Export Documentation Framework

An exporter needs to keep himself thoroughly updated on all documentation

requirements to carry out an export transaction successfully and it is one of his
primary responsibilities to ensure that all documentary formalities are duly
complied with.

Proper documentation will ensure smooth sailing with the requirements of each of
these agencies and the resulting transaction will be a successful one. Inaccurate or
incomplete documentation will result in serious financial and goodwill losses.

Export documentation in India has evolved a great deal particularly since 1990.
Efforts are on, on a faster footing to streamline and modernize the system further.
Prior to 1990, the documentation was all manual and not at all coordinated. The
result was lot of delays and mistakes, rendering the task very clumsy, tiresome,
repetitive and truly frustrating. India adopted the ADS in 1991. ADS refers to
Aligned Documentation System, which is the internationally accepted
documentation system. ADS uses a Master Document that contains the information
common to all documents forming part of the aligned series.

• Documentation plays a vital role in the international business

• It facilitates the smooth flow of goods/services and payments across national
frontiers
• Every document accompanying the shipment must be correct and properly
filled
• Export documents are complex and more in number
• Requirement of documents differ from country to country
• Wrong documents will lead to loss of time in clearance of consignment,
storage charges, frustration to the importer who will be reluctant to import
again from the same exporter
• Advisable to take the help of shipping and forwarding agents to complete the
relevant documents in correct order

The export documentation framework in India can be best understood by

classifying export documents in the following categories:

1) Commercial Documents:

These documents have their origin in “Custom of Trade” in international commerce

and are used by exporters/importers to discharge their respective legal and other
incidental responsibilities under sales contract. Commercial documents can be
further sub-divided into:

a) Principal commercial documents

b) Auxiliary commercial documents
Principal commercial documents include:

 Commercial invoice (and the invoice prescribed by the importer)

 Packing list
 Certificate of inspection
 Certificate of insurance/insurance policy
 Bill of Lading/Airway bill/Combined transport document
 Certificate of origin
 Bill of exchange
 Shipment advice

Significance of commercial invoice:

• Basic document
• Contains all information which are required for the preparation of all other
documents
• Called “documents of control”
• Harmonised System Nomenclature (HSN), price charged
• Terms of the shipment
• Marks and number of packages containing the merchandise
• Date, name and address of both the buyer and the seller
• Name of the shipping vessel and port of disembarkation
• Exporter has to design his own form for invoice
• Some countries have their own form of invoice – the exporter has to use their
form of invoice.

Auxiliary commercial documents: These documents are required to

prepare/procure the principal commercial documents and include:

 Proforma invoice
 Shipping instructions
 Insurance declaration
 Intimation for inspection
 Shipping order
 Mate’s receipt
 Application for certificate of origin
 Letter to bank for negotiation/collection of documents

2) Regulatory Documents:
These are prescribed by various government departments/bodies for compliance of
formalities under relevant laws governing export transactions. These document are
required to comply with the rules and regulations governing export trade
transactions such as FEMA, customs formalities, export inspections etc. These
include:

 Exchange Control Declaration Form-GR Form

 Freight Payment Certificate
 Insurance Premium Payment Certificate
 ARE I/ARE II Forms
 Shipping Bill/Bill of Export
 Port Trust Copy of Shipping Bill/Export Application/Dock Challan
 Receipt of Payment of Port Charges
 Vehicle Ticket

3) Export Assistance Documents:

• for claiming assistance

• drawbacks
• packing credit facilities etc

4) Documents required by importing countries:

• to satisfy the requirements of the Government

• Certificate of origin
• Consular invoice
• Quality control certificate etc

Regulatory Requirements:
• Exporter has to follow strictly the requirements of both the exporting
and importing country e.g. under FEMA an exporter has to submit
FORM which declares that “we undertake to realize the foreign
exchange in lieu of the goods/services exported.
• Licence to export the controlled commodities.
• Preshipment inspection and quality control are compulsory in order
to build up the image of Indian goods abroad
• Certain documents certified by their missions in the exporting
country. This gives the need of consular invoice and in some cases,
the use of legalized invoice
• Countries specially the commonwealth countries and also those
developed countries, which have offered concessions to the developing
countries under the Generalized System of Preferences demand that
the exporters must submit a certificate of origin.
• Exporter therefore submits:
 1. GR/SDF/PP/SOFTEX form
2. Export licence, wherever required
3. Inspection certificate
4. Legalized invoice and
5. Certificate of origin

Operational Requirements:
• Shipping Bill -- No shipping company or airlines will accept any cargo unless
the customs authorities have granted their permission on the shipping bill.
• Along with shipping bill, commercial invoice and packing list are also to be
submitted
• When goods are shipped by ship or sea it is Bill of Lading
• By air, it is Air Way Bill
• Exporter must insure his goods against risks through Marine Insurance
Policy

Other Aspects:
• Compliance of the floor price regulations
• Export of some products could be canalized through designated bodies like
STC, MMTC, MSTC etc
• Compliance with measurement and weighment
• As soon as the goods are exported the exporter becomes eligible for duty
drawbacks etc.