EXPORT IMPORT

DOCUMENTATION
UNIT-4
The organization of exports –imports
firms and business planning
An export plan:
helps you understand the facts, constraints, and goals.
to set specific objectives,
to decide on implementation schedules,
to mark milestones of your success.
It can also motivate your team to reach goals.
Written plans give a clear understanding of specific steps to
take to assure a commitment to exporting.
How the plan should be…?
Keep it simple. The initial planning effort itself gradually generates more
information and insight.
Make a flexible management tool, not a static document: Objectives should be
compared with actual results to measure the success of different strategies.
A detailed plan is recommended for companies that intend to export directly,
meaning selling to an end-user in another country.
 Basic Steps to develop your export plan
•Identify the product or service to be exported and
check its export potential,
•Conduct market research on the countries of interest,
•Decide on a pricing strategy for the product or service, and
•Define a strategy to find buyers.
Considerations before Planning
Product or Service
Pricing Considerations
Management Issues
Experience
Personnel
Production Capacity
Financial Capacity
Contents of Export Business plan in
detail
Part I: Export Policy Commitment Statement
Part II: Situation or Background Analysis
Part III: Marketing Component
Part IV: Tactics—Action Steps
Part V: Export Budget
Part VI: Implementation Schedule
Addenda: Background Data on Target
Part I: Export Policy Commitment Statement
Part II: Situation or Background Analysis
•Product/Service for Export
•Export License (if needed)
•Personal Export Organization
•Products/Services to be Exported
•Products that Qualify Under FTPs
•Resources Outside the Company
•Industry Structure, Competition, Demand Operations
•Resources Inside the Company
Part III: Marketing Component
•​Identifying, Evaluating, and Selecting Markets
•Product Selection and Pricing
•Distribution Methods
•Internal Organization and Procedures
•Sales Goals (Profit and Loss Forecasts)
•Terms and Conditions
•Pricing with Consideration of Duties, Taxes
•Freight Costs, and Logistics Included
 Part IV: Tactics—Action Steps
• Primary Target Countries
• Indirect Marketing Efforts
• Quarterly Accomplishments
• Secondary Target Countries
​
Part V: Export Budget
• Pro-forma Financial Statements
• Marketing Materials
• Travel
• Website Enhancements
• Trade Show Visits
• Other Costs
Part VI: Implementation Schedule
•Follow-up
•Periodic Operational and Management Review (Measuring Results against the Plan)

Addenda: Background Data on Target

•Basic Market Statistics (Historical and Projected)
•Background Facts
•Competitive Environment
IMPORT PROCEDURES &
DOCUMENTATIONS
IMPORT PROCEDURES &
DOCUMENTATIONS
Import procedure:

Step 1. Obtaining import license and quota

Importer has to attach the following documents to his application form :-

Receipt which shows that import license fee has been paid.
Certificate from a Chartered Accountant showing the total value of goods to
be imported.
Verification Certificate for income tax.
 IMPORT PROCEDURES & DOCUMENTATIONS
Step 2. Obtaining foreign exchange
Before placing any order, the importer must apply to the Exchange Control
Department (ECD) of RBI (India's Central Bank) for the release of requisite
foreign exchange.
Step 3. Placing an order
The importer may either place the order directly or through the indent house
(Agent).
Step 4. Dispatching letter of credit
After getting the confirmation from the supplier regarding the supply of
goods, the importer requests his bank to issue a Letter of credit in favour
of supplier.
 IMPORT PROCEDURES & DOCUMENTATIONS
Step 5. Appointing clearing and forwarding agents

The importer makes arrangement to appoint clearing and forwarding

agents to clear the goods from the customs. Since clearing of goods is a
specialized job, it is better to appoint C & F agents.

Step 6. Receipt of shipment device

The importer receives the shipment advice from the exporter. The
shipment advice states the date on which the goods are loaded on the
ship.
 IMPORT PROCEDURES & DOCUMENTATIONS
Step 7. Receipts of documents

The importer's bank receives the documents from the exporter's bank. The documents include bill of exchange, a
copy of bill of lading, certificate of origin, commercial invoice, consular invoice, packing list, and other relevant
documents. The importer makes payment to the bank (if not paid earlier) and collects the documents.

Step 8. Bill of entry

This is a document required in case of import of goods. It is like shipping bill in case of exports. A Bill of Entry is
the document testifying the fact that goods of the stated value and description in specified quantity are entering
into the country from abroad.

Step 9. Delivery order

The clearing agents obtains the delivery order from the office of the shipping company. The shipping company
gives the delivery order only after payment of freight, if any.
 IMPORT PROCEDURES & DOCUMENTATIONS

Step 10. Clearing of goods

The clearing agent pays the necessary dock or port trust dues and obtains the port Trust Receipt in two
copies.

Step 11. Payment to clearing and forwarding agent

The importer then makes the necessary payment to the clearing agent for his various expenses and fees.

Step 12. Payment to exporter

The importer has to make payment to exporter. Usually, the exporter draws a bill of exchange. The importer has to
accept the bill and make payment.

Step 13. Follow up

The importer then informs the exporter about the receipt of goods. If there are any discrepancies or damages to the
goods, he should inform the exporter.
EXPORT PROMOTION SCHEMES
i. Merchandise Exports from India Scheme (MEIS)
Under this scheme, exports of notified goods/ products to notified markets as listed in Appendix
3B of Handbook of Procedures, are granted freely transferable duty credit scrips on realized FOB
value of exports in free foreign exchange at specified rate. Such duty credit scrips can be used
for payment of basic custom duties for import of inputs or goods.
Exports of notified goods of FOB value upto Rs 5,00,000 per consignment, through courier or
foreign post office using e-commerce shall be entitled for MEIS benefit. List of eligible category
under MEIS if exported through using e-commerce platform is available in Appendix 3C.
ii. Service Exports from India Scheme (SEIS)
Service providers of notified services as per Appendix 3D are eligible for freely transferable duty
credit scrip @ 5% of net foreign exchange earned.
DUTY EXEMPTION & REMISSION
SCHEMES
◦ Advance Authorization Scheme

Under this scheme, duty free import of inputs are allowed, that are physically incorporated in
the export product (after making normal allowance for wastage) with minimum 15% value
addition.
Advance Authorization (AA) is issued for inputs in relation to resultant products as per SION or
on the basis of self declaration, as per procedures of FTP.
AA normally have a validity period of 12 months for the purpose of making imports and a
period of 18 months for fulfillment of Export Obligation (EO) from the date of issue. AA is issued
either to a manufacturer exporter or merchant exporter tied to a supporting manufacturer(s).
 ◦ Advance Authorization for annual requirement

Exporters having past export performance (in at least preceding two financial years) shall be
entitled for Advance Authorization for Annual requirement. This shall only be issued for items
having SION.
◦ Duty Free Import Authorization (DFIA) Scheme

DFIA is issued to allow duty free import of inputs, with a minimum value addition requirement
of 20%. DFIA shall be exempted only from the payment of basic customs duty. DFIA shall be
issued on post export basis for products for which SION has been notified. Separate schemes
exist for gems and jewellery sector for which FTP may be referred.
◦ Duty Drawback of Customs

The scheme is administered by Department of Revenue. Under this scheme products made out of duty
paid inputs are first exported and thereafter refund of duty is claimed in two ways:
All Industry Rates : As per Schedule
Brand Rate : As per application on the basis of data/documents
◦ Interest Euqlisation Scheme (IES)

The Government announced the Interest Equalisation Scheme @ 3% per annum for Pre and Post
Shipment Rupee Export Credit with effect from 1st April, 2015 for 5 years available to all exports under
416 tariff lines [at ITC (HS) code of 4 digit] and exports made by Micro, Small & Medium Enterprises
(MSMEs) across all ITC(HS) codes. With effect from November 2, 2018, the rate of Interest Equalisation
for MSME has been increased to 5%. The Scheme has also been extended to Merchant Exporters who
will now avail the benefit @ 3% for all exports under 416 tariff lines w.e.f. January 2, 2019.
EPCG SCHEME
◦ Zero duty EPCG scheme

Under this scheme import of capital goods at zero custom duty is allowed for producing quality
goods and services to enhance India’s export competitiveness. Import under EPCG shall be
subject to export obligation equivalent to six times of duty saved in six years. Scheme also allows
indigenous sourcing of capital goods with 25% less export
DEPB – Duty Entitlement Passbook
Scheme
DEPB scheme comprised two parts namely the post-export and pre-export of DEPB.
However, pre-export was eliminated from 01.04.2000. Post-export is issued after the exports,
where the exporter is given a duty entitlement Pass Book Scheme at a pre-determined credit on
the FOB value.
The DEPB rates permit the import of any items except the items that are prohibited from
importing. Items like Gold Nibs, Gold Pen, Gold watches etc. though covered under the generic
description of writing instruments, components of writing instruments and watches that are still
not eligible to benefit under the DEPB scheme.
DEPB (Contd.)
DEPB Rates
The DEPB rates are applicable based on FOB value or the value cap, whichever is the least. If an
item’s FOB value is Rs. 700, and the cap value is Rs. 500, the DEPB rate shall be applied on Rs. 500.
Benefits of DEPB Rates
The benefit of the DEPB scheme shall be available on the exported products that are having an
extraneous material up to 5% by weight. In such cases, the extraneous material that is up to 5%
shall be ignored and the actual DEPB rate for the export product will be considered.
Review of DEPB Rates
The Government of India reviews the DEPB rates after receiving the appropriate export import data
on the FOB value of exports and the CIF value of inputs that are used in the export product as per
SION. This data and information have to be obtained from the concerned Export Promotion
Councils.
DEPB (Contd.)
Implementation of DEPB Rates
Given below are the facilities that are provided to implement the DEPB Rates. DEPB rates are rationalized to
the account for the changes in the customs duties. The caps are fixed on certain items but there would be no
verification of Present Market Value(PMV) on these items.
A number of ports have been added in order to avail the facilities under the Duty Exemption Scheme,
including the DEPB. The threshold limit of Rs. 200 million to fix new DEPB rates have been removed.
Provisional DEPB Rate
The purpose of provisional DEPB rates is to encourage the diversification and to promote the export of new
products. However, the provisional DEPB rates are valid only for a limited period of time when the exporter
has to furnish data on export and import for regular fixation of rates.
Maintenance of Records
It is mandatory for the Custom House at the ports to maintain a separate record of details for exports that are
made under the DEPB Schemes.