An Export Procedure At DUKE PLASTO TECHNIQUE PVT LTD Summer Project Report Submitted In the partial fulfillment of the

Degree of Master of International Business (MIB) Semester-II By Name: Bhavesh Patel Roll No.01

Under the Guidance of: - Prof. Nupur Sharma Center for Management Studies Submitted To: Center for Management Studies, Ganpat University, Ahmedabad

(May-June 2011)

PREFACE
Now a days we can say that foreign trades becomes easy as local trades. Because, after the liberalization of 1972 government liberalize on some restriction, and because of that liberalization on restriction our Indian foreign trade becomes easy. For foreign trade, there will be arising some questions related foreign trade like, How to trade in foreign market? Which documents is required for that? What is the process of the trade? And which government benefits are available after trade! For foreign trade every related educational institute provided theoretical knowledge, but how to convert that theoretical knowledge in to practical or real life. Summer internship is the only way to get practical knowledge during study. As per our MIB (Master of International Business) syllabus I have completed summer internship at, M/s. DUKE PLASTO TECHNIQUES PVT LTD on the above points. It helps me to know about foreign trade theory, process and documentation, and also about applying in real trade.

Patel Bhavesh D.

ACKNOWLEDGEMENT

In the period of my summer internship I have been supported and enriched by the Guidance, Innovations, Suggestions, Practice and Moral supports from many in many different ways. In simple words we can say that Parents is the source or way to get money for students. So, First of all I would like to special thanks to my parents who helps me by providing financial and non financial supports. And secondly I would like to express my gratitude to Ganpat University and center for management studies for making summer internship as a part of MIB syllabus and give me opportunity of summer internship for practical knowledge. And also thankful to Prof. Nupur Sharma for provide a guide line during my internship.

On industry side first of all I would like to thank Mr. Sanjay Panchal (HR Manager) who accepted my summer internship request letter and give me permission for internship. And I am also thankful to Mr. Naresh Parmar (Export-Import Manager) for providing me guidelines for practical work during my internship at Duke Plasto Techniques Pvt. Ltd.

PATEL BHAVESH D.

CONTENT
Sr. no.      1. 2. 2.1. 2.2. 2.3 3. 3.1. 3.2. Particular Certificate By the Guide Certificate by Mentor Candidates Statement Preface Acknowledgement Abbreviations General information Company profile Organization structure Achievements Introduction of Export Introduction of Export (Import) Types of exporter Page no. I II III IV V

3.3
3.4 4. 5. 6. 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 7. 8.

Why export rather than sales in domestic market?

Example of benefits Export procedure International commercial terms Export documentations Pro-Forma Invoice L/C: (Letter Of Credit) Invoice Commercial Invoice Packing List ARE Certificate Of Origin Mates Receipt Shipping Bill Bill Of Lading GR Form Bill Of Exchange / Draft Conclusion Bibliography

1. ABBREVIATIONS

DPTPL: Duke Plasto Techniques Private limited SEZ: Special Economic zone IMF: International Monitory Fund IEC: Import Export Code DEPB: Direct Export Promotion Board GDP: Gross Domestic Product SHE: Secondary and Higher Secondary Education C&F agent: Carrying and Forwarding agent CHA: custom house agent EPC: Export Promotion Zone INR: Indian Rupees MPEDA: Marin Product Export Development Authority APEDA: Agriculture Product Export Development Authority RCMC: Registration Cum Membership Certificate L/C: Latter of Credit FOB: Free on Board ARE: Application for Removal of Excise S/B: Shipping Bill B/L: Bill of Leading CIF: Cost Insurance & Freight

2. GENERAL INFORMATION

2.1. COMPANY PROFILE

 M/s Duke Plasto Techniques Pvt. Ltd. N.H. 14, Deesa Highway, Palanpur - 385511 (N.G.) India  Contact no: +91-2742-280156,280157  Establishment: Since 1998  Company Role: Manufacturer Exporter  Product : All types of PVC Pipes with Fittings and All type of Submersible Pumps with Accessories  Raw material Import from : Malaysia, Mexico, Taiwan, China  Export to: Kenya, Libya, Saudi Arebia, Bangladesh, Nepal, DJigoti  Valuable Domestic Customer: y y y y y y y Gujarat Water Supply And Sewerage Board Uttarpradesh Jal Nigam PHED UNICEF AND WHO Karnataka Water Supply And Sewerage Board Oil And Natural Gas Corporation Reliance Industries Ltd y y y y y y y Metro, Delhi Hindustan Zink Western Railway GEDA (Under Scheme of UGVCL) WASMO Agricultural Engineering Department, Tamilnadu Sanghi Cement

2.2. ACHIEVEMENTS OF ORGANIZATION

Certification for IS: 4985 Certification for IS: 4985 National quality award for quality products ISO 9001:2008 Certification for TUV: SUD NSIC CRISIL Rating of CRISIL 2B ISI Certification for IS: 8034 & IS: 9283 SSI Certificate from District Industries Centre, Palanpur BEE star Rating NSIC Certification RCMC from Federation of Indian Exporter Organization, Ahmedabad

3. INTRODUCTION OF EXPORT

3.1. INTRODUCTION OF EXPORT - IMPORT Export is not only marketing of goods or service across national frontiers or boundaries but also sales of goods or service within national boundary like sales of goods, commodities or services to SEZ (special economic zone) ex. Kandala special economic zone, or that type of sales where world bank pay their payment its called also a export. Import is a purchase of material or goods from foreign market its called an import. 3.1.1. Types of import High-seas: in simple words we can say third party purchase, here any importer indirectly purchase from the direct importer. Imports are mostly done by high-seas in Duke. Ex. If XYZ person/organization import a resin from foreign market to the India and duke palsto buy that resin from XYZ person then its called a high-seas. Direct import: here any person or organizations buy a material or goods from the foreign market its called a direct import. Ex. If duke import material directly from foreign country. 3.1.2. Types of export Real exporter: Here in real export where goods moves across the national boundaries. It means material moves one country to another country at the time of export. Deemed export: Deemed export means that type of export where goods, commodity or service does not leave the country, And payment receive in us dollar not in Indian rupees. Ex.1. Suppose if we sell Duke Plasto Techniques Pvt. ltds PVC pipe at kandala special economic zone then its called a export, because SEZ wont be sell that PVC pipe in the domestic market but it will sell it in the overseas market. Ex.2. suppose DPTPL sell submersible pumps at that place where its payments received from IMF or World Bank but not paid by Indian government.

3.2. TYPES OF EXPORTER

1. Manufacturer exporter: 2. Merchant exporter: 3. Service exporter: Export businesses are mainly classified into three categories of exporter manufacturer exporter, merchant exporter and service-exporters. M/s Duke Plasto Techniques Pvt. Ltd. is a manufacturer exporter because they buy several raw materials from oversees market and sells their product in domestic market as well as foreign market.

3.2.1. Manufacturer exporter: Export-manufacturers include the manufacturers, producers, assemblers and processors of export goods. Export manufacturers either directly export the goods or indirectly export the goods through the export-traders. Here M/s Duke Plasto techniques Pvt. Ltd works as a manufacturer exporter. Because they import resin from Malaysia, Mexico and Taiwan, and sales finished product at Kenya, Libya, Saudi Africa, Bangladesh, Nepal, and DJigoti

3.2.2. Merchant exporter: A person who buy from the domestic market and sell it in foreign market that person or any organization called a merchant exporter Merchant exporters directly buy goods, material or commodity from domestic market and sell it in the foreign market. Ex. If Mr. X purchase a product domestically and sell it in party P in Bangladesh then that person called a merchant exporter.

3.2.3. Service-Exporters Service-exporters include the banks, ocean shipping (steamship) companies, air cargo companies or airlines, trucking companies, rail carriers, insurance companies, freight forwarders or consolidators, consulting firms, and miscellaneous service companies. Service-exporters provide services to export-traders and export-manufacturers.

3.3 Why Export Rather Than Sales In Domestic Market? There are several benefits against the domestic sales like. 1) Exemption of excise duty or rebate of excise duty 10% on submission on ARE form to the superintendent of excise department. 2) Exemption or rebate on cess 2% (It based on excise amount) 3) Exemption on SHE1% (1% based on excise amount) 4) No any type of value added taxes in export. 5) Increase the value of organization or company. 6) Increase GDP (Gross domestic product) by fulfills a foreign demand. 7) Return or no payment in custom duty. (If raw material imported under the DEPB claim or advance contract). Here if exporter import material under the DEPB claim then exporter can get return 5% of custom duty, which was paid at the time import. 8) And other benefits from any export promotion or award from the government department.

3.4 SEVERAL BENEFITS AGAINST EXPORT AND DOMESTIC TRADE OF PVC PIPE WITH EXAMPLE If exporters export goods by any claim (like DEPB Direct Export Promotion Board) or claim after the export for refund paid excise value.

Ex. of export under the DEPB claim and local trade* Local trade Cost Excise duty 16% Cess 2% on excise SHE 1% on excise Total VAT (4%) PT (1%) on VAT Total cost 1000 Cost 160 Excise duty (If DEPB) 32 Cess 16 SHE 1208 Total 48.32 VAT 0.48 PT 1256.8 Total cost Export 1000 00 00 00 1000 00 00 1000

*In the case of Nepal and Bhutans export duty and taxes charged same as local sales

4. EXPORT PROCEDURE

EXPORT PROCEDURE CHART Compliance with the legal framework

Conducting an export deal

Arranging X finance

Producing /Manufacturing of goods

Appointing CHA agent

Arranging cargo insurance

Book shipping space

Sending docks to the CHA agent

Dispatch goods to the CHA agent

Receipt of docks and cargo by CHAgents

Custom clearance, Completion of port formalities & Cargo loading by CHAgents

Sending docks to the exporter by CHAgent

Sending shipping advice to the importer

Claiming exporter invoice

Presentation of docks to the negotiation bank

Receiving export invoice

Export receive payment

4.1. COMPLIANCE WITH LEGAL FRAMEWORK

Obtaining IEC number (Import-Export code) from Director General foreign trade by submitting required documents and paying INR 2500 cash. There is no any validity period on Import- Export code number. It is addable so we can increase our number of product or service. Ex. 1919115708 (It always ten digits)

Registration with EPC (Export Promotion council) or commodity board. Like MPEDA (Marine products Export development authority), APEDA (Agriculture product Export development authority, tea commodity board, coffee commodity board, spices commodity board, or SEZ (Special economic zone). And receive RCMC (Registration Cum Membership for five year.

Registration with sales tax and income tax authority for tax exemption and tax payment form state sales tax, central sales tax and central excise duty of export goods.

4.2. CONDUCTING AN EXPORT-IMPORT DEAL  Identify importer from overseas market  Negotiate with importer  Confirm the deal  Receive an export order or contract  Examine thoroughly and ask for amendment (if any)  Scrutinize thoroughly, compare with the terms of contract, Ask for amendments, if needed Receive amendment

In export deal first of all, Importer find out Exporter by any advertisement, website of exporter, or any other way. Here first of all importer drafts mail or verbally demand a quotation of goods and services. In other side exporter receive mail of quotation demand letter or oral message for quotation of goods and services. Against that letter or verbal message exporter sent pro-forma invoice to the importer. Here importer receives pro-forma invoice and get costs, terms and condition of the goods. By that information importer easily find out cost, quality and terms of goods. If its cost and quality will be more than domestic products or other exporters then they reject it and demand from others, and if its cost will be less than others cost then they negotiate with exporter. After the negotiate importer-exporter conform their deal, exporter receive an export order or contract from importer (contract may be in terms of time or quantity demand of product). Here exporter scrutinize that export order is as per pro-forma invoices terms and condition or not. If there is any different in export order and pro-forma invoice then ask to the importer for that amendment (those amendments).

4.3. EXPORT-IMPORT DEAL PROCESS CHART

Importer

Exporter

Search Through: Advertisement, Internet, Foreign trade websites, Internal contacts, etc.

Offer their products Exporter Accept or Reject Importer

Draft a letter/e-mail or directly demand a quotation Pro-forma invoice Importer

Accept that pro-forma invoice

Reject it and find another exporter

Send export order

Exporter receive an export order or contract

Scrutinize order, compare with the pro-forma invoice, if any amendments ask for that, Receive amendment, and finalize order.

4.4. ARRANGEMENT OF FINANCE

 Arrangement of capital from row material to receipt of payment. Ex. Duke Plasto has received huge amounts order of PVC pipe form Kenya then company has to block its huge capital from purchase of material for the export to receipt of payment of consignment.

Pre shipment generally provided from:

y y y

Packing credit/ shipping loan in Rupees from the Commercial Bank Packing credit advance in foreign currencies Advance against export incentives

Export finance arrangement process y The exporter submits an evidence of export to the bank like L/C (letter of credit) issued by importers bank or conform order placed by the importer. y Bank calculate amount of packing credit to be granted, generally doesnt exceed the FOB value of goods. y Banks fixes 10-12% as a margin (Exporters contribution) and releases the fund beating to the packing credit to the exporters account.

4.5. MANUFACTURING OF GOODS

1. Send delivery note to the factory and purchase department. So purchase department purchase a required material, and equipments for the production. And production department arrange machinery for the production if it needed and demand for worker overtime to the production (Mostly happen in customized product)

Ex. If any importer or local customer of Dukes demand a different size, different safes product of PVC pipe or pump are not making Duke, Then DUKEs production department required to set or changes the settings of machinery. And if buyer/importer demand within a short period then production department have to arrange a worker to produce as possible as fast.

2. Production department start its production as per the requirements and make its finished goods (as per importers requirements)

3. Pre shipment inspection: Before the clearing of shipment custom authority required submission of inspection certificate in compliance with the government rules. Under the export quality control and inspection act- 1963 about 1000 commodities under the group of fisheries, food and agriculture, organic and inorganic chemicals, jute products, light engineering etc.

It can be in process quality certification, self certification and consignment wise Certification. Here consignment wise certification divided in two category 1) Preshipment inspection does at the place of factory or warehouse by obtaining no objection stuffing certificate under the sign of authorized person of shipping department and 2) inspection does at the place, where container load

4. Central excise clearance on goods for export : Export of goods under the claim for excise duty rebate;

y y y

Exporter first makes payment of excise duty and subsequently gets the refund. Refund of duty paid on raw material (Except Nepal and Bhutan) Exporter has option to get goods examined at its premises by excise; such goods are not examined at port by custom.

Exporter prepares six copies of ARE 1/ARE 2 forms and submit it to the superintendent who deputes an inspector to carry out inspection and selling.

Export of goods under the bond Remove export excisable goods/input for export production without payment of export duty.

1. Examination of goods at place of dispatch 2. Remove of goods under self certification. 3. Examination at the place of export. 4. Removal of excisable input for export promotion.

4.6 APPOINTMENT OF CUSTOM HOUSE AGENT Exporter and importer required to appoint a CHA agent to completion of some tasks 1. Advising export or importer on choice of shipping route: CHA agent gives some advice to the exporter or importer for choice of shipping line. Like which shipping lines is provide better service at lower rate and whose service is better, etc. 2. Reservation of shipping space: Here CHA agents also reserve space for import or export of goods in the ship. 3. Studying provision of L/C or contract and take necessary action. 4. Port, shipping and custom formalities for import or export. CHA agent works as collection, submission, of commercial papers. And forward goods to the final destination and receive goods from port by fulfilling formalities of customs, port, and shipping company etc. by charging some amount or personage of consignment. 5. Carried and forward agents arrangement of an overseas transport service. Ex. By air, by sea, by road, or by pipe here if we want to forward our goods by sea then CHA agents works as like reservation of shipping space of that shipping companys which companys service is good, low risk, low costly etc. 6. Monitor movement of goods to importer. CHA agent also conforms and collects information that within how many days goods will arrive or rich at final destination. 7. General CHA agent works as advisory by providing necessary information to the importer or exporter. Like CHA agent provides information of which documents a are required for export, by giving a legally advice etc.

4.7 ARRANGING CARGO INSURANCE  Soon after the receiving the docks from exporter CHA agent takes insurance on export goods for the security purpose.  Whenever exporter receives L/C (letter of credit) then Liability mentioned in it. Who will pay insurance cost?  FOB & CFR Importer  Liabilities is of insurance company mentioned in contract  Nature of risk cover and insurable value is also specified in the contract. XYZ Company exporting goods from India to Bangladesh worth INR 10, 00,000, and it has insured its goods from any insurance company. Suppose while exporting goods, it damaged by fire then insurance company will pass its claim if yes then till how many will it pass its claim.

Nature of risk like Fire, flood in the sea, Accident, Damage because of high or low temperature etc

4.8 BOOKING SHIPPING SPACE  While getting excise clearance and pre-shipment inspection authorized person of export department or CHA agent get the shipping space reserved.  Shipping order is issued by the shipping company as the proof of space reservation.

4.9 DISPATCH OF GOODS TO THE PORT  Once space reserved production department arranges transport for dispatch of goods to the port.  Goods are generally considered to the port in the name of CHA  Indian railways allot wagon on the priority basis for the transportation of export cargo to the port of shipment.

Following docks are needed  Railway/ Lorry/ Truck receipt  ARE 1 / ARE 2 form  Inspection certificate

4.10 PORT PROCEDURE AND CUSTOM CLEARANCE

Soon after receiving the cargo initiates action to custom clearance and seeks permission of the port authorities for bringing the cargo to the shipment shed.

 CHA agents receives docks from exporter  CHA agent takes delivery of cargo  CHA Agents stores cargo in W/H till shipment  CHA agents prepare S/B and submit along with other docks to custom house  Documentary checks by custom examiner who also instruct docks appraiser about extend of physical examination of cargo  Cargo bought to port shed for loading  Preventive officer endorses let ship on duplicate copy of S/P  Cargo loading on board the vessel  Master of vessel issues mates receipts to shed superintendent of port  CHA agent collects mates receipts after the paying port dues  CHA agents present mates receipts, to shipping company  Shipping company issues B/L in exchange for mates receipts  CHA agents dispatches B/L along with other docks to other

Objectives of custom control are:  Ensure that trade is in compliance with the various related regulations.  Ensure authenticity of the value of goods and check incorrect invoicing.  Accurately assess and collect the custom duty Custom department makes both documentary and physical and examination CHA prepares the shipping bill and submits the following docs for clearance:  Shipping bill  Export order/ contract  L/C (original)  Commercial invoice  GR form  Inspection certificate (original)  ARE 1/ARE 2  Any other documents needed by custom These documents are examined by appraiser for following:  Compliance to the rules, regulations and other procedural required  Declaration of value and quantity in the shipping bill vis--vis export order or L/C. After the value appraisal and examination of docks, the custom appraiser makes and endorsement on the duplicate copy of the shipping bill and gives direction to the dock appraiser to the extent of physical examination required Except original shipping bill, original GR form and copy of commercial invoice all docs are returned to the CHA. Port trust copy of SB shed superintendent- to obtain order for carting the cargo in the transits shed for physical examination by the dock appraiser. In case of shed cargo separate dock channel is needed, while in the case of ship loading dock charges are mentioned in the SB itself.

For getting the physical examination done by dock appraiser, following docks are needed:  Shipping bill  Commercial invoice  Packing list  Inspection certificate  ARE1/ARE2 forms  GR form After physical examination- dock appraiser endorses LET EXPORT on the duplicate copy of Shipping Bill. y y CHA- presents this shipping bill to preventive officer Officer supervising the cargo loading in the vessel examines and check contents weight etc. y y y Make on endorsement of LATE SHIP on the duplicate copy of SB. Authorized shipping Company will accept cargo in the vessel for shipment. After loading cargo in the ship authorized person of shipping company issue met receipt. y y CHA takes the mates receipts after the payment of port charges. Mates receipt presented to-preventive officer, who certifies that shipment has taken place and mentions it on all the copies of the SB, ARE1/ARE2 etc. y The mates receipt then presented to the shipping company to issue bill of lading.

4.11. DISPATCH OF DOCUMENTS TO THE EXPORT

After the receiving the B/L, the CHA sends the following docks to the exporter:  Full set of clean on board B/L  Copies of commercial invoice arrested by customs  Duty drawback copy of the SB  Original export order/contract  Original L/C  ARE1/ARE2 form  GR form

Sending shipment advice:  Send to importer date of shipment, name of vessels and its ETA  Shipment advice is accompanied by the commercial invoice, packing list, non-negotiable copy of the B/L to enable the importer to take delivery of the goods.

4.12 PRESENTATION OF DOCUMENT AT THE BANK

 Complete set of docks presented to bank after shipment  Bank scrutinizes all documents and forward to the issuing bank  Payment made by the bank on the receipt of the docks  Once payment received by the importers bank, the duplicate copy of the GR form is directly transmitted by the exporters bank to the exchange control department of the RBI  Exporter is returned the original copy of the bank certificate  The authorized dealer forward the duplicate copy of the bank certificate to the jurisdictional DGFT office

4.13 CLAIMING EXPORT INCENTIVE

 Soon after shipment, export claim for incentive  Claiming excise rebate  Export or the CHA file claim with the maritime commissioner of the central excise authority in the port town or jurisdictional central excise authority.  Refund of excise duty paid credited in the personnel ledger A/C -discharge of bond liability  The duplicate copy of the ARE1/ARE2 certified by the custom and the B/L or SB are the only docks required for the purpose.  Receiving duty drawback  Application to the drawback department of the customs  Submitting drawback claim pro-forma, bank or custom certified copy of the commercial invoice and non-negotiable copy of the B/L

5. INTERNATIONAL COMMERCIAL TERMS

DESCRIPTION OF PAYMENT (COMMERCIAL TERMS) 1. Seller and Buyer conclude a sales contract, with method of payment usually by letter of credit (documentary credit). 2. Buyer applies to his issuing bank, usually in Buyer's country, for letter of credit in favor of Seller (beneficiary) 3. Issuing bank requests another bank, usually a correspondent bank in Seller's country, to advice, and usually to confirm, the credit. 4. Advising bank, usually in Seller's country, forwards letter of credit to Seller informing about the terms and conditions of credit. 5. If credit terms and conditions conform to sales contract, Seller prepares goods and documentation, and arranges delivery of goods to carrier. 6. Seller presents documents evidencing the shipment and draft (bill of exchange) to paying, accepting or negotiating bank named in the credit (the advising bank usually), or any bank willing to negotiate under the terms of credit. 7. Bank examines the documents and draft for compliance with credit terms. If complied with, bank will pay, accept or negotiate. 8. Bank, if other than the issuing bank, sends the documents and draft to the issuing bank. 9. Bank examines the documents and draft for compliance with credit terms. If complied with, Seller's draft is honored. 10. Documents release to Buyer after payment or on other terms agreed between the bank and Buyer. 11. Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the goods or the delivery order.

6. EXPORT DOCUMENTATIONS

LIST OF DOCUMENTS FOR EXPORT

 Pro-forma invoice  L/C  Invoice  Commercial Invoice  Packing list  ARE 1 (for excise clearance)

 Certificate of origin  Mates receipt  Shipping bill / GR form  Bill of lading  Bill of exchange

6.1. PRO-FORMA INVOICE

The starting point of the export contract is in the form of offer made by the exporter to the foreign customer. The offer made by the customer is in the form of the Pro-forma Invoice. It is a quotation given as a reply to an enquiry. It normally forms the basis of all trade transactions & enables importer to obtain import license, if required.

Contents of Pro-forma Invoice are generally the following: Name & addresses of exporter & importer Mode of transportation, port of discharge, final destination Buyers & seller's reference numbers / dates Description of the goods, mode of packing, total number of packages, expected total weight etc. Origin of goods Price offer on FOB & CIF Basis Basic terms & conditions of sale.

6.2. L/C: (LETTER OF CREDIT)

L/C (letter of credit) is documentary credit. Which issues by issuing bank (Importers bank) to the negotiate bank (Exporters bank). This type of payment is more secured then other payment by check, payment by demand draft, or cash payment. Process for LC 1. Importers application for documentary credit to the issuing bank 2. Issuing bank scrutinize importers credit

3. If importers credit is good in the market then issuing bank issue credit document to the advising bank 4. Advising bank and exporter will receive L/C 5. Exporter will check L/C that whatever information is mention in the L/C is as per deal or not. 6. If exporter find any different then it will reject that L/C

CIF Contract CIF is a part of negotiation which does mention in the L/C y Cost, insurance & freight means, that the seller has the same obligations as under the FOB contract, but with the addition, that, he has to organize the marine freight & procure marine insurance, against the buyers risk of loss or damage, to the goods during carriage. y y The seller contracts the insurance and pays the premium and also pays the ocean freight. The seller has the following additional obligations as compared to FOB Contract:

To arrange for the carriage of the goods to the named port of destination by the usual route in a sea-going vessel & to pay its costs & freights. To obtain cargo insurance as agreed in the contract & to provide the buyer with the insurance policy or other evidence of insurance cover. y The above obligations are excluded from the buyers obligations. Buyer still has the obligations, as indicated in the buyers obligations, in FOB contracts

6.3 INVOICE Invoice is a document prepared by exporter and it is a pre formed document. In simple words we can say invoice is a bill of goods.

Contents of invoice: 1. Exporters detail name and address. 2. Importers detail mane and address. 3. Invoice number. 4. Date of invoice. 5. Exporters reference it includes reference number and IFD number. 6. Buyers order number and date. 7. Country of origin and country of destination. 8. Terms of delivery and payment. 9. Container number. 10. Port of discharge and port of destination. 11. Port of loading. 12. Description of goods. (quantity and rate) 13. Mention detail about any claim. 14. Declaration. 15. Sign of authorized person from exporter.

6.4 COMMERCIAL INVOICE

Commercial invoice is the basic export document & contains all information required for make other documents. It is prepared by the exporter after the execution of the export order giving details about the goods shipped It should be addressed to the consignee as per the letter of credit. It is the basic evidence of the contract of sale or purchase & therefore must be prepared strictly in accordance to the terms 7 conditions mutually agreed between the buyer & seller. It should contain basic details as in the pro-forma invoice, the detailed description of goods, as well as the final packing lists and the markings on packages plus details of shipment of goods, name & number of vessel/ voyage. This document is used for various export formalities, incentive claims, negotiation of documents, accounting etc.

6.4. PACKING LIST

The exporter prepares the packing list to facilitate the buyer to check the shipment. It contains the detailed description of the goods, packed in each case, their gross & net weights etc. The packing list also contains all basic information about the export order like name & address of the buyer & the exporter, purchase order number & date etc. The packing order is the basic document used in the preparation of further documents like proforma invoice & so on.

6.5. EXCISE CLEARANCE FOR EXPORTS ARE1

Excise Duty: Excise duty is a tax imposed by the Central government on goods manufactured in India. It is collected at source i.e. before removal of goods from the factory premises Exporters are totally exempted from payment of CED However, necessary clearances must be obtained by the exporter in one of the following ways

(I) Export Under Rebate Under this system, an exporter is required to pay CED initially & then claim it from central excise department after shipment of goods. (II) Export under Bond Under this system, an exporter is required to execute a bond, in favor of excise authorities, for a sum equivalent to the amount of excise chargeable on such goods. Such bond should be supported by an appropriate bank guarantee.

Excise Clearance under Rule 18 & Rule 19 of Central Excise Rules Export Procedures for Excise - There are basically two procedures for dispatching the goods out of India. (A) (Rule 18 of Central Excise Rules). In the first procedure, duties are paid and subsequently rebate (refund) is claimed after exportation of such goods. Alternatively, rebate is granted of duty paid on inputs used in the exported final product. Rebate claim had to be made to A.C. of Central excise along with original of ARE-1 & other prescribed documents.

(B) (Rule 19 of Central Excise Rules). The other procedure is to export goods under bond without payment of excise duty. On actual exportation of goods and on presentation of necessary proofs regarding exports, the bond is released. Regular Exporters can have a running bond for this purpose. A merchant exporter has to furnish bond in form B-1 & certificate in CT-1.

Conditions and limitations for central excise: y The procedure for export of excisable goods (except to Nepal & Bhutan) is subject to certain conditions & limitations. y The excisable goods can be exported directly from a factory or a warehouse after the payment of excise duty y The excisable goods must be exported within 6 months from the date within which they were cleared for export from the factory of manufacture or his warehouse. y The market price of the excisable goods at the time of exportation is not less than the amount of rebate duty claimed. y y The amount of rebate of duty admissible is not less than Rs.500.00 The excisable goods must be exported within 6 months from the date on which they were cleared for exports from the factory of manufacturer or his warehouse.

Procedure for Central Excise Clearance: The following is the procedure for obtaining central excise clearance: (I) Application to the Assistant Collector/ commissioner of Central Excise (ACCE) The exporter is required to make an application to the Superintendent or the Inspector of Central Excise, having jurisdiction over the factory of production or warehouse of the exporter, by filling up 4 copies of ARE-I form, in five copies with distinctive colors.

(II) Information to the Range Superintendent The ACCE informs the range superintendent, in whose area the exporters factory or warehouse is located. On receiving instructions from the ACCE, the range superintendent, deputes an inspector for clearance of goods for exports.

(III) Sealing of goods: The inspector of Central Excise verifies the goods mentioned in the application and the particulars of the duty paid or payable. If satisfied, he seals each package or the container in the manner as may be specified by the Commissioner of Central excise and endorses each copy of the application.

(IV)Processing of ARE-I Forms

o ARE-I (Original) and ARE-II (Duplicate): The Superintendent or Inspector returns the original and duplicate copy to the exporter

o ARE-I (Triplicate): The triplicate copy of ARE-I is sent to the maritime commissioner at the port of shipment or to the Excise Rebate Audit section in case the rebate is to be claimed by EDI (Electronic Data Interchange) system of customs.

o ARE-I: (Quadruplicate): This copy of ARE-I is retained by the Superintendent or Inspector of Central Excise.

o ARE-I (Quintuplicate): This copy is returned to the exporter for claiming any other incentive.

(v) Examination of the goods at the place of exports At the port of shipment, the exporter presents goods together with original, duplicate & quintuplicate copies of the ARE-I to the Commissioner of Customs. The Commissioner of Customs examines the consignments and if satisfied, certifies the goods for exports, by an endorsement on all the copies of ARE-I. The original & quintuplicate copies are returned to the exporter and the duplicate copy is sent to the Maritime Commissioner.

(VI) Submission of the claim: For claiming rebate, the exporter is required to submit the following documents along with the prescribed application in form C (in triplicate) to Assistant Commissioner of central excise / maritime collector Original copy of ARE-I duly endorsed by customs officer Duplicate copy of ARE-I received from customs officer in a sealed cover. Duly attested copy of shipping bill Duly attested copy of Bill of Lading or airway bill

 Duplicate copy of Central Excise invoice under which CED was paid

(VII) Verification of the application Assistant or Deputy Commissioner of Central Excise compares the details listed in the different copies of ARE-I & if he is satisfied that the exports are not under claims for duty drawback, he sanctions the rebate. (VIII) Refund of duty If any refundable amount is not paid to the applicant within 3 months from the date of filing the claim, interest at the rate of 20% is paid for the period between the expiry of 3 moths & the date of refund. (IX) Cancellation of documents If the excisable goods are not exported, the Assistant Commissioner of Central Excise cancels the export documents on request of the exporter.

6.6. CERTIFICATE OF ORIGIN

The importers in several countries require a Certificate of Origin without which clearances to import is refused. The certificate of origin states that the goods exported are originally manufactured in the country whose name is mentioned in the certificate. Certificates of origin are required when: Goods produced in a particular country are subject to preferential tariff rates in the foreign market at the time of importation The goods produced in a particular country are banned for import in the foreign market.

Types of Certificate of Origin (1) Certificate of Origin for Availing Concessions under GSP : Required by countries like France, Germany, Italy, Benelux countries, UK, Australia, Japan, and USA etc., which extend GSP benefits & are issued by specialized agencies like: Export inspection agencies Joint DGFT, Commodity Boards & their regional offices Development Commissioner, Handicrafts Textile Committee for textiles Marine product export development authority for marine products Development Commissioner for EPZs (2) Non-preferential Certificate of Origin: These are normally required for clearance of goods by all importers & are issued by the Chamber of Commerce of the exporting countries or by Trade Association of the importing country. (3) Certificate for availing concessions Under Commonwealth Preferences: This is also known as Combined Certificate Of origin & value & is required by two commonwealth countries, Canada & New Zealand for concessions under Commonwealth preferences.

6.7. MATES RECEIPT

Mates receipt is a receipt issued by the commanding officer of the ship when the cargo is loaded on the ship. This receipt is a prima facie evidence that goods are loaded in the vessel. Mates receipt is first handed over to the Port Trust authorities & on receipt of port dues, the Port Trust authorities, hand the mates receipt to the exporter or his agent. The mates receipt has to be handed over shipping company for obtaining the Bill of Lading. The mates receipt is a transferable document & can be of two types Clean mates Receipt: This signifies that the goods have been received well in order, properly packed & without any defect or damages Qualified Mates receipt: This signifies goods have not been packed properly or received damaged. In this case the shipping company does not take any responsibility for damage in transit.

6.8. SHIPPING BILL

Shipping Bill is an important document required by the customs authorities for allowing shipment. It is prepared by the exporter & it contains the name of the vessel, name of port of discharge, country of final destination, exporters name & address, details about packages, number & description of goods, marks & numbers, quantity & details about each case, FOB price, total number of packages with the weight & value and the name & address of the importer.

The shipping Bills are of following types: Duty Free Shipping Bill: No duty or cess applicable Dutiable Shipping Bill: Goods subject to export duty / cess Drawback Shipping Bill: Shipping Bill for shipment Ex-bond.: For goods imported for re-export.

Documents required for Processing of Shipping Bill: The following documents are required for the processing of the Shipping Bill: GR forms (in duplicate) for shipment to all the countries. 4 copies of the packing list mentioning the contents, quantity, gross and net weight of each package. 4 copies of invoices which contains all relevant particulars like number of packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc. Contract, L/C, Purchase Order of the overseas buyer. AR4 (both original and duplicate) and invoice. Inspection/ Examination Certificate.

6.9. BILL OF LADING

Bill of Lading (B/L) is a document issued by the shipping company or its agent acknowledging the receipt of goods on board the vessel, and undertaking to deliver the goods in the like order and condition as received, to the consignee or his order, provided the freight & other charges as mentioned have been duly paid. It is also a document of title to the goods & as such is freely transferable by endorsement & delivery.

Types of Bill of Lading Clean B/L: It acknowledging receipt of goods apparently in good order & condition & without any qualification is a clean B/L. Such B/L does not contain any negative remark about condition of goods Claused B/L: With a remark such as goods insufficiently packed is known as claused B/L. Transshipment or through B/L: For multimode transportation, or when another shipping companys vessel is used, this B/L is issued. Stale B/L: A B/L held too long (normally more than 21 days)), before negotiations, is termed stale B/L. Freight paid B/L: This type of bill of lading issued when freight is paid at the time of shipment is a freight paid B/L Freight collect B/L: This type of B/L issued when freight is not paid at the time of shipment& is to be collected from consignee is freight collect B/L

Contents of Bill of Lading Name & logo of the Shipping Line Name & address of the shipper Name & number of vessel Name of the port of lading, port of discharge & place of delivery Marks & container number, container seal number Packing & container description Total number of packages & containers Description of goods, gross weight, volume Amount of freight paid or payable Shipping Bill number & date Signature & initials of the Chief Officer

6.10. GR FORM

GR Form is an exchange control document required by RBI. The exporter through the GR Form has to assure to the RBI that the export proceeds will be realized within 180 days. It is submitted in duplicate, to the customs, at the port of shipment along with the Shipping Bill & the customs certify the value declared by the exporter & also record the assessable value. Customs returns one copy to exporter & retains the original for transmission to RBI The exporter is required to negotiate the shipping documents, through his bankers (authorized dealers), along with the GR Form, within 21 days of the shipment. The authorized dealer reports to the RBI after negotiation of documents & has to retain the documents till the full exports proceeds have been realized, & thereafter send the documents to RBI.

6.11. BILL OF EXCHANGE / DRAFT

A bill of exchange also known as Draft contains an order from the creditor to the debtor to pay a specified amount to a person mentioned therein. The maker of the Bill is known as Drawer & the person who is directed to pay is called the Drawee The person who is entitled to receive the amount is called Payee A bill of exchange is of two types: (I) Sight draft (immediate payment) & (II) Usance Draft (Credit Usance 30 days or usance 60 days) Unless & until the draft is retired, the negotiating collecting bank does not hand over the shipping documents & the buyer cant take delivery of goods.

7. CONCLUSION After the completion of my summer internship at Gujarats most leading company of agriculture industry M/s duke Plasto techniques Pvt Ltd, I am concluding that I learned lot many thing in practical as well as theoretical related to export procedure. First of all I understood right meaning of export. Before my internship I was thinking export means only sales of goods or service across national boundary. Secondly I learned Whole procedure of export from obtaining of IEC code to claim for its benefits after the export. It includes from where and how to collect IEC code, registration of EPC, sales tax and income tax, Dukes export deal process from searching of demander to receipt of order or contract, Appointment of custom house agents and their formalities at custom department and port and his other roles, for excise clearance ARE 1 and Are 2 for deemed exporter and manufacturer exporter under central excise rule 18 and rule 19 etc. For all this process which documents are required, who can issue those documents, to whom and how many copies? etc. Like Pro-forma invoice issue at the time of export import process deal by exporter to importer, Letter of credits issue process from draft of application letter for L/C by importer to final receipt of L/C to an exporter, Commercial involve issues on the address of consignee by the exporter, Certificate of origin issued by chamber of commerce under the authorized signature when product was produced in their own nation, Mates receipt is issued by commanding officer of ship when cargo loaded on ship, Shipping bill prepared by the custom house agent or exporter, Bill of loading document shows that whatever material had sent to the CHA is loaded in the ship after the completion of custom process, Bill of exchange letter drafts exporter to the issuing bank for the transfer of payment. And most important thing I have learned, how exporters are receive their payment and importers receives their goods as per the order with high security, there is a one process I have shown in this report named by international commercial terms. It is starts from export-import deal to the receipt of payments and goods safely without any risk. There are many schemes for export Here duke is exporting goods under the DEPB scheem, so duke getting get benefits till 5% in import duty as per the value of export.

BIBLIOGRAPHY  Duke Plasto Techniques (P) Limited marketing department  C. Rama Gopal, NEWAGEINTERNATIONAL(P) LIMITED, PUBLISHERS 4835/24,Ansari
Road, Daryaganj, New Delhi - 110002

 www.eximguru.com/excise-duty/default.aspx  help.sap.com/saphelp_47x200/helpdata/en/15/ad76920fca0c4398bc80a902e6f127/con
tent.htm

 www.caclubindia.com/forum/form-a-r-e-1-amp-form-a-r-e-2--49143.asp  www.google.com/search?hl=en&gbv=1&ie=ISO-88591&tbm=isch&sa=1&q=commercial+invoice+for+export&btnG=Search

 en.wikipedia.org/wiki/Special:Search?search=ARE-1&go=Go  www.dgft.gov.in/  dgft.gov.in/exim/2000/download-ftp1011.htm  www.dukeplasto.com