SUMMER TRAINING PROJECT REPORT

ON

“EXPORT DOCUMENTATAION

AT RUBY INTERNATIONAL,

MORADABAD”
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE MASTER’S DEGREE IN INTERNATIONAL BUSINESS

OF

GRAPHIC ERA UNIVERSITY DEHRADUN

SUBMITTED BY: SUBMITTED TO:

MOHD. ISLAUDDIN Mrs. R. K. MALHOTRA

MBA-(I.B.) CO-ORDINATOR MBA-(IB)

GRAPHIC ERA UNIVERSITY-DEHRADUN

SESSION 2008-2010

1
ACKNOWLEDGEMENT

2
 ACKNOWLEDGEMENT

God Almighty’s opportunity is man’s extremity. In what ways God Offers opportunities

is not known but here RUBY INTERNATIONAL”offered me the opportunity by

allowing me to have my summer training, a part of M.B.A.-(IB) course in their

magnificient organization is really an opportunity of learning.I cannot forget to express

my gratitude for the staff of the Ruby International who spared their valuable time in

assisting me in carrying out this project.

It has been my proud privilege to be attached to RUBY INTERNATIONAL, a highly

professionalized company with modern outlook. I have learnt a lot during my short

duration of training.

I am thankful to my parents for their elderly guidance and briefing accountability of

my work.

I am thankful to Mr. MANISH KUMAR (Head of the management department),

Institute of Management Studies, and our Internal Guide MrS. R. K. MALHOTRA for

their kind support. I am specially thankful to Mr.MohanAgarwal for their guidance

and co- operation without which I would not have been able to complete my project.

.DATE: MOHD. ISLAUDDIN

3
 CERTIFICATE

I have the pleasure in certifying that Mr./Ms. ...…………..…………………………..is a

He/She has completed his/her project work entitled ……………………………………

I certify that this is his/her original effort & has not been copied from any other source.
This project has also not been submitted in any other University for the purpose of
award of any Degree.

This project fulfils the requirement of the curriculum prescribed by H.N.B.Garhwal

Signature : ……………………………………
Name of the Guide : ……………………………………
Date : ……………………………………

4
 TO WHOM IT MAY CONCERN
This is to certify that Mohd. Islauddin student of graphic era University, Dehraqdun,
doing Master of International Business has completed his summer training project
from 14th July 2009 to 20th August 2009. In our organization on “EXPORT
DOCUMENTATION & EXPORT PROCEDURES”.

During the training we found him sincere and dedicated towards him work. Him
conduct was very good. We wish him bright future in years to come.

5
EXECUTIVE SUMMARY

6
 EXECUTIVE SUMMARY

RUBY INTERNATIONAL is one of the renowned name in Cutlery Industry.It deals

with the cutlery products.It is a big name in Export Industry exporting cutlery

products.The company office is at MoraDabad (U.P.).

Liberalization and globalization, which entail economic reforms in Industrial and

foreign trade, have created a most congenial environment for export.. By the favourable

liberalization policy of the Indian Government, wide opportunities for facing the open

global market have been created and its horizons have widened to immeasurable

lengths and breadths. At the same time the whole market has become very competitive

and the need of a sound documentatation strategy has cropped up.

There are several factors, which have prompted the companies actively in the global

market.These factors together play a vital role in pushing the companies ahead in the

open arena of the world market.

7
The project is done on the topic of Export Documentation and Export

Procedures”.Different types of Export documents are used in exporting cutlery

products like:-

 Commercial invoice

 GR Form

 Letter of credit

 Bill of exchange

 Shipping Bill

 Marine insurance policy

 Bill of lading

 Airway bill

 Proforma invoice

 Packing list

 Mate’s receipt

 Certificate of origin

8
 CONTENTS

1. OBJECTIVES

2. INTRODUCTION

3. METHODOLOGY

4. FINDINGS

5. ANALYSIS OF FINDINGS

6. CONCLUSIONS

7. RECOMMENDATIONS

8. REFRENCES

9. ANNEXURES

9
OBJECTIVES

10
 OBJECTIVES

The purpose of the study is to get aware of the working of an export firm and that is

“RUBY INTERNATIONAL” in my case. In depth of the objective of the study are the

following:-

 To gain practical knowledge.

 To get users suggestions for the betterment of the company.

 To measure the export market of different companies.

 To know the user perception about all cutlery items.

11
INTRODUCTION

12
 ABOUT COMPANY

Ruby International,situated in the outskirts of Moradabad, popularly known as

Brasscity has the unique distinction of being one of the few i.e. totally dedicated to

manufacture and export of stainless steel utensils like house ware,kitchen ware,cutlery

ware,hand made cutlery,food service products and bar accessories.

Ruby International has a rich and enviable experience of over 10 years in

manufacturing and exporting these products.

13
  Profile...
FACILITY NAME :   M/s Ruby International.
     
STATUS:   MANUFACTUER & EXPORTER
     
ADDRESS :   PEETAL NAGRI GATE
    OPP GULABBARI PARK,
    RAMPUR ROAD.
    MORADABAD,(U.P) 244001
     
CONTACT NO’S:   OFF : +91-591-3297060, 6536070
    FAX: +91-591-2460752
    MOBILE: +91-9837049073
     
E-MAIL ADDRESS:   [email protected]
    [email protected]
    [email protected]
     
     
VISIT US AT:   http://www.rubyintonline.com
     
CONSTITUTION:   PARTNERSHIP
     
CONTACT PERSONS   Mr. MOHAN AGARWAL
     
     
PRODUCT HANDLED:   CUTLERY (FLATWARE, BAR TOOLS, SALAD SERVERS
    CHEESE SETS, SPREADERS ETC) LAMPS, CANDLE HOLDERS
    AND DECORATIVE ITEMS,
     
LEGAL REQUIREMENT   IEC NO :29920002999
    RBI :      KR180008
     
BANKERS:         BANK OF INDIA (SSI) BRANCH

14
      
PRESENTLY EXPORTING TO:   USA, GERMANY ,UK & JAPAN
     
MANUFACTURING UNIT
MANUFACTURING SINCE:   1957 (EXPERIENCE OF 50 YEARS,)
     
ADDRESS:   PEETAL NAGRI GATE
    OPP GULABBARI PARK,
    RAMPUR ROAD.
    MORADABAD,(U.P) 244001
     
CONTACT NO:   +91-591-3297060, 6536070
     
EMAIL:   [email protected]
     
PRODUCTS MANUFACTURING:   (1) ART WARES & HANDICRAFTS OF ALL  METALS,
    (2) SPECIALIST IN STAINLESS STEEL CUTLERY,
     
PRODUCTION CAPACITY:   30 TONS PER MONTHS,
     
ANNUAL TURNOVER:   RS.5 CRORES.
     
LIST OF VARIOUS MACHINES:   (a) DOUBLE ACTION PRESS                                                       
    (b) SPINNING LEATHS NO 2
    (c) ELECTRO PLATING PLANTS
    (d) POLISHING MACHINES
    (e) SEMI-AUTOMATIC DRILL MACHINES
    (f) FULL SET-UP DESIGN DEVELOPMENT.
    (g) PUNCHING MACHINES
    (h) STRAITENING MACHINES
    (i) POWDER COATING PLANT
     
GENERATORS:   (2) CAPACITY 35 KVA
    (2) CAPACITY 7.5 KVA
NO. OF EMPLOYEES:   100 PEOPLE ( NO CHILD LABOUR INVOLVED )
     
QUALITY:   AS PER COMPANIES STANDARD.

                                                                                                                              Print this document

15
 PRODUCTS

FLAT WARES

16
SALAD SERVERS

SPREADERS

17
 BAR TOOLS

METHODOLOGY

18
 METHODOLOGY

Methodology is a way to systematically solve the problem. It is science of studying how

problem is solved scientifically. In it we study the various steps that are generally

adopted by the researcher. As this methodology is descriptive of the state of affairs as it

exists at present, in the we have no control over the variable, we can only report what

has happened or what is happening,i.e.what the retailer and wholesaler feels about the

product and distribution.

The research methodology used for this project is as follows:

 Problem Definition

 Research Design

 Data collection

Problem Definition

It is the first step of research process, which should be clear about the implicit

definition. We have various objectives behind the conduction of this project. In this

project our main objective is to study in detail several commercial and regulatory

procedures and documentation required to be done.

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Research Design

After defining the research problem the choice of research design depend on the depth

and extent of data required, the cost and benefit of research and time available for

completing it. Research design is actually the blue print of the research project. Mainly

we have use the observation and interview method to get more information from the

respondent.

Data collection

Data is the base for research, therefore, data collection is an elaborate process in which

the researcher makes a planned research for all relevant data, data requirement for

various analytical techniques must be anticipated in advance in data collection, i.e.,

sampling and non sampling error must be tried to reduce. It was total desk work being

done that is secondary data is being used. Various data regarding Documents has been

generated from company profile, company documents etc.

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FINDINGS

21
 EXPORT
DOCUMENTATION

22
There are many documents involved in international trade, such as Commercial

documents , financial documents, transport documents, insurance documents and other

international trade related documents. In processing the export consignment

documentation may be executed in up to four contracts: the export sales contract, the

contract of carriage, the contract of finance and the contract of cargo insurance. It is

therefore important to understand the role of each document and their requirements in the

international trade.

The documentary requirements are both regulatory and operational in nature and

necessary documents should be prepared to comply with rules and regulations of the

exporting and importing country.Moreover, these requirements are different for different

types of products. When exporting for the first time the exporter should therefore always

find out from the buyer the documents required by him/her for the import of the product.

Accuracy and completeness are of paramount importance in documents covering exports

shipments. Whether two or ten copies of the invoice are required by the buyer the same

should be supplied as the buyer probably has some reasons for it.

The documentation work should be handled by the professionals in this field. Large export

firms have their separate export documentation department headed by Documentation

23
Mangers. The small exporters can however take the services of the clearing and

forwarding agent to prepare the shipment documents.

Commercial Documents:

Commercial documents are required for effecting physical transfer of goods and their

title from the exporter to the importer and the realization of export sale proceeds. Out

of the 16 commercial documents in the export documentation framework as many as 14

have been standardized and aligned to one another. These are Proforma invoice,

commercial invoice, packing list, shipping instruction, intimation for inspection,

certificate of inspection of quality control, insurance declaration, certificate of

insurance, mate’s receipt, bill of lading or combined transport document, application

for certificate origin, certificate of origin, shipment advice and letter to the bank for

collection or negotiation of documents.

Regulatory Documents:

Regulatory pre-shipment export documents are prescribed by the different government

departments and bodies in order to comply with various rules and regulations under the

relevant laws governing export trade such as export inspection, foreign exchange

regulation, export trade control, customs, etc. Out of 9 regulatory documents four have

been standardized and aligned.

24
 These are shipping bill or bill of export, exchange control declaration, export

application dock challan or port trust copy of shipping bill and receipt for payment of

port charges.

Commercial Invoice

Commercial Invoice is key documents for an export transaction and it must be

prepared by the exporter. Since it is the basic export document, it should provide

information as comprehensively as possible. Besides, information provided should be

mentioned clearly and accurately.

A commercial invoice contains information on the exporter, the consignee’s details, and

country of origin of goods, country’s final destination, and terms of delivery and

payment, vessel/flight no., port of loading, port of discharge, final destination, marks

and numbers, number and kind of packaging, detailed description of goods, quantity,

rate and total amount payable. As a customary trade practice, soon after striking an

export deal, the exporter prepares a proforma invoice and sends it to the importer.

Once the importer accepts and countersigns the proforma invoice, it becomes a part of

export contract. A proforma invoice also helps the importer in arranging finances and

opening of the letter of credit.

Packing List:-

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 Packing List provides details of how the goods are packed, the contents of different

boxes, or bales, and details of the weights and measurements of each package in

received. the consignment. Packing list is used by the carrier while deciding on the

loading of the consignment Besides, this it is an essential document for the customs

authority. It also helps the importer to check the inventory of the merchandise received

when the consignment is small or consists of a simple pack, the packing information is

generally incorporated in the commercial invoice. However, as a general trade rule, it is

better to provide financial and packing information separately in invoice and packing

list.

Bill Of Lading:-

It is a transport document issued by the shipping company to the shipper for accepting

the goods for the carriage of merchandise.

This document has got a unique significance in shipping and is known as the ‘document

of title’, which means that the legitimate holder of the document is entitled to claim the

ownership of the goods covered therein. Therefore, it would be impossible for the

importers to obtain the possession of the cargo unless they surrender a signed original

bill of lading to the shipping company at the destination.

Thus, the bill of lading serves the following three purposes.

 It is the receipt of cargo by the shipping company,

26
 The contract of carriage and also

 A document of title

Certificate Of Origin:-

This document is used as an evidence of the origin of goods in the importing country. It

includes the details of the goods covered and the goods country where the goods are

grown, produced, or manufactured. The manufactured goods must have substantial

value addition in the exporting country. Operations like packaging, splitting,

assembling, or sorting may not be sufficient for qualifying the country of origin. It is

also needed for deciding whether the import from the country of origin is partially or

completely prohibited. The certificate of origin is required for deciding the liability and

the rate of import duty in the importing country. Besides, it is also used for granting

preferential duty treatment to goods originating in the importing country.

There are two types certificate of origin:

 Preferential Certificate of origin

 Non-preferential Certificate of origin

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Inspection Certificate:-

Under the export (Quality Control and Inspection) Act, 1963, it is mandatory to obtain

an export inspection certificate for a number of products by the notified agency. The

agencies entrusted with compulsory pre-shipment quality inspection include Export

Inspection Agency; Generally, an importer wants the inspection to be carried out by a

private agency nominated by him to ensure the quality of merchandise as per the export

contract. The exporter has to submit the intimation for inspection in a prescribed

format and the inspection certificate is issued by the inspection agency for payment of a

fee.

Insurance Policy/Certificate:-

Since the carrier and other intermediaries, such as clearing and forwarding agents, port

authorities, warehousing operators, etc. have only limited ability during the process of

cargo movement from the exporters to the importer, they cannot be held responsible in

the event of loss due to a situation beyond their control, such as man-made accidents

natural calamities, etc. Therefore, in order to provide protection to the cargo-owner, an

insurance cover is necessary while the cargo is in transit from the consignor to the

consignee.

Mate’s Receipt :-

Mate’s receipt is a receipt issued by the Commanding Officer of the ship when the cargo

is loaded on the ship. The mate’s receipt is a prima facie evidence that goods are loaded

in the vessel. The mate’s receipt is first handed over to the Port Trust Authorities.

28
After making payment of all port dues, the exporter or his agent collects the mate’s

receipt from the Port Trust Authorities. The mate’s receipt is freely transferable.

Types Of Mate’s Receipt:-

a) Clean Mate’s Receipt:

The Commanding Officer of the ship issues a clean mate’s receipt, if he is satisfied

that the goods are packed properly and there is no defect in the packing of the cargo or

package.

b) Qualified Mate’s Receipt:

The Commanding Officer of the ship issues a qualified mate’s receipt, when the goods

are not packed properly and the shipping company does not take any responsibility of

damage to the goods during transit.

Exchange Control Declaration Form

29
Under the Foreign Exchange Management Act, 2000, for every export activity taking

place out of India, the exporter has to submit an exchange control declaration form in

the prescribed format. Exports to Nepal and Bhutan are exempt from such declaration.

The basic objectives of a declaration form are to ensure the realization of export

proceeds by the exporter as per the provisions of the Foreign Exchange Management

Act, 1999.As per FEMA, all documents relating to export of goods from India should be

submitted to the authorized dealer in foreign currency within 21 days and the amount

representing the full export value must be realized within six months from the date of

shipment.

The various types of forms used for foreign exchange declaration are as follows.

GR FORM:

Guaranteed remittance forms are for all types of physical exports, including software

exports in physical form.

SDF FORM:

For all such exports where the customs authority has the facility for EDI processing of a

shipping bill and is attached in duplicate with the shipping bill.

PP FORM:

30
 Postal parcel forms are for all exports by post.

SOFTEX FORM:

Software export declaration forms for software exports in non-physical form.

Shipping Bill/ Bill of Export :-

Shipping bill is the main document required by the custom authorities. The export

cargo is allowed to be carted on port shed and docks only after the shipping bill has

been stamped by the custom authorities. The shipping bill mentions the description of

goods, marks, no., quantity, FOB value, flight no., port of loading, port of discharge, etc.

In case shipment by sea/air/ICD the document is known as shipping bill, in case of

shipment by land it is known as bill of exports.

The main types of shipping bills are:

 WHITE Shipping Bill:

It is for export of duty free goods prepared in triplicate in the standardized

format.

31
  GREEN Shipping Bill:

It is for export of goods under claim for duty drawback prepared in

quadruplicate.

 YELLOW Shipping Bill:

It is for export of dutiable goods prepared in triplicate.

 PINK Shipping Bill:

It is for export duty free goods ex-bond prepared in triplicate.

 BLUE Shipping Bill:

It is for export under the DEPB of scheme prepared in seven copies.

Bill Of Entry:-

After unloading the imported cargo is transfer to the custody of an authorized agency

such as Port Trust Authority or any other customs approved warehouse. For getting

32
custom clearance on imported cargo, bill of entry is required to be submitted in four

copies.

There are three types of bill of entry:

 WHITE Coloured:

It is for home consumption and used to get goods cleared in one lot by the importer.

 YELLOW Coloured:

It is specially useful when the importer has shortage of warehousing space or he is

unable to pay the import duty at one go.

 GREEN Coloured:

It is also known as Ex-bond bill of entry and is used for removing goods from the

warehouse.

33
Letter Of Credit :-

A letter of credit has been used for more than 150 years to facilitate trade by providing

payment against presentation of documents relating to the transaction as specified in

the credit.

They are used widely for international trade,covering transaction valued from as little

as a few hundred pounds to many millions.They are used primarily at the request of the

commercial parties for effecting payment,they may also be used because some

importing countries require letters of credit as part of their exchange Control

regulations.

A Letter of credit is defined as an undertaking by an issuing bank to the beneficiary to

make payment with in a specified time,against the presentation of documents which

comply strictly with the terms of the credit.Therefore,the risk to the seller of non

payment by the buyer is transferred to the issuing bank(and the confirming bank if the

letter of credit is confirmed)along as the exporter presents the documents in strict

compliance with the credit.It is important to remember that all parties in the letter of

credit transaction deal with documents,not goods.

On the other hand,a letter of credit is the most secure method of payment in

international trade,with the payment undertaking of the bank,as long as the terms of

the credit are met.The letter of credit also provides security for the importer who can

34
ensure all contractual documentary requirements are met by making them conditions of

the letter of credit.

Parties involved in a Letter of credit Transaction:-

 Applicant – the importer.

 Issuing Bank- the bank issuing the credit on the instructions of the applicant.

 Beneficiary- the exporter

 Advising Bank- usually the correspondent bank of the issuing bank in the

exporter’s country which verifies the authenticity of the letter of credit and

forwards it to the beneficiary.

 Nominated Bank- the bank authorized within the letter of credit to make

payment to the and to whom the documents are presented.The payment

undertaking, however is purely from the issuing bank so the country risk is

not covered.

 Confirming Bank- usually the advising bank in the beneficiary’s country

which adds its confirmation (where this is required) to the credit and

35
 Undertaken an independent obligation to pay the exporter provided the terms

of the credit are met.

Types of Letter of Credit:-

 Revocable:

A revocable letter of credit can be amended or cancelled at any time

without the beneficiary’s agreement(unless documents have been taken up by the

nominated bank).Little protection is offered to the beneficiary’s with a revocable

credit and they are rarely seen.

 Irrevocable:

An irrevocable letter of credit can neither be amended nor cancelled

without the agreement of all parties to the credit.

 Unconfirmed:

An unconfirmed letter of credit is forwarded by the advising bank directly to the

exporter without adding its own undertaking to make payment or accept responsibility

for payment at a future date ,but confirming its authenticity.

36
  Confirmed:

A confirmed latter of credit is one in which the advising bank on the instructions of the

issuing bank has added a confirmation that payment will be made as long as complaint

documents are presented.This commitment holds even if the issuing bank or the buyer

fail to make payment.A bank will make an additional charge for confirming a letter of

credit.

 Standby letters of credit:

When the exporter fail to receive payment from the buyer he may claim under the

standby letter of credit.Certain documents are likely to be required to obtain payment

including: the standby letter of credit, a sight draft for the amount due,a copy of the

unpaid invoice,proof of dispatch and a signed declaration from the beneficiary stating

that payment has not been received by the due date and therefore reimbursement s

claimed by letter of credit.

 Revolving letter of credit:

The revolving credit is used for regular shipments of the same commodity to the same

buyer. It can revolve in relation to time or value. The credit must state that it is a

revolving letter of credit and it may revolve either automatically or subjects to certain

37
provisions. Revolving is useful to avoid the need for repetitious arrangements for

opening or amending letter of credit.

 Transferable letter of credit:

A transferable letter of credit is one in which the beneficiary has the right to request

the paying or negotiating bank to make either part or all of the credit value available to

one or more third parties. This type of credit is useful for those acting as middlemen

especially where there is a need to finance purchases from third party suppliers.

 Back to Back letter of credit:

A back to back letter of credit can be used as an alternative to the transferable letter of

credit. Rather than transferring the original letter of credit to the supplier once the

letter of credit is received by the exporter from the opening bank, that letter of credit is

used as security to establish a second letter of credit drawn on the exporter in favour of

his supplier. Many banks are reluctant to issue back to back letters of credit due to the

level of risk involved.

PROCEDURE OF REALISATION OF EXPORT PROCEEDS

(a)Presentation of Documents to the Bank for Negotiation:-

38
 After shipment of goods the exporter is required to submit the shipping

documents to an authorized dealer with in 21 days of the date of shipment for

negotiation. Submission of relevant document to the bank and the process of getting the

payment from the bank is called “Negotiation of the documents” and the documents are

called “Negotiable set of documents”

The set normally contains:

 Bills of exchange

 Bill of lading, Airway bill

 Original letter of credit

 Customs invoice

 Commercial invoice

 Packing list

 GR forms

39
 Exchange control copy of the shipping bill

 Certificate of origin

(b)Despatch of Documents:

The bank negotiates these documents to the importer’s bank in the manner as specified

in the L/C. Before negotiating documents the exporters bank scrutinises them in order

to ensure that all formalities have been complied with and all documents are in order.

The bank then sends the bank certificate and attested copies of commercial invoice to

the exporter.

Acceptance of the Bill of exchange:-

Bill of exchange accompanied by the above documents is known as Documentary Bill of

Exchange. It is of two types:-

 Documents against Payment(sight Draft):-

40
 In case of sight draft the drawer instruct the bank to hand over the relevant

documents to the importer only against payment.

 Documents against Acceptance(Usance Draft):-

In case of usance draft the drawer instructs the bank to hand over the relevant documents

to the importer against his acceptance of the bill of exchange.

(c )Letter of Indemnity:-

The exporter can get immediate payment from his bank on the submission of documents by

signing a letter of indemnity.By signing the letter of indemnity the exporter undertakes to

indemnify the bank in the event of non-receipt of payment from the importer along with

accrued interests.

(d) Realization of Export Proceeds:-

On receiving the documentary bill of exchange, the importer releases payment in case

of sight draft or accepts the usance draft undertaking to pay on maturity of the bill of

exchange. The exporter’s bank receives the payment through importer’s bank and is

credited to exporters account.

41
(e) Processing of GR form:-

On receiving the export proceeds the exporters bank intimates the same to the RBI by

recording the fact on the duplicate copy of GR.The RBI verifies the details in duplicate

copy of GR with the original copy of GR received from the customs. If the details are

found to be in order than the export transaction is treated to be completed.

CUSTOM FORMALITIES

Goods may be shipped out of India only after customs clearance has been obtained. For

this purpose, the exporter (or the clearing and forwarding agent on behalf of the

exporter) should present the following documents to the customs authorities:

1. Shipping bill

2. Declaration regarding truth of statement made in the shipping Bill

3. Invoice

4. GR form

5. Export license (wherever required)

6. Quality control inspection certificate (wherever required)

42
7. Original contract wherever available or correspondence, leading to contract

8. Contract registration certificate (wherever applicable)

9. L/C (wherever applicable)

10. Packing list

11. AR-4 form

12. Any other documents

The customs authorities scrutinize the shipping bill and other requisite documents, and

if, prima fade, satisfied, they pass it for export, subject to a physical examination by the

dock or air transit staff of the customs. The shipping bill passed by the export

department has to be presented to the cargo supervisor or the steamship company or

the shed manager, who is port official, for permission to bring in the cargo for export. A

facility is available for customs checking of the goods at the factory. Application for this

purpose should be made to the assistant collector of the customs. The custom appraiser

can go to the factory to check the consignment; and after checking it, he can seal the

packages.

43
However, the preventive inspect the sealed packages before they are actually loaded on

the ship; but when he is satisfied about the bonafied of the party, he does not open the

sealed packages nor check them again.

ANALYSIS OF FINDINGS
44
EXPORT PROCEDURES

45
The exporting activity involves several commercial and regulatory procedures. These

procedures also involve considerable documentation requirements. Besides the

documentation pertaining to the commercial aspects of the export business, there are

documents requirement of a regular in nature like excise clearance, foreign exchange in

regulation, etc.

The export documentation involves the preparation of the specified number of copies of

the prescribed documents pertaining to the different procedures.

An export procedure can be studied under the following heads:

1 .Registration stage

2. Pre- shipment stage

3. Shipment stage

4. Post- shipment stage

46
REGISTRATION
STAGE

47
The exporter is required to register his organization with a number of institutions/

authorities which includes:

1. REGISTRATION OF ORGANISATION UNDER APPROPRIATE ACT:

The form of organization selected by the exporter must be registered under the

appropriate Act of the country.

(a) A joint stock company under the Companies Act, 1956.

(b) A partnership firm under the Indian Partnership Act, 1932.

(c) Sole trader should seek permission from the local authorities as required.

2. Opening bank Account :

The exporter should open a Current account in the name of the firm or company with a

commercial bank which is authorised by Reserve bank of India to deal in foreign

exchange. Such bank also serves as a source of pre- shipment and post-shipment finance

for the exporter.

48
3.Obtaining Importer-Exporter Code number from DGFT.-

The IEC number is issued by the Director General of Foreign trade. The application

form for obtaining IEC number should be accompanied by fee of Rs.1000.

4 .Obtaining PAN from Income Tax department.

Export income is subject to a number of exemptions and deductions under different

sections of the Income Tax Act. For claiming such exemption the exporter should

registered his organization with the Income Tax Authority and obtains the Permanent

Account Number.

5 .Obtaining Sales Tax number from sales tax office.

Exportable goods are exempted from sales tax provided the exporter or his firm is

registered with the sales tax authorities. For this purpose the exporter is required to

make an application in the prescribed form to the Sales tax office in whose jurisdiction

exporter’s office is situated.

6 .Registration with export promotion council and obtaining RCMC. :-

It is obligatory for every exporter to register with the appropriate Export Promotion

Council and obtain the Registration cum Membership Certificate. The benefits

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provided in the current EXIM policy are extended only to the registered exporters

having valid RCMC.

7. Registration with ECGC:-

The exporter should also register with the Export Credit and Guarantee Corporation of

India in order to secure overseas payments against political and commercial risks. It

also helps the exporters in obtaining the financial assistance from the commercial banks

and other financial institutions.

8. Registration with other authorities:-

The exporter should also register with various other authorities such as:

 Federation of Indian export organization.

 Indian trade promotion organization.

 Chambers of Commerce.

 Productivity Councils etc.

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PRE- SHIPMENT STAGE

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1. Approaching foreign buyers:-

In order to secure an export order, a new exporter can make use of one of the

techniques such as advertising in international media, sales Promotion, public relation,

personal selling, publicity and participation in trade fairs and exhibitions.

2 .Inquiry and offer:-

An inquiry is a request from a prospective importer about description of goods their

standards or grades, size, weight or quantity, terms of payments etc. On getting an

inquiry from importer, the exporter must process it immediately by making an offer in

form of preformed invoice.

3. Confirmation of order:-

Once the negotiations are completed and the terms and conditions are finalized, the

exporter sends three copies of proforma invoice to importer for confirmation of order.

The importer signs these copies and sends two copies back to the exporter.

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4 .Opening L/C:

The documentary credit or letter of credit is the most appropriate and secured method

of payment adopted to settle international transactions. On finalization of the export

contract, the importer opens a letter of credit in favour of the exporter, if agreed upon

in the contract.

5. Arrangement of pre- shipment finance:

The exporter procures pre- shipment finance from his bank for procuring raw

material and other components processing and packing of goods and transfer of goods

to the port of shipment.

6. Production or procurement of goods.:-

On securing the preshipment finance from the bank, the exporter either arranges for

the production of the required goods or procures them from the domestic market as per

the specification of the importer.

7.Packing and marking:

After proper packaging necessary details are marked such as port of shipment and

destination, country of origin, gross and net weight, etc.

8.Pre- shipment inspection:-

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If the goods to be exported are subject to compulsory quality control and pre-shipment

inspection then the exporter should contract the Export Inspection Agency for

obtaining an inspection certificate.

9.Central excise clearance:-

Exporters are totally exempted from the payment of central excise duty, but it needs to

be claimed as export under rebate/ export under bond.

10..Obtaining insurance cover::-

The exporter must take appropriate policies in order to insure risks:

(a) ECGC policy in order to cover credit risks.

(b) Marine policy, if price quotation agreed upon is CIF.

11.. Appointment of C&F agent:

Since exporting is a complex and time consuming process, the exporter should appoint a

Clearing and Forwarding (C&F) agent for the smooth clearance of goods from the

customs and preparation and submission of various export documents.

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SHIPMENT STAGE

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 1. Reservation of shipping space:

Once the export contract is finalized, the exporter reserves the required space in the

vessel for shipment. On accepting the exporter’s request, the shipping company issues a

Shipping Order. The original copy of the shipping order is given to the exporter and the

duplicate is sent to the commanding officer of the ship. The shipping order is an

instruction by the shipping company to the commanding officer of the ship that the

goods as per the details given should be received on board.

2. Arrangement of internal transportation up to the port of shipment:

The exporter makes necessary arrangements for transportation of goods to the port

either by road or railways. On loading goods into railway wagon, the railway

authorities issue a “Railway Receipt” which may be either “freight paid” or “freight to

pay”. It serves as a title to the goods.

3. Preparation and processing of shipping documents:

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When goods reach the port of shipment, exporter should issue detailed instructions to

C&F agent for the shipment of cargo along with following documents:

(a) Letter of Credit along with the export order

(b) Commercial invoice (2 copies)

(c) Packing list

(d) GR form

(e) ARE-1 form

(f) Certificate of inspection, where necessary (original co

4. Customs clearance:

Cargo must be cleared from the customs before it is loaded on the ship. For this the

above mentioned documents along with five copies of shipping bill are to be submitted

to custom appraiser. Custom appraiser ensures that all formalities relating to exchange

control, quality control, pre-shipment inspection and licensing have been complied with

by the exporter. After verification all the documents except original GR, original copy

of shipping bill and one copy of commercial invoice are returned to C&F agent.

5. Obtaining Carting Order from port trust authorities:

C&f agent approaches the Superintendent of the concerned Port Trust for obtaining the

carting order for moving the cargo inside the dock. After obtaining the Carting Order,

the cargo is physically moved in to the port area and stored in the appropriate shed.

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6. Customs examination and issue of Let Export Order:

Customs examiner at the port of shipment physically examines the goods and seals

packages in his presence. The Customs Examiner, if satisfied, he issues a formal

permission for the loading of cargo on the ship in the form of a Let Export Order.

7. Obtaining Let Ship Order from customs preventive Officer:

Let Ship Order issued by the Customs Preventive Officer. The C&F agent submits the

duplicate copy of shipping bill, duly endorsed by the Customs Examiner, to the Customs

Preventive Officer who endorses it with the Let Ship Order.

8 Obtaining Mate’s Receipt and Bill of Lading

Goods are then loaded on board the ship for which the mate or the captain of the ship

issues Mate Receipt to the Port Superintendent. The C&F agent surrenders the mates

receipt to the Shipping Company for obtaining the Bill of Lading. The Shipping

Company issues two to three negotiable and two to three non-negotiable copies of Bill of

Lading.

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POST-SHIPMENT STAGE

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 The post-shipment stage consists of following steps:

1. Submission of documents by C&F agent to the Exporter:

On the completion of the shipping procedure, the C&F agent submits the documents

Include-

(a) Invoice copy attested by customs.

(b) Drawback copy of shipping bill.

(c) Export promotion copy of shipping bill.

(d) Set of copies of Bill of Lading.

(e) Original L/C or export order/ contract.

(f) Duplicate copy of ARE-1 form.

(g)Shipment advice to importer (& one copy of non-

negotiable Bill of Lading to the importer).

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1. Presentation of documents to bank for negotiations: -

Submission of relevant documents to the bank and the process of getting the payment

from bank is called “Negotiation of documents: and the documents are called

“Negotiable set of documents”. The set normally contains:

 Bill of Exchanges, Sight Draft or Usance Draft

 Bill of Lading, Airway Bill

 Original Letter Of Credit

 Customs Invoice

 Packing List

 Commercial Invoice

 Certificate of Origin

 Marine Insurance Policy in duplicate.

3. Dispatch of documents:-

The exporter’s bank scrutinizes all documents and sends bank certificate with attested

copies of commercial invoice to exporter. The bank negotiates these documents to

importers bank as specified in L/C.

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4. Acceptance of Bill Of Exchange:-:

BOE accompanied by above documents is known as documentary BOE. It is of two

types:

 Documents against Payment or sight draft:

The drawer instructs the bank to hand over the relevant documents to importers only

against payment.

 Documents against Acceptance or usance draft:

The drawer instructs the bank to hand over the relevant documents to the importer

against his acceptance of Bills of Exchange.

5. Letter of indemnity:

The exporter can get immediate payment from his bank on submission of documents

by signing letter of indemnity.By signing the letter of indemnity the exporter undertakes

to indemnify the bank in event of non-receipt of payment from importer along with

accrued interest.

6 .Realisation of export proceeds:

On receiving the documentary Bill of Exchange, the importer releases payment in case

of sight draft or accepts usance draft undertaking to pay on maturity of Bill of

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Exchange. The exporter’s bank receives the payment through importer’s bank and is

credited to exporter’s account..

7. Processing of GR form:

On receiving the export proceeds the exporter’s bank intimates the same to RBI by

recording the fact on duplicate copy of GR.The RBI verifies the details in duplicate

copy of GR with the original copy of GR received from the Customs. If details are found

in order then export transactions is treated to be completed.

CONCLUSIONS

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 CONCLUSION

From the project of Export documentation and Export procedure at

“RUBYINTERNATIONAL”.I have concluded that documents of very much

importance in exporting cutlery products in foreign countries. Due to the change in

government policies many company enter export-import is very cumbersome and that’s

why company push back their hands.

I want to suggest that company has to employee some specialized professionals in

documentation, for the swift passage of goods and hope that government should look

upon the policies to make documentation part more easy.

I hope this study gives better understanding and result orientation, researcher and

consultants.

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RECOMMENDATIONS

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 RECOMMENDATION

After the study of procedures and documents of export.I would like to make few

recommendations. Some of them are:

1 .They should work on technology upgradation, quality and design improvement,

product development, innovation, etc.

2 .They should organize visits of delegation of their members abroad to explore overseas

market opportunities.

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3 .They should participate in trade faires, exhibition and buyer-seller meets in India and

abroad to promote themselves.

4. Customers are generally price conscious.They generally consider price as well as the

quality of the cutlery products.

5 .The companies should keep in mind the potential threat for new entrance and keep

ready some plans for it, especially in region where there is no market for the cutlery’s.

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 REFRENCES

BOOKS:-

Here I have used some books to get information for export procedure and

documentation. These are as follows:

Book 1: Francis Cherunilam, “International Trade And Export Management” :

Thirteenth Edition, 2004 (Himalaya publishing house, Mumbai).

Book 2: S. Khushpat Jain and Dr. W.K. Acharya, “Export import procedures and

documentation”: Fourth Edition, 2007 (Himalaya publishing house, Mumbai).

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ABook 3: P.K. Khurana, “Export Management” : Second Edition, 2001 (Galgotia

publishing company, Delhi).

WEB SITES:-

 www.importexport.com

 www.exportprocedures.htm

 www.rubyintonline.com

ANNEXURES
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