Ques2. Explain the various terms and conditions of an export sales contract.

Also discuss the methods and terms of payments for exports. Ans2. It is difficult to draw up a comprehensive contract that can be standardized for all export transactions. However, the exporter and the importer should be aware of certain minimum general requirements when drawing up an export sales contract. The clauses covering these requirements, will make up the basic elements of the contract and are outlined below: Name and addresses of the parties. The parties to the contract should be clearly stated. Product. standards and specifications. The export contract should explicitly state the product name, as well as technical names there are any; sizes in which the product is to be supplied (if this is required); the applicable national or international standards and specifications: specific buyer requirements; and sample specifications. Quantity. The quantity should be clearly stated in both figures and words; units of measure should be specified. Inspection. Although a number of goods are now subject to pre-shipment inspection by designated agencies, foreign buyers may stipulate their own inspection agencies and conditions for inspection. Therefore. the parties should clearly state the nature, manner and focus of the inspection envisaged, as well as the inspection agency. Total value of the contract. The total value of the contract should be put in both words and figures, and the currency should be specified. Terms of delivery. Terms of delivery (one of the Incoterms 2000) should be stated in the contract, Taxes, duties and charges. The prices quoted by the seller may be inclusive of taxes, duties and charges. Levies, if any. in the country of importation may be the buyers responsibility. Responsibility for payment of all such taxes should be cleay specified in the contract.

Period of delivery, shipment. etc. The place of dispatch and delivery should be clearly specified. Also whether the period of delivery will run from the date of the contract, from the date of notification of the issue of an irrevocable letter of credit, or from the date of receipt of the notice of issuance of the import license by the seller. Part-shipment, trans-shipment, consolidation of cargo. The contract should explicitly state whether the parties to it have agreed on part-shipment or transshipment. The contract should also indicate the port of trans-shipment and the number, if any, of partial shipments agreed. If the goods are likely to be shipped under a consolidation of export cargoes scheme, this should be mentioned in the contract. Packaging, labeling and marking. Packaging, labeling and marking requirements should be clearly stated in the contract. Terms of payment. amount, mode and currency. When quoting different payment terms, the exporter should specify whether the prices are based on the current rate of exchange of the South African rand, or on the basis of another currency (e.g. the US dollar). Fluctuations in the rate of exchange should also be addressed. Discounts and commissions. The contract should specify the amount of discount or commission to be paid and by whom (i.e. by the exporter or by the importer). if required. the basis on which commission is calculated and the rate to be applied should also be clearly stipulated. Discount or commission rates may, or may not, be included in the export price agreed upon by the exporter and importer. Licenses and permits. Import licenses may be difficult to obtain in the buyers country. Parties to the contract should therefore clearly state whether the export transaction will require any export or import licenses, whose responsibility it will be to obtain them, and at whose expense. Insurance. A contract should provide for the insurance of goods against Loss, damage or destruction during transportation. The contract should specify the type of risk covered and the extent of coverage.

Documentary requirements. Documents required by the buyer/importer, and which the exporter agrees to provide. should be stated. Where the exporter is required to take out marine insurance, it is important that he be asked to provide a certificate of insurance, rather than the policy, to enable him to ship consignments under an open policy. Product guarantee. The length of the period of guarantee should be fixed, Delay in delivery. The contract should define the damages due to the buyer from the seller in the event of late delivery owing to reasons other than force majeure. Force majeure or excuse for non-performance of contract. Parties should include certain provisions in the contract defining the unforeseeable circumstances that would relieve them of their liability for non- performance of the contract. Such provisions are intended to identify the relief which may be available to either party to the contract should supervening circumstances occur during the period of validity of the contract. Remedial action. As defaults in contractual obligations by any of the parties can occur, it is always advisable to include in the sale or purchase contract certain specific remedial actions. These remedial actions should reflect the mandatory provisions of the law applicable to the contract. Applicable law. The contract should state the law of the country that is to govern the contract. Arbitration. The contract should include an arbitration clause to facilitate the amicable and quick settlement of disputes or differences that may arise between the parties. Signature of the parties. The signing of the contract indicates the agreement of both parties to the terms and conditions of the contract.

The passing of ownership is still a matter of uncertainty in international trade. It is not, as many believe, linked to the transfer of the bill of lading when shipment is by sea. In the case of road, rail or air transport, a bill of lading is not provided. it would therefore be prudent to have a reservation of ownership clause in the sales contract, to the effect that the exporter reserves ownership of the goods sold until he has received the purchase price. The various methods and terms of payments for exports are follows: 1. Consignment Purchase Consignment purchase terms can be the most beneficial method of payment for the importer. In this method of purchase, importer makes the payment only once the goods or imported items are sold to the end user. In case of no selling, the same item is returned to the foreign supplier. Consignment purchase is considered the most risky and time taking method of payment for the exporter. 2. Cash-in-Advance (Pre-Payment) Cash in Advance is a pre-payment method in which, an importer the payment for the items to be imported in advance prior to the shipment of goods. The importer must trust that the supplier will ship the product on time and that the goods will be as advertised. Cash-in-Advance method of payment creates a lot of risk factors for the importers. However, this method of payment is inexpensive as it involves direct importer-exporter contact without commercial bank involvement. 3. Down Payment In the method of down payment, an importer pays a fraction of the total amount of the items to be imported in advance. The down payment methods have both advantages and disadvantages. The advantage is that it induces the exporter or seller to begin performance without the importer or buyer paying the full agreed price in advance and the disadvantage is that there is a possibility the Seller or exporter may never deliver the goods even though it has the Buyer's down payment.

4. Open Account In case of an open account, an importer takes the delivery of good and ensures the supplier to make the payment at some specific date in the future. Importer is also not required to issue any negotiable instrument evidencing his legal commitment to pay at the appointed time. This type of payment methods are mostly seen where when the importer/buyer has a strong credit history and is well-known to the seller. Open Account method of payment offers no protection in case of non-payment to the seller. There are many merits and demerits of open account terms. Under an open account payment method, title to the goods usually passes from the seller to the buyer prior to payment and subjects the seller to risk of default by the Buyer. Furthermore, there may be a time delay in payment, depending on how quickly documents are exchanged between Seller and Buyer. While this payment term involves the fewest restrictions and the lowest cost for the Buyer, it also presents the Seller with the highest degree of payment risk and is employed only between a Buyer and a Seller who have a longterm relationship involving a great level of mutual trust. 5. Documentary Collections Documentary Collection is an important bank payment method under, which the sale transaction is settled by the bank through an exchange of documents. In this process the seller's instructs his bank to forwards documents related to the export of goods to the buyer's bank with a request to present these documents to the buyer for payment, indicating when and on what conditions these documents can be released to the buyer. The buyer may obtain possession of goods and clear them through customs, if the buyer has the shipping documents such as original bill of lading, certificate of origin, etc. However, the documents are only given to the buyer after payment has been made ("Documents against Payment") or payment undertaking has been given - the buyer has accepted a bill of exchange issued by the seller and payable at a certain date in the future (maturity date) ("Documents against Acceptance"). Documentary Collections make easy import-export operations within low cost. But it does not provide same level of protection as the letter of credit as it does not involve any kind of bank guarantee like letter of credit.

6. Letter of Credit A letter of credit is the most well known method of payment in international trade. Under an import letter of credit, importers bank guarantees to the supplier that the bank will pay mentioned amount in the agreement, once supplier or exporter meet the terms and conditions of the letter of credit. In this method of payment, plays an intermediary role to help complete the trade transaction. The bank deals only in documents and does not inspect the goods themselves. Letters of Credit are issued subject to the Uniforms Customs & Practice for Documentary Credits (UCPDC) (UCP). This set of rules is produced by the International Chamber of Commerce and Industries (CII).

Ques3. Write a short note on any two of the following: i. ii. iii. Certificate of Origin Proforma Invoice and commercial Invoice Shipping Bills

Ans 3. i. A Certificate of Origin (CO) is a document which is used for certification that the products exported are wholly obtained, produced or manufactured in India. It is generally an integral part of export documents. India is signatory to World Trade Organization because of which Indian exports are accorded preferential treatment available to all WTO members. Secondly, India has also entered into bilateral and multilateral trade pacts with its trade partners because of which Indian exports get into these countries at concessional import duty regime. In order to avail the preferential treatment, the Indian exporter are required to furnish the proof that the goods manufactured are, indeed, of Indian origin. Hence, the need for Certificate of Origin. It help importers of Indian goods as it is a document that helps improve the competitive edge of your exports. It enables your buyers to claim preferential tariff treatment when importing your products under many schemes of preferences such as available under WTO, Generalised System of Preferences (GSP), Commonwealth Preference (CP), Global System of Trade Preferences (GSTP), CO for MFA etc. Generally, different Certificate of Origins required by your importers to avail Different concessions. The importer will usually tell you the type of Certficate of Origin required by him. The Certificate of Origins could be broadly classified under two categories. 1. Certificate Of Origin ( Preferential) 2. Certificate Of Origin ( Non-Preferential)

Preferential Certificate of Origins as Certificate for Exports for Textile Quota (under MFA), GSP etc. are issued by designated Government Offices. For most of other countries Non-Preferential Certificate of Origins are required and that are issued by Chamber of Commerce of Industries. Only bodies authorized by DGFT, Union Ministry of Commerce and Industry can issue Certificate of Origin. Any other Chamber of Commerce and Industry/ Association cannot issue the Certificate of Origins. So, it is important to know which Office/Chamber of Commerce can issue the Certificate of Origin. Certificate of Origins issued from ISAP can be get by following way : First we need to get the Proforma of Certificate of Origin from ISAP. Fill it up and submit it alongwith documents required to be attested (like Invoice and Packing List). You could also download the format from ISAPs website. Advantages of getting the Certificate issued from ISAP: ISAP is open six days a week (open on Saturdays) Minimum processing time (5 minutes) Convenient Timings from 9.30 AM to 06.00 PM ISAP Certified documents are authenticated by CPV Division, Ministry of External Affairs for purposes of legalization of documents also.

ii.

Proforma Invoice and commercial Invoice:PROFORMA INVOICE:

A Proforma Invoice (Proforma) is an official price quote, a step up from a published price list that allows the customer to present the Proforma Invoice to their Accounting Department and to arrange a prepayment procedure. It is most commonly requested by customers pre-paying orders via bank money transfer before shipping an order.

It is used by customers to formalize the terms of sale (price, shipping,

F.O.B. location, shipping date, etc.) and properly allocate and/or transfer the funds needed for the purchase. Proforma invoice is an invoice provided by a supplier in advance of providing the goods or service to confirm the order and terms.

COMMERCIAL INVOICE: The customs officials of the country to which you're exporting may require a commercial invoice for dutiable shipments. The invoice must be prepared on the company letterhead, which must contain your complete address and other contact informations. When completed, attach the original and four copies (all signed separately) to your DHL waybill. A commercial invoice without letterhead is not acceptable. Customers without letterhead should approximate one by typing their company name and address information at the top of the form. Commercial invoice should have exporter's original signature on original invoice and each of the four copies along with the DHL waybill. It is advisable that you type all commercial invoices. The commercial invoice must include a few specific pieces of information such as the parties involved in the shipping transaction, the goods being transported, the country of manufacture, and the Harmonized System codes for those goods. A commercial invoice must also include a statement certifying that the invoice is true, and a signature. It is primarily used to calculate customs tax..

The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions. A series of three-letter trade terms related to common sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries. First published in 1936, the Incoterms rules have been periodically updated, with the eighth version Incoterms 2010having been published on January 1, 2011. "Incoterms" is a registered trademark of the ICC.

Rules for Any Mode(s) of Transport

The seven rules defined by Incoterms 2010 for any mode(s) of transportation are: EXW Ex Works (named place of delivery) The seller makes the goods available at its premises. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller doesn't load the goods on collecting vehicles and doesn't clear them for export. If the seller does load the good, he does so at buyer's risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale. FCA Free Carrier (named place of delivery) The seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place. The seller pays for carriage to the named point of delivery, and risk passes when the goods are handed over to the first carrier. CPT - Carriage Paid To (named place of destination) The seller pays for carriage. Risk transfers to buyer upon handing goods over to the first carrier. CIP Carriage and Insurance Paid to (named place of destination) The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. DAT Delivered at Terminal (named terminal at port or place of destination) Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal. DAP Delivered at Place (named place of destination) Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer.

DDP Delivered Duty Paid (named place of destination) Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. This term places the maximum obligations on the seller and minimum obligations on the buyer.

[edit] Rules for Sea and Inland Waterway Transport

The four rules defined by Incoterms 2010 for international trade where transportation is entirely conducted by water are: FAS Free Alongside Ship (named port of shipment) The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo. FOB Free on Board (named port of shipment) The seller must load the goods on board the vessel nominated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel (this rule is new!). The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments. CFR Cost and Freight (named port of destination) Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel (this rule is new!). Maritime transport only and Insurance for the goods is NOT included. This term is formerly known as CNF (C&F). CIF Cost, Insurance and Freight (named port of destination) Exactly the same as CFR except that the seller must in addition procure and pay for the insurance. Maritime transport only.

Q1. Documentation is the engine of exports in global trade. It facilitates the movement of freight, transfer of title, Processing of payment, and customs clearance. In this context discuss the role of documentation in the export trade. How is Aligned Documentation System helpful in the promotion of Export trade? Also explain the classification of Export Documents therein. The export process is made more complex by the wide variety of documents that the exporter needs to complete to ensure that the order reaches its destination quickly, safely and without problems. These documents range include those required by the South African authorities (such as bills of entry, foreign exchange documents, export permits, etc.), those required by the importer (such as the Performa and commercial invoices, certificates of origin and health, and pre-shipment inspection documents), those required for payment (such as the South African Reserve Bank forms, the letter of credit and the bill of lading) and finally, those required for transportation (such as the bill of lading, the airway bill or the freight transit order). Documentation requirements for export shipments also vary widely according to the country of destination and the type of product being shipped. Most exporters rely on an international freight forwarder to handle the export documentation because of the multitude of documentary requirements involved in physically exporting goods and it is strongly recommended that you also make use of a freight forwarder to help you work your way through the maze of documentation

The benefits of documentation

Documentation is a key means of conveying information from one person or company to another, and also serves as permanent proof of tasks and actions undertaken throughout the export process. Documentation is not only required for your own business purposes and that of your business partner, but also to satisfy the customs authorities in both countries and to facilite the transportation of and payment for goods sold. One value of documentation is that copies can be made and shared with the parties involved in the export process (although you should always ensure that you make identical copies from an agreed-upon master - it is no use making changes without the other party's agreement and then presenting these as the "latest" copies). If the

documentation is complete, accurate, agreed upon by the parties involved and signed by each of these of these parties (or their representatives), the document will represent a legally binding document.

Function of export documentation

Export documentation may serve any or all of the following functions:

An attestation of facts, such as a certificate of origin Evidence of the terms and conditions of a contract if carriage, such as in the case of an airways bill Evidence of ownership or title to goods, such as in the case of a bill of lading A promissory note; that is, a promise to pay A demand for payment, as with a bill of exchange A declaration of liability, such as with a customs bill of entry A receipt for goods received.

Documents Required for export trade are as follows: Certain documentation takes place while exporting from India. Special documents may be required depending on the type of product or destination. Certain export products may require a quality control inspection certificate from the Export Inspection Agency. Some food and pharmaceutical product may require a health or sanitary certificate for export.

Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. Usually the Shipping Bill is of four types and the major distinction lies with regard to the goods being subject to certain conditions which are mentioned below:

Export duty/ cess Free of duty/ cess Entitlement of duty drawback Entitlement of credit of duty under DEPB Scheme Re-export of imported goods

The following are the documents required for the processing of the Shipping Bill:

GR forms (in duplicate) for shipment to all the countries. 4 copies of the packing list mentioning the contents, quantity, gross and net weight of each package. 4 copies of invoices which contains all relevant particulars like number of packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc.

Contract, L/C, Purchase Order of the overseas buyer. AR4 (both original and duplicate) and invoice. Inspection/ Examination Certificate.

The formats presented for the Shipping Bill are as given below:

White Shipping Bill in triplicate for export of duty free of goods. Green Shipping Bill in quadruplicate for the export of goods which are under claim for duty drawback. Yellow Shipping Bill in triplicate for the export of dutiable goods. Blue Shipping Bill in 7 copies for exports under the DEPB scheme.

Note :- For the goods which are cleared by Land Customs, Bill of Export (also of 4 types - white, green, yellow & pink) is required instead of Shipping Bill.

EXPORT DOCUMENTS:

SHIPPING DOCUMENTS: The various document in addition to the commercial documents and regulatory documents are used in connection with the shipment of goods. A comprehensive listing of these documents along with their definition is given:

COMMERCIAL DOCUMENTS:

A.

COMMERCIAL INVOICE:

A commercial invoice is the accounting document

by which the seller chares the goods to buyer. A commercial invoice normally includes the flowing information: 1. 2. 3. Date Name and address of the buyer and seller Order and contract number of unit price & total number of packages and

shipping marks & numbers, 4. 5. Term & delivery of payment & Shipment details.

B.

PACKING LIST:

Packing list is also an essential document for import export.

The packing list match with the consignment or the goods shipment. The custom officials look at goods to assure themselves that there is any type of error or not .packing list may contain all the description of the consignment their size, quality, quantity etc

C.

INTIMATION OF INSPACTION:

This is a prescribed form of policy by the

export inspection agency. the exporter has to give notice for inspection in this prescribed form the inspection of export shipment.

D.

CERTIFICATE OF ORIGIN:

Certificate of origin is also known of FORM A.A certificate of origin or FORM A is a signed statement providing evidence of origin of the goods. In many countries a certificate of origin at through prepared exporter or his agent has to be issued in a mandatory form and manner with certificate by an independent

official organization ex. A chamber of commerce such a document contains details of the shipment to which it relates states the origin of the goods & bears the signature & certifying body. E. SHIPPING ORDER: This is slip issued by the shipping line at the time of shipment is being sent by air then the reservation slip known as carting order.
F. MATES RECEIPT:

It is issued by the chief of vessel after cargo is loaded and it

contains the name of shipper, Place of receipt and voyage number, description of goods, gross weight and other details. This receipt is transferable nature and must be presented at the shipping companys office to be exchanged into bill of lading.
G. BILL OF LADING:

Bill of lading is a receipt for the goods shipped by sea. it is the

transport document which must be presented if credit stipulates a MARINE BILL OF LADING. This bill of lading lists follows: port of lording port of discharge the name of carrying vessel it is duly signed it is evidence payment of fright;

H. SHIPMENT DETAILS:

This certificate is issued by the Moody International or any other reputed inspection agencies authority has checked that inspected equipment with clients regulations according to evidence produced by the manufacturer as well as his own verifications. STORE RECEIPT VOCHER: After the material are received in warehouse department.SRV is a document through APPL; S own inspectors SRV is raised by the material, by the stores department and their acceptance is communicated to the

stores accounts section and other department. The stores receipt voucher contains the following information: Ward/section from which SRV is issued or were the stores are to be stocked ultimately name of the supplier. Challen number and date Purchase order number & date Name of the indentor, railway receipt/luggage way bill no. & wagon no., carrier receipt no. and material delivery challen no. and under which the material are receiver. Name of the ship Bill of lading no. and date Descriptions of the material with code no. Unit of measurment Quantity supplied Quantity accepted & quantity reject Railway/lorry fright particulars other charges like post ageless.
I. BILL OF EXCHANG:

Definition of bill of exchange Draft: It is an unconditional order in writing signed by one person & requires that the other person i.e. to whom it is addressed to pay a certain sum of money on instruction at a specified time.

INSURANCE DOCUMENTS:

Insurance document has two type first is related to air lines & second related to sea. 1. Air lines insurance 2. Marine insurance

 REGULATORY DOCUMENTS

1.

Exchange control decleration form:

Every exporter required to declare to the reserve bank of India, the full export value of shipment and also submit an undertaking that the full proceeds shall be realized by him within a period of six months or due date of payment, whichever is earlier. the declaration is made in the prescribed exchange control declaration forms.

These forms are: GR SOFTEX DD SDF These forms are used for specific shipment.

2.

Fright payment certificate:

This certificate indicates that the fright has been paid, it is like receipt for payment of the fright.

3.

Insurance premium payment certificate:

This is like a receipt for the payment of the insurance premium. ARE-1FORM: This form is called as APPICATION FOR REMOVAL OF EXCISABLE GOODS from the factory premises. The application form is given to the Central Excise Authorities. The ARE form bearers have all six copies they are: 1) WHITE 2) BULE 3) PINK 4) GREEN 5) BLUE 6) YELLOW 4. ORIGINAL DUPLICATE TRIPLICATE QUADRUPLICATE QUINTUPLICATE SIXTUPLICATE

Shipping BILL/BILL OF EXPORT:

Import documents required by the custom authority for allowing exports. it contains all the details of the goods Shipped. the clearing and forwarding agent(also known as custom house agent) or the exporter himself fill up the shipping bill and the bill is used when the

IMPORT DOCUMENTATION: Pre-Import Procedure (a) (b) (c) (d) (e) (a) (b) (c) (d) (e) Selecting the Commodity: Selecting the Overseas Supplier: Capability and Creditworthiness of Overseas Supplier: Role of Overseas Suppliers Agents in India: Inquiry, Offer and Counter-offer: Finalization of the Terms of Contract: Mode of Pricing and INCO TERMS: Mode of Settlement of Payment: Obtaining IEC Number: Obtaining Import license:

(I) (g) (h) (i) (a) (b)

Obtaining Foreign Exchange: Arranging Finance for Import: Obtaining Import UC limit: Dispatching Letter of Credit: Loading of Goods and Receipt of Shipment Advice: Retirement of Import Documents:

Following documents to be submitted to the bank: (a) (b) (c) (d) (e) (f) A letter authorizing his bank to debit the equivalent Indian rupees to the value of documents including bank charges. Exchange control copy of the Import License, if applicable. Acceptance of the bill of exchange: Scrutiny of Documents Received under LIC: Appointment of C & F Agent: Form A duly completed for the remittance in foreign exchange.

IMPORT DOCUMENTS
(a) Loading of Goods and Receipt of Shipment Advice :-. The shipment advice contains invoice number, bill of lading; airway bill number and date, name of the vessel with date, the port of export, description of goods and quantity and the date of sailing of the vessel. (b) Retirement of Import Documents: - After shipping the goods, the overseas supplier prepares the necessary documents as per the terms of contract and letter of credit and hands them over to his bank for their onward negotiation to importer in the manner as specified in the L/C Set normally contains bill of exchange, commercial invoice, bill of lading, packing list, certificate of origin, marine insurance policy, etc. For the retirement of documents, the importer is required to submit the following documents to his bank:

 A letter authorizing his bank to debit the equivalent Indian rupees to the value of documents including bank charges. Exchange control copy of the Import License, if applicable.

Form A, duly completed for the remittance in foreign exchange. (c) Acceptance of the bill of exchange: - Bill of Exchange accompanied by the above documents is known as the Documentary Bill of Exchange. It is of two types: Documents against Payment (Sight Drafts): - In case of sight draft, the drawer instructs the bank to hand over the relevant documents to the importer only against payment. Documents against Acceptance (Usance Draft): - In case of usance draft, the drawer instructs the bank to hand over the relevant documents to the importer against his 'acceptance' of the bill of exchange. Incorrect documents may lead to non-delivery of goods to the importer. The number of documents to be filled in is large, so also is the number of authorities to whom the relevant documents are to be submitted. Moreover documents required differ from country to country. On the basis of functions to be performed, export documents can be classified into four categories as under: Commercial documents Regulatory documents Export assistance Documentation required by importing countries

COMMERCIAL DOCUMENTS: Includes Invoice, bill of exchange, Bill of lading, and Letter of credit etc.

REGULATORY DOCUMENTS: The documents, which are required for complying with the rules and regulations governing export trade transactions such as foreign exchange regulations, export inspections etc. EXPORT ASSISTANCE DOCUMENTS: Required for claiming assistance under export assistance schemes. Examples: Drawbacks of Central Excise and Customs Duty, Packing Credit Facilities etc. Documentation required by importing countries: These are basically meant for satisfying government requirements. For instance, Certificate of Origin, Consular invoice, Quality Control certificate etc.

Classification of export documents:

As Invoice is the statement containing full details of the goods shipped. An Invoice is not a document of goods but description of goods. Serves the purpose of verifying that the goods shipped and price is as per the contract. Following are the types' of invoices:-1) PROFORMA INVOICE 2) COMMERCIAL INVOICE 3) EXCISE INVOICE 4) CONSULAR INVOICE 5) CUSTOMS INVOICE 1) PROFORMA INVOICE Once the export order is confirmed a Proforma invoice is sent to the consignee and commits the shipment of the products covered at the agreed price during the specified time.

2) COMMERCIAL INVOICE This is one of the most important Documents issued by the seller in the standard format. The invoice is usually made out for full realizable amount of goods as per the trade terms 3) EXCISE INVOICE When the central excise people came to the company's (exporter) warehouse to check that goods are according to invoice and if they are satisfied then only the goods can be removed from the exporter's ware house

4) CONSULAR INVOICE Consular Invoice is a document required mainly by the Latin American countries. This invoice is most important document, which need to be submitted for Certification of the Embassy of the country concerned. The exporter has to pay some fees for the certification of this invoice and has to be signed it. 5) CUSTOMS INVOICE It is generally made out on a special form Presented by the custom authorities of the importing country and helps for allowing entry of goods in the importing country at preferential Tariff rates. Invoice shall contain details such as: A) B) C) D) E) F) G) Name and address of the exporter. Name and address of the consignee. Description of goods. Quantity. Value. Shipping marks (name and add. Of exporter & Consignees name) Port of loading.

H)

Port of discharge.