An exporter should take the following steps while processing the export order: 1. Scrutinising the Export Order 2. Producing or Collecting the Goods 3. Clearance from Excise Authority 4. Clearance from Inspection Authorities 5. Dispatch of Goods to Port 6. Appointment of Clearing and Forwarding Agent 7. Shipment of Goods 8. Dispatch of Documents to the Exporter 9. Formalities with Negotiating Bank.

1. Scrutinising the Export Order:

The exporter, should scrutinize the export order keeping in mind the terms and conditions of the order or contract. It should be ensured that the contract is in accordance with the provisions of the laws relating to the export-import trade, the policies of the Government and the foreign exchange regulations prevalent for the time being in the country.

The mode of payment must be clearly mentioned in the export order as specified in terms of Letter of Credit, documents on payment and documents against acceptance etc.

2. Producing or Collecting the Goods:

After confirming the export order, the next step is to make necessary arrangement for manufacturing the goods as per export order, if the exporter is a manufacturer-exporter. In case the exporter is not a manufacturer, he is either to collect the required goods from the market or has to get them manufactured from other manufacturers.

3. Clearance from Excise Authority:

As soon as the goods have been procured the exporter has to obtain clearance from the excise authorities. Excisable goods may be exported under claim for refund of excise duty or secure under bond.

(a) Making Payment:

In this method, the payment of excise duty is done at the time of removing goods for export from the factory. The exporter then files a claim for rebate to the excise authorities after the goods are exported.

(b) Clearance under Bond:

In this method, the exporter enters into a bond with Excise Authorities. The moment the goods are removed from the factory the debit entry for excise duty is made in the bond account of the exporter. The obligation is discharged as soon as the goods are exported. For this purpose the exporter has to prepare two important documents— AR4A form and Gate Pass Form G.P.1 or G.P.2. AR-4 Form has to be presented before the Range Superintendent, Central Excise in six copies who after completion of necessary formalities, signs all copies. Out of the six, three copies are sent to Maritime Commissioner.

The fourth copy is given to the Chief Accounts Officer and the remaining copy is kept by the office of Range Superintendent.

4. Clearance from Inspection Authorities:

At this stage the Export Inspection Agency is approached for Quality Control and pre shipment inspection of the goods. Export inspection agency deputes an Inspector to inspect the consignment. If the goods match to the prescribed specifications then the Inspector issues the Inspection Certificate in triplicate. As soon as the above formalities are over, the goods are dispatched to the port of shipment.

5. Dispatch of Goods to Port:

At this stage works manager sends dispatch advice to the export department and also sends an application to get the marine Insurance Policy from the insurance company.

The documents sent by the Export Department are:

(i) Commercial invoice

(ii) Export order in original

(iii) Letter of credit in original

(iv) GR form in original showing/EC number

(v) AR-4 Form (original as well as duplicate copies)

(vi) Packing and Weight Lists

(vii) Invoice/Challan in lieu of Excise Gate Pass (original)

(viii) Certificate of Inspection

(ix) Declaration Form (In triplicate)

(x) Export Licence

(xi) Consular Invoice (where necessary)

(xii) Purchase memo, and

(xiii) Railway Receipt (RR).

6. Appointment of Clearing and Forwarding Agent:

After the goods have been dispatched to the port town, the exporter applies for the marine insurance policy and appoints clearing and forwarding agent. The exporter, thereafter, sends these documents to him alongwith detailed instructions.

On receipt of the documents, the clearing and forwarding agent takes delivery of the goods and arranges its storage in the warehouse. Clearing and forwarding agent also initiates action to obtain customs clearance and permission from the port authorities to bring goods into the shipment shed (Customs House).

Thereafter C/F agent prepares shipping bill filling in all the columns of the shipping bill form. The agent should prepare five copies of the shipping bill and it should be submitted to the Custom House alongwith the necessary documents and information. The shipping bill is then processed in the Custom House and passed.

7. Shipment of Goods:

C/F agent presents the copy of the shipping bill, to the shed superintendent of the Port Trust. He allows to bring the export cargo to the transit shed for physical examination. The shed superintendent after conducting physical examination, records examination report and makes ‘Let Export’ endorsement on the duplicate copy of the shipping bill. The duplicate copy of the shipping bill is then handed over to the agent of the shipping company. This constitutes an authorization by the Customs Authorities to the shipping company to accept the cargo on vessel.

8. Dispatch of Documents to the Exporter:

After obtaining the bill of lading from the shipping company, the agent sends the following documents to the exporter:

(i) Full set of Bill of lading (Negotiable and Non-negotiable copies)

(ii) Export promotion copy of shipping bill

(iii) A copy of the Commercial Invoice duly attested by the customs

(iv) AR-4A/AR-4 Form (Duplicate copy)

(v) Drawback copy of shipping bill

(vi) Original Letter of Credit, and

(vii) GR Form (Duplicate).

The above mentioned documents are forwarded alongwith shipment advice and certificate of origin.

9. Formalities with Negotiating Bank:

Once the goods have been shipped and the necessary documents are dispatched to the importer, the next step is to collect the payment from the importer. For this purpose, the exporter has to contact the negotiating bank.

He has to submit the following documents for negotiation:

(i) GR 1 form (Duplicate Copy)

(ii) Bill of Exchange (First and Second Copy)

(iii) Full set of clean on board Bill of Lording (all negotiable and non-negotiable copy)

(iv) Letter of Credit in original

(v) Commercial invoice (two copies)

(vi) Custom Invoices

(vii) Certificate of origin (Two copies)

(viii) Packing list (Four copies)

(ix) Marine Insurance Policy (two copies)

(x) Bank Certificate (Two copies)

(xi) Consular invoice (where necessary).

The above documents are processed in the negotiating bank with reference to the terms and conditions of the original Letter of Credit.

Following documents are transmitted to the banker of the importer for the collection of the amount from the importer:

(i) Bill of Exchange

(ii) Negotiable Bill of Lading

(iii) Commercial Invoice

(iv) Custom Invoice

(v) Insurance Policy

(vi) Certificate of origin, and

(vii) Packing List.

As soon as shipment is completed, the exporter should send shipment advice to the importer mainly in the form of non-negotiable copy of Bill of Lading. The exporter should submit shipping documents as per the export order to the bank for securing the sale amount and at the same time documentation formalities are undertaken for getting rebate in excise duty and duty drawback.

In this way an export exercise is concluded successfully after the exporter has been able to deliver the consignment in accordance with the export contract and receive payment for the goods.