Export Documentation

Factors on Which Export Documentation is Based

The process of export is systematic, thus it is essential to have all the important documents before entering into the export business world. There are consultancies, legal firms, and business advisors who help people in understanding the process of export. In international trade, the commercial party has to agree on a price rate that is fixed and agreed by both seller and buyer.

Table of Content

1 Factors on Which Export Documentation is Based
- 1.1 Basic Export Documents
2 Essential Documentation
3 Registration of Exporter
4 Registration With Export Promotion Council
5 EDI Registration
6 IEC Certificate
7 Mandatory Requirements to Apply for Iec Certificate
8 Export Assistance in India

The buyer accepts the price for purchasing goods from the supplier’s or seller’s warehouse or on delivery to his or her warehouse. The purpose is to simplify the process of business as it is easier for the buyer or seller to deal with the formalities including insurance of the goods from one place to another in the same country.

The scenario of international trade is little complex and it includes three separate contract for carriage of goods, which are explained as follows:

First, for moving the goods within the seller’s country from his/her warehouse
Second, for shipping the goods internationally within the buyer’s country
Third and last, sending the goods to final destination that is buyer’s warehouse within his or her country

Now let us discuss, the basic export documents that would be required for shipping the goods from seller to the buyer.

Basic Export Documents

Financial Times defined export documents as “Documents sent by an exporter’s bank to a bank or other organisation in the importer’s country, who delivers them to the importer when the importer pays for the goods or accepts bills of exchange. These documents are needed by the importer to get permission for the goods to come through customs and to make insurance claims if the goods are lost or damaged.” Basic export documents are the common or general documents that need to be submitted by both exporter and importer to ensure proper shipment of the goods.

The list of basic documents needed for export trade is given below:

Invitation to quote
Quote
Pro-forma Invoice
Order confirmation or acknowledgement
Bill of lading (B/L)
Ocean Bill of lading (Ocean B/L)
Airway bill
Marine (other) insurance policy
Commercial invoice
Consular invoice
Certified invoice
Certificate of origin (C/O)
Packing list or weight note
Specification sheet
Manufacturer’s analysis certificate
Health, sanitary, phytosanitary, and veterinary certificates
Quality inspection certificate or certificate of value
Independent third party inspection certificate
Dispatch advice note
Dangerous goods declaration
Shipping or export consignment notes
Documentary credit of payment drafts
Export licenses
Import licenses
Exporter’s commission advices to the agent
Customs and Excise export entry forms
EU Movement documents EUR 1 Form
Shipping Bill
Mate Receipt
Other specifically requested documents

The requirement for documents vary from developed to third world countries, thus not all documents are relevant for every country. For controlling the quantity and variation in the export document many exporters prefer to design a file folder, which includes the following:

Entire control procedure required for documentation
Production of goods
Payment details
Shipping instructions

Each separate transaction is then allocated to a numbered filed folder. The importer requires these documents in his or her home country for fulfilling the requirements of trade control authorities and also for implementing the documentary trade transactions. Trade control authorities requires these documents to ensure that goods prohibited should not be imported in the country. The importer also ensures that these requirements should be confirmed by the exporter in the documentary letter of credit operations for getting the payment.

Essential Documentation

Import and export is a complicated task as it requires a plethora of documentation and paperwork before taking the initial step in the foreign trade world. However, utmost importance should be given to documentation as it’s the key for international trade. Exporters need to be very careful with documentation requirement as it varies with country, commodity, and situation. In this topic we will discuss essential documents that are required for export. Export Documentation Framework comprises of 16 commercial documents of which 14 documents have been regulated and aligned with each other.

These 14 documents are:

Pro-forma invoice
Commercial invoice
Packing list or weight note
Shipping instructions
Intimation for inspection
Certificate of inspection and quality control
Insurance declaration
Certificate of insurance
Mate’s receipt
Bill of lading (B/L) or combined transport documentation
Application for certificate origin
Certificate of origin (C/O)
Shipping or export consignment notes
Letter to bank for collection or negotiation of documents

The two documents which could not be standardised and aligned are:

Shipping order
Bill of exchange

The important documents are explained below:

Commercial Invoice

It is also called the ‘Document of Contents’ because it contains all the information required for preparing all the other documents. Exporter prepares this document in the name of the importer or buyer based on the contract of sale and the agreed terms between them. This document defines the terms on which sale and shipping of the goods would be carried out.

Packing List

This list is prepared by the shipper and it consists of itemised classification of all the items that would be shipped. The quantities and items written on commercial invoice should align with that on packing lis.

Certificate of Inspection

Its pre-shipment inspection that is done to confirm that all requirements and regulations are fulfilled. These specifications and regulations are mentioned by the government and industry.

Bill of Lading

It is a legal document that is issued by the carrier of the goods to the shipper of the goods for the receipt of goods. It is a contract that is agreed upon by the seller (owner) of the goods and the carrier of the goods (who will deliver the goods) to deliver the goods.

Certificate of Origin

It is a document that is prepared by the manufacturer of the goods and a certified by quasi-official authority. This document basically defines the items’ country of origin.

Insurance Certificate

This is an important document which covers the items against loss or damage that may occur during its shipment.

Bill of Exchange

It is a negotiable instrument, which the shipper or seller issues for the buyer when the goods are shipped It is an instrument by which the payment is received. The exporter draws the bill of exchange on the importer or on the bank acting on behalf of the importer. After the exporter gets his payment or after the importer has made arrangements for the payment, the bill of landing is issued to the importer.

Registration of Exporter

An organisation needs to register itself with various government authorities before it can start the export of its product in the international markets. First and foremost every organisation needs to get registered under the Company’s Act 1956. The registration depends upon the type of organisation i.e., whether the organisation is a proprietary firm or a private limited organisation or a shop or an establishment.

Once the organisation has been registered under the Companies Act 1956, registrations with other government organisations, which are necessary for acquiring an exporter status becomes easier. The aspiring exporter needs to register the organisation with 5 government organisations, namely the Reserve Bank of India (RBI), Director General of Foreign Trade (DGFT), Commodity Boards, Income Tax Authorities, and Export Promotion Council (EPC). Out of these the first four are explained here and the registration with the EPC is explained in the next section.

Let us discuss the registration of exporter briefly as given below:

Registration with Reserve Bank of India (RBI)

Before 1997, it was mandatory for the first time exporter to get IEC number from RBI before undertaking any an export operation. Now, this responsibility is handed over to the DGFT.

Registration with Director General of Foreign Trade (DGFT)

Registering an export firm with DGFT, Ministry of Commerce, and Government of India is the main requirement that every firm needs to follow. The agency generates unique IEC number, for each of the registered exporters. This 10-digit IEC number is must for traders who wish to take lead in export or import business. The exporter cannot export the goods in the absence of IEC number. Traders who export items to Nepal or Myanmar through Indo-Myanmar border or to China through Gunji, Namgaya, Shipkila, or Nathula need not to obtain IEC number.

However, to trade with the rest of the world, one must obtain IEC number and submit an application to the nearest regional authority of DGFT for IEC number. The exporter needs to fill “Aayaat Niryaat Form – ANF2A” that is submitted online at the DGFT website. The applicant needs to submit PAN number, amount of Rs 1000/- as the application fee along with the application form.

Here, PAN number works as a unique key that means single IEC number is generated for a single PAN number. The applicant needs to submit his Current Bank Account number and Bankers Certificate apart from the PAN number. Application fee needs to be submitted either by way of demand draft orit can be done through Electronic Fund Transfer (EFT).

Registration with Commodity Boards

Commodity Board is a registered agency designated by the Ministry of Commerce, Government of India. The boards are established for promoting export business. The commodity boards have their offices in India as well as abroad. Currently, there are five statutory Commodity Boards working under the Department of Commerce set up for tea, coffee, rubber, spices, and tobacco. These boards are responsible for production, development, and export

Registration with Income Tax Authorities

The government has exempted the goods that are exported out of the country from Value Added Tax (VAT) and Central Sales Tax (CST) both. Therefore, to avail the benefits of VAT and CST tax exemption it is necessary for an exporter to get registered with the income tax authorities.

Central Excise registration/declaration wherever applicable.

Registration With Export Promotion Council

Export Promotion Councils (EPC) are registered as non-profit organisations under the Indian Companies Act or the Societies Registration Act. The purpose of this body is to promote various goods exported from India in international market. EPC works in collaboration with the Ministry of Commerce and Industry, Government of India. EPC is more like a platform or a connecting link between the exporting community and the government.

EPCs are established for encouraging exporters to earn foreign exchange and boosting international trade for the country manufactured products. For the importer, it becomes important to obtain a Registration Cum Membership Certificate (RCMC) from the EPC. To get membership, the interested candidate should send application for registration, along with a self certified copy of the IEC number.

The applicant has to pay a membership fee in the form of cheque or draft after confirming the amount from the concerned EPC. The RCMC certificate is valid from 1st April of the licensing year, till five years, ending 31st March of the licensing year, unless otherwise specified.

RCMC is issued by various departments that are as follows:

Agriculture and Processed Food Products Export Development Authority (APEDA)
Apparel Export Promotion Council
Chemicals Pharmaceuticals and Cosmetics Export Promotion Council (CHEMEXIL)
Carpet Export Promotion Council
Cashew Export Promotion Council of India
Chemical and Allied Products Export Promotion Council
Cotton Textile Export Promotion Council
Engineering Export Promotion Council
Gems and Jewellery Export Promotion Council
Export Promotion Council for Handicrafts
Handloom Export Promotion Council
Handicrafts and Handloom Export Corporation
Office of the Development Commissioner for Handlooms
Development Commissioner for Iron Steel
Indian Silk Export Promotion Council
Council for Leather Export
Marine Products Exports Development Authority (MPEDA)
Overseas Construction Council of India
Powerloom Development and Export Promotion Council
Sports Goods Export Promotion Council
Synthetic and Rayon Textiles Export Promotion Council
Wool and Woolens Export Promotion Council

EDI Registration

Indian Customs EDI System (ICES) is the beginning of a new era in the country. It marked the beginning of paperless trade as well as trade facilitation rather than control. It is the result of joint efforts made by ICES along with officers of Central Board of Excise and Customs (CBEC) and National Informatics Centre (NIC).

The main objectives set for an Indian Customs EDI System by the Customs were:

Fast action to the needs of the trade.
Digitalisation of import/export, ex-bond clearance of stored goods, goods imported with regard to export promotion schemes, and regulation and monitoring of export promotion schemes.
Lessen the interaction of the trade with government agencies.
Easy access to information. It means that one can retrieve information from other custom locations to have uniformity in assessment and valuation.
Beneficial for policy making as it generates accurate information on import/export statistics which it provides to Director General of Commercial Intelligence and Statistics.

The introduction of Pilot EDI Project has been decided and it would be established in DGFT headquarters. The project shall relate to the following:

It will be responsible for issuing Advance license under Duty Exemption Scheme and will submit an application on its letterhead enclosing a copy of Appendix 1B of Handbook of Procedures (Vol.1)
The applicant should submit the application through EDI in the EDI compatible application form as well.
The file number will be generated by the EDI Division; the same shall be electronically transmitted to the applicant.
In case of any deficiency, the applicant will be informed through EDI and replies to such deficiency will also be received through EDI.
Message regarding the delivery will be sent to the applicant through EDI.
The applicant should visit EDI counter at the DGFT headquarter along with a complete set of application as given in Appendix -11B of Handbook of Procedures (Vol.1), duly signed, and the prescribed documents including proof of the deposition of the application fee that is required for the collection of license.
The license will be issued at the EDI counter after verifying valid identity card issued by the licensing authority. The license is issued after getting the approval of Director General of Foreign Trade.

IEC Certificate

IEC certificate is a unique 10 digit code issued by Director General of Foreign Trade (DGFT), Ministry of Commerce and Government of India to Indian Companies. It stands for “Importer Exporter Code”. IEC certificate is mandatory to carry out export and/or import business in India. The applicant is required to submit an application to Registered/Head Office to the nearest Regional Authority of Directorate General Foreign Trade, along with the prescribed documents.

The details relating to the procedure for getting an IEC certificate, its validity, method of payment are given below:

IEC Code certificate Online Application Form: As mentioned earlier, the applicant can download application Form called “Aayaat Niryaat Form – ANF2A” from the website of DGFT.
Validity of IEC Code No: The IEC number will be valid for all the branches, divisions, units and factories of the applicant till the time it is revoked by the officials or surrendered by the holder itself. The importers/exporters must give the complete addresses of their offices/factories/warehouses to incorporate the same in IEC.
Duplicate copy of IEC certificate: In case IEC Number is lost or misplaced, the applicant can request for duplicate IEC certificate by sending request for grant of a duplicate copy of IEC number.
Surrender of IEC Number: An IEC number holder can surrender the IEC number by informing the issuing authority. By receiving such request, the issuing authority will immediately cancel the IEC number and it will be electronically transmitted to DGFT for onward transmission to the Customs and Regional Authorities.

Application Fee for IEC Code Number ₹250.00

Mode of Payment: The applicant can pay the fee through Demand Draft/ Pay Order from any designated bank in favour of Zonal Joint Director General of Foreign Trade or Payment through EFT by any nominated bank by DGFT. Another way to make the fee payment is by means of a TR6 Challan with Duplicate Copy in any branch of Central Bank of India and TR6 Challan need to be submitted along with IEC Code Application.
Territorial Jurisdiction of Regional Authorities: Every application needs to be submitted to the Regional Authority of Directorate General Foreign Trade, according to the territorial jurisdiction of the Regional authorities indicated in Policy and Handbook of Procedure, Volume-I.
Filing of Application: One can fill up the Application form online in DGFT website; details of online links are given below. An incomplete application will be rejected. If an applicant is submitting a soft copy, he has to fill the application in MS Word format.
Profile of Importer/Exporter: Each importer/exporter is supposed to file importer/exporter profile once with the Regional Authority in Part 1 of ‘Aayaat Niryaat Form – ANF2A’. Here the role of Regional Authority is to enter the information provided in Part 1 of ‘Aayaat Niryaat Form ANF-2A’ in their database.
Self-Addressed Stamped Envelope: The applicant shall furnish a self-addressed envelope of 40 x 15 cm with postal stamp affixed on the envelope. IEC No: Exempted Categories.

The following categories of importers or exporters are exempted from obtaining Importer – Exporter Code (IEC) number:

Importers covered by clause 3 (1) [except sub-clauses (e) and (l)] and exporters covered by clause 3(2) [except sub-clauses (i) and (k)] of the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.
Ministries/Departments of the Central or State Government.
Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.
Persons importing/exporting goods from/to Nepal provided the CIF value of a single consignment does not exceed Indian ₹25,000.
Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian ₹25,000.

However, the exemption from obtaining Importer-Exporter Code (IEC) number shall not be applicable for the export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of the ITC (HS) except in the case of exports by category (ii) above.

The following permanent IEC numbers shall be used by non-commercial PSUs and the categories of importers/exporters mentioned against them for import/ export purposes:

IEC- 0100000011- All Ministries/Departments of Central Government and agencies wholly or partially owned by them.
IEC- 0100000029 – All Ministries/Departments of any State Government and agencies wholly or partially owned by them.
IEC- 0100000037- Diplomatic personnel, Counsellor Officers in India and officials of UNO and its specialised agencies.
IEC- 0100000045- Indians returning from/going abroad and claiming benefit under Baggage Rules.
IEC- 0100000053- Persons/Institutions/Hospitals importing or exporting goods for personnel use, not connected with trade or manufacture or agriculture.
IEC- 0100000061- Persons importing/exporting goods from/to Nepal
IEC- 0100000070- Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas
IEC- 0100000088- Ford Foundation
IEC- 0100000096- Importers importing goods for display or use in fairs / exhibitions or similar events under provisions of ATA carnet. This IEC number can also be used by importers importing for exhibitions/fairs as per Para 2.29 of HBPv1.
IEC- 0100000100- Director, National Blood Group Reference Laboratory, Bombay or their authorised offices.
IEC- 0100000126- Individuals / Charitable Institution / Registered NGOs importing goods, which have been exempted from Customs duty under Notification issued by Ministry of Finance for bonafide use by victims affected by natural calamity.
IEC- 0100000134- Persons importing / exporting permissible goods as notified from time to time, from / to China through Gunji, Namgaya Shipkila and Nathula ports, subject to value ceilings of single consignment as given in Para 2.8(iv) above.
IEC- 0100000169- Non-commercial imports and exports by entities which have been authorised by Reserve Bank of India.

Mandatory Requirements to Apply for Iec Certificate

Covering letter
Fill Part A, B & D of the application form.
Application must be accompanied by documents as per details given below:
- Bank Certificate from the bank on Bank letter head as per pro-forma (Part B) given in the application.
  - In case of Proprietorship firms, please furnish:
    - Date of Birth of individual
    - Number of IECs held along with their details
  - In case of Companies, please furnish:
    - Extract of Board of Resolution.
    - MOA with Form 32 and ROC in case of change in Directors.
  - In case of others:
    - Notarised Partnership Deed showing date of formation.
    - No Objection Certificate from other partners/HUF
- Self certified copy of Permanent Account Number (PAN) issued by income Tax Authorities.
- Two copies of passport size photographs of the applicant. The photograph pasted on the banker’s certificate must be attested by the banker with Seal and Signature of the applicant.
The application must be submitted in Duplicate.
Each individual page of the application must be signed by the applicant.
Self-addressed envelope stamped with ₹25 (Local Address) & for others ₹30/-. These documents may be kept secured in a file cover.

Check List of Documents to Apply for IEC Certificate

Covering Letter on your company’s letter head for issue of new IEC Number.
Two copies of the application in prescribed format (Hayat Narayan Form ANF 2A) must be submitted to your regional Jt. DGFT Office.
Each individual page of the application has to be signed by the applicant.
Part 1 & Part 4 has to be filled in by all applicants. In case of applications submitted electronically.
No hard copies of Part 1 may be submitted. However in cases where applications are submitted otherwise the hard copy of Part 1has to be submitted.
Only relevant portions of Part 2 need to be filled in.
₹250.00 Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application fee in terms of Appendix 21B.
Certificate from the Banker of the applicant firm in the format given in Appendix 18A.
Self-certified copy of PAN issuing letter or PAN (Permanent Account Number) Card issued by Income Tax Authority.
Two copies of passport size photographs of the applicant duly attested by the Banker of the applicant.
Self-addressed envelope with ₹25/- postal stamp for delivery of IEC certificate by registered post or challan/DD of ₹100/- for speed post.
Application can be submitted in person or by an Authorised Employee of the Company at the R & I counters in the office or it can be sent by post or courier.

Processing of IEC Application

Submit the fully filled form at the counter in person at the office or use Post/Courier service. The application sender will receive a receipt as an acknowledgement after receiving the form. This receipt has a file number and this file number can be used for correspondence/query regarding the IEC application. The application is sent to IEC for further processing. If the form is correct and accepted, the IEC number will be generated. Or else the applicant is informed about the rejection of the form.

Issue and Dispatch of IEC Certificate

IEC allotment letter is mailed through post at the registered office. Similarly deficiency letters are sent to applicant by post.

About IECApplication Status

File No for IEC application: The applicant can check the status of their application online as well. Just enter the PAN number and the file number will be generated. Applicants who have sent their application through post/courier can know their file number using option “File No for IEC application”
Status of IEC Application: The applicant can know the status of the IEC application using option “Status of IEC Application” on the website of CLA.
IEC Issued Day Wise: IEC’s issued daily can be viewed on the website using option “IEC issued day wise”

IEC Code Number Related Links

DGFT Online IEC Number Application Form -ANF-2A
View Your IEC Status : http://dgft.delhi.nic.in:8100/dgft/iecprint
IEC Status at Custom(BIN) : http://164.100.9.176/iecstatus.html
http://www.dgft.gov.in/dgftcla
http://www.dgft.gov.in
http://www.icegate.gov.in

Export Assistance in India

EXIM Policy 1992-97 accompanied with globalisation has opened doors for India to participate in international trade. This has been a positive breaking point in the economic development of the country. It allowed financial assistance from external sources such as World Bank. For assisting global trade many regulations have been introduced by the Government of India (GOI), which are discussed in the sections given below.

Export Credit Guarantee Corporation (ECGC)

Export Credit Guarantee Corporation, a central government undertaking body is designed to save the interest of the exporter. The corporation offers a credit guarantee on the default of payments by the buyer. This body works as an insurance firm that guarantees export payment in case the buyer fails in making the payment.

Bureau of Indian Standards

The Bureau of Indian Standards (BIS) is the National Standards Body of India. This body is governed and guided by the Ministry of Consumer Affairs, Food & Public Distribution, Government of India. It was established in 1986.However,it came into effect on 23 December, 1986 only. Earlier it was known as Indian Standards Institution (ISI) and was registered under the Societies Registration Act, 1860.

Export Inspection Council (EIC)

The Export Inspection Council (EIC) was formulated and established by the Government of India under Section 3 of the Export (QualityControl and Inspection) Act, 1963. The main objective of this council is to confirm that quality standards are met for the goods to be exported for ensuring sound export development.

Indian Council of Arbitration

The Council helps in settling all international commercial disputes by using the process of arbitration. According to Arbitration and Conciliation Act, 1996, the rules of arbitration have been amended in recent times. This council is established with primary focus on settling industrial and trade disputes quickly and peacefully with the help of arbitration.

The members of this council include:

Government of India (GOI)
The Federation of Indian Chambers of Commerce and Industry (FICCI).
Other important Chambers of Commerce and trade associations in India
Export Promotion Councils (EPCs)
Public Sector Undertakings (PSUs)

Export Promotion Councils

Export Promotion Councils (EPC), are registered under the Indian Company Act or the the Societies Registration Act. It is a non-profit organisation and the purpose of this body is to promote various goods exported from India in international market. As explained earlier in this chapter, EPC works in collaboration with the Ministry of Commerce and Industry, Government of India. The EPC is a connecting link between the exporting community and the government.

India Trade Promotion Organisation (ITPO)

India Trade Promotion Organisation (ITPO), is a nodal agency, that is regulated and guided by Ministry of Commerce and Industry (India). The main head office of this organisation is located in Pragati Maidan, New Delhi. The main purpose of this agency is the promotion of and providing assistance in country’s external trade. ITPO is controlled by Government of India as they have 100 percent shareholding in it. Moreover, it is a Schedule-B Miniratna Central Public Sector Enterprise (CPSE).