PROCESSING OF

EXPORT ORDER
• An export exercise is concluded successfully only after the
exporter has been able to deliver the consignment in accordance
with the export contract and received payment for the goods.
• This involves practice of prescribed procedure to be performed .

• The fact is that one does not need only to be very well informed
about his/her export company, his/her products, his/her
suppliers, his/her export chain, his/her market, the world
market, but one also needs to know the export rules and
terms, the different cultures that one targets and the final
customers’ needs.
• Then comes fulfilling these needs by the most
competitive way and by adding value to one’s services.
This is so because all sell the same products with minor
changes , but what makes the difference is the method
and the value added services one provides to the
ultimate consumers.
• Simply speaking, that making an export company is an
easy process, but making it successful and long lasting
export company is a very difficult task
• Therefore, it seems pertinent to learn the various steps’
involved in the processing of an export order.
• 1. Having an Export Order:
• Processing of an export order starts with the receipt of an export
order. An export order, simply stated, means that there should
be an agreement in the form of a document, between the
exporter and importer before the exporter actually starts
producing or procuring goods for shipment. Generally an export
order may take the form of proforma invoice or purchase order
or letter of credit. You have already learnt these just in the
preceding section.
• 2. Examination and Confirmation of Order:
• Having received an export order, the exporter should
examine it with reference to the terms and conditions
of the contract. In fact, this is the most crucial stage as
all subsequent actions and reactions depend on the
terms and conditions of the export order.
• The examination of an export order, therefore,
includes items like product description, terms of
payment, terms of shipment, inspection and insurance
requirement, documents realising payment and the
last date of negotiation of documents with the bank.
Having satisfied with these, the export order is
confirmed by the exporter.
• 3. Manufacturing or Procuring Goods:
• The Reserve Bank of India (RBI), under the export
credit (interest subsidy) scheme, extends pre-shipment
credit to exporter to finance working capital needs for
purchase of raw materials, processing them and
converting them into finished goods for the purpose of
exports. The exporter approaches the bank on the basis
of laid down procedures for the pre-shipment credit.
Having received credit, the exporter starts to
manufacture / procure and pack the goods for shipment
overseas.
• 4. Clearance from Central Excise:
• As soon as goods have been manufactured/ procured, the process for
obtaining clearance from central excise duty starts. The Central Excise and
Sale Act of India and the related rules provide the refund of excise duty
paid. There are two alternative schemes whereby 100 per cent rebate on
duty is given to export products on the submission of the proof of
shipment.
• The first scheme is to make payment of the excise duty at the time of
removing the export consignment from the factory and file a claim for
rebate of duty after exportation of goods. The second scheme is to remove
goods from factory/warehouse without payment but under an appropriate
bond with the excise authorities. The exporter needs to apply on a form
known as AR4 or AR4A to the Central Excise Range Superintendent for
obtaining excise clearance.
• Form A is filed when goods are to be cleared after examination by the
excise inspector. In all other cases, form AR4A is filed.
• 5. Pre-Shipment Inspection:
• There are number of-goods whose export requires
quality certification as per the Government of India’s
notification. Consequently, the Indian custom
authorities will require the submission of an inspection
certificate issued by the competent and designated
authority before permitting the shipment of goods takes
place.
• Inspection of export goods may be conducted
under:
• (i) Consignment-wise Inspection
• (ii) In-process Quality Control, and
• (iii) Self-Certification.
• The Inspection Certificate is issued in triplicate. The
original copy is for the customs verification. The second
copy of the certificate is sent to the importer and the
third copy remains with the exporter for his reference
purpose.
• 6. Appointment of Clearing and Forwarding
Agents:
• On completion of the process of obtaining the
Inspection Certificate from the custom agencies, the
exporter appoints clearing and forwarding agents who
perform a number of functions on behalf of the
exporter.
• The main functions performed by these agents include
packing, marking and labeling of consignment,
arrangement for transport to the port arrangement for
shipment overseas, customs clearance of cargo,
procurement of transport and other documents.
•
contd……..
In
the order to
exporter
discharging facilitate
in
his
duties,
documents
submitted the following
are
to the
agent:
(i) Commercial invoice in
8-10
(ii) copies
Customs Declaration
Form
(iii) in triplicate
Packing list
(iv) Letter
(original) of Credit
(v) Inspection Certificate
(original)
(vi) G.R.
original Form
and (in
duplicate)
(vii) AR4/
original andAR4A (in
duplicate)
(viii)
(ix) GP-l/GP-2
Railway (original)
Receipt/Lorry
as the case may be Way Bill,
7. Goods to Port of Shipment:
After the
inspection excise clearance
formalities are and pre-shipment
completed, the
goods
and to be
labeled. exported
Proper are packed,
marking, marked
labeling and
packing
of goods. help
The quick
exportand safe transportation
department takes steps
to reserve space on the ship
goods are to be sent to the importer. through which
The shipping
through the space
clearing can
andbe reserved
forwarding either
agent
or freight
shipping broker
company who
or works
directly on behalf
from the of the
shipping
reserved, company.
the shippingOnce the
company space is
issues a
document known as Shipping Order.
order serves as a proof of space reservation. This
If
thegoods
port, are
no sent through
specific a
formalityroadis carrier
involved. to In
case, the
shipment, goods are
allotment sent
of by
wagonrail to the
needs port
to be of
obtained from the Railway Board.
contd…….
The following documents are submitted to the
booking railway yard/station:
(i) Forwarding Note (A Railway Document)
(ii) Shipping Order
(iii) Wagon Registration Fee Receipt
Once wagons have been allotted, goods are loaded, for which
railways will issue Railway Receipt (RR). Then, this receipt and
other documents are sent to the clearing and forwarding agent at
the port town. At the same time, the production/export
department takes insurance policy in duplicate for risk coverage
(internal as well as overseas) for the goods to be exported.
• 8. Port Formalities and Customs Clearance:
• Having received the documents from the export
department, the clearing and forwarding agent takes
delivery of the cargo from the railway station or the
road transport company and stores it in the
warehouse. He also obtains customs clearance and
permission from the port authorities to bring the cargo
into the shipment shed.
• The custom department grants permission for export
at the office of the customs and physical verification of
goods in the shipment shed. The clearance for export is
given on the Shipping Bill.
The
agentclearing
is and
required forwarding
to submit
the
withfollowing
the documents
Customs House for
obtaining customs
and permission: clearance
(i) Shipping Bill
(ii) Contract Form
(iii) Letter of Credit, if applicable
(iv) Commercial Invoice
(v) GR Form
(vi) Inspection Certificate
(vii) AR4/AR4A Form
(viii) Packing List, if needed
After
the receiving
export documents
department, the from
clearing
presents and
the forwarding
Port Trust agent
Document
to the
port. Shed
He Superintendent
obtains carting of
order the
bringing the cargo to the transit
shed for physical examination by
The Dock Appraiser
presented the is
following
documents
in physical
export goods: to facilitate
examination him
of
(ii) Commercial Invoice
(iii) Packing List
(iv)
Pass AR4/
(v) AR4A
GR FormForm and Gate
(duplicate) (vi)
Inspection Certificate (original)
The Dock Appraiser,
examination, makes afterExport’
‘Let making
endorsement
of the Shipping on the duplicate
Bill and hands copy
over
it to
these the Forwarding
documents are Agent. All
presented to
the Preventive‘Let
endorsement Officer
Ship’who
on puts an
the
duplicate
The copy
preventive of the
officer Shipping
supervises Bill.
the loading
vessel. of cargo on board the
After
board the goods
the vessel,are loaded
theknown on
captainasof the
ship issues
‘Mate’s a receipt
Receipt’ to the Shed
Superintendent
concern. The of the portagent
forwarding,
after paying
delivery port
of Shippingcharges,
the ‘Mate Company takes
Receipt’. He the
submits
requests to and
Lading. it to issue the Bill of
•
•of
After obtaining
Lading
Shipping from the
the
Company, Bill
the
clearing
agent
documents andtoforwarding
dispatcheshis all
/ the
her
exporter.
•include:
These documents
•(attested
(i) Commercial
by the Invoice
customs)
•Copy
(ii) Export Promotion
••(iii)
(iv) Drawback
Clean on Copy
Board Bill
of
••(v) Lading
Letter of Credit
(vi)
Gate AR4/
Pass AR4A and
•duplicate)
(vii) GR Form (in
• 10. Certificate of Origin:
On receipt of above documents from the forwarding
agent, the exporter now applies to the Chamber of
Commerce for a Certificate of Origin and obtains it. If the
goods are exported to countries offering GSP
concessions, the exporter needs to procure the GSP
Certificate of Origin from the concerned authority like
Export Inspection Agency.
•12. Submission of Documents to
•At the end
presents of following
the the process, the exporter
documents to
his bank for realisation of his amount
•(i) Commercial Invoice’(ii)
due to the
Certificate
importer:
of Origin
•Credit
(iii) Packing List(iv) Letter of
•GR
(v) Marine
Form Insurance Policy (vi)
•Exchange
(vii) Bill of Lading (viii) Bill of
•Commercial
(ix) Bank Certification
Invoice (x)
•Incentives:
13. Claiming Export
•processing
On
the completion
three of an
levels of
of the
export order
shipment at
i.e.,
pre-shipment,
post-shipment,
claims for exportshipment
the and
exporter
•
admissible
 
to himincentives
/ her.