SCDL MBA PROJECT - AN INSIGHT TO EXPORT PROCEDURE & DOCUMENTATION

Export procedure is a system or methodology by which export trade transaction is completed. It involves the study of different steps that are to be taken by the two parties namely the exporter and the importer. The export procedure is lengthy & time consuming. It involves a number of steps right from the time an export order is received and it is completed with the realization of export proceeds.

                                    In between there are many formalities is required to be completed. In the export procedure various formalities need to be completed & various documents are required to be prepared by the exporter. Every exporter should have a thorough knowledge of the rules, regulations & procedure required to be followed for exporting the goods abroad.

                         

   The procedure of exporting involves the following stages:-

STAGE 1:

          

             First of all, searching of customer is done and then export order is received. Usually CHAMONG gets order in three ways:-

·        Through Internet.

·        Through International Trade & Exhibition.and,

·       Through Global Tender which is floated by the Importer.

STAGE 2:

           The export order must specify the mode of payments such as:

·        L/C (Letter of Credit)

·        D/P (Document against Payment)

·        D/A (Document against Acceptance)

At this stage, the company prepares all the necessary documents including Sales Contract required by the buyer and submits to the negotiating bank in exact specified manner. The most important documents demanded by the importer are:-

·        Bill of Exchange

·        Commercial Invoice

·        Packing List

·        Bill of Lading

·        Marine Insurance Policy

·        Certificate of Origin

STAGE 3:

          After getting export order from the desired country, CHAMONG enters  into a contract with it. Once the order has been received, the export order is scrutinized with reference to the terms & conditions of the export contract. This is the most crucial stage. All subsequent actions and reactions will depend on these terms & conditions.

 It is ensured that contract has been entered into in accordance with the prevalent export policies of the country and Foreign Exchange Regulations like FERA and FEMA.

STAGE 4:

        

               As soon as the export order has been confirmed, preparations for the dispatch of Teas are started. After Agreement, the manufacturing order is sent to the production manager by the marketing department of CHAMONG. This order contains the description of Teas as has been given in the export order, alongwith the copy of the instructions given by the importer. The date by which the teas must ready is clearly intimated to the production manager and advice the material procurement for assuring the availability of the items required for the teas on the basis of work order, manufacturing starts.

STAGE 5 :

            After manufacturing, inspection is carried out by the quality assurance deptt. of CHMONG, as final inspection is done by the IMPORTER, if the importer so desires.

STAGE 6 :

                         As soon as the teas are manufactured, production manager informs the marketing department

that the goods are ready to dispatch. At this stage, two important documents are to be prepared :-

·        ARE 1 form

·        CT 1 form

ARE 1 form is prepared in quantiplicate and CT 1 form is prepared in quadra duplicate. CT forms are issued by the exise department. ARE1 forms are presented to the Range Superintendent of Central Exise , who after necessary formalities signs all the copies. The original & duplicate copies are given back to the exporter. The triplicate copy is sent to the maritime collector, fourth copy is sent to the Chief Accounts Officer & the remaining copy is kept by the office of Range Superintendent.

            The other authority which the export department approaches immediately at this stage is the Export Inspection Agency for conducting Quality & Pre-Shipment Inspection. An inspector is deputed by the Inspection Agency to inspect the consignment. If the teas are confirmed to the prescribed specifications, an Inspection Certificate is issued.

The teas are then dispatched to the port of shipment.

STAGE 7:

           After the teas have been dispatched to the port of loading, a dispatch advice is sent to the export department. Soon after an application is sent to the Insurance Company for Marine Insurance Cover. The

Insurance policy is obtained in duplicate.

At this stage all formalities in relation to ECGC cover, Certificate of Origin, Consular Invoice etc. wherever necessary is completed.

Thereafter the export department sends the following documents to its clearing & forwarding agent along with detailed instructions:-

·        Commercial Invoice

·        Original Export Order

·        Original Letter Of Credit

·        ARE1 form (original & duplicate copies)

·        Excise Gate Pass

·        Packing List

·        Certificate of Inspections

·        Declaration Form in Triplicate

·        Consular Invoice

·        Export License

·        Railway Receipt

STAGE 8:

         The Clearing & forwarding agent takes the delivery of the consignment from the railways & arranges its storage & warehouse. Thereafter the agent prepares the requisites copy of shipping bill.

STAGE 9:

          

          After the shipping bill has been prepared & passed by the customs, the Clearing & forwarding

agent presents the port trust copy of the shipping bill to the shed superintendent of the port trust & obtain carting order for bringing the export cargo in the transit shed for physical examination. Thereafter, in the case of shed cargo, the dock challan is prepared. The following details are given in the dock challan:-

·        Consignee’s name & address

·        Vessel name

·        Port of destination

·        Exporter’s name

·        Mark & No. of packages

·        Gross weight

·        Port charges payable

·        Other details as necessary

STAGE 10:

        The ship clerk calls for cargo from shed & after loading prepares the mate’s receipt. The mate’s receipt is signed by the captain of the ship. It is then delivered to the port commissioner’s shed. The clearing & forwarding agent pays the port charges & takes the delivery of the mate’s receipt.  This mat’s receipt is then presented to the shipping company along with the requisite no. of Bill of Lading.

STAGE 11:

            The clearing & forwarding agent forwards the following documents to the exporter:-

·        Full set of Bill of Lading

·        Shipping Bill

·        Copies of Custom Invoice

·        ARE1 form

·        One copy of commercial Invoice duly attested by the customs

·        Original Export order

·        Original Letter of Credit

·        Railway concession form duly attested by the customs

STAGE 12:

           As,soon as the exporter (CHAMONG) receives the above documents from the clearing& forwarding agent, completes the remaining formalities. The exporter files a claim with maritime collector of Central Excise in the port town for rebate of Central Excise duty, side by side, shipment advice is sent to the importer. The following documents are forwarded along with the shipment advice:-

·        A non negotiable copy of the Bill of Lading

·        Customs Invoice

·        Commercial Invoice

·        Packing list

·        Certificate of Origin

·        Single country declaration

STAGE 13:

          The following documents are presented to the

 negotiating bank:-

·        ARE 1 form (Duplicate copy)

·        Bill of Exchange

·        Full set of Bill of Lading (All the negotiating copies)

·        Letter of Credit (original)

·        Commercial Invoice (Two copies)

·        Custom Invoice (2 copies)

·        Packing list (2 copies)

·        Certificate of Origin (2 copies)

·        Marine Insurance certificate (2 copies)

·        Bank Realisation Certificate (2 copies)

STAGE 14:

          This is the last stage of export procedure. At this stage the bank processes & negotiation is done in the following manner:-

Ø The entire documents are scrutinized with reference to yhe terms & conditions of the original Letter of Credit (In case of L/C payment terms)

Ø Thereafter a set of following documents is transmitted to the banker of the importer by the first air mail followed by the second set of it by the second air mail to ensure that in case the first is lost, the importer can take the delivery of the consignment on the basis of second set of documents. These set of documents are:-

·        Bill of Exchange

·        Negotiable bill of lading

·        Commercial Invoice

·        Customs Invoice

·        Insurance policy

·        Certificate of Origin

·        Consular Invoice

·        Packing list

The original copy of the bank certificate along with the attested copies , the commercial invoice is returned to the exporter. The duplicate copy of the bank certificate is forwarded to the office of the Director General of foreign trade in the area.

                                                          

WORKING OF THE MARKETING DEPARTMENT i.e, EXPORT DOCUMENTATION