The export of goods to a foreign country involves transportation, insurance of goods and cargo, documentation, packaging, and payment. Proper documentation and procedures are required for smooth and easy flow of goods and payments across the national borders. The documents required during foreign trade are required to be filled correctly and properly.
The documentation is a cumbersome process as there are large numbers of documents which are required to be filled and submitted to various concerned authorise. Goods will not reach the importer if documents are not filled correctly. Though if there is any mistake it can be rectified but till then exporter has to pay many dues to the various authorities and delay in transit will affect the regulations of the export and import.
1. Commercial Invoice:
Commercial invoice provides a list of shipped goods and detail of other charges. It is prepared by the exporter and provides full description of goods dispatched, the shipping marks, the unit and F.O.B. value, etc. It is essential that the invoice is made in the name of the importer/buyer as mentioned in the letter of credit.
Generally the following descriptions are included in the commercial invoice:
(i) Buyer’s detail
(ii) Country of origin of goods
(iii) Detailed description of goods
(iv) Quantity of goods shipped
(v) Number and kind of Packaging
(vi) Shipping terms
(vii) Country and Port of final destination, and
(viii) Rate and Total price charged for goods sent.
2. Letter of Credit:
It an official letter issued by a bank authorizing a person to take money from another bank. Such a letter is an undertaking issued by the importer’s bank to pay a stated amount to the exporter, provided certain conditions are met. The letter of credit is the single mode of payment which has been accepted by all the traders throughout the world.
3. Bill of Exchange:
In International marketing Bills of Exchange are also a popular mode of Payment. Bill of exchange is an order instrument which is in written form without any condition. The writer of this instrument orders another person to pay a certain amount to him or to the bearer of that instrument after a certain period.
4. Bill of Lading:
In the process of exports the bill of lading is one of the most important documents. This is a written contract between the exporter and the shipping company. It is a negotiable document. It is a receipt given by the shipping company for the goods delivered shipping company.
Generally the bill of lading should contain the following particulars:
(i) Name of the ship
(ii) Description of goods and marks of identification
(iii) Total number of packages with gross weight
(iv) Place and Port of loading
(v) Date of shipment of goods
(vi) Name and address of consignee, and
(vii) Amount of freight.
5. Certificate of Origin:
The Certificate of Origin is issued by Export Council of India and its various agencies, Chamber of Commerce or Trade Association. An exporter submits an application along with commercial invoice and prescribed fees to the chamber of commerce to issue a certificate of origin.
On this basis the chamber of commerce issues a certificate of origin. This certificate identifies that the particular goods are originated in a particular country. It is also an important and necessary document for tariff and control purposes. It is also helpful to prevent unusual import of goods from prohibited countries.
6. Certificate of Inspection:
This certificate is generally prepared by an independent firm or agency. In India an exporter has to obtain an inspection certificate from Directorate General of Foreign Trade (DGFT) Govt., of India. Inspection Certificate certifies the quality and quantity of goods being shipped. It also certifies that the goods were in a good condition prior to their shipment.
7. Marine Insurance Policy:
Insurance policy is a contract between the policy holder and the insurance company. Insurance policy protects the exporter from any kind of damage in transportation. It covers all kinds of losses during the transit to ultimate destination.
8. Packing List:
Packing list provides details of how the goods are packed, the contents of different cartons, boxes and details of the weights and measurement of each package. Item-wise details of the contents of the container or parcel enable the buyer to check the contents.
9. GR Forms:
GR Form has been prescribed by Reserve Bank of India under FERA to ensure that Foreign exchange receipts in respect of exports are repatriated to India. GR Form is filled and submitted by exporter to Custom Authorities in duplicate alongwith other shipping documents stating exact quantity and value of goods exported. Name of the importer, the currency in which payment is expected, country of destination must also be disclosed alongwith GR Form.
10. Shipping Bill:
Another document named shipping bill is also required by the Custom Authorities for allowing shipment.
There are three types of shipping bills:
(i) Shipping bill for dutiable goods.
(ii) Shipping bill for duty free goods.
(iii) Shipping bill for duty drawback goods.
11. ARE-1 (Application for Removal of Excisable Goods-1):
ARE-1 is an application by the exporter to the Area Superintendent of Central Excise Department at the time of removal of the goods. Four copies of ARE-1 form must be submitted 24 hours in advance from the time of removal of the goods.
12. ARE-2 (Application for Removal of Excisable Goods-2):
This form is used for refund of excise duty paid on finished goods as well as the production inputs used in manufacturing of final products. ARE-2 is a consolidated application for removal for goods for export under claim for rebate of duty paid on excisable goods used in manufacture of goods to be exported.