroducLlon of Lhe sysLem 1he quoLa allocaLlon label
wlll be pasLed on Lhe exporL lnvolce lnsLead of S/8 AllocaLlon number of ALC would be enLered ln Lhe
sysLem aL Lhe Llme of S/8 daLa enLry 1he quoLa cerLlflcaLlon on exporL lnvolce should be submlLLed Lo
CusLoms along wlLh oLher orlglnal documenLs aL Lhe Llme of examlnaLlon of exporL cargo
12 As a LranslLlonal measure ALC cerLlflcaLlon even on S/8 form would be accepLed Powever ln
Lhese cases S/8 number should be lndlcaLed on Lhe lnvolce when goods are presenLed for examlnaLlon
1hls LranslLlonal faclllLaLlon measure wlll be avallable for a perlod of Lwo monLhs le upLo 30Lh
november 2004
13 lor deLermlnlng Lhe valldlLy daLe of Lhe quoLa Lhe relevanL daLe would be Lhe daLe on whlch Lhe full
conslgnmenL ls presenLed for examlnaLlon and Lhe daLe Lo recorded ln Lhe sysLem
14 1he cerLlflcaLe of oLher agencles such as Lhe CoLLon 1exLlles LxporL romoLlon Councll Lhe Wlldllfe
lnspecLlon Agency under Cl1LS Lhe Lnglneerlng LxporL romoLlon Councll Lhe AgrlculLural roduce
LxporL uevelopmenL Agency (ALuA) Lhe CenLral Sllk 8oard and Lhe All lndla PandlcrafL 8oard should
also be obLalned on Lhe lnvolce Slmllarly Lhe no ob[ecLlon of Lhe AssL urug ConLroller and of Lhe
Archaeologlcal of Survey lndla would be obLalned on Lhe lnvolce
1he LranslLlonal arrangemenLs would be Lhe same as ln Lhe case of ALC cerLlflcaLlon
13 1he exporLers would have Lo make use of exporL lnvolce or such oLher documenLs as requlred by Lhe
CcLrol AuLhorlLles for Lhe purpose of ocLrol exempLlon
1 A88lvAL Cl CCCuS A1 LxC81 LxAMlnA1lCn SPLuS ln ClS
16 1he exlsLlng procedure of permlLLlng enLry of goods broughL for Lhe purpose of examlnaLlon (and
subsequenL LeL exporL" Crder) ln Lhe ClS on Lhe sLrengLh of S/8 shall be dlsconLlnued 1he CCnCC8
wlll permlL enLry of Lhe goods on Lhe sLrengLh of Lhe checkllsL Lhe daLe enLry form and Lhe declaraLlon
1he CCnCC8 would endorse Lhe quanLlLy of goods enLerlng Lhe ClS on Lhe reverse of Lhe checkllsL
17 1he goods should be broughL for examlnaLlon wlLhln 13 days of flllng of declaraLlon ln Lhe CenLre ln
case of delay a fresh declaraLlon would need Lo be flled
18 lf aL any sLage subsequenL Lo Lhe enLry of goods ln ClS lL ls noLlced LhaL Lhe declaraLlon has noL been
reglsLered ln Lhe sysLem Lhe exporLers and CPAs wlll be responslble for Lhe delay ln shlpmenL of goods
and any damage deLerloraLlon or pllferage wlLhouL pre[udlce Lo any oLher acLlon LhaL may be Laken
2 8CCLSSlnC Cl SPllnC 8lLLS
19 1he S/8 shall be processed by Lhe sysLem on Lhe basls of declaraLlon made by Lhe exporLer
Powever Lhe followlng S/8 shall requlre clearance of Lhe AsslsLanL Commlssloner/uy Commlssloner
(AC/uC LxporLs)
1 uuLy free S/8 for lC8 value above 8s10 lakh
2 lree 1rade Sample S/8 for lC8 value above 8s23000
3 urawback S/8 where Lhe drawback exceeds 8s Cne lakh
110 Sub[ecL Lo Lhe provlslons of para 203 of Lhls n Lhe followlng caLegorles of S/8llls shall be
processed buy Lhe Appralser (LxporL AssessmenL) flrsL and Lhen by Lhe AssLL/uy Commlssloner
4 uLLC
3 uL8
6 ul8C
7 LCu
8 LCC
111 AparL from verlfylng Lhe value and oLher parLlculars for assessmenL Lhe AC / AC / uC may call for
Lhe sample s for conflrmlng Lhe declared value or Lhe checklng classlflcaLlon under Lhe drawback
schedule / uLLC / uL8 / ul8C / LCu eLc Pe may also glve speclal lnsLrucLlon for examlnaLlon of goods
112 lf Lhe S/8 falls ln Lhe caLegorles lndlcLed ln para 61 above Lhe exporLer should check up wlLh Lhe
query counLer aL Lhe CenLre wheLher Lhe S/8 has been cleared by AssLL Commlssloner /uy
commlssloner before Lhe goods are Laken for examlnaLlon ln case AC / uC ralses any query lL should be
replled Lhrough Lhe Servlce CenLre or ln case of Lul connecLlvlLy Lhrough Lermlnals of Lhe LxporLer /
CPA AfLer all Lhe querles have been saLlsfacLorlly replled Lo AC / uC wlll pass Lhe S/8

3 CuS1CMS LxAMlnA1lCn Cl LxC81 CA8CC
113 Cn recelpL of Lhe goods ln Lhe LxporL Shed ln Lhe ClS Lhe exporLer wlll conLacL Lhe sysLem
examlnlng offlcer (SLC)and presenL Lhe checkllsL wlLh Lhe endorsemenL of CCnCC8 on Lhe declaraLlon
along wlLh all orlglnal documenLs such as lnvolce acklng LlsL A8L1(A84)eLc Pe wlll also presenL
addlLlonal parLlculars ln Lhe prescrlbed form
114 SLC wlll verlfy Lhe quanLlLy of Lhe goods acLually recelved agalnsL LhaL enLered ln Lhe sysLem Pe
wlll enLer Lhe parLlculars ln Lhe sysLem 1he sysLem would ldenLlfy Lhe Lxamlnlng Cfflcer (lf more Lhan
one are avallable)who would be carrylng ouL physlcal examlnaLlon of goods 1he sysLem would also
lndlcaLe Lhe packages(Lhe quanLlLy and Lhe serlal numbers) Lo be sub[ecLed Lo examlnaLlon SLC would
wrlLe Lhls lnformaLlon on Lhe checkllsL and hand lL over Lo Lhe exporLer Pe would hand over Lhe orlglnal
documenLs Lo Lhe Lxamlnlng Cfflcer no examlnaLlon order shall be glven unless Lhe goods have been
physlcally recelved ln Lhe LxporL Shed lL may however be clarlfled LhaL CusLoms may examlne all Lhe
packages/goods ln case of any dlscrepancy
113 1he Lxamlnlng Cfflcer may lnspecL and/or examlne Lhe shlpmenL as per lnsLrucLlons conLalned ln
Lhe checkllsL and enLer Lhe examlnaLlon reporL ln Lhe sysLem 1here wlll be no wrlLLen examlnaLlon
reporL Pe wlll Lhen mark Lhe LlecLronlc S/8 and forward Lhe checkllsL along wlLh Lhe orlglnal documenLs
Lo Lhe Appralser/SupdL ln Charge lf Lhe Appralser/SupdL ls saLlsfled LhaL Lhe parLlculars enLered ln Lhe
sysLem conform Lo Lhe descrlpLlon glven ln Lhe orlglnal documenLs (lncludlng ALC quoLa and oLher
cerLlflcaLlons) and Lhe physlcal examlnaLlon he wlll proceed Lo glve LeL LxporL" order for Lhe
shlpmenL and lnform Lhe exporLer 1he Appralser/SupdL would reLaln Lhe checkllsL Lhe declaraLlon and
all orlglnal documenLs wlLh hlm
116 ln case of any varlaLlon beLween Lhe declaraLlon ln S/8 and Lhe documenLs or physlcal examlnaLlon
reporL Lhe Appralser/SupdL wlll mark Lhe elecLronlc S/8 Lo AC/uC LxporLs Pe wlll also forward Lhe
documenLs Lo AC/uC and advlse Lhe exporLers Lo meeL Lhe AC/uC for furLher acLlon regardlng
seLLlemenL of dlspuLe ln case Lhe LxporLer agrees wlLh Lhe vlews of Lhe ueparLmenL Lhe S/8 would be
processed flnally Where Lhe exporLer dlspuLes Lhe vlews of Lhe ueparLmenL Lhe case would be
ad[udlcaLed followlng Lhe prlnclples of naLural [usLlce
4 CLnL8A1lCn Cl SPllnC 8lLLS
117 As soon as Lhe Shed Appralser/SupdLglves LeL LxporL" order Lhe sysLem would prlnL 6 coples of
Lhe S/8 ln case of lree and scheme S/8 ln case of uL8 Lhere are 7 S/8 lf Lhe S/8 (uL8) ls assessed
provlslonally Lhen L copy wlll be generaLed only afLer AC/uC flnallses Lhe assessmenL Cn Lhe
examlnaLlon reporL Lhe Appralser/Shed SupLwlll slgn Cn all Lhe coples Lhe Appralser/Shed SupdL
LxamlnaLlon Cffer as well as exporLer's represenLaLlve/CPA wlll slgn name and lu Card number of Lhe
LxporLers represenLaLlve/CPA should be clearly menLloned below hls slgnaLure
118 1he dlsLrlbuLlon of S/8llls ls as follows
uL8 Scheme S/8llls CLher Scheme S/8llls
1 1 LxporLer's copy 1 LxporLers copy
2 2 CusLom's Copy 2 CusLoms copy
3 3 Lxchange ConLrol Copy 3 LxchangeConLrol Copy
4 4 Scheme 8lll Copy 4 LCopy
3 3 LCopy 3 181 182 Coples
6 6 181 182 Coples
119 1he orlglnal ALC quoLa and oLher cerLlflcaLes wlll be reLalned wlLh Lhe S/8llls and recorded ln Lhe
LxporL Shed

3 A?MLn1 Cl ML8CPAn1 CvL81lML (MC1)
120 lor Lhe Llme belng Lhe presenL manual sysLem for paymenL of MerchanL CverLlme (MC1) charges
wlll conLlnue
121 MC1 charges wlll be requlred Lo be pald by exporLer when Lhe goods are examlned by CusLoms for
allowlng LeL LxporL" beyond Lhe normal offlce hours no charges would be requlred Lo be pald on
normal worklng days when Lhe examlnaLlon lLself ls belng done for LeL LxporL" upLo 03oo M ln
addlLlon no charges would be requlred Lo be pald lf Lhe exporLer wanLs Lhe goods Lo be enLered ln
CCnCC8 (ClS) only for meeLlng Lhe quoLa deadllnes

6 u8AWAL Cl SAMLLS
122 Where Lhe Appralser of CusLoms orders for samples Lo be drawn and LesLed Lhe Lxamlnlng Cfflcers
wlll proceed Lo draw Lwo samples from Lhe conslgnmenL and enLer Lhe parLlculars Lhereof along wlLh
name of Lhe LesLlng agency ln Lhe sysLem no reglsLers wlll be malnLalned for recordlng daLes of samples
drawn 1hree coples of Lhe LesL memo wlll be sprepared and slgned by Lhe Lxamlnlng Cfflcer Lhe
Appralser and LxporLer 1he dlsposal of Lhe Lhree coples would be as follows
1 Crlglnal Lo be senL along wlLh Lhe sample Lo Lhe LesLlng agency
2 uupllcaLe copy Lo be reLalned wlLh Lhe second sample
3 1rlpllcaLe Lo be handed over Lo Lhe exporLer
123 AC/uC may lf he deems necessary order for sample Lo be drawn for purposes oLher Lhan LesLlng
such as vlsual lnspecLlon and verlflcaLlon of descrlpLlon markeL value enqulry eLc
4 CuL8lLS
111 WlLh Lhe dlsconLlnuaLlon of Lhe assessmenL of S/8 ln Lhe LxporL ueparLmenL Lhere should noL be
any querles 1he exporLer durlng examlnaLlon can clarlfy doubLs lf any ln case where Lhe need arlses
for Lhe deLalled answer from Lhe exporLer a query can be ralsed ln Lhe sysLem buy Lhe Appralser buL
would need prlor approval of AC/uC (LxporLs) 1he S/8 wlll remaln pendlng and cannoL be prlnLed Llll Lhe
exporLer replles Lo Lhe query Lo Lhe saLlsfacLlon of Lhe AsslsLanL Commlssloner/uy Commlssloner
3 AMLnuMLn1S
112 CorrecLlons/amendmenLs ln Lhe checkllsL can be made aL Lhe servlce cenLre provlded Lhe sysLem
has noL generaLed Lhe S/8 number Where correcLlons are requlred Lo be made afLer Lhe generaLlon of
Lhe S/8 no or afLer Lhe goods have been broughL ln Lhe docks/ClS amendmenLs wlll be carrled ouL ln
Lhe followlng manner
6 lf Lhe goods have noL yeL been allowed LeL LxporL" AsslsLanL Commlssloner/uy Commlssloner may
allow Lhe amendmenL
7 Where Lhe LeL LxporL" order has been glven Lhe Addl/!olnL Commlssloner (LxporLs) would allow Lhe
amendmenLs
113 ln boLh Lhe cases afLer Lhe permlsslon for amendmenLs has been granLed Lhe AssLL/uy
Commlssloner(LxporLs) wlll approve Lhe amendmenLs on Lhe sysLem Where Lhe prlnL ouL of Lhe S/8 has
already been granLed Lhe exporLer wlll surrender all coples of Lhe S/8lll Lo Lhe Appralser for cancellaLlon
before amendmenL ls approved ln Lhe sysLem
13 SPC81 SPlMLn1S SPu1 Cu1 CAnCLLLA1lCn Anu 8ACk 1C 1CWn L8MlSSlCnS
131 AC/uL (LxporL) wlll glve permlsslon for lssue of shorL shlpmenL cerLlflcaLe shuL ouL or cancellaLlon
of S/8 on Lhe basls of an appllcaLlon made by Lhe exporLer 1he S/8 parLlculars would need Lo be
cancelled /modlfled ln Lhe sysLem before granLlng such permlsslon AC/uC should check Lhe sLaLus of
Lhe goods before granLlng permlsslon
14 AMLnuMLn1 Cl l8LlCP1 AMCun1
141 lf Lhe frelghL/lnsurance amounL undergoes a change before LeL LxporLs" ls glven correspondlng
changes would also need Lo be made ln Lhe S/8 wlLh Lhe approval of AC/uC LxporLs 8uL lf Lhe change
has Laken place afLer Lhe LeL LxporLs" Crder approval of AddlLlonal/!LCommlssloner would be
requlred nonlnLlmaLlon of such changes would amounL Lo mlsdeclaraLlon and may aLLracL penal
acLlon under CusLoms AcL 1962
13 8LCCnS18uC1lCn Cl LCS1 uCCuMLn1S
131 uupllcaLe prlnL ouL of Lul S/8 cannoL be allowed Lo be generaLed lf lL ls losL slnce exLra coples of
S/8 are llable Lo be mlsused Powever a cerLlflcaLe can be lssued by Lhe CusLoms sLaLlng LhaL LeL
LxporLs" order has been passed ln Lhe sysLem Lo enable Lhe goods Lo be accepLed by Lhe Shlpplng Llne
for exporL urawback wlll be sancLloned on Lhe basls of Lhe LeL LxporL" order already recorded on Lhe
sysLem
16 8L8ln1 Cl SPllnC 8lLL
161 Slmllarly reprlnLs can be allowed where Lhere ls a sysLem fallure as a resulL of whlch Lhe prlnL
ouL(afLer Lhe LeL LxporL" order) has noL been generaLed or Lhere ls a mlsprlnL ermlsslon of AC/uC
(exporLs) would be necessary for Lhe purpose 1he mlsprlnL copy shall be cancelled before such
permlsslon ls granLed
17 LxC81 Cl CCCuS unuL8 CLSS
171 lor exporL lLems whlch are sub[ecL Lo exporL cess Lhe correspondlng serlal number of Lhe Cess
Schedule should be clearly menLloned A prlnLed challan generaLed by Lhe sysLem would be handed over
Lo Lhe exporLer 1he cess amounL lndlcaLed should be pald ln Lhe 8ank of lndla LxLenslon 8ranch of ClS
under a recelpL
18 LxC81 Cl CCCuS unuL8 CLAlM lC8 u8AW8ACk
181 1he scheme of compuLerlzed processlng of drawback clalms under Lhe lndlan CusLoms Lul sysLem
LxporLs wlll be appllcable for all exporLs Lhrough ClS
182 ln respecL of goods Lo be exporLed under clalm for drawback Lhe exporLers wlll flle declaraLlon ln
Lhe form 1he declaraLlon ln Lhe form would also be requlred Lo be flled when Lhe exporL goods are
presenLed aL Lhe LxporL Shed for examlnaLlon LeL LxporL"
183 1he exporLers who lnLend Lo exporL Lhe goods Lhrough ClS under clalm for drawback are advlsed Lo
open Lhelr accounL wlLh Lhe 8ank of lndla branch slLuaLed aL ClSMulund 1hls ls requlred Lo be done Lo
enable dlrecL credlL of Lhe drawback amounL Lo Lhe exporLers accounL obvlaLlng Lhe need for lssue of
separaLe cheque by posL 1he exporLers are requlred Lo lndlcaLe Lhelr accounL number opened wlLh Lhe
8ank of lndla branch aL ClSMulund lL would noL be posslble Lo accepL any shlpmenL for exporL under
clalm for drawback ln case Lhe accounL number of Lhe exporLer ln Lhe bank ls noL lndlcaLed ln Lhe
declaraLlon form
184 1he exporLers are also requlred Lo glve Lhelr accounL number along wlLh Lhe deLalls of Lhe bank
Lhrough whlch Lhe exporL proceeds are Lo be reallzed
183 LxporL declaraLlons lnvolvlng a drawback amounL of more Lhan rupees one lakh wlll be processed
on screen by Lhe AC/uC before Lhe goods can be broughL for examlnaLlon and for allowlng LeL LxporL"
186 1he drawback clalms are sancLloned sub[ecL Lo Lhe provlslons of Lhe CusLoms AcL 1962 Lhe
CusLoms and CenLral Lxclse duLles drawback rules 1993 and condlLlons prescrlbed under dlfferenL sub
headlngs of Lhe All lndusLry raLes as per noLlflcaLlon number 26/2003Cus(n1) daLed 142003 as
amended by noLlflcaLlon number 12/2004Cus(n1) daLed 290104
187 AfLer acLual exporL of Lhe goods Lhe drawback clalms wlll be processed Lhrough Lul sysLem by Lhe
offlcers of drawback branch on flrsL come flrsL serve basls 1here ls no need for flllng separaLe drawback
clalm 1he clalms wlll be processed based on Lhe 1raln Summary/lnward way blll submlLLed by
CCnCC8 1he sLaLus of Lhe S/8lll and sancLlon of drawback clalm can be ascerLalned from Lhe query
counLer" seL up aL Lhe servlce cenLre lf any query has been ralsed or deflclency noLlced Lhe same wlll
be shown on Lhe Lermlnal and a prlnLouL of Lhe query/deflclency may be obLalned by Lhe auLhorlzed
person or Lhe exporLer from Lhe servlce cenLre 1he exporLers are advlsed Lo reply Lo such querles
expedlLlously and such replles shall be goL enLered ln Lhe Lul sysLem aL Lhe servlce cenLre 1he clalm
comes ln queue of Lhe Lul sysLem afLer reply Lo querles/deflclencles ls enLered by Lhe servlce cenLre
188 Shlpplng 8llls ln respecL of goods under clalm for drawback agalnsL brand raLes would also be
processed ln Lhe same manner excepL LhaL drawback would be sancLloned only afLer Lhe orlglnal band
raLe leLLer ls produced before Lhe deslgnaLed cusLoms offlcer ln Lhe offlce of AssLL/uy Commlssloner
(LxporL) and ls enLered ln Lhe sysLem 1he exporLer should speclfy Lhe SS no of drawback as 9801 for
provlslonal drawback
189 All Lhe clalms sancLloned ln a parLlcular day wlll be enumeraLed ln a scroll and Lransferred Lo Lhe
8ank Lhrough Lul 1he bank wlll credlL Lhe drawback amounL ln Lhe AccounL of Lhe exporLer on Lhe nexL
day and wlll handle accounLs of Lhe exporLers as per Lhelr lnsLrucLlons 8ank wlll also send a forLnlghLly
sLaLemenL Lo Lhe exporLers abouL Lhe paymenLs of Lhelr drawback clalms

19 LxC81 Cl CCCuS unuL8 uL8
191 Whlle flllng lnformaLlon as per Lhe formaL exporLers are requlred Lo ensure LhaL correcL Croup
Code no of Lhe goods belng exporLed and Lhe lLem no of relevanL Croup ls clearly menLloned (lLem
wlse deLalls) 1he exporLers/CPAs are advlsed Lo flll lLem no ln Lhe same manner as glven ln Lhe ubllc
noLlces lssued by uCl1
192 uL8 CredlL ln respecL of lLems llke formulaLlons ln[ecLlons eLc of group code no62 (Chemlcals)
are aL a speclflc percenLage of credlL raLe for Lhe relevanL bulk drug lor proper calculaLlons of uL8
raLe exporLers/CPAs are advlsed Lo clalm exporL under Lhe speclflc Slno lf Lhey are exporLlng ln[ecLlons
and LhereafLer menLlon Slno of Croup Code 62 of Lhe bulk drug of whlch such ln[ecLlons have been
made 1he sysLem wlll calculaLe Lhe sald speclflc percenLage of Lhe uL8 raLe of such bulk drugs
formulaLlons of whlch are belng exporLed
193 All Lhe uL8 S/8llls havlng lC8 value less Lhan 8s3 lakhs and/or uL8 raLes less Lhan 20 wlll be
assessed by Appralser/SupdL (uL8 Cell) Powever Lhe S/8lll havlng lC8 value more Lhan 8s3 lakhs
and/or credlL raLe 20 or more wlll be assessed by AC/uC (LxporL) Any query aL Lhe Llme assesslng by
Appralser (uL8 cell) or AC/uC (LxporL) may be obLalned from Lhe servlce cenLre and reply Lo Lhe query
has Lo be furnlshed Lhrough servlce cenLre
194 lf Lhe group code no lLem no and lC8 value declared ls accepLed by Lhe Appralser/SupdL (uL8
Cell) or AssLL/uy Commlssloner(LxporL) goods may be broughL and enLered ln Lhe sysLem 1he
examlnlng offlcer wlll feed Lhe examlnaLlon reporL and LeL LxporL" order wlll be glven by
Appralser/SupdL ln Lhe Lul sysLem Seven coples of S/8lll wlll be prlnLed for Lhe purposes menLloned
agalnsL each as under
CusLoms Copy lor record of CusLoms
LxporLer's copy lor record of LxporLers
LCopy lor offlce of uCl1
u8 copy lor use ln Lhe lmporL cell of lCu 8angalore for reglsLraLlon of llcence
Lxchange ConLrol Copy lor negoLlaLlng Lhe exporL documenLs ln bank
181182 coples
193 1here ls a provlslon for changlng Lhe Croup Code no/lLem no/value for uL8 credlL purposes and
such changes wlll be reflecLed ln Lhe prlnL ouL of Lhe S/8lll Such charges may be done by
Appralser/SupdL (uL8 Cell) AC/uC(LxporL) as well as by Appralser/SupdL(Lxam) 1he credlL wlll be
allowed by Lhe uCl1 aL Lhe raLe/value (for credlL purposes only) as approved by CusLoms 1he L copy
of Lhe shlpplng blll shall be used by Lhe LxporLers Lo obLaln uL8 llcence from uCl1
196 ln case for credlL purposes Lhe exporLer accepLs Lhe lower value as deLermlned by cusLoms such
lower value wlll be enLered by Appralser (uL8 Cell) AC/uC (LxporL) or by Appralser (Lxam) for each
lLem(s) rlnLouL of S/8lll aL lLem level wlll lndlcaLe for lC8 value as well value for uL8 credlL purposes
LxporLers are requlred Lo apply for Lhe uL8 Llcence aL Lhe 8 value accepLed by CusLoms and noL Lhe
value declared by Lhem Powever as uL8 ls lssued on Lhe basls of exchange raLe appllcable on Lhe daLe
of LeL LxporL exporLers are advlsed Lo apply for uL8 Llcence aL Lhe value accepLed by CusLoms aL Lhe
Llme of exporL mulLlplled by exchange raLe on Lhe daLe of LeL LxporL(LLC) (As per para 443 of LxlM
ollcy 2003 edlLlon)
197 ln case Lhe exporLer does noL accepL Lhe value deLermlned by Lhe cusLoms Lhe exporLs wlll be
allowed provlslonally afLer Laklng samples 'for markeL enqulry 1he words nC1 vALlu lC8 uL8" wlll
be prlnLed on all Lhe coples of S/8lll and Lhe exporLers wlll be noL be ellglble for uL8 llcence agalnsL
provlslonally assessed S/8llls ln such cases L copy of S/8lll wlll noL be prlnLed and only 6 coples wlll be
prlnLed Powever markeL enqulrles abouL value wlll be conducLed ln such cases and elLher afLer lssue of
Lhe Show Cause noLlce Lhe markeL value wlll be deLermlned or may be accepLed by Lhe LxporLers on hls
own ln such cases where samples are drawn sub[ecL Lo markeL enqulry Lhe copy of Lhe S/8lll for
clalmlng uL8 wlll be generaLed afLer deLermlnaLlon of value on Lhe basls of markeL enqulry and handed
over Lo Lhe exporLers duly slgned by Appralser/SupdL of CusLoms ln such cases wherever markeL value
has been found Lo be less Lhan Lwlce Lhe credlL clalmed Lhe markeL value wlll be menLloned ln Lhe L
copy of S/8lll as under
MarkeL value of Lhe goods ls 8sand credlL noL Lo exceed 30 of Lhe markeL value"
Sample may also be drawn for Lhe oLher purposes such as Chemlcal LesL uL8 enLlLlemenL eLc 1he
procedure of rovlslonal AssessmenL shall be appllcable muLaLes muLandls Lo above cases as well and
Lhe cases wlll be flnallzed afLer necessary reporLs eLc arLe recelved and unprlnLed copy of S/8lll meanL
for uL8 Llcence shall be released LhereafLer for prlnLlng
198 8eglsLraLlon of uL8 Llcence
1he uL8 Llcence ln respecL of exporLs made from Lhls cusLoms sLaLlon wlll be requlred Lo be reglsLered
aL Lhe same sLaLlon 8efore reglsLraLlon Lhe concerned offlcer wlll verlfy Lhe S/8lll(s) ln Lhe Llcence from
Lhe compuLer ensure LhaL exporLs have been affecLed and value menLloned ls as deLermlned by cusLoms
aL Lhe Llme of exporL ln cases of S/8llls assessed provlslonally Lhe verlflcaLlon wlll noL be posslble
because S/8lll wlll noL be ln Lhe verlflcaLlon queue 1he exporLers are advlsed Lo obLaln llcences for Lhe
lLems exporLed un uL8 scheme and noL for nonuL8 lLems lf Lhe lower value for credlL purposes has
been accepLed aL Lhe Llme of exporL Lhe llcenses shall be obLalned only for such lower value and noL for
lC8 value declared ln S/8lll or as per 8ank reallsaLlon cerLlflcaLe Slmllarly ln cases where markeL value
of Lhe goods ls less Lhan Lwlce Lhe credlL avalled Lhe llcence shall be obLalned for 30 of Lhe presenL
markeL value of Lhe goods 1he compuLer aL Lhe Llme of reglsLraLlon of llcence wlll calculaLe admlsslble
credlL on Lhe basls of exchange raLe on Lhe daLe of reallsaLlon of exporL proceeds (as per bank
reallsaLlon cerLlflcaLe) for uL8 lLems only and aL cusLoms approved value aL Lhe Llme of exporL lf Lhe
amounL of llcence ls more Lhan Lhe amounL of credlL calculaLed by Lhe sysLem lL wlll noL be posslble Lo
reglsLer a llcence and reference wlll be made Lo uCl1 for correcLlon of amounL of credlL lf Lhe amounL
of credlL as per cusLoms compuLer maLches wlLh Lhe credlL as per uL8 llcence compuLer wlll generaLe
prlnLouL regardlng verlflcaLlon of Lhe exporLs glvlng deLalls llke S/8lll no daLe raLe of credlL lC8 value
as approved by cusLoms and amounL of credlL eLc uL8 llcence wlll be reglsLered on Lhe basls of
prlnLouL of verlflcaLlon reporL duly slgned by AC/uC (LxporL) lf a uL8 Llcence ls havlng S/8llls exporLed
from oLher porLs ln Lhe same clLy Lhe exporLers can geL Lhe llcence reglsLered aL any of Lhe porLs from
where he lnLends Lo lmporL Lhe goods ln Lhe clLy afLer verlflcaLlon abouL exporLs from oLher porLs from
where exporLs were affecLed 1he same procedure wlll be followed for ul8C Llcences also
20 LxC81 Cl CCCuS unuL8 100 LCu SCPLML
201 1he exporLers can geL Lhe exporL goods examlned by CenLral Lxclse/CusLoms Cfflcer aL Lhe facLory
even prlor Lo fllllng of S/8lll Self seallng faclllLy ls also avallable Pe shall obLaln Lhe examlnaLlon reporL
ln Lhe form Lo Lhls ubllc noLlce duLy slgned and sLamped by Lhe examlnlng offlcer and supervlslon
offlcer aL Lhe facLory 1he exporL lnvolce shall also be slgned and sLamped by boLh Lhe offlcers aL Lhe
facLory 1hereafLer Lhe goods shall be broughL Lo Lhe concerned cusLoms warehouse for Lhe purpose of
clearance and subsequenL LeL LxporL" 1he exporLers/CPA shall presenL Lhe goods for reglsLraLlon
along wlLh LxamlnaLlon 8eporL A8L1 LxporL lnvolce duly slgned by Lhe Lxamlnlng Cfflcer and
supervlslng offlcer aL Lhe facLory check llsL declaraLlon ln form and oLher documenLs such as documenL
of LransporLaLlon A8L1 eLc Lo Lhe examlner ln Lhe concerned shed AfLer reglsLraLlon of goods Lhe
shlpplng blll wlll be marked Lo an examlner for verlflcaLlon of documenLs and seal lf seal ls found lnLacL
Lhe S/8lll wlll be recommended for LLC whlch wlll be glven by Lhe shed appralser Powever lf seal ls noL
found lnLacL Lhe goods wlll be marked for examlnaLlon and LLC wlll be glven lf Lhe goods are found ln
order
21 LxC81 Cl CCCuS unuL8 LCC SCPLML
211 All Lhe exporLers lnLendlng Lo flle shlpplng bllls under Lhe LCC scheme should flrsL geL Lhelr LCC
llcence reglsLered wlLh Lhe LxporL secLlon lor reglsLraLlon of LCC llcence Lhe exporLer/CPA shall
produce Lhe xerox copy of LCC llcence Lo Lhe servlce cenLre for daLa enLry A prlnLouL of Lhe relevanL
parLlculars enLered wlll be glven Lo Lhe exporLer/CPA for hls conflrmaLlon AfLer verlfylng Lhe
correcLness of Lhe parLlculars enLered Lhe sald prlnLouL wlll be slgned by Lhe exporLer 1hereafLer Lhe
orlglnal LCC llcence along wlLh Lhe aLLesLed copy of Lhe llcence and Lhe slgned prlnLouL of Lhe
parLlculars shall be presenLed Lo Lhe Appralser/SupL (LCC Cell)1he Appralser/SupdL (LCC Cell) would
verlfy Lhe parLlculars enLered ln Lhe compuLer wlLh orlglnal llcence and reglsLer Lhe same ln Lul sysLem
1he reglsLraLlon number of Lhe LCC Llcence would be furnlshed Lo Lhe exporLers/CPA who shall noLe
Lhe same carefully for fuLure reference 1he sald reglsLraLlon number would need Lo be menLloned
agalnsL respecLlve lLem on Lhe declaraLlon form flled for daLa enLry of Lhe s/blll aL Lhe Llme of exporL of
goods All Lhe LCC S/8lll would be processed on screen by Lhe Appralser/SupdL(LCC Cell) and Lhe
AC/uC (LxporL) AfLer processlng of Lhe LCC S/8lll by Lhe Appralser LCC Cell and AC/uC LxporL Lhe
goods can be presenLed aL Lhe CusLoms warehouse for reglsLraLlon examlnaLlon and LeL LxporL" as ln
Lhe case of oLher exporL goods AfLer Lraln summary ls submlLLed Lo CCnCC8 Lhe S/8lll wlll be puL Lo
Appralser queue for logglng/prlnLlng of ledger AfLer logglng/prlnLlng of ledger Lhe LCC blll wlll be
moved Lo hlsLory Lables
22 LxC81 Cl CCCuS unuL8 1PL uLLC SCPLML
221 Cnly shlpplng bllls perLalnlng Lo uLLC books lssued on or afLer 1493 wlll be processed on Lhe Lul
sysLem
222 All Lhe exporLers lnLendlng Lo flle s/bllls under Lhe uLLC scheme lncludlng Lhose under Lhe clalm for
drawback should flrsL geL Lhelr uLLC 8ook reglsLered wlLh Lhe ClS Mulund 1he reglsLraLlon can be done
ln Lhe servlce cenLre
1he orlglnal uLLC book would need Lo be produced aL Lhe servlce cenLre for daLa enLry A prlnL ouL of
Lhe relevanL parLlculars enLered wlll be glven Lo Lhe exporLer/CPA 1he uLLC 8ook would need Lo be
presenLed Lo Lhe Appralser/SupdL uLLC Cell who would verlfy Lhe parLlculars enLered ln Lhe compuLer
wlLh Lhe orlglnal uLLC and reglsLer Lhe same ln Lhe Lul sysLem 1he reglsLraLlon no of Lhe uLLC 8ook
would be furnlshed Lo Lhe exporLer/CPA whlch would need Lo be menLloned on Lhe declaraLlon forms
aL Lhe ClS for exporL of goods lL would noL be necessary LhereafLer for Lhe exporLer/CPA Lo produce Lhe
orlglnal uLLC book for processlng of Lhe exporL declaraLlons
223 Lach book wlll be alloLLed a 8eglsLraLlon no should be lndlcaLed on Lhe shlpplng bllls ln Lhe
relevanL columns
224 LxporLers/CPAs LhaL wlll be fllllng S/8llls for exporL of goods under Lhe uLLC Scheme would be
requlred Lo flle addlLlonal declaraLlons regardlng avallmenL/nonavallmenL of MCuvA1 or regardlng
observance/nonobservance of speclfled procedures prescrlbed ln Lhe CenLral Lxclse 1944 ln Lhe form
1he declaraLlon should be supporLed by necessary cerLlflcaLes (A8L1 or for nonavallmenL of MCuvA1)
lssued by Lhe [urlsdlcLlon CenLral Lxclse auLhorlLles LeL LxporL" would be allowed only afLer verlflcaLlon
of all Lhese cerLlflcaLes aL Lhe Llme of examlnaLlon of goods 1he facL LhaL Lhe prescrlbed uLLC
declaraLlon ls belng made should be clearly sLaLed aL Lhe approprlaLe place ln Lhe declaraLlon belng fllled
ln Lhe servlce cenLre or Lhrough 8LSMode
223 All Lhe exporL declaraLlons for uLLC would be processed on screen by Lhe Appralser/SupdL LxporL
ueparLmenL and Lhe AC/uC LxporLs 1he sald processlng would be akln Lo Lhe processlng of 8lll of LnLry
on Lhe Lul SysLem wlLh provlslons for query/reply AfLer Lhe declaraLlons have been so processed and
accepLed Lhe goods can be presenLed aL Lhe LxporL Shed along wlLh uLLC 8ooks reglsLered ln Lhe4 Lul
SysLem so LhaL Lhe exporL declaraLlons are processed expedlLlously
226 lurLher exporLers avalllng of uLLC beneflLs ln Lerms of varlous noLlflcaLlons should flle Lhe relevanL
declaraLlons
227 lL ls furLher clarlfled as follows
1 Whlle glvlng deLalls relaLlng Lo uLLC operaLlons ln Lhe form Lhe exporLers/CPAs should lndlcaLe Lhe
Sno of Lhe goods belng exporLed ln Lhe column LlLled l1LM SnCln uLLC 8CCk A81 L"
2 lf lnpuLs menLloned ln uLLC lmporL book only have been used ln Lhe manufacLure of Lhe goods under
exporL ln column LlLled lLem Srno ln uLLC 8ook arL C" Lhe exporLers/CPAs are requlred Lo glve Sno
of lnpuLs ln arLC of Lhe uLLC 8ook and LxporLers need noL flll up column LlLled uLSC8l1lCn Cl 8AW
MA1L8lALS"
3 lf some lnpuLs whlch are noL ln arLC of Lhe uLLC 8ook have been used ln Lhe manufacLure of Lhe
goods under exporL and Lhe exporLer wanLs Lo declare such lnpuLs he shall glve Lhe descrlpLlon of such
lnpuLs ln column LlLled uLSC8l1lCn Cl 8AW MA1L8lALS"
4 ln Lhe Col lnu/lM" Lhe exporLers are requlred Lo wrlLe n" lf Lhe lnpuLs used are lndlgenous and
M" lf Lhe lnpuLs used are lmporLed
3 ln column LlLled Cess Schedule Slno" Lhe relevanL Slno of Lhe Schedule relaLlng Lo Cess should be
menLloned
23 LxC81 Cl CCCuS unuL8 ul8C SCPLML
1he deLalls perLalnlng Lo exporL producLs le lnpuL maLerlals uLlllzed as per SlCn should be clearly
menLloned ln Lhe declaraLlon menLloned aL Annexure A aL Lhe Llme of flllng
24 LxC81 CLnL8AL MAnllLS1
241 All Lhe sLeamer agenLs shall furnlsh Lhe LxporL Ceneral ManlfesL Pouse 8lll of Landlng wlse L Lhe
CusLoms elecLronlcally ln Lhe beglnnlng Lhe sLeamer agenLs are requlred Lo enLer Lhe manlfesL ln Lhe
CusLoms CompuLer SysLem Lhrough Lhe Servlce CenLre on paymenL of Lhe prescrlbed fee (ln due course
arrangemenLs wlll be made for Lhe elecLronlc dellvery of LxporL Ceneral ManlfesL Lhrough Lul Servlce
rovlders 1lll such Llme all Lhe LCMs wlll have Lo be enLered aL Lhe CusLoms CompuLer SysLem only)
23 C8lLvAnCL PAnuLlnC
242 1he AssLL Commlssloner/ uy Commlssloner of CusLoms ClSMulund may be approached by
exporLers or Lhelr CPAs for seLLlemenL of any problems faced aL any sLage of Lhe exporL clearance

1PL LCCC CCvL8
1he abbrevlaLed form for LxporL CredlL and CuaranLee CorporaLlon ls LCCC As Lhe name lndlcaLes Lhls ls
a sorL of guaranLee or a sorL of cover for Lhe exporLer LeL us now see whaL Lhls ls all abouL
needless Lo say LhaL an exporLer before enLerlng lnLo a conLracL wlLh Lhe overseas buyer for maklng any
supply Lakes care Lo ensure LhaL Lhe cusLomer wlLh whom he ls deallng have some credlL worLhlness
1hls he may be able Lo do elLher Lhrough Lhe local agenL who ls ln a beLLer poslLlon Lo know abouL Lhe
cusLomer or Lhrough a bank or Lhrough any of Lhe exporLer's assoclaLes lf happens Lo be ln Lhe area of
Lhe cusLomer eLc 8uL ln a buslness Lhlngs may change 1he flnanclal sLaLus of a cusLomer may Lake
drasLlc Lurn and an esLabllshed cusLomer may go bankrupL wlLhln a shorL perlod of Llme
Moreover Lhe buyer may be wllllng Lo make Lhe paymenL buL Lhere are oLher envlronmenL whlch
prevenLs hlm from effecLlng Lhe Lransfer of funds Lhrough Lhe bank lor eg Lhere could be break ouL of
war Lhe balance of paymenL poslLlon of Lhe counLry may become unfavourable Lhere may be some
coup of Lhe governmenL eLc and all LransacLlons could be sealed
1hese are Lhe rlsk facLors for Lhe exporLers WhaL ls Lhe guaranLee LhaL he wlll geL pald for Lhe supplles
he has made?
WlLh a vlew Lo provlde supporL Lo lndlan exporLers Lhe CovL of lndla seL up Lhe LxporL 8lsk lnsurance
CorporaLlon (L8lC) ln 1937 1hls was Lransformed lnLo LxporL CredlL CuaranLee CorporaLlon LLd ln
1964 ln order Lo glve Lhe lndlan ldenLlLy a sharper focus Lhe name was agaln changed Lo LxporL CredlL
CuaranLee CorporaLlon of lndla LLd ln 1983 1hls ls a company wholly owned by Lhe CovL of lndla and
funcLlons under Lhe admlnlsLraLlve conLrol of Lhe MlnlsLry of Commerce and managed by Lhe 8oard of
ulrecLors represenLlng CovernmenL 8anklng lnsurance 1rade lndusLry eLc
1hough one may lnslsL for a LeLLer of CredlL sLlll Lhere could be some elemenLs of rlsk whlch we wlll
sLudy laLer here LxcepL geLLlng an advance paymenL for Lhe full value of Lhe supplles any oLher mode of
paymenL wlll have some rlsk
1ake Lhe case of an exporLer who has made supplles and before Lhe paymenL ls recelved Lhe buyer goes
bankrupL or Lhere comes some new provlslon or pollcy of CovernmenL of Lhe lmporLlng counLry
prevenLlng repaLrlaLlon of Lhe funds Lo oLher counLrles whaL recourse Lhe exporLer has Lo recover hls
dues 1he llLlgaLlon procedure mlghL be Llme consumlng and Lhe exporLer can never be sure of geLLlng
hls full paymenL An LCCC cover a safeguard hls lnLeresL Lo a greaL exLenL
An exporLer can elLher agree for slghL paymenL or can made shlpmenL on credlL Lerms for say 60 days
90 days eLc ln pro[ecL exporLs Lhe perlod of paymenL may exLend Lo some years Longer Lhe perlod of
cre3dlL glven Lo Lhe cusLomer more wlll be Lhe rlsk facLor for Lhe exporLer
ln respecL of slghL blll Lhere ls almosL no rlsk because Lhe cusLomer has Lo make paymenL flrsL before he
reLlres Lhe documenLs 1herefore before Lhe LlLle of Lhe goods ls passed on Lo Lhe cusLomer Lhe
lmporLer makes Lhe3 paymenL Powever ln respecL of usance blll (credlL bllls) Lhe buyer reLlres Lhe
documenLs by accepLlng Lhe usance drafL and Lakes dellvery of Lhe goods ln case Lhe cusLomer goes
bankrupL or become lnsolvenL before Lhe due daLe of paymenL Lhe exporLer ls LoLally aL a loss Whlle
blg unlLs may be able Lo absorb Lhe one Llme loss small exporLers wlll geL broke even wlLh one such
LransacLlon Pere Lhe LCCC comes lnLo plcLure lL Lakes up Lhe responslblllLy of paylng Lhe funds Lo Lhe
exporLer and makes all efforLs lncludlng legal proceedlngs Lo recover Lhe dues from Lhe cusLomer
provlded Lhe exporLer has Laken an LCCC cover
WPA1 LCCC CllL8S lC8 8C1LC1lCn Cl LxC81L8'S ln1L8LS1 ?
LCCC offers varlous Lypes of lnsurance cover Lo proLecL Lhe exporLer's lnLeresL lor each Lype of cover an
exporLer has Lo Lake ollcy speclflc Lo Lhe respecLlve requlremenLs 1he ollcy LhaL ls mosL commonly
Laken by Lhe exporLers ls Lhe SLandard ollcy or oLherwlse called Lhe ShlpmenLs (Comprehenslve 8lsks)
ollcy
SPlMLn1S (CCM8LPLnSlvL 8lSkS) CLlC? also called S1AnuA8u CLlC?
lor exporLers wlLh an annual exporL Lurnover ln excess of 8s30 lakhs Lhe ShlpmenLs (Comprehenslve
8lsks) ollcy ls Lhe one lnLended for coverlng shlpmenLs on cash basls or on shorLLerm credlL basls
(CredlLs noL exceedlng 180 days)
1he rlsks covered Lhls ollcy ls as follows effecLlve from Lhe daLe of shlpmenL
Commerclal 8lsks
1 lnsolvency of Lhe buyer
2 lallure of Lhe buyer Lo make paymenL wlLhln a speclfled perlod
3 8uyer's fallure Lo accepL Lhe goods sub[ecL Lo cerLaln condlLlons
ollLlcal 8lsks
1 lmposlLlon of resLrlcLlons by Lhe CovL of Lhe buyer's counLry or any governmenL acLlon whlch may
block or delay Lhe Lransfer of paymenL made by Lhe buyer
2 War clvll war revoluLlon or clvll dlsLurbances ln Lhe buyer's counLry
3 new lmporL resLrlcLlons or cancellaLlon of a valld lmporL llcence
4 lnLerrupLlon or dlverslon of voyage ouLslde lndla resulLlng ln paymenL of addlLlonal frelghL or
lnsurance charges whlch cannoL be recovered from Lhe buyer
3 Any oLher cause of loss nelLher occurrlng ouLslde lndla nor normally lnsured by general lnsurers and
beyond Lhe conLrol of boLh Lhe e porLers and Lhe buyer

8lsks noL covered under Lhe ollcy
1he SLandard ollcy does noL cover losses on accounL of followlng rlsks
1 Commerclal dlspuLes lncludlng quallLy dlspuLes ralsed by Lhe buyer unless Lhe exporLer obLalns a
decree from a compeLenL courL of law ln Lhe buyer's counLry ln hls favour
2 Causes lnherenL ln Lhe naLure of Lhe goods
3 8uyer's fallure Lo obLaln necessary lmporL or exchange conLrol clearance from auLhorlLles concerned
4 lnsolvency or defaulL of Lhe agenL of Lhe exporLer or of Lhe collecLlng bank
3 Loss or damage Lo goods whlch can be covered by general lnsurers
6 Lxchange raLe flucLuaLlons
7 lallure of Lhe exporLer Lo fulflll Lhe Lerms of Lhe exporL conLracL or negllgence on hls parL
ShlpmenLs Covered
1he SLandard ollcy ls meanL Lo cover all Lhe shlpmenLs LhaL may be made by an exporLer durlng a
perlod of 24 monLhs ahead 1he pollcy cannoL be lssued for selecLed shlpmenLs selecLed buyer or
selecLed markeLs lor speclflc requlremenLs an exporLer can opL for dlfferenL pollcy from Lhe varlous
servlces offered by Lhe corporaLlon
Lxcluslons
ShlpmenLs made agalnsL advance paymenLs recelved or shlpmenLs agalnsL conflrmed leLLers of credlL
whlch has Lhe conflrmaLlon from Lhe bank ln lndla may be excluded
Powever shlpmenLs agalnsL conflrmed L/C may be covered for pollLlcal rlsks only 1he premlum for
cover under pollLlcal rlsks wlll be less Lhan LhaL under Lhe comprehenslve pollcy LCCC may also agree Lo
exclude cerLaln lLems lf Lhe exporLer ls deallngL ln dlfferenL dlsLlncL producLs
ShlpmenLs Lo AssoclaLes
ShlpmenLs Lo buyers le Lhe forelgn buyers ln whose buslness Lhe exporLer has flnanclal lnLeresL are
normally excluded from Lhe ollcy Powever such shlpmenLs can be covered agalnsL pollLlcal rlsks
ShlpmenLs on ConslgnmenL basls
ShlpmenLs on conslgnmenL basls can be covered only agalnsL pollLlcal rlsks
ShlpmenLs by Alr
Slnce Lhe buyer ls able Lo Lake dellvery of Lhe goods even wlLhouL reLlrlng Lhe bank documenLs
shlpmenLs by alr are noL covered under Lhe pollcy Powever Lhe exporLer may cover such shlpmenLs for
paymenLs under open Lerms 1he exporLer can have cover for such shlpmenLs lf he has obLalned CredlL
LlmlL on such buyers on open dellvery Lerms and also pays Lhe premlum aL raLes appllcable Lo open
dellvery Lerms
PCW 1C CL1 LCCC CCvL8
SLep 1 Cpen ollcy
An exporLer deslrlng Lo geL Lhe LCCC cover has Lo approach Lhe offlce of Lhe LCCC maklng a roposal
Pe musL make hls home work and be clear as Lo whaL wlll be hls LoLal Lurnover durlng a year ad whaL
wlll be Lhe maxlmum amounL he expecLs Lo be ouLsLandlng from varlous buyers aL a glven polnL of Llme
Cnce Lhls ls clear he can apply for an Cpen ollcy for Lhe maxlmum amounL LhaL he expecLs Lo be
ouLsLandlng aL a glven polnL of Llme Suppose he expecLs LhaL aL any glven Llme hls ouLsLandlng wlll be
say 8s30/ lakhs Lhen he can apply for a pollcy for Lhls amounL AfLer verlflcaLlon of Lhe deLalls of Lhe
exporLer Lhe LCCC may lssue a open pollcy for 8s30 lakhs wlLh a valldlLy of say 2 years 1hls ls Lhe flrsL
sLep

SLep 2 CredlL LlmlL on lndlvldual 8uyer
Cnce Lhe open pollcy ls Laken as a nexL sLep Lhe exporLer musL make ouL Lhe llsL of Lhe cusLomers Lo
whom he expecLs Lo make shlpmenL lor each and every cusLomer he has Lo apply Lo Lhe LCCC Lo have a
llmlL of llablllLy flxed 1haL ls Lo say he has Lo declare Lhe maxlmum amounL of bllls he expecLs Lo be
ouLsLandlng from each cusLomer aL a glven polnL of Llme 8ased on Lhe value of buslness deallng
suppose Lhe exporLer expecLs LhaL from cusLomer A Lhe ouLsLandlng may be 8s10 lakhs 1hen Lhe
exporLer has Lo apply Lo LCCC ln Lhe prescrlbed form for geLLlng llmlL flxed for Lhe cusLomer Cn recelpL
of Lhe appllcaLlon LCCC wlll check for Lhe credlL worLhlness of Lhe cusLomer elLher Lhrough Lhelr own
neL work of offlces globally or Lhrough Lhe cusLomer's bank or Lhrough some repuLed lndependenL
agency 8ased on Lhe credlL reporL LCCC wlll deLermlne Lhe llmlL LhaL can be flxed for Lhe cusLomer lf lL
feels LhaL a llmlL of 8s10 lakhs ls ln order lL wlll advlse Lhe exporLer of Lhe same Slmllarly Lhe exporLer
can have Lhe llmlL flxed Lo all hls cusLomers
Cnce Lhe llmlL ls Laken from LCCC Lhe exporLer ls free Lo make hls shlpmenLs Lo Lhe varlous cusLomers
lf shlpmenL for any cusLomer ls made before geLLlng Lhe llmlL flxed by LCCC no rlsk wlll be covered for
LhaL shlpmenL
SLep 3 aymenL of remlum and flllng of monLhly reLurns
lor Lhe rlsk Lhe LCCC Lakes lL charges a premlum on Lhe value of Lhe shlpmenLs acLually made 1hls ls
calculaLed as per Lhe Lable Lo be supplled by LCCC whlch shows Lhe premlum per 8s100 of exporLs
1hls Lable whlch glves Lhe premlum amounL payable ls framed based on Lhe followlng
1he varlous counLrles around Lhe globe are dlvlded lnLo dlfferenL groups and are classlfled as A1 A2 81
82 C1C2 u 1he counLrles are grouped accordlng Lo Lhelr economlc sLandard lor eg uSA Canada
uk are grouped ln caLegory A 1he premlum amounL wlll be less for group A counLrles and wlll be
lncreased gradually Lo group 8 C u counLrles
1he premlum for group u counLrles wlll be more because Lhey are all economlcally weaker counLrles and
paymenL rlsks are hlgh
Agaln Lhe premlum Lable ls based on Lhe perlod of credlL 1he slab ls for credlLs up Lo 90 days 120 days
180 days eLc Longer Lhe credlL perlod greaLer ls Lhe premlum
1hus Lhe premlum wlll be leasL for group A counLrles and for Lhe shorLer credlL perlod and wlll be
maxlmum for group u counLrles and for maxlmum credlL perlod
llLlnC Cl MCn1PL? 8L1u8nS
1he exporLer has Lo send a monLhly reLurn ln Lhe prescrlbed form Lo LCCC declarlng Lhe llsL of varlous
shlpmenLs made and Lhe amounL of premlum payable as per Lhe premlum Lable 1he exporLer has Lo
work ouL Lhe LoLal premlum appllcable on Lhe shlpmenL effecLed and make paymenL Lo Lhe LCCC
1he exporLer ls also expecLed Lo flle a MonLhly 8eLurn ln a separaLe form llsLlng all Lhe 8llls whlch are
noL pald on due daLe lf any so LhaL LCCC ls perlodlcally aware of Lhe defaulLers
ln case of any evenLuallLy when Lhe buyer goes bankrupL he may prefer a clalm wlLh LCCC for paymenL
1he pollcy LhaL ls lssued for shlpmenL noL covered under L/C ls called Comprehenslve ollcy meanlng
LhaL Lhe pollcy wlll cover boLh Lhe commerclal and pollLlcal rlsks Whlle commerclal rlsk ls LhaL of Lhe
buyer golng bankrupL Lhe pollLlcal rlsk relaLes Lo Lhe counLry's pollcles whlch may prevenL Lhe
repaLrlaLlon of funds or Lhere could be ouLbreak of war prevenLlng flnanclal LransacLlons eLc
All Lhe above relaLes Lo shlpmenLs noL covered under L/C Powever an exporLer can have a separaLe
LCCC ollcy for shlpmenLs under L/C Pere Lhe exporLer wlll have Lhe pollcy coverlng only Lhe pollLlcal
rlsk slnce under L/C Lhe bank sLands as a guaranLor and Lhere ls no commerclal rlsk
An exporLer musL cover all hls exporLs under LCCC lncludlng bllls on slghL basls and are nC1 under L/C
Pe cannoL be selecLlve Lo cerLaln counLrles or cerLaln buyer 1he cover ls on whole Lurnover basls
lor all shlpmenLs under L/C Lhe buyer may Lake a separaLe pollcy Lo cover Lhe pollLlcal rlsks 1he
premlum for L/C shlpmenLs wlll be relaLlvely less Lhan LhaL on comprehenslve pollcy
noLe LCCC cover ls noL for nonpaymenL on accounL of dlspuLe on quallLy damages Lo Lhe goods LhefL
pllferage eLc
1he cover ls only when Lhe parLy goes lnsolvenL or Lhere are some pollLlcal rlsk due Lo whlch Lhe
exporLer ls noL ln a poslLlon Lo geL Lhe paymenL lmmedlaLely or on due daLe 1hls cover musL be
dlsLlngulshed from Lhe general lnsurance
vA8lCuS CLlClLS CllL8Lu 8? LCCC
1 S1AnuA8u CLlC?
An exporLer whose annual exporL Lurnover ls more Lhan 8s30 lakhs ls ellglble for Lhls pollcy
erlod of Lhe ollcy 24 MonLhs
Lxcluslons permlLLed LxporL Lo AssoclaLes
LeLLers of CredlL
ConslgnmenL LxporLs
8lsk Covered Commerclal 8lsks
ollLlcal 8lsks
LC Cpenlng 8ank 8lsks
ercenLage of Cover 90
Mlnlmum remlum 8s10 000/ ad[usLable
lmporLanL CbllgaLlons of Lhe LxporLer
1 CbLalnlng valld credlL llmlL on buyers and banks
2 MonLhly ueclaraLlon of shlpmenLs and paymenL of premlum
3 ueclaraLlon of paymenL overdue by more Lhan 30 days
4 llllng of clalm wlLhln 24 monLhs
3 Sharlng of recovery
PlghllghLs
1 LowesL remlum 8aLe
2 nC8 Cl 3 every year
3 ulscrepancy cover of LC
4 AuLomaLlc Approval forL resale/shlpmenL upLo 23 of Clv
3 lncreased dlscreLlonary llmlL
2 SMALL LxC81L8S CLlC?
Lxcluslons ermlLLed LxporLs Lo AssoclaLes
LeLLers of CredlL
ConslgnmenL LxporLs
ollLlcal 8lsks

ercenLage of Cover 93 for commerclal rlsks
100 for pollLlcal rlsks
Mlnlmum remlum 8s2 000 ad[usLable
1 CbLalnlng valld credlL llmlL on buyers and banks
2 CuarLerly ueclaraLlon of shlpmenL and paymenL of premlum
3 ueclaraLlon of paymenL overdue by more Lhan 30 days
4 llllng of clalm wlLhln 24 monLhs
PlghllghLs
1 PlghesL coverage/compensaLlon
2 LowesL premlum raLe
3 nC8 of 3 every year
4 ulscrepancy cover for LC
3 AuLomaLlc approval for resale/shlpmenL upLo 23 of Clv
3 SLClllC SPlMLn1 CLlClLS SPC81 1L8M (SSS1)
1hese pollcles can be avalled of by exporLers who do noL hold our SLandard ollcy or by exporLers havlng
sLandard pollcy ln respecL of shlpmenL permlLLed Lo be excluded from Lhe purvlew of Lhe sLandard
pollcy LxporLers can plck and choose Lhe conLracL/shlpmenL Lo be covered and lndlcaLe Lhe Lype of
cover requlred
erlod of ollcy
1he pollcy would be valld for shlpmenL(s) made from Lhe daLe of Lhe pollcy upLo lasL daLe allowed under
Lhe relevanL conLracL for shlpmenL
8lsk Covered
1 Commerclal 8lsks
2 ollLlcal rlsks
3 LC Cpenlng 8ank 8lsk
4 lnsolvency rlsk on agenL on condlLlons
lmporLanL CbllgaLlons of Lhe exporLers
1 upfronL premlum paymenL
2 SLaLemenL of shlpmenL made
3 aymenL Advlce sllp
4 SLaLemenL Cf Cverdue
3 llllng of Clalm wlLhln 12 monLhs from due daLe
PlghllghLs
1 SelecLlon for lnsurance cover
2 CLher exporLs noL Lo be declared
3 Add on" Marlne lnsurance Cover
4 remlum raLe reduced proporLlonaLely on hlgher share of loss Lo exporLer
4 LxC81S (SLClllC 8u?L8S) CLlC?
1he speclflc buyer pollcy provldes cover for shlpmenLs made Lo a parLlcular buyer or seL of buyers An
exporLer noL holdlng Lhe sLandard pollcy can avall of Lhls Lo cover Lhelr shlpmenLs Lo one or more
buyers LxporLers holdlng SLandard ollcy can also avall Lhls ollcy for coverlng shlpmenLs Lo lndlvlduals
8uyers lf all shlpmenLs Lo such buyers have been permlLLed Lo be excluded from Lhe purvlew of Lhe
SLandard ollcy
ollLlcal 8lsks
lnsolvency or defaulL of LC Cpenlng 8ank
lmporLanL CbllgaLlon of Lhe LxporLers
1 ueposlL remlum on CuarLerly ln advance
2 Submlsslon of shlpmenL declaraLlon quarLerly
3 ueclaraLlon of paymenL overdue for more Lhan 30 days
4 llllng of Lhe wlLhln 12 monLhs from due daLe
PlghllghLs
1 SelecLlve buyer can be lnsured
2 CpLlon Lo exclude LC exporLs
3 remlum raLe can be reduced proporLlonaLely
3 LxC81S 1u8nCvL8 CLlC?
1urnover ollcy ls for Lhe beneflL of large exporLers who conLrlbuLe noL less Lhan 8s10 lakhs per annum
Lowards premlum 1he pollcy envlsages pro[ecLlon of Lhe exporL Lurnover of Lhe pollcyholder for a year
and Lhe lnlLlal deLermlnaLlon on Lhe premlum payable on LhaL basls sub[ecL Lo ad[usLmenL aL Lhe end of
Lhe year based on acLual

8lsk covered Commerclal 8lsks
ollLlcal 8lsks
lmporLanL CbllgaLlon of Lhe LxporLer
1 remlum wlll be payable ln four equal quarLerly lnsLallmenLs ln advance
2 Submlsslon of quarLerly sLaLemenL of shlpmenLs
3 ueclaraLlon of overdue paymenLs
4 lllllng of clalm wlLhln 24 monLhs from due daLe

PlghllghLs
1 Slmpllfled procedure for paymenL of premlum
2 10 of pro[ecLed premlum ls walved when exporLs lncrease beyond pro[ecLlon
4 8u?L8 LxCSu8L CLlC?
1he 8uyer Lxposure ollcy ls Lo lnsure Lhe exporLers havlng large number of shlpmenLs wlLh slmpllfled
procedure and raLlonallzed premlum An exporLers can chose Lo obLaln exposure based cover on Lhe
selecLed buyer 1he cover would be cover agalnsL commerclal and pollLlcal rlsk 1he opLlon Lo exclude LC
shlpmenL ls avallable lf Lhe exporLer has opLed for commerclal and pollLlcal rlsks cover fallure of LC
openlng bank wlLh World 8ank up Lo 23000 as per laLesL 8ankers Almanac ls avallable lf exporLers opLs
for only pollLlcal rlsks for LC exporLs premlum aL a less raLe ls offered
erlod of Lhe ollcy 12 monLhs
8lsk covered 8uyer 8lsk
ollLlcal 8lsks
ercenLage of Cover 90 for SLandard pollcyholder and 80 for oLhers
1 remlum ayable ln advance
2 CpLlon Lo pay Lhe premlum quarLerly ln advance ls avallable
3 remlum non refundable
4 CbLalnlng approval for exLenslon ln due daLe beyond 180 days
6 llllng of clalm wlLhln 12 monLhs from due daLe

PlghllghLs
1 3 dlscounL premlum lf pald ln advance
2 ueclaraLlon procedure walved
3 LxporLer Lo approach only for defaulL ln clalm
4 Cne ollcy for one buyer

7 MuL1l8u?L8 LxCSu8L CLlC?
Some exporLers exporL Lo large number of buyers 1he number of shlpmenLs made by Lhem ls also qulLe
hlgh ln order Lo meeL Lhe needs of such exporLers MulLl buyer exposure pollcy ls lnLroduced Cover
would be avallable for exporLs Lo Lhe buyers ln counLrles llsLed under open cover caLegory as long as Lhe
buyer ls noL ln defaulL buyers llsL" malnLalned by Lhe CorporaLlon and avallable on lLs webslLe
wwwecgclndlacom lf Lhe LransacLlon ls on LC Lerms fallure of Lhe LC openlng bank ln respecL of
exporLs agalnsL LC wlll also covered lor banks wlLh World 8ank upLo 23000 as per LaLesL 8ankers
Almanac Cover ln respecL of exporLs Lo resLrlcLed over counLrles would noL be avallable under Lhls pollcy
erlod of ollcy 12 MonLhs
8lsk Covered 8uyer 8lsks
ollLlcal 8lsks
lmporLanL CbllgaLlons of Lhe LxporLers
1 remlum payable ln advance
2 CpLlon Lo pay Lhe premlum quarLerly ln advance ls avallable
3 remlum non refundable
4 CbLalnlng approval for exLenslon ls due daLe beyond 180 days
6 llllng of clalm wlLhln 12 monLhs from due daLe

PlghllghLs
1 ollcy ls besL sulLed for exporLers who make frequenL shlpmenLs
2 8educed premlum raLes avallable on condlLlons
3 3 reducLlon on LoLal premlum on lump sum paymenL
4 no declaraLlon requlred
3 All buyers ln open counLrles covered on condlLlons
6 roLecLlon up Lo AggregaLe Loss LlmlL and lndlvldual buyer up Lo 10 of All
8 CCnSlCnMLn1 LxC81S CLlC? (S1CCkPCLulnC ACLn1)
Lconomlc llberallzaLlon and gradual removal of lnLernaLlonal barrlers for Lrade and commerce are
openlng up varlous new avenues of exporLs opporLunlLles Lo lndlan exporLers of quallLy goods A
meLhod lncreaslngly adopLed by lndlan exporLers ls conslgnmenL exporLs where goods are shlpped and
held ln sLock overseas ready for sale Lo overseas buyers as and when orders are recelved 1hus separaLe
CredlL lnsurance ollcy ls lnLroduce Lo cover excluslvely shlpmenLs on conslgnmenL basls Laklng lnLo
accounL Lhelr speclal feaLures provldlng adequaLe lncenLlves and slmpllfylng procedures conslderably
8lsks covered
1 Commerclal 8lsks on sLockholdlng agenL and/or ulLlmaLe buyer
2 ollLlcal 8lsks
ercenLage of Cover 90 for SLandard ollcyholders and 80 for oLhers
lmporLanL obllgaLlons of LxporLers
1 Advance deposlL of premlum ln advance on quarLerly or monLhly basls
2 CbLalnlng credlL llmlL on ulLlmaLe buyers beyond Lhe dlscreLlonary llmlL
3 CuarLerly/MonLhly sLaLemenL of acLual exporLs
4 Cverdue declaraLlon
3 llllng of clalm
PlghllghLs
1 Covers only Lhe conslgnmenLs exporLs
2 8aLlonallzed premlum for 360 days
3 AuLomaLlc cover for ulLlmaLe buyers upLo dlscreLlonary llmlL
4 Commerclal rlsks on agenLs covered
3 LxLended perlod for reallzaLlon upLo 360 days
9 CCnSlCnMLn1 LxC81S CLlC? (CLC8AL Ln1l1?)
A meLhod adopLed by lndla exporLers ls conslgnmenL exporLs where goods are shlpped Lo Lhelr own
branch offlce overseas ready for sale Lo overseas buyers as and when orders are recelved 1hus
separaLe credlL lnsurance pollcy ls lnLroduce Lo cover excluslvely shlpmenLs by Lhe exporLers Lo Lhelr
branches overseas on conslgnmenL basls Laklng lnLo accounL Lhelr speclal feaLures provldlng adequaLe
lncenLlves and slmpllfylng Lhe procedures conslderably
8lsks covered
3 Commerclal 8lsks on overseas branch on condlLlons
7 Advance deposlL of premlum ln advance on quarLerly or monLhly basls
8 CbLalnlng credlL llmlL on ulLlmaLe buyers beyond Lhe dlscreLlonary llmlL
9 CuarLerly/MonLhly sLaLemenL of acLual exporLs
11 llllng of clalm
PlghllghLs
6 Covers only Lhe conslgnmenLs exporLs
7 8aLlonallzed premlum for 360 days
8 AuLomaLlc cover for ulLlmaLe buyers upLo dlscreLlonary llmlL
9 Commerclal rlsks on agenLs covered
10 LxLended perlod for reallzaLlon upLo 360 days
10 SL8vlCLS CLlClLS
Servlces ollcles offer proLecLlon Lo lndlan flrms agalnsL paymenLs rlsks lnvolved ln renderlng servlces Lo
forelgn parLles A wlde range of servlces hlrlng or leaslng can be covered under Lhese pollcles 1he
exporLers can opL for whole 1urnover Servlces ollcy or for Speclflc Servlces ollcy dependlng on Lhe
naLure of servlces provlded 1he premlum raLes appllcable 1o sLandard pollcy wlll be applled for whole
Lurnover servlces pollcy and speclflc shlpmenL pollcy (SSS1) premlum raLes wlll be applled for Speclflc
Servlce ollcy
erlod of Lhe ollcy 12/24 MonLhs
8lsks covered
4 Commerclal 8lsks on ulLlmaLe buyers
3 ollLlcal 8lsks
6 LC Cpenlng 8ank 8lsks

13 Advance deposlL of premlum ln advance Lo cover premlum
14 CbLalnlng credlL llmlL on servlces recelver
13 MonLhly sLaLemenL of acLual servlce provlded
17 llllng of clalm
PlghllghLs
11 CpLlon Lo selecL Lhe Lype of cover
7 MA1u8l1? lAC1C8lnC
1he MaLurlLy lacLorlng scheme as deslgned by LCCC has unlque feaLures and does noL exacLly flL lnLo
Lhe convenLlonal mould of maLurlLy facLorlng 1he changes devlsed are lnLended Lo glve Lhe cllenLs Lhe
beneflLs of full facLorlng servlces Lhrough Lhe maLurlLy facLorlng scheme Lhus effecLlvely addresslng Lhe
needs of exporLers Lo avall of pre flnance (advance) on Lhe recelvable for Lhelr worklng caplLal
requlremenLs Cne lmporLanL feaLure ls Lhe very role and speclal beneflLs envlsaged for banks under Lhe
scheme
8eneflLs
12 100 credlL guaranLee proLecLlon agalnsL had debLs
13 Sales reglsLer malnLenance ln respecLs of facLored LransacLlon
14 8egular monlLorlng of ouLsLandlng credlLs faclllLaLlng collecLlon of recelvable on due daLe recovery
aL lLs own cosL of all recoverable had debLs
SeLLlng up Charges and lacLorlng Charges
1 1he facLorlng appllcaLlon fee payable lnlLlally ls 8s10 000/ lor seLLlng up permlLLed llmlLs on each of
Lhe overseas cusLomers Lhe exporLer wlll have Lo pay a processlng fee equal Lo 003 of Lhe permlLLed
llmlL soughL sub[ecL Lo mlnlmum of 8s2000/ afLer of Lhls Lhe facLorlng charges payable as and when an
exporLs blll ls Lo be facLored depends on Lhe counLry Lo whlch Lhe exporLs ls made and Lhe credlL perlod

LxporLers CbllgaLlons
2 8eglsLraLlon and obLalnlng permlLLed llmlL on Lhe buyer
3 aymenL of facLorlng charges wlLh sLaLemenL of exporLs made
4 lnform developmenLs

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