2012

ImportOperationsGeneralManual Overview
SHORTREPORT
ByMuhammadAtif

MuhammadAtif VenusCarpetsPvtLtd. 9/5/2012

EXECUTIVE SUMMARY This study comprises a general overview on the operations of Import department at Venus carpets Pvt Ltd. It include the behind work follow which is involved in the, Arrival Of Shipments, Intimation To Clearing Agents, Import duties, Payment Terms, Documentation, Supply chain and logistics and Costing. This study is useful to get an idea of the behind work follow that is involved in Importing Goods.

ImportOperationsGeneral Manual Overview 2012

INDEX

EXECUTIVE SUMMARY

1. Arrival Of Shipment

2. Intimation To Clearing Agent

3. Trade Payment Modes

4. Documentation

5. Transshipment To In-Land Location

6. Costing

7. CONCLUSION/ RECOMMENDATION

ImportOperationsGeneral Manual Overview 2012

ARRIVAL OF SHIPMENT
Operation starts with the notice of arrival of new shipment which could be by E-mail, or post (courier), once it is received a new file is opened with a new document number is allotted to it, ECS1 is updated accordingly to its progress till it reaches to its final duty and transshipped to any in-land location. It has an arrival date of the cargo to be Trans loaded at port which is an ETA. In importing goods from abroad the key thing is to get the owner ship on the goods being imported, once the ownership is acquired it is easy to move them to any location or trade them or use them in manufacturing. Ownership can be acquired by means of the Original documents. Now the concerning thing is how to get the documents or who will give the documents it depends upon the seller preference over the mode of payment this is explained in short in trade payment mode.

INTIMATION TO CLEARING AGENT2

As the Original/ Coped documents (Bill of Lading, Packing List, Com. Invoice, Certificate of Origin) that are received are then send to the clearing agent for entering the consignment at customs. Clearing agent after entering the documents at customs sends the required import duties such as, COC, ETO, QICTL, KICTL, PICTL, THC and SD. 3 Sometimes seller send documents to bank on the preference of the seller in case of CAD to the remitting bank who then sends instructions to the collector or presenting bank of buyer for the purchase and financing of merchandise. Marine Insurance is bought for the safety of goods being imported, not all the time it is required only when letter of credit is opened marine insurance is required Once the documents are received then send to the clearing agent for entering them to customs and same process is followed as above.

TRADE PAYMENT MODE

The exporter that prepares the goods and gets them ready for dispatch, as agreed with the importer, has to think of the payment terms and a financing program, as he will experience serious difficulties if he/she is not paid. Therefore, it is necessary for the exporter to have sufficient information about the different methods of payment available to him/her. The main payment methods in foreign trade are cash in advance, open account, on consignment, draft or documentary collection and letter of credit. In this part, the main characteristics of each payment method are explained and the advantages and risks for each one are given, Thus enabling one to choose the best method for the transaction.
1

Expected&ARRIVECONTRSUMMARY

COLLECTOROFCUSTOMS(COC)
EXCISEANDTAXATIONOFFICERSEADUES(ETO) QASIMINTERNATIONALCONTAINERTERMINALLIMITED(QICTL) PAKISTANINTERNATIONALCONTAINERTERMINALLIMITED(PICTL) KARACHIINTERNATIONALCONTAINERTERMINALLIMITED(KICTL)

CASHAGAINTDOCUMENTS

ImportOperationsGeneral Manual Overview 2012

REMITTANCE (Outward): means that the goods are manufactured and delivered before payment is necessary (for example, payment could be due 14, 30, or 60 following shipment or delivery). The method provides great flexibility and in many countries sales are likely to be made on an open-account basis if the manufacturer has been dealing with the buyer over a long period of time and has established a secure working relationship. The open account method is a preferred method of payment for the importer, since it places the risk on the exporter or seller. This method cannot be used safely unless the buyer is credit worthy and the country of destination is politically and economically stable. However, in certain instances it might be possible to discount open accounts receivable with a factoring company or other financial institution (Latin Trade, 19995).
4

SIGHT DRAFTS: If the exporter and importer have agreed that payment should be made immediately upon receipt of the draft and/or shipping documents by the buyer's bank, the draft is said to be drawn at sight (Latin Trade, 1999). A sight draft is an order signed by the seller instructing the buyer to pay a specified amount to the seller upon presentation of the draft. TIME DRAFTS: If the seller has provided credit terms to the buyer, thereby allowing the merchandise to be released before payment is received; it is called a time draft. The exporter will need a written promise from the buyer that payment will be made at a specified future date. When a bank receives time drafts, the bank is requested to deliver the documents only when the buyer has accepted. The buyer's acceptance of the draft is his/her agreement to pay at an agreed upon future date (Latin Trade, 1999). LETTER OF CREDIT: A letter of credit is a document issued by a bank at the buyers request in favor of the seller; it guarantees that the buyer will pay the agreed amount of money to the seller within a specified period of time, provided that the seller conforms to the product specifications and document requirements of the buyer.
6

Documentation
After receiving the original documents and the bills from the clearing agent compliance need to be followed for arranging the documents in its respective file, a standard pattern is as under Swift copy and letter Landing costing Goods declaration (GD) Custom duty challan pay order copy and customer portion Delivery order charges invoice/ receipt pay order copy and customer portion Bank retirement memo and voucher Wharfage pay order copy and customer portion
4 5

Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination

Module23:TradePaymentMethods .

ImportOperationsGeneral Manual Overview 2012

Container rent pay order copy and customer portion Clearing agent expense statement and bill Container summary/ packing list Bill of lading Supplier packing list Commercial invoice After arranging the documents by following the compliance, other step is to sort out the income tax challans, sale tax challans then file them to their respective file. Income tax challans are filed in ascending date vise orders while the sale tax challans are arranged in a custom manner by placing all the clearing agency bills, wharfage bills and bill of entries collectively in sale tax file.

Transshipment To In-Land Location

After the final duty is paid at customs, the container is released from the custody of customs and is ready to be transshipped to an in-land location, currently we have four locations where container are to be send namely: Venus Carpets at Hattar. Oriental Synthetic at Bhimber. Site at Karachi. Farmhouse at Karachi. If the container is to be send to any of the above Karachi location local transporter is hired by the clearing agent who is paid later along with its clearing and forwarding charges. If the container is to be transshipped to Hattar or Bhimber then we contact to a logistic company to outsource the service, charges are negotiated after finalizing deal is confirmed container is handed over to the logistic company against a bilty which is then e-maid to the point of destination of the container along with the following documents (bill of lading, Com Invoice, Packing List, Certificate of Origin, Track Record), Track Record is e-mailed only with a sealed container if the container is devanned Track Record is not required. Follow up is maintained throughout the journey of the container from port to the destination point and vies versa. Track record receiving is received by e-mail from the destination point that insures the arrival of the container. The receiving is then printed on a paper and filed to its respective file for record maintaining, after the container reaches the depot container at the respective port for empty container delivery.

Costing
A managerial accounting method that describes when all fixed and variable costs, including importing costs, are used to compute the total cost per unit.

ImportOperationsGeneral Manual Overview 2012

CONCLUSION:
This how work is being done at import department which is not a detailed explanation but a general overview from which an idea can be taken about import workflow, thats how it begins with an opening of a new file to transshipment of container.

RECOMMENDATION:
Monthly Workshop regarding to new import procedures and Customs rules. Need compliance for all workflow. Need SOPs for all workflow.