Documents play an important role in import/ export transactions. An unorganized or missing set of documents can cause immeasurable distress to all stakeholders A shipment cannot be surrendered or acquired if the office work is not completed. They may even face a penalty and lose their credibility.
Topics we'll discuss include:
How the authorities reduce documentation for export-import
In order to export products via sea, exporters need three key documents
In order to import products that are arriving via sea, importers need three key documents
For more information on which shipping documents are required for customs clearance, please read our blog post.
Documentation for export and import operations and how to reduce it.
A brief description of import-export documentation in India and current government guidelines follows.
Before five years ago, exporters and importers were required to prepare seven to eight mandatory documents - plus any additional documentation that may be required, depending on the type of products shipped or country-specific regulations and guidelines. It was a tedious and expensive procedure as a result. The World Bank cited it as a factor behind India's poor performance in the Ease of Doing Business Index. Earlier this year, India ranked 142 out of 189 countries (it now ranks 63). To reduce the amount of paperwork required in imports and exports, the Department of Commerce established an Inter-Ministerial Committee in the same year. The mission was to improve the export-import process and India's ranking in the Ease of Doing Business and double exports to $900 billion by 2020. It was recommended that import and export documents be whittled down to three each.
The suggestions have been approved. In a notification issued by the Directorate General of Foreign Trade (DGFT), a department of the Ministry of Commerce and Industry that formulates and implements India's Foreign Trade Policy, the modifications were announced. With the revised Foreign Trade Policy, which is effective from April 2015, here are the 3 key documents for exports and imports.
Important shipping documents for exports
Bill of Lading
The most important document for exporters. An exporter, the shipping line, and the importer all have to sign the bill of lading (the act of loading a shipment on a ship). An exporter needs a complete set of bills of lading from the shipping line/freight forwarder and dispatch it to the importer/importer's bank for easy transportation.
This bill of lading contains the following information:
Description, amount, weight of products
Name and address of consignee
Terms of sale
2.Commercial Invoice cum Packing List
An exporter issues this payment invoice to an importer as a settlement of the sale. Based on the purchase price, they can determine the responsibilities and taxes due on the products.
Among the information it contains are:
Name, address of seller (exporter)
Name, address of buyer (importer)
Value, amount of products
{An itemized packing list contains information about the products.|In a packing list, product information is listed item by item.|An itemized packing list contains information about the products.] read more At the point of clearance, it simplifies their exam and corrects tallying.
It contains:
Description of the products
Quantity and weight (gross and net) of the products
Number of packages
Type of packaging (PP,Jute, BOP , Laminated etc)
Marks and numbers (symbols/numbers positioned on every piece of shipment in a cargo to discover them)
Carrier’s (ship) name
Date of export
Export licence number
Letter of credit score number
There used to be separate files for the economic bill and packing listing.
3. Bill of Entry
A shipping bill or export bill is a type of customs clearance application submitted by the exporter. Using this information, customs determines whether an exporter has taken advantage of government incentives, such as:
Various tax exemptions, rebates, and refunds
Export benefits under various government programs
Documents needed for imports
Bill of Lading
An exporter or importer must have this document. The exporter and importer must share the bill of lading. A bill of lading is required for importers to accept goods at their end.
2. Commercial Invoice cum Packing List
Similarly, the importer needs this document as well. Customs clearance is most often determined by the commercial invoice and packing list.
3. Bill of Entry
Finally, importers must have a bill of entry. Customs authorities inspect and clear goods at the port of entry based on a declaration that importers make. Bill information is compared with insurance policies or sales invoices.
The information includes:
Type of cargo
Value of the goods
Quantity of the goods
This was a quick overview of the three documents that importers and exporters should always have on hand. It does not mean that these are the only documents required. The shipping process involves a lot of paperwork. Various factors and case-by-case determine whether importers and exporters are required to submit additional supporting documents.