E&I MNGT Presentation Pradnya 06

Export And Import Management
Presentation on:
Import Procedures:
Submitted by : Kakade Pradnya - 06
Presented by:
Deshmukh Abhilash - 05
Kakade Pradnya - 06
Kalokhe Krinal - 07
Lapshetwar Yash - 08
Pokiya Vatsal - 13
Shah Farmaan - 21
Submitted To:
Prof. Rajabhau Dhande, Sir.
Contents:
Import
Import Procedures
Types of Import
Import of Restricted Item and Unrestricted
Item
Import Clearance and Documents
Cargo Handling and Demurrage Charges
Application Fee for Import Licences
1- IMPORT
 The term “Import” is derived from the conceptual meaning as to bring in the
goods and services in to the port of the country.
 The buyer of such goods and services is referred to as an “Importer” who is

based in the country of import whereas the overseas based seller is referred to
as an “ Exporter”. Thus an import is any good (e.g. a commodity) or service
brought in from another country for sale.
 Import goods or services provided

to domestic consumers by foreign
producers. Import consists of
transactions in goods and services
(sales, barter, gifts or grants) from
non-residents to residents.
2- IMPORT PROCEDURE
 The general procedure for import trade in India involves the following stages:
 Import trade refers to the purchase of goods from a foreign country. The procedure
for import trade differs from country to country depending upon the import policy,
statutory requirements and customs policies of different countries. In almost all
countries of the world import trade is controlled by the government.
1) Making Trade Enquiry And Receiving Pro Forma Invoice/Quotation Offer:
The first stage in the import trade is to make trade enquiry from the intending
exporters or their agents. An enquiry is a request by the intending importer to
supply the following information:
- Specification of goods such as quality, size, design, etc.
- Unit price,
- Quantity of goods available,
- Terms of shipments (FOB, C&F, CIF),
- Terms of payment (D/P, D/A, Letter of Credit),
- Delivery schedule,
- Last date of validity of the offer.
In response to his enquiry, the importer may receive different Performa
invoices/quotation offers, for different suppliers. After making a thorough
comparison of different offers, the importer should decide about the supplier
with whom the import order/indent should be placed.
2) Obtaining Import License:

To obtain an import license, the intending importer makes an application in the
prescribed form and submits it to the licensing authority along with the
following documents:
- Treasury receipt for import license fee;
- Certificate for the value of goods imported by the applicant in the previous
year
- Income tax verification certificate from income tax authorities:
The licensing authority then issues the import license in duplicate after
examining the documents and satisfying itself about the claim of the applicant.
3) Obtaining Foreign Exchange :
After obtaining the import license, the intending importer makes an application
in the prescribed form under the Foreign Exchange Management Act (FEMA)
and submits it to the Exchange Control Department of RBI after getting it
forwarded by his exchange bank. The RBI sanctions the release of the amount
of foreign exchange to the importers after scrutinizing the application. It may be
noted that exchange is released and made available only for a specific
transaction for which import order has been placed.
4) Placing the Indent or Order:

The next step in the import of goods is that of placing the order. This order is
known as Indent. An indent is an order placed by an importer with an exporter
for the supply of certain goods. It contains the instructions from the importer as
to the quantity and quality of goods required, method of forwarding them,
nature of packing, mode of settling payment and the price etc. The indent should
be several types like open indent, closed indent, confirmatory indent.
5) Arranging Letter of Credit:
A letter of credit is a document issued by importer’s bank on behalf of importer
to authorize the negotiating bank to make payment of the amount stated therein
to a party named therein in his order on presentation of documents mentioned in
the letter of credit.
Generally, foreign traders are not acquainted to each other and so the exporter
before shipping the goods wants to be sure about the creditworthiness of the
importer. The exporter wants to be sure that there is no risk of non-payment.
Usually, for this purpose he ask the importers to send a letter of credit to him.
6) Getting Shipping Documents:

- In case of D/A (Documents against Acceptance), importer gets the shipping
documents on the acceptance of the bill.
- In case of D/P (Documents against Payment), importer gets the shipping
documents on the payment of bill.
- In case of Letter of Credit arrangement, importer gets the shipping documents
from his bank.
7) Appointing Clearing Agent:
By now we understand that the importer may has to fulfill many legal formalities
before he can take delivery of goods. The importer may take the delivery of goods
himself at the port. But it involves much time, expenses and difficulty. Thus to save
himself from the botheration of complying with all the complicated formalities, the
importer may appoint clearing agents for taking the delivery of goods on behalf of
others. They charge some remuneration on performing these valuable services.
8) Functions Performed by the Clearing Agent:

- Getting bill of lading enclosed for delivery,
- Filling up bill of entry,
- Payment of dock charges,
- Getting customs clearance,
- Taking delivery from the dock,
- Dispatching goods to importer by rail/road, and
- Sending advice to the importer.
9) Taking Delivery of Goods from Railway/Carrier:
After receiving the advice from the clearing agent, the importer takes the
delivery of goods from railway/carrier surrending railway receipt/lorry receipt
and carries them to his godowns.
10) Making Payment:

The mode of payment for the import depends upon the agreement between
the importer and the exporter. Usually, 30 to 90 days are allowed to the
importer for making the payment of such bills.
- In case of Documents against Acceptance (D/A Bills), the importer gets the
shipping documents on giving the acceptance of Bill of Exchange and makes
the payment on the maturity date.
- In case of Documents against Payment (D/P Bills), the importer gets the
shipping documents on making payment of Bill of Exchange.
- In case of Letter of Credit, the importer gets the shipping documents after
payment.
3- TYPES OF IMPORTS
There are two basic types of import:
1) Intermediate Goods and Services

2) Industrial and Consumer Goods
4- IMPORT OF UNRESTRICTED ITEM AND
RESTRICTED ITEM:
1 - Import of Unrestricted Item:

After obtaining customs clearance, payment of applicable
import duty.
2 - Import of Restricted Item:
For imports under negative list, the importer has to give
justification of the need of import.
5- IMPORT CLEARANCE AND DOCUMENTS
1) Bill of Entry :
A Bill of Entry also known as Shipment Bill is a statement of the nature and
value of goods to be imported or exported, prepared by the shipper and
presented to a customhouse. The importer clearing the goods for domestic
consumption has to file bill of entry in four copies; original and duplicate
are meant for customs, third copy for the importer and the fourth copy is
meant for the bank for making remittances.
If the goods are cleared through the EDI system, no formal Bill of Entry is
filed as it is generated in the computer system, but the importer is required
to file a cargo declaration having prescribed particulars required for
processing of the entry for customs clearance.
In the non-EDI system along with the bill of entry filed by the importer or his representative
the following documents are also generally required:-
Signed invoice
Packing list
Bill of Lading or Delivery Order/Airway Bill
GATT declaration form duly filled in
Importers/ CHA’s declaration
License wherever necessary
Letter of Credit/Bank Draft/wherever necessary
Insurance document
Import license
Industrial License, if required
Test report in case of chemicals
Adhoc exemption order
DEEC Book/DEPB in original
Catalogue, Technical write up, Literature in case of machineries, spares or chemicals as may
be applicable
Separately split up value of spares, components machineries
Certificate of Origin, if preferential rate of duty is claimed
No Commission declaration
2) Amendment of Bill of Entry:
Whenever mistakes are noticed after submission of documents, amendments to the

bill of entry is carried out with the approval of Deputy/Assistant Commissioner.
3) Green Channel facility:
Some major importers have been given the green channel clearance facility. It means
clearance of goods is done without routine examination of the goods. They have to
make a declaration in the declaration form at the time of filing of bill of entry. The
appraisement is done as per normal procedure except that there would be no
physical examination of the goods.
4) Payment of Duty:
Import duty may be paid in the designated banks or through TR-6 challans. Different
Custom Houses have authorised different banks for payment of duty and is
necessary to check the name of the bank and the branch before depositing the duty.
5) Prior Entry for Shipping Bill or Bill of Entry:
For faster clearance of the goods, provision has been made in section 46 of the Act, to
allow filing of bill of entry prior to arrival of goods. This bill of entry is valid if
vessel/aircraft carrying the goods arrive within 30 days from the date of presentation of
bill of entry.
6) Specialized Schemes:
Import of goods under specialized scheme such as DEEC and EOU etc is required to
execute bonds with the custom authorities. In case failure of bond, importer is required to
pay the duty livable on those goods. The amount of bond would be equal to the amount of
duty livable on the imported goods. The bank guarantee is also required along with the
bond. However, the amount of bank guarantee depends upon the status of the importer
like Super Star Trading House/Trading House etc.
7) Bill of Entry for Bond/Warehousing:
A separate form of bill of entry is used for clearance of goods for warehousing.
Assessment of this bill of entry is done in the same manner as the normal bill of entry and
then the duty payable is determined.
8) Execution of Bonds:
Wherever necessary, for availing duty free assessment or concessional assessment under
different schemes and notification, execution of end use bonds with Bank Guarantee or
other surety is required to be furnished. These have to be executed in prescribed forms
before the assessing appraiser.
9) Mother Vessel/Feeder Vessel:

Often in case of goods coming by container ships they are transferred at an intermediate
ports (like ceylon) from mother vessel to smaller vessels called feeder vessel. At the time
of filling of advance nothing B/E, the importer does not know as to which vessel will
finally bring the goods to Indian port. In such cases, the name of mother vessel may be
filled in on the basis of the bill of lading. On arrival of the feeder vessel, the bill of entry
may be amended to mention names of both mother vessel and feeder vessel.
10) EDI Assessment:

In the EDI system of handling of the documents/declaration of taking imports clearances
as mentioned earlier the cargo declaration is transferred to the assessing officer in the
groups electronically. The assessing officer processes the cargo declaration on screen
with regard to all the parameters as given above for manual process. However in the EDI
system, all the calculations are done by the system itself.
6- CARGO HANDLING AND DEMURRAGE
CHARGES
A -CARGO HANDLING:
Cargo handling is the activity of moving goods on and off ships,
planes, trucks, etc.
- Cargo handling is done through four means of transport:
1- Waterways
2- Airways
3- Railways
4- Roadways
1- Waterways:
Waterways is the cheapest means of transportation. Large volume
of world trade is done through ships. Ships handle cargo from one
country to another country through sea.
 Waterways Procedure of Cargo:
1- Pickup:
We come to the designated warehouse and bring empty containers
to pick up your cargo.
2- Transportation and Relocation:

Containers loaded with the cargo are transported and relocated to
the container yard (Y) of the port of embarkation.
3- Customs Clearance:
An export/import declaration is made for each container using
NACCS (Nippon Automated Cargo and Port Consolidation System).
4- Customs Approval:
If there are no issue with the declaration, customs approval is
granted. If a customs inspection is deemed necessary the cargo will
undergo a sampling or complete inspection.
5- Loading and Departure:

Containers granted export approval are loaded onto the cargo ship at
the container yard and depart the port.
2- Airways:
Airways is the fastest but mostly costly means of transport.
Through this means of transportation only valuable goods
having less volume can be transported.
 Airways International Importing Procedure:
1- Arrival:
Cargo is unloaded from the aircraft.
2- Confirmation:
Unloaded cargo is confirmed for the quantly and condition.
3- Relocation:
The confirmed cargo is transported to bonded warehouse.
4- Customs Clearance:
An import declaration is made using the air nacces customs
information processing system.
5- Customs Approval:
If there are no issues with the declaration, customs approval is
granted if a custom inspection is deemed necessary the cargo
will undergo a sampling or complete inspection.
6- Delivery:
Cargo granted import approval is loaded and delivered to
customers.
B- Demurrage Charges:
Delays in shipping are commonplace and as a result, customers may incur a multitude of
extra charges which they have not catered for one such extra charge is the demurrage charge.
“ Demurrage is a charge levied by the shipping line to the importer in cases where they have
not taken delivery of the full container and move it out of the port/terminal area for unpacking
within the allowed free days”.
Demurrage may be caused due to a variety of reasons common among them

are:
 Consignee did not receive the documents in time for customs clearance.
 Documentation received by consignee is incorrect or insufficient.
 Container has been stopped by customer police or other authorities for inspection of the cargo
which may take longer than expected.
 Consignee was unaware of the arrival of the cargo and was unable to do the customs clearance
in time.
 Consignee does not have the finances in order to clear the container in time.
 Dispute between shipper and consignee.
 Cargo received was not as per the sales order.
THANK YOU

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E&I MNGT Presentation Pradnya 06

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Export And Import Management

 The buyer of such goods and services is referred to as an “Importer” who is

 Import goods or services provided

2) Obtaining Import License:

4) Placing the Indent or Order:

6) Getting Shipping Documents:

8) Functions Performed by the Clearing Agent:

10) Making Payment:

1) Intermediate Goods and Services

1 - Import of Unrestricted Item:

Whenever mistakes are noticed after submission of documents, amendments to the

3) Green Channel facility:

7) Bill of Entry for Bond/Warehousing:

9) Mother Vessel/Feeder Vessel:

10) EDI Assessment:

2- Transportation and Relocation:

5- Loading and Departure:

Demurrage may be caused due to a variety of reasons common among them

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