Export documentation is a necessary process that all exporters must pay close attention to, as documentation requirements vary considerably by country, commodity, and situation. Exporters must prepare all documents with absolute accuracy. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification.
India took a leap forward in improving 'Ease of Doing Business' by reducing the mandatory documents required for import and export of products such as hot rolled steel coil to three documents each. The Directorate General of Foreign Trade (DGFT) issued a Notification to this effect.
The Department of Commerce had set up an Inter Ministerial Committee under the Chairmanship of DGFT to study and recommend ways to reduce the number of mandatory documents required for export and import. The Committee held detailed discussions with all stakeholders and the concerned Departments/ Ministries/Agencies and also visited JNPT to study the ground situation and find ways to minimize the number of documents and reduce transaction costs and time for exports and imports. The Committee submitted its "Trading Across Borders" report to Prime Minister's Office.
As a consequence, after issue of the DGFT's Notification only three documents each would be mandatory documents for export and import.
The following mandatory documents are prescribed for exports and imports of goods from India:
- Bill of Lading/Airway Bill
- Commercial Invoice cum Packing List (Separate Commercial Invoice and Packing List would also be accepted)
- Shipping Bill/Bill of Export
Bill of Lading/Airway Bill
A bill of lading is a contract between the between the steamship company and the shipper. B/L is issued by the shipping company and a proof for shipper that the goods are received by the shipping company. The bill of lading confirms that where the goods are delivered, how freight charges will be paid, who is the consignee.
Bills of lading are two types non-negotiable and negotiable. The shipper uses the first type, non-negotiable "straight bills," when consigning the shipment directly to the final buyer. Meanwhile, the shipper uses the second type, negotiable "order bills," when he does not want title to pass to the buyer until certain conditions have been met. In this instance, the specified shipper must endorse the bill of lading before delivery can occur. An order bill of lading must also show the party to be notified at destination.
Order bills of lading play an important part in international transactions, especially when dealing with letters of credit and drafts. Most letters of credit call for "on board" bills of lading, which provide proof to the buyer that the shipment has been placed on board the vessel.
Bill of Lading/Airway Bill
The airway bill is a non-negotiable instrument. It serves as a receipt for the shipper and issued by the airline or consolidator. The AWB serves as documentary evidence of the conclusion of the contract of carriage, freight bills, certificates of insurance, the customs declaration. AWB indicates that the carrier has accepted the listed goods and obligates itself to carry the consignment to the destination airport in accordance with the conditions listed on back of the original bill. The Airway Bill gives the information about the handling, dispatching and delivering of shipments.
Commercial Invoice
A commercial invoice is a bill for the goods issued by the seller to the buyer. This invoice must include the dates of billing and shipping, names of exporter or manufacturer, consignee, terms of sale, mode of payment, description of goods, country of origin, packing marks and numbers, numbers of units, price per unit, total price, transportation mode and any other information required by the country of destination. These invoices are often used by governments to determine the true value of goods when assessing customs duties.
Packing List
Packing list is the details of all items in the box, crate, pallet, or container, plus the type, dimensions, and weight of the container. Customs officials use this list to check cargo, while buyers use it to inventory merchandise received. A packing list gives information about the seller, buyer, shipper, invoice number, date of shipment, mode of transport, carrier, and itemizes quantity. A packing list may serve as conforming document but it is not a substitute for a commercial invoice.
Shipping Bill / Bill of Export
For goods moving out of country must be approved by customs by mandatory filing of a legal document called shipping bill. Shipping bill contains all required details about the goods planed to export. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship's owner, seller, buyer and some other parties. For each one represents a kind of certificate document. Usually the Shipping Bill is of four types and the major distinction lies with regard to the goods being subject to certain conditions which are:
- Export duty/cess
- Free of duty/cess
- Entitlement of duty drawback
- Entitlement of credit of duty under DEPB Scheme
- Re-export of imported goods
With the Shipping Bill the following documents also have to be filled:
- Invoice
- Packing List/Weight Specifications
- Order & Confirmation, Copy of L.C. if any
- Export License/Permit where necessary
- Quality Control Certificate
- GR Form in duplicate duly filled
- Drawback Claim Application Form duly filled
- AR4/Form
Formats of Shipping Bill:
- Shipping Bill in triplicate for export of duty free of goods - White colour
- Shipping Bill in quadruplicate for the export of goods which are under claim for duty drawback - Green Color
- Shipping Bill in triplicate for the export of dutiable goods - Yellow Colour
- Shipping Bill in 7 copies for exports under the DEPB scheme - Blue Colour
