SESSION IV

1
 Modes of Transportation

i. Shipment by SEA
ii. Shipment by AIR
iii. Shipment by ROAD
iv. Shipment by POST
Customs formalities are essentially the same
except minor variations

2
 Computerised Processing of Export Docs

Computerised processing has ensured

speedy & efficient customs clearance of
export shipments
System is known as Indian Customs EDI
System – Exports (ICES-E)

3
 Computerised Processing of Export Docs

Documentation for customs clearance is

different for 1manual and 2computerised

processing system
Exporter OR Clearing & Forwarding Agent (also
known as Customs Housing Agent) prepares docs
accordingly

4
 C & F AGENT

Represents exporter, handles procedures

involved in customs clearance of export shipment
books space with the shipping line/airline
provides assistance for hiring of container in case
of FCL(full container load)
*Shipping line issues SHIPPING ORDER, Airline
issues CARTING ORDER

5
 EDP No.

Electronic Data Processing No. is

mandatory for every exporter
EDP No. is allotted by Asst. Commissioner
of Customs, Export Dept., Customs House
Shipping Bill can’t be generated by
computer system without EDP No.

6
 Various Registration Numbers
Import Export Code no. is issued by DGFT
RBI 10 digit code no. is issued by RBI
Authorised Dealer Code No. of the Bank a.k.a.
SWIFT A/C NO. through which exporter
negotiates the shipping docs for negotiation/
collection
Current A/C no. with the bank  for crediting
the amount of duty drawback to exporter
7
 OPENING Current A/C

Exporter has to open an a/c with designated

branch of designated bank at Customs Station
where export shipment is to be sent. e.g. PNB
at Delhi Customs

8
 SHIPPING BILL: ANNEXURE A
Manual processing:
Exporter has to file the appropriate type
of Shipping Bill to seek order for customs
clearance of export shipment
Order is called “LET EXPORT”

9
 SHIPPING BILL: ANNEXURE A
Computerised processing:
Exporter doesn’t file the shipping bill
It is generated by computer system
Exporter/CHA files required info with Service
Center of Customs Station in the form called
‘Declaration of Export-of Goods: Annexure A or B’

ANNEXURE A - DECLARATION FORM FOR EXPORT OF GOODS w/o CLAIM FOR DRAWBACK 10
ANNEXURE B - DECLARATION FORM FOR EXPORT OF GOODS UNDER CLAIM FOR DRAWBACK
 SHIPPING BILL: ANNEXURE A
Computerised processing:
Info is fed into computer
checklist is generated & given to exporter/CHA
for verification
exporter/CHA checks & confirms the checklist
System generates Shipping Bill and assigns the
Shipping Bill No.
Shipping Bill is used as basic doc. for issue of ‘Let
Export’ order 11
 Exchange Control Declaration Form

Exporter has to declare exchange value of

export shipment
Also give undertaking that export proceeds
shall be realised within 6 months or due date
whichever is earlier
Computerised system – shipment by SEA/AIR
SDF Form in duplicate is filed as ECD
In case of Manual system  GR Form
12
Documentation Requirement for Customs Clearance

Exporter/CHA is required to submit various

docs. to Customs Authorities to seek clearance
and obtain ‘let export’ order
*Docs required depend on mode of shipment

13
Docs Requirement in case of Shipment by AIR/SEA
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1. Shipping Bill in quadruplicate or Annexure A (computer)
2. Commercial Invoice
3. ECD form (GR/SDF) (orig. + dup.)
4. Copy of L/C or P.O. or Export Contract attested by bank
5. Packing List
6. COO or GSP COO
7. Shipper’s Declaration form for export of goods under:
a. Claim of Duty Drawback
b. Advance Licence
c. w/o certification from EIA (Export Inspection Agency)
8. ARE.1 duly approved by the Central Excise Officer or Invoice showing
clearance of excisable goods
14
 Additional Docs (If Required)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1. Export licence
2. Pre-shipment inspection certificate
3. Marine insurance policy certificate in triplicate
4. Antiquity Certificate in case of export of Antiques issue by
Archaeological Survey of India
5. Special Customs/Consular Legalised Invoice
6. Freight declaration
7. Declaration of quality, value and specification
8. Any particular declaration/statement/certificate/documents
required by the customs in respect of such particular shipment
Additional docs required in case of shipment by sea:
a. Port trust copy of the shipping bill
b. Cart chit/vehicle ticket/export cargo ticket 15
 CUSTOMS CLEARANCE PROCEDURE
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

A. Checking of shipping docs

B. Physical examination of cargo

C. Loading of goods

D. Post loading certification

16
 Shipment by AIR

A. Checking of shipping docs

I. CHA/Exporter books cargo with airline
and obtains Carting Order. *Even AWB can be
taken in advance before arrival of flight

II. CHA/Exporter submits SDF (orig. + dup.)

to Sup.(Central Registration Unit)

17
 Shipment by AIR

A. Checking of shipping docs

III. Sup.(CRU) signs & allots running 10 digit RBI
Code No. on SDF form
IV. CHA/Exporter submits Annexure A/B to Service
Center @ Customs Station
V. Service Center issues a check list to CHA/
Exporter

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 Shipment by AIR

A. Checking of shipping docs

VI. CHA/Exporter checks and signs the checklist
and returns
VII. Service Center generates Shipping Bill, shipping
bill no. is automatically allotted FOR FOLLOW
UP

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 Shipment by AIR

A. Checking of shipping docs

VIII.CHA/Exporter submits all required export
docs to export dept. of customs for
checking

20
 Shipment by AIR

A. Checking of shipping docs

*Customs officer examines the docs for:
a. Value/qty should be as per P.O. or L/C
b. Whether Exchange Control Declaration/
Pre-Shipment Inspection (if applicable)
have been completed or not

21
 Shipment by AIR

A. Checking of shipping docs

If ALL OK, Sup. determines the extent of

physical examination of goods and
assigns an inspector to conduct the
examination

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 Shipment by AIR

B. Physical examination of cargo

Inspector conducts the examination in quick
succession => goods should be brought along
when docs are being presented
1. Cargo is brought to export shed on the date
mentioned in the CARTING ORDER
2. CHA submits Annexure C  inspector verifies
the NO. on docs & MARKS on the packages
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Annex.C - data to be entered by inspector when X goods are brought for examination
 Shipment by AIR

B. Physical examination of cargo

3. Unload cargo for weight check
4. Pay Terminal Storage & Processing Charges to
International Airport Authority of India
5. cargo is stacked in export cargo SHED at the
place earmarked for the AIRLINE
6. If ALL OK inspector/sup. records the report
on the Shipping Bill through computer system

24
 Shipment by AIR

B. Physical examination of cargo

7. Sup. of Customs issues ‘Let Export Order’.
8. CHA/Exporter gets the Shipping Bill printed. He
gets Exporter’s Copy and X Promotion Copy of
Shipping Bill duly signed by competent authority

25
 Shipment by AIR

C. Loading of goods
1. After issuance of ‘LET EXPORT’, X cargo moves to
BONDED AREA for storage & palletisation by
International Airport Authority of India.
2. Receipt of cargo is acknowledged on the Carting
Order and on AWB copy.
3. *cooling period – 24 to 48 hours before loading

26
 Shipment by AIR

C. Loading of goods
4. Airline prepares EGM (Export General Manifest)
before arrival of flight for its handing over to
customs
5. On delivery date, cargo (as per EGM) is moved to
loading area. Customs Officer – Loading
Operations supervises the loading of cargo
6. After loading, airlines file the EGM with the
customs in a day or two 27
 Shipment by AIR

D. Post loading certification

1. After loading cargo, CAPTAIN of Airlines signs the
duplicate & triplicate copy of Shipping Bill against
the received goods
2. After clearance, CHA gets ALL submitted docs
EXCEPT the original copy of SDF form which is
sent by Customs RBI directly

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SHIPMENT BY SHIP (SEA)

29
 SHIPMENT BY SHIP (SEA)

1. Basic procedure same as shipment by AIR

2. Generally shipping space is booked 4-6
weeks in advance
3. During custom clearance, Port Trust copy
of Shipping Bill/Dock Challan is submitted
for determination of port & dock charges

30
 SHIPMENT BY SHIP (SEA)

A. Checking of shipping docs

1. CHA presents docs to customs authority
2. Customs authority i assigns a no. & date on the
Shipping Bill/SDF (GR) Form, ii assigns ‘Rotation
No.’ to the vessel & iii notes the details of
shipment in the register
3. Inspector & Sup. of Customs checks docs for
i details of goods, ii FOB value, iii duty drawback
rate*, iv input-output norms* 31
 SHIPMENT BY SHIP (SEA)

A. Checking of shipping docs

4. Shipping Bill and SDF(GR) Form is detached from
the set of documents
5. Customs Appraiser/Examiner i examines docs,
ii appraises value, iii endorses Shipping Bill (dup.)
and iv directs Dock Appraiser to conduct physical
examination

32
 SHIPMENT BY SHIP (SEA)

A. Checking of shipping docs

6. ALL DOCS except i GR/SDF form (orig.), ii Shipping
Bill (orig.) and iii Commercial Invoice (copy) are
returned to CHA for presenting to Dock Appraiser

7. CHA submits Port Trust docs to Shed Sup. - Port

and obtains Carting Order to bring cargo to
Transit Shed for examination by Dock Appraiser

33
 SHIPMENT BY SHIP (SEA)

B. Physical examination of export goods

1. Cargo is brought as per carting order
2. CHA submits following docs to Dock Appraiser for
physical examination of goods
a. Shipping Bill – Dup. + trip. + X promotion copy
b. Commercial Invoice / Packing List
c. ARE.1 (orig. + dup.)
d. Inspection Certificate (orig.) / SDF or GR (dup.)
34
 SHIPMENT BY SHIP (SEA)

B. Physical examination of export goods

3. Dock Appraiser i examines the goods, ii records the
report on Shipping Bill, if all OK, iii issues L.E.O. on
Shipping Bill (dup.) to CHA
4. CHA presents All Docs + L.E.O. to Preventive Officer
(Customs) for the issue of ‘Let Ship Order’

35
 SHIPMENT BY SHIP (SEA)

C. Loading of cargo

1. Preventive Officer supervises the loading of cargo

on the vessel
2. He issues ‘Let Ship Order’ on Shipping Bill (dup.) to
the agent of shipping company
3. L.S.O. authorises shipping company to accept cargo

36
 SHIPMENT BY SHIP (SEA)

C. Loading of cargo

4. After loading, Mate of the Ship issues Mate’s

Receipt to Sup. - Shed
5. CHA pays port & dock charges and collects the
Mate’s Receipt

37
 SHIPMENT BY SHIP (SEA)

D. Post loading certification

1. CHA presents Mate’s Receipt to Preventive Officer
who records the certificate of shipment on all
copies of Shipping Bill & ARE.1 form (orig. + dup.)
2. Preventive Officer returns E.P. Copy, copy of
Drawback Shipping Bill and ARE.1 (dup.) to CHA

38
 SHIPMENT BY SHIP (SEA)

D. Post loading certification

3. CHA presents Mate’s Receipt to Shipping Line for
issuance of B/L (negotiable & non-negotiable
copies)
4. Shipping Line’s Agent files EGM with customs

39
 All docs 3. All docs minus [G.R./S.D.F.(orig.), S.B.(orig.), C.I.(copy)]
CHA CHA
(3)
recorded, E.P. Copy, copy of DBK S.B. & ARE.1 (dup.) + Mate receipt are
(12) certificate of shipment on S.B. (all copies) & ARE.1 form (orig. + dup.) are

Inspector & Customs

Customs (1) All docs Sup. of (2) All docs minus Appraiser/
authority S.B./S.D.F.
Customs Examiner

(4)Port Trust docs

(11) C.H.A. pays port & dock charges, takes Mate receipt

Preventive Dock
(7) L.E.O. Shed Sup. -
Officer Appraiser
S.B.(dup.) Port
returned

(5)Carting order
(Customs) (Transit shed)

(6)Cargo
(12)
(8) L.S.O. on
CHA S.B. (dup.) CHA
(8) Cargo CHA
(13) Mate receipt
BANK
Shipping (9) Cargo Mate of the (10) Mate receipt
Company/Agent Ship

(14) B/L (16) B/L

CHA Exporter
(15) B/L
 EXPORT THROUGH POST PARCEL

Important mode of shipment in case of low volume,

high value goods (gems, jewellery, etc.)
Extensively used by exporters to dispatch trade samples
to buyers
Post Parcels for X are sent through Foreign Post Offices
Parcels can be sent only after custom clearance which is
evidenced by stamp ‘Customs Pass’

*Mostly, the International Post Parcel Service is regulated under the Universal Union Parcel
Post Agreement. India is a part of this agreement.
**India has bilateral agreements for exchange of parcels with Pakistan, Bhutan, Canada,
Nepal, USA and S.Africa 41
 EXPORT THROUGH POST PARCEL

Steps to send shipment by post

1. Booking  parcel should be booked with the

Foreign Post Office
2. Weight  general maximum weight limit (as per
Universal Postal Union) of a foreign parcel by SEA is
20 kg, AIR is 10 kg.
*Maxm wt. limit differs from country to country

42
 EXPORT THROUGH POST PARCEL

Steps to send shipment by post

3. Size  (as per UPU) Maxm height ≤ 2 meters. Maxm

length ≤ 1.05 meters. Minm size ≥ 90mm x 140mm
4. Manner of addressing  it is obligatory to write the
sender’s address on the parcel

43
 EXPORT THROUGH POST PARCEL

Steps to send shipment by post

5. PACKING
a. Packing should be good, should not endanger the
health of the officials
b. Parcel should withstand long distances/long
durations/ multiple transhipments
c. Leave enough space for scribbling instructions/
affixing stamps & labels
d. An Air-mail post parcel must bear on the top left
hand corner of addressee side, the special blue air
mail label ‘Pan Avion – By Air Mail’
44
 EXPORT THROUGH POST PARCEL

Documentary Requirements
Docs to be submitted at the time of booking
a. Dispatch note  post parcel should be presented for booking along
with duly filled in ‘Dispatch Note’ in the prescribed form - giving instructions to
postal authorities regarding what to do in case of non-delivery of parcel.
Exporter should only mark a cross (X) on the back of Dispatch Note failing
which, parcel is automatically returned => return charges

b. Custom Declaration Form it’s a prescribed form. Should be

filled carefully. False or inaccurate declaration!!! can lead to confiscation of
goods/legal proceedings

45
 EXPORT THROUGH POST PARCEL

Documentary Requirements
Docs to be submitted at the time of booking
c. PP Form all exports through post parcel to any place (except Nepal &
Bhutan) should be accompanied by a declaration on PP Form (in dup.) to be
countersigned by an A.D. in forex. This ensures that forex realised by such
exports will be disposed off in the manner & within the period specified by RBI.
PP Form is available with RBI

46
 EXPORT THROUGH POST PARCEL

Documentary Requirements

*PP Form is not required

i. Where export of article doesn’t involve any forex
transaction
ii. Where sender declares goods worth ≤ Rs.200, and
no forex transaction is involved

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 Export shipment through courier

Exporters can use authorised couriers to send sample

shipments/free trade samples/docs/small shipments
Maximum weight ≤70 kg.
Authorised courier has to file a statement to customs
in the ‘Form Courier Shipping Bill I or II’ regarding
export goods before departure of flight
After filing the Courier Shipping Bill, courier presents
the goods to the Customs for inspection/examination/
assessment
48
 Export shipment through courier

Courier packs export goods separately in

separate identifiable courier company bags with
appropriate labels in following categories
1. Docs
2. Samples & free gifts
3. Dutiable or commercial goods
Exporters can send commercial samples of value
≤ Rs.50,000 through courier
49
50
 Pre-shipment inspection (PSI)

vital for penetration & sustenance in X

WYSIWYG

51
“This session covers
i. various forms of pre-shipment
inspection,
ii. procedures and documentation
formalities of different agencies
conducting pre-shipment inspection”

52
 CONCEPT OF QUALITY

“Quality : set of specifications”

fabric, colour, stitch, fit, measurement,
hand-feel, trims, packaging material,
packing, shipping
Good or bad quality is determined with
reference to specifications agreed upon

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 Need for quality inspection before shipping

Competition  National and International

Facilitates penetration & sustenance
GOI recognised need for effective Pre-
Shipment Inspection  Export (Quality
Control & Inspection) Act, 1963 was enacted
to develop export trade through Q.C. & PSI

54
 TYPES OF PRE-SHIPMENT INSPECTION
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1. VOLUNTARY INSPECTION

2. COMPULSORY INSPECTION

55
 1. VOLUNTARY INSPECTION
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

a. By exporter himself
b. By the buyer’s representative
c. By the buyer’s agent in the exporter’s
country
d. By the inspection agencies in private
sector

56
 2. COMPULSORY INSPECTION
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Conducted by following agencies of GOI

a. Export Inspection Council(EIC) through
its Export Inspection Agencies(EIA)
b. Central Silk Board

57
 2. COMPULSORY INSPECTION
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Under the Export (Quality Control & Inspection) Act,
1963, Central Govt. is empowered to:
a. Notify commodities wherein Q.C./Inspection is
must
b. Specify the type of Q.C. or Inspection
c. Establish, adopt or recognise standard specs
d. Prohibit X in absence of certificate, mark or seal by
GOI
d. GOI has estd Export Inspection Council (EIC)as an
advisory body to enforce Q.C. & Inspection of
goods for X. EIC is a statutory body with its own
seal.
e. GOI has established E.I.A. + pvt. agencies at
Mumbai, Kolkata, Cochin, Delhi and Chennai 58
 Essential Requisites for Export Inspection System
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1. Standard for quality of export product

2. Testing facilities

3. Procedural details

59
1. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Standard for quality of export product

The product should meet (a) stipulated

specs (b) contractual specs (c) approved
samples
Should also meet the phytosanitary,
environmental, public safety and public
health regulations of the importing country

60
 2. ~~~~~~~~~~~~~~~~~~~~~~~~
Testing facilities

Inspection agencies should have adequate

testing facility
Well equipped lab
*Success/failure of a PSI scheme also depends
on time taken for sampling & analysing the
sample

61
3. ~~~~~~~~~~~~~~~~~~~~~~~~~~~
Procedural details

EIA conducts PSI as per prescribed procedure

for each of the different systems of inspection
as notified by Export (Quality Control &
Inspection) Act, 1963
Central Silk Board also conducts PSI of export
goods under Duty Exemption Scheme*(M of raw mat.)

62
 PSI by Export Inspection Agency (EIA)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

EIA provides for compulsory PSI of X goods which

come under notified items under the Act, 1963
Product Coverage
GOI has notified 1057 items for compulsory PSI.
The items relate to textiles/apparel are:
a. Jute and jute products
e. Coir & coir products
f. Footwear & footwear components

* standards of quality are periodically reviewed and upgraded in order

63
to create better demand for Indian goods in the overseas market
 SYSTEMS OF INSPECTION
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

EIA provides for PSI under 3 different

systems of inspection
I. Consignment wise inspection
II. In-Process Quality Control (IPQC)
III. Self-Certification Scheme

64
 I. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Consignment Wise Inspection

Each X consignment is inspected & tested by a

recognised EIA
Random selection of sample – checked to
determine conformity
After inspection, EIA issues PSI certificate to
exporter
inspection fee (0.4% of FOB value) (SSI units are
allowed 10% rebate on fee i.e. 0.36%) 65
 II. In-Process Quality Control (IPQC)

1. Ensures quality during each stage of production.

2. The SIX stages are 1raw material control
2production process control 3finished product
control 4metrological control 5preservation control
6packing control
3. Units having IPQC system & which are approved
from concerned EIA are known as Export Worthy
Units
66
 II. In-Process Quality Control (IPQC)

i. IPQC Units can inspect & clear the goods for X

ii. EIA issues the certificate of inspection upon formal
request from the Unit
iii. Inspection fee is 0.2% of FOB value

67
 III. Self-Certification Scheme

Manufacturing units with proven record of

Quality maintenance can self certify if Director
(Inspection & Q.C.), N.Delhi has inspected and
approved the unit
Unit should be well equipped with testing
facilities & required Q.C. systems
Fee = 0.1% of FOB subject to a minimum of
Rs.2500 & maximum = 1 Lakh in a year
*CONDITION : NO COMPLAINT during preceding 3 years from the buyer 68
 EXEMPTIONS FROM PSI
Units which are exempt from requirement of
compulsory PSI:
1. One to five star export house
2. 100% EOU and units set up in SEZ
3. Products bearing ISI mark or AGMARK for Xs
4. Items notified under Export (Q.C. & Inspection)
Act, 1963 is ALSO exempted from PSI if unit
produces a firm letter from buyer citing he does
not require any official PSI
* Exemption is NOT available if items belong to ‘Potential Health
Hazard’ or ‘Safety Hazard’ category 69
 PSI BY CENTRAL SILK BOARD

NO PSI is required in case of SILK GARMENTS,

CARPETS and TEXTILE GOODS
PSI is required where inputs have been imported
under Duty Exemption Scheme. Exporter should
have RCMC from Indian Silk Export Promotion
Council before requesting for issue of PSI certificate

70