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its very useful to international bushiness students in behalf of making (SIP) project.
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A PROJECT REPORT ON
“A STUY OF EXPORT PROCESS & DOCUMENTS OF GIVEN M/S WIN PET & POLYMERS. IN UTHRAKHAND AREA IN ROORKEE CITY”
FOR
“M/S WIN PET & POLYMERS”
SUBMITTED TO
“UNIVERSITY OF PUNE”
IN PARTIAL FULFILLMENT OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (M.B.A.)
BY
MOHD.AHMED
UNDER THE GUIDANCE OF
PROF. RAGHUNUNDAN HELWADE
THROUGH
NBN SINHGAD SCHOOL OF MANAGEMENT STUDIES, AMBEGAON (BK.), PUNE-411041 2012-2014
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ACKNOWLEDGEMENT
It gives me immense pleasure to present a report on export procedure & documentation involved at M/S WIN PET & POLYMERS. This project report could not be possible without the able guidance of Mr. MUDASSIR HASSAN. I am also thankful to my college placement cell for providing me opportunity for working with this organization. I thank my parents who every time supported & motivated me during my summer internship project. I am heartily thankful to the whole unit of m/s win pet & polymers for the warm response they had given To complete my summer training . I am also thankful to the MR.RAFIQ SHABAN (GENERAL MANEGER ) to give this opportunity to undertake this project in his reputed organization. I am extremely thankful to those who were directly OR indirectly involved for providing me necessary support and encouragement during my project.
MOHD.AHMED
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EXECUTIVE SUMMARY/ABSTRACT
The M/S WIN PET & POLYMERS is a Custom house agent company which provides quality services. This can be gauged from the fact that every year many clients are adding up & exporting through this company. This organization has modern equipments with highly skilled & trained officials. Company operates its business in Roorkee and provides global exposure to the people who want to import or export. It also does the work of custom clearance. It charges affordable fees for this activity. The greater Advantage Company has is it has custom office situated in its premises, so minimum time is required for clearance work. Quick dispatch of goods is possible from ICD to the port. It avoids the delay in further processes. I spoke with different operation people of the company regarding their rules and procedures of export & I found that the overall procedure is easy and simple. I have also gone through the list of the clients who are regular exporter or importer through M/S WIN PET & POLYMERS. I spoke with some of their clients & most of them were satisfied by the service provided by company. By discussion with officials, I came to know that their clients were increasing in number over the period of time. This is one of the growing companies in India and it needs some time to expand its business. By providing quality services, I am sure that this corporation will achieve the no. 1 position as a CUSTOM HOUSE AGENT.
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INDEX
SR.NO CHAPTER I CHAPTER II CHAPTER III CHAPTER IV CHAPTER V
PARTICULARS INTRODUCTION COMPANY PROFILE INDUSTRIAL PROFILE RESEARCH DESIGN & METHODOLOGY DATA PRESENTATION,ANALYSIS & INYERPRETATION EXPORT PROCEDURE DOCUMENTATION
PAGE NO. 5-8 9-12 13-18 19-20 21-31
CHAPTER VI CHAPTER VII CHAPTER VIII
32-38 39-51 52-61
INCOTERMS 2011
CHAPTER IX CHAPTER X CHAPTER XI
FINDINGS, SUGGESTION & CONCLUSION BIBLIOGRAPHY ANNEXURE
62-64 65-67 68
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CHAPTER-I INTRODUCTION
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INTRODUCTION TO THE TOPIC
In today’s world of globalization, the importance of IMPORT & EXPORT is increasing at a faster rate. Almost every country in the, now-a-days, engages itself in international trade. A Nation gains particularly due to export because lots of foreign exchange reserves are generated through export & its industries get profit after export.
Exports have direct impact on Balance of trade& Balance of payment positions, of any nation. Day by day, India’s export is mounting at a faster rate.
As I have chosen, International business as my specialization area, in MBA, by studying export procedure & documentation, I will get thorough knowledge of how export takes place? what are the different documents required for export? How the work of customs examination & clearance takes place?
I would also know, what are the different benefits/incentives exporter gets from government after export. In addition to this, I would also know what is current trend of export of India & its Balance of payment position.
In addition to that, I will also get the practical exposure to study the whole export procedure, under the able guidance of skilled & trained officials of CUSTOM HOUSE AGENT.
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OBJECTIVES
1 .To study the 100% Export Oriented Unit (E.O.U) Scheme of M/s win pet polymers pvt Ltd. 2. To study the export procedure and the documents maintained for implementation of Export Oriented Unit (EOU) Scheme. 3. To understand the benefits associated with the Export Oriented Unit (EOU) Scheme which gives a competitive edge of these exporting companies. 4. To know the distribution of Export Oriented under the various states India. 5. To understand the contribution and share of Export process & documentation in India’s international trade especially exports. of &
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SCOPE
The scope of project of 100% Export process Scheme consists of the study of the documents maintained by the company. It has been observed that various types of documents maintained by the company. The study involved verification of records and checking of various documents, core functioning of Export Oriented Unit.
Limitations
1. Due to confidentiality policy of the company, some of the information related to the export scheme was not shared by the company. 2. The company representative had limited time for interaction because of their busy schedule.
3. The time period for the completion of the project was limited to two months.
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CHAPTER-II COMPANY PROFILE
9
COMPANY PROFILE
[PROFESSIONALS IN CUSTOM CLEARANCE & FREIGHT FORWARDING]
M/S WIN PET & POLYMERS introduce themselves as
pioneer’s in the field of
Licensed Customs House Agent (Tin No. 05009493609) and International Freight Forwarders, and allied activities connected to Government Bodies. Since 1987 company specialize for clearance of New and Second hand Machineries. Company have the recognition from IATA//FIATA and DG Shipping Registration. M/S WIN PET & POLYMERS. is in this field with a team of Professionally skilled, dedicated and highly experienced personnel and extending economic, competitive and best services to our value to customers on permanent basis.
M/s win pet & polymers have good associations with Customs and Airlines, Shipping Companies and overseas agents.
Govt. Depts,
PHILOSOPHY:By giving best premium quality services, M/s win pet & polymers. get recommendation from trade & enabling business growth.
MISSION:Be a global engineering company with leadership in our chosen fields in niche markets with commitment to deliver quality products and services to our customers’ delights and focus on creating shareholders value.
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VALUES:[1] Commitment to customer satisfaction. [2] Steady growth of business with growth profit. [3] People are main resources, we encourage & appreciate resourceful employee. [4] Provide environment to foster creativity & innovation. [5] Encourage involvement of people through trust, communication, delegation. [6] Continuous introduction of modern & appreciate technology, products of good quality backed by efficient after sale service.
SERVICES:[A] Ocean Freight. Air Freight. [C] Door-To-Door Pick up & Delivery. [D] Customs clearance. [E] Transport. [F] Import licensing. [G] Insurance. [H] LCL Consolidation.
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Warehousing. [J] Projects Handing. [K] Complete Logistics.
ACHIVEMENTS:-
[A]
2007:- M/S WIN PET & POLYMERS takes over AESA, PREMIER Air
Engineering company Headquarter in Armenia. 2007:- M/S WIN PET & POLYMERS acquires Quick mill Inc, leading machine tool company in Canada. [C] 1996:- M/S WIN PET &POLYMERSForas was set up. [D] 1992:- M/S WIN PET & POLYMERS celebrated its centenary year. [E] 1993:- M/S WIN PET & POLYMERS International created. [F] 1988:- M/S WIN PET &POLYMERSImpex was set up. operation. [H] 1989:- Export Division was formed. 1992:- Manufacturing division was started in Ghaziabad. [J ]1991:- M/S WIN PET & POLYMERS was incorporated as LTD. Company. [L] 1892:- M/S WIN PET & POLYMERS Established as selling organization in Mumbai.
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CHAPTER-III INDUSTRIAL PROFILE
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INDUSTRY PROFILE
CUSTOM HOUSE AGENT & LOGISTIC industry is growing day-by-day. Due the concept of “Borderless World”, growth of country’s international trade is rising at a faster rate. If we look for India, its international trade is been rising at a rapid rate.
LOGISTICS
Origin of logistics goes back to France where it was used for military organizations. Importance of logistics emerged during 1st& 2nd world war. Logistics is the flow of goods and services & information from point of origin to the point of consumption. It is the part of supply chain management. TWO TYPES:[1]Inbound logistics:It involves all activities in inflow of raw material from supplier to manufacturing site and through different stages of production. [2] Outbound logistics:It involves all activities in outflow of final product from manufacture through various stages to the final consumer.
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[A] Custom Clearance: - For Imports and Exports
Freight Forwarding:– Imports and Exports – Having principals around the globe where M/s win pet & polymers can handle carriages on warehouse –to warehouse basis stuffing the container – custom clearance at port of loading / issuance of bill of lading / Follow up for non negotiable documents and on receiving documents / checking & tracking of container / arrival of vessel / planning for custom clearance etc. and viceversa for exports
[C] Consultant for Licenses with DGFT: – Have Good consultant who can help you for various licenses / advance licenses / selling of licenses (DEPB) after receiving your inputs with data of your products can help you to know the incentives / licenses.
[D] Consultant for Customs and Central Excise: – Have Good consultant who can guide you various procedures involved in the trade.
[E] Shipping Lines:-Since last three decades – having good contacts with shipping lines for exports and imports.
[F] Transporter: – Having good reputed Transporters who can provide good trailers of 20’ ft and 40’ ft with reliability.
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M/S WIN PET & POLYMERS .gives complete Logistics to its customers under one Roof from Delhi/Mumbai (JNPT Sea Port / Mumbai Sea Port/ Sahara other metropolitan cities. Airport ) and
CUSTOM HOUSE AGENT
Custom house agent is one who makes the export/Import process easier for exporter/Importer. He is the connecting link between exporter/Importer and custom officers. He makes cargo examination through custom officers & its clearance and makes sure that goods reach the port without delay. He makes sure that, all the documents are attached and have necessary stamps and signature of custom officers. He also makes sure that all necessary documents are attached. CUSTOM HOUSE AGENT is appointed by customs. He makes Import/Export process simpler. He acts as a mediator. For clearing the cargo customs ; CHAs charge competitive fees. When out of charge is given to cargo and it moves to the respective port. The responsibility gets transferred to the clearing & forwarding agent. The material/cargo goes in the custody of freight forwarder; Here the role of CHA ends.
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TRENDS IN EXPORT OF INDIA SINCE LAST FIVE YEARS:-(2005-2012)
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CHAPTER-IV RESEARCH DESIGN & METHODOLOGY
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RESEARCH METHODOLOGY
The very common meaning of research is “a research for knowledge”. Research is an art of scientific investigation. It is a movement from the known to the unknown. Curiosity is an essential natural feeling of every human being. Research is defined as “the process which includes defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis” Whether the unknown fact confronts us, we try to find the meaning and cause of that fact. This feeling of human being is the mother of all knowledge and the method which he employs for obtaining the knowledge of whatever the unknown is called as Research. Thus, research is voyage of discovery. It is a scientific systematic search for pertinent information on a specific topic. It is an organized enquiry. It clarifies doubtful facts. It corrects the misconceived facts or ideas. It seeks to find explanation to unexplained phenomenon. In fact, research is an original contribution to the existing stock of knowledge making for its advancement. It is the pursuit of truth with the help of study, observation, comparison and experiment. In short, research is nothing but the search for knowledge though objective. It is a systematic method of finding solution to a problem.
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CHAPTER-V DATA PRESENTATION,ANALYSIS & INYERPRETATION
21
Data Collection:-
TYPES OF DATA
i.)
Primary Data
rimary data are obtained by study specifically designed to fulfill the data needs of the problems at hand. Such data are original in character and are generated in large number of surveys conducted mostly by Government and also by some individuals, institutions and research bodies.
Methods of Collecting Primary Data:
i. ii. iii. iv. v. Direct personal interviews. Indirect oral interviews Mailed questionnaire method Information from correspondents Schedules sent through enumerator.
ii.)
Secondary Data:It is the data which are not originally collected but rather obtained from published or unpublished sources are known as secondary data. The secondary data constitutes the chief material on the basis of which stastical work is carried out in many investigations.
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Methods of Collecting Primary Data:
? ? ? ? ? ? ? ? ?
Books Records Biographies Newspapers Published censuses or other statistical data Data archives Internet articles Research articles by other researchers (journals) Databases
? ?
Published sources and Unpublished sources.
Methods used to collect data in project:-
Primary Data:
i. Personal Interview with officials.
? Secondary Data
i. ii. iii. Company magazine Company website. Reference books.
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DATA PRESENTATION, ANALYSIS AND INTERPRETATION
Salient Features of EOU ( EXPORT ORIENTED UNIT) Scheme
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? No license required for import. Exemption from Central Excise Duty in procurement of capital goods, raw-materials, consumables spares etc. from the domestic market. Exemption from customs duty on import of capital goods, raw materials, consumables spares etc. Reimbursement of Central Sales Tax (CST) paid on domestic purchases. Supplies from DTA to EOUs treated as deemed exports. Reimbursement of duty paid on furnace oil, procured from domestic oil companies to EOUs as per the rate of drawback notified by the Directorate General of Foreign Trade. 100%ForeignDirectInvestmentpermissible. Exchange earners foreign currency (EEFC) Account Facility to retain 100% foreign exchange proceeds in EEFC Account. Facility to realize and repatriate export proceeds within twelve months. Re-export of imported goods found defective, goods imported from foreign suppliers on loan basis etc. Exemption from industrial licensing requirement for items reserved for SSI Sector. Access to Domestic market up to 50% of FOB value of export on concessional rate of duty. Profits allowed to be repatriated freely without any dividend balancing requirement. Duty free goods to be utilised in two years. Further extension granted on liberal basis. Conversion of existing Domestic Tariff Area (DTA) unit into EOU permitted.
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ENTITLEMENT FOR SUPPLIESFROM THE DOMESTIC TARIFF AREA
Supplies from the DTA to EOU units will be regarded as “Deemed Exports” and domestic suppliers will be eligible for the following entitlements:? Reimbursement of Central ales Tax; ? Exemption from payment of Central Excise Duty on all goods as per entitlement under paragraph 6.2 of the policy. ? Discharge of export performance (EP), if any, on the supplier. ? Reimbursement of duty paid on fuels procured from domestic Oil C ? Deemed Exports Drawback. ? Refund of Terminal Excise Duty.
EXIT FOR EXPORT ORIENTEDUNIT (EOU) SET UP
With approval of DC, an EOU may opt out of scheme. Such exit shall be subject to payment of Excise and Customs duties and industrial policy in force. If unit has not achieved obligations, it shall also be liable to penalty at the time of exit. An EOU/ STP unit may also be permitted by DC to exit from the scheme at any time on payment of duty on capital goods under the prevailing EPCG Scheme for DTA Units. This will be subject to fulfilment of positive NFE criteria under EOU Scheme, eligibility criteria under EPCG scheme. Unit proposing to exit out of EOU Scheme shall intimate DC and customs and Central Excise.
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Table NO.2 Distribution of Export Oriented Unit (EOU) Scheme in India
EOUs n Nos
Rajasthan 3% Uttar Pradesh 4% Haryana 4% Other 12%
Maharashtra 16% Andra Pradesh 10% West Bengal 3% Gajrat 11%
Tamil Nadu 18%
Karnataka 19%
INTERPRETATION
The Distribution of EOUs in India can be best explained through the above Pie Chart. Maharashtra, Andhra Pradesh, Tamil Nadu and Gujarat top the list in the total Number of EOUs in the region.
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Table No.3 Export from EOUs & its share in Country’s export and Net Foreign Exchange earned by EOUs. (Values in Crores)
YEAR EOUs Export Growt h Rate % India’s Export
Growth
Rate%
EOUs EOUs % Imports
India share in Export
NFEs by EOUs
NFE as % of Export 75.03 74.25 78.00 77.00 68.30 70.44 65.56 57.45 38.37 56.90 35.91 34.86
1998-99 1999-2000 2000-2001 2001-02 2002-03 2003-04 2004-05 2005-06 2006-08 2008-09 2009-10 2010-12
10278.51 12058.27 13701.29 15912.00 18743.45 23590.60 28827.58 39228.40 49462.35 69964.60. 168838.80 171498.20 17.32 13.63 16.14 17.79 25.86 22.20 36.08 26.09 41.45 141.32 1.58
130101 139579 159561 203571 209018 255137 293367 375340 456418 571779 655863 839978
9.50 7.40 14.20 27.60 2.70 22.06 14.98 27.94 21.60 25.28 14.71 28.07
7.90 8.63 8.59 7.82 8.97 9.25 9.83 10.45 10.84 12.24 25.74 20.42
2566.68 3104.80 3014.70 3659.01 5940.81 6973.00 9928.00 16692.11 30485.96 30154.50 108209.59 111707.17
7711.63 8953.47 10686.59 12252.99 12802.64 16617.60 18899.58 22536.29 18976.39 39810.10 60629.19 59791.04
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INTERPRETATION
The Net Foreign Exchange earned by EOUs over several years needs to be analysed from the data to evaluate the exact impact of EOU Scheme over foreign exchange reserves of India. Analysis of the contribution of EOUs in Indian Exports would also be done in the further upcoming part as it is very important factor which will positively contribute to balance of trade of India.
Table No.4 Net Foreign Exchange earned in % of Total exports
90 80 70 60 50 40 30 20 10 0
99-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12
EOUs % Column1 Column2
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INTERPRETATION
From the above diagram we get to know that, though initially EOUs had a great share in earning foreign exchange, a consistent fall in that share is observed. But considering the years of declining foreign exchange earnings, it can also be concluded that the reason mainly lies in the economic showdown which had affected in the given years after recession in US and EU after 2006.
Table No. 5 Export Oriented Unit (EOUs) share of India’s export
40 35 30 25 EOUs nos 20 15 10 5 0 Column1 Column2
99-01
01-02
02-03 03-04 04-05 05-06
06-07
07-08 08-09
09-10 10-11 11-12
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INTERPRETATION
In the previous analysis we analysed that the Net Foreign Exchange earned is decreasing these years. But recently opposite trend can be seen in the contribution to total exports. Hence we can say that though EOU Scheme has been successful in increasing the exports it has been not as successful to generate the net foreign exchange. The increase in exports may have been accompanied by increase in imports by the EOUs in the given period.
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CHAPTER VI EXPORT PROCEDURE
32
* EXPORT PROCEDURE*
MOVEMENT OF CARGO
EXPORTEREX
PORTER.
CHA
ANNEXURE PREPARED DOCKS STUFFING
EDI SUBMISSION FOR S/BILL PROCESS
CARTING
S/BILL GENERATION
CUSTOMS OFFICE DYNAMIC LOGISTICS APPRAISEE
CARGO DESTUFFED IN WAREHOUSE
CARGO EXAMINATION
LET EXPORT ORDER
PRINT OF SHIPPING BILL STUFFING INTO CONTAINER/CBT OUT OF CHARGE
CARGO MOVES FOR PORT
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EXPORT PROCEDURE
[A] FILING OF SHIPPING BILL:[1] Exporter will first contact CHA for the clearance of the goods from Indian Customs. [2] Exporter will mail/fax documents such as invoice, packing list etc. to concerned
CHA for Scrutiny. [3] CHA check details provided for export like,EDI Registration, IEC code, Bank A/C details product details, scheme detailsetc.
[4] Exporter gives the Export Instruction to CHA regarding exports. [5] Based on the details submitted, annexure is prepared which is submitted CMC for shipping bill number. [6] These details are forwarded to EDI service centrefor the generation of Checklist. CHA/Exporter checks& confirms for the final SB print.
CARTING:[1] In of carting, print of shipping bill number is taken. [2] Intimation is given to Dynamic logistics regarding cargo, FCL or LCL etc. [3] based on information provided, Dynamic logistic issues Gate Pass for cargo. [4] After this container is GATE IN. If container comes out of PCMC area, it first pays octroi at octroi post and then comes in. [5] Finally cargo is stuffed in the warehouse; this is known as CARTING.
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[C] CUSTOM CLEARANCE:[1] After generationof Shipping billnumber & shipping bill copy , file goes to custom officer(screen) for the appraisal. Custom officer (Appraiser) verifies the
documents,checks the claimed schemes. [ 2] If information is correct, then it is forwarded to Asst. commissioner, custom. He checks all the details case & permits for the further process .Once the commissioners approvalreceived, file goes for goods registration. [3 ] Appraise have signing authority (assessment )for the export value up to Rs.10 laces. [4] In case of value more than Rs.10 lacs, Asst. commissioner of customs use toassess the shipment. [5] After the completion of assessment process, shade appraiser (custom officer) registers thegoods. [6] Once the cargo gets registered, the next step of examination get started under the supervision of custom officer(Inspector).Physical examination of cargo is done, after which examination report is prepared, which is duly signed by the inspector. [7] Container stuffing report is prepared. In this container size, custom seal number, whether it is FCL or LCL is checked, no. of packages is checked. [8] Again the Shade appraise checks all the information, & ifinformation is correct, he issues LET EXPORT ORDER (LEO) for the movement of cargo. [9] After the receipt of LEO, cargo stuffing is done in CBT/Container by the port handling authority (Dynamic logistics). [10] Finally, out of charge print is taken from EDI & out of charge is given to cargo.
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[11] Custom seal is applied to the CBT/Container under the supervision of custom officer (Inspector) and shipment moves further for JNPT/NSICT/MUMBAI PORT (for loading on the respective Vessel)
[D] PROCEDURE INVOLVED IN FACTORY STUFF CONTAINER:For the factory stuffing permission, shipper has to apply with the customs. Once he gets the permission, he can arrange for the factory stuffing of the cargo under the supervision of excise officer. [1] At the time of loading of cargo in the container in factory, excise officers examines the material, then report is prepared & same is printed on the commercial invoice cargo. Lock it with excise seal& permit for the movement of container to the respective ICD/PORT for custom clearance & related formalities. [2] When factory stuff container report to the ICD/Port, after following the custom clearance procedure. Inspector removes the excises seal& applies custom seal followed by the out of charge process without physical examination of cargo at docks.
[E] MOVEMENT OF CARGO:- (OUTWARD) Once the custom formalities get over, CBT /Container movement procedure are handled by the handling agent .In case of ICD clearance. Here in ICD, Dihi , Dynamic logistic plays the role of handling agent with the following procedures. [1] When print is taken from EDI; out of charge is given for the cargo. [2] Along With cargo, two copies of TR1 & TR2 are sent in custom seal envelop.
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[3] Checkingof documents at the port gate is done by the port officer. There Form No.13 is collected &filled bythe transporter and it is submitted at the port gate.
[4] After checking all details & filling up of form no. 13, Transporter is allowed to gate in container inside the port where the respective vessel is birthing.[PORT IN PROCEDURE]. [5] When vessel comes at port, concerned personchecks, onwhich vessel line container is to be loaded. Accordingly he files Export Goods Manifest [EGM] of that cargo for that particular vessel in port. [6] After the container is loaded on the vessel, Original copy of TR 1 document is send to NHAVA-SHEVA /JNPT/MUMBAI PORT for their record & one copy of TR 2 is send back to ICD (To concern CHA) for the assurance that cargo has been loaded & exported to respective destination. [7] When the concern CHA receives the TR 2 copy, on that basis A.R.E. copy and E. P. copy as well scheme copy (if applicable) is released form the customs and given to concerned party for their confirmation that their goods have been exported.
[F] BIFERCATION OF SHIPPING BILL:Normally there are seven copies of shipping bill get generated, in case of scheme benefit number of copies are Eight by customs. Earlier in manual filing of shipping bill the colour code was given for the scheme wise .But in case of online submission(EDI) there is no colour code for the scheme all are in white colour only .The bifurcation of shipping bill copies is as below:-
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[1] First original:- it is a customs copy which are keep with customs for their record & are not returnable. [2] Second original:-Which is Exchange control copy which is for the exporter’s record returned to exporter after the movement of cargo from the customs.
[3] Third original:- It is called Export promotion copy(EP).This s copy is also given to the Exporter for his record. [4] Fourth original:-This is the scheme copy (if any) given to the customs; by which exporter gets benefit after the export. Exporter can get certain amount of incentives from Government of India, against the export. [5] Fifthoriginal:-It is called as Examination Report, this copy is given to the customs; which indicates that goods have been examined under the supervision of custom officer (Inspector), and goods are ready for their further movement. [6] Sixth original:-Which is Exporter copy; given to the therespectiveparty(Exporter) for their confirmation that goods have been moved for the port for further export. [7] Seventh original:- These are called as Transference 1&Transference 2 copies which are given with the cargo which required to show at the container/CBT reach their for further export. port gate when
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CHAPTER VII DOCUMENTATION
39
DOCUMENTS
A.
INVOICE NO.
B. PAKAGING LIST.
C. CHECK LIST.
D.A.R.E FORM.
40
E.SDF FORM.
F. DECLARATION
FORM.
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[H] SHIPPING BILL:{1} Exporter copy. {2} Custom copy. {3}Export Promotion copy. {4} Exchange control copy. {5}Transference 1. {6} Transference 2. {7} Examination Report. {8} DEPB copy: if any.
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NATURE OF PAYMENTS FOR EXPORT:-
[A] Letter of credit- {LC}.
Not Applicable - {NA}. [C] Direct Payment - {DP}. [D] Advance Payment- {AP}.
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EXPORT CLIENTS
[1] DSM India pvt.ltd. [2] Filtrum polymers pvt, ltd. [3] Korou services. [4] POLYBOND India pvt.ltd. [5] Mapro foods pvt.ltd. [6] Water treatment equipments. [7] Super thermotech. [8] Electro lead Pune pvt.ltd. [9] Pushpam foods and beverages pvtltd. [10] Master handler’s pvt.ltd. [11] Green ways health care pvt.ltd. [12] Uniklinger ltd. [13] ACME tools.
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MATERIAL HANDLING TOOLS
TYPES OF CONTAINERS USED IN SHIPMENT
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46
PACKING OF MATERIAL
47
CUSTOM SEAL
HANDLING AT THE PORT
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EXPORT BY SEA WAYS
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EXPORT BY LAND WAYS
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EXPORT BY AIRWAYS
51
CHAPTER VIII INCOTERMS 2011
52
INCOTERMS 2011
Published by the International Chamber of Commerce (ICC) to be used in international transactions:? First published in 1936. ? Reviewed every 10 years to ensure that they are kept up to date with current trade practices. Inco terms 2011 will be effective from January 2012. ? Post 1st January 2012 the number of categories has been reduced from four to two. ? These categories cover:? ? Terms for any mode or modes of transport, or: Terms for sea and inland waterway transport.
? Current number of 13 Inco terms will be reduced to 11.
In international trade, it would be best for exporters to refrain, wherever possible, from dealing in trade terms that would hold the seller responsible for the import customs clearance and/or payment of import customs duties and taxes and/or other costs and risks at the buyer's end, for example the trade terms DEQ (Delivered Ex Quay) and DDP (Delivered Duty Paid). Quite often, the charges and expenses at the buyer's end may cost more to the seller than anticipated. To overcome losses, hire a reliable customs broker or freight forwarder in the importing country to handle the import routines. Similarly, it would be best for importers not to deal in EXW (Ex Works), which would hold the buyer responsible for the export customs clearance, payment of export customs charges and taxes, and other costs and risks at the seller's end.
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? The following Inco terms will be removed:[A] DAF. DES. [C] DEQ. [D] DDU.
• The new Inco terms are being introduced:
[A] DAT. DAP.
? Reduction in the number of Terms for any Mode of Transport:-
• These consists of the following seven terms:[A] CIP: Carriage and Insurance Paid To. CPT: Carriage Paid To. [C] DAP: Delivered At Place. [D] DAT: Delivered At Terminal. [E] DDP: Delivered Duty Paid. [F] EXW: Ex Works. [G] FCA: Free Carrier.
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Terms for Sea & Inland Waterways:• These consists of the following four terms:[A] CFR: Cost and Freight to. CIF: Cost, Insurance and Freight to. [C] FAS: Free Alongside Ship. [D] FOB: Free On Board.
[A] EXW :-{Ex Works}
Ex means from. Works means factory, mill or warehouse, which is the seller's premises. EXW applies to goods available only at the seller's premises. Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks. In practice, it is not uncommon that the seller loads the goods on truck or container at the seller's premises without charging loading fee. In the quotation, indicate the named place (seller's premises) after the acronym EXW, for example EXW Kobe and EXW San Antonio. The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works.
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FCA:-{Free Carrier}
The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller's premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller's expense. The point (depot) at origin may or may not be a customs clearance center. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks. In the air shipment, technically speaking, goods placed in the custody of an air carrier is considered as delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air shipment. The term FCA is also used in the RO/RO (roll on/roll off) services. In the export quotation, indicate the point of departure (loading) after the acronym FCA, for example FCA Hong Kong and FCA Seattle. Some manufacturers may use the former terms FOT (Free On Truck) and FOR (Free On Rail) in selling to export-traders.
[C] FAS:-{Free Alongside Ship}
Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard the ship, at seller's expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks. In the export quotation, indicate the port of origin (loading) after the acronym FAS, for example FAS New York and FAS Bremen. The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels.
56
[D]FOB:-{Free
On
Board}
The delivery of goods on board the vessel at the named port of origin (loading), at seller's expense. Buyer is responsible for the main carriage /freight, cargo insurance and othercosts and risks. In the export quotation, indicate the port of origin (loading) after the acronym FOB, for example FOB Vancouver and FOB Shanghai. Under the rules of the INCOTERMS 1990, the term FOB is used for ocean freight only. However, in practice, many importers and exporters still use the term FOB in the air freight. In North America, the term FOB has other applications. Many buyers and sellers in Canada and the U.S.A. dealing on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and FOB Destination. FOB Origin means the buyer is responsible for the freight and other costs and risks. FOB Destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyer's premises, which may include the import customs clearance and payment of import customs duties and taxes at the buyer's country, depending on the agreement between the buyer and seller. In international trade, avoid using the shipping terms FOB Origin and FOB Destination, which are not part of the INCOTERMS (International Commercial Terms).
57
[E] CFR :-{Cost and Freight}
The delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the cargo insurance and other costs and risks. The term CFR was formerly written as C&F. Many importers and exporters worldwide still use the term C&F. In the export quotation, indicate the port of destination (discharge) after the acronym CFR, for example CFR Karachi and CFR Alexandria. Under the rules of the INCOTERMS 1990, the term Cost and Freight is used for ocean freight only. However, in practice, the term Cost and Freight (C&F) is still commonly used in the air freight.
[F] CIF:-{Cost, Insurance and Freight}:The cargo insurance and delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the import customs clearance and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym CIF, for example CIF Pusan and CIF Singapore. Under the rules of the INCOTERMS 1990, the term CIF is used for ocean freight only. However, in practice, many importers and exporters still use the term CIF in the air freight.
58
[G] CPT:-{Carriage Paid To} The delivery of goods to the named place of destination (discharge) at seller's expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks. In the export quotation, indicate the place of destination (discharge) after the acronym CPT, for example CPT Los Angeles and CPT Osaka.
[H] CIP:-{Carriage
and Insurance Paid To}
The delivery of goods and the cargo insurance to the named place of destination (discharge) at seller's expense. Buyer assumes the import customs clearance, payment of customs duties and taxes, and other costs and risks. In the export quotation, indicate the place of destination (discharge) after the acronym CIP, for example CIP Paris and CIP Athens.
DAF:-{Delivered At Frontier}
The delivery of goods to the specified point at the frontier at seller's expense. Buyer is responsible for the import customs clearance, payment of customs duties and taxes, and other costs and risks. In the export quotation, indicate the point at frontier (discharge) after the acronym DAF, for example DAF Buffalo and DAF Welland.
59
[J] DES:-{Delivered Ex Ship}
The delivery of goods on board the vessel at the named port of destination (discharge), at seller's expense. Buyer assumes the unloading fee, import customs clearance, payment of customs duties and taxes, cargo insurance, and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym DES, for example DES Helsinki and DES Stockholm.
[K] DEQ:-{Delivered Ex Quay}
The delivery of goods to the quay (the port) at destination at seller's expense. Seller is responsible for the import customs clearance and payment of customs duties and taxes at the buyer's end. Buyer assumes the cargo insurance and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym DEQ, for example DEQ Libreville and DEQ Maputo.
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[L] DDU:-{Delivered Duty Unpaid}
The delivery of goods and the cargo insurance to the final point at destination, which is often the project site or buyer's premises, at seller's expense. Buyer assumes the import customs clearance and payment of customs duties and taxes. The seller may opt not to insure the goods at his/her own risks. In the export quotation, indicate the point of destination (discharge) after the acronym DDU, for example DDU La Paz and DDU Ndjamena.
[M] DDP:-{Delivered Duty Paid}
The seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer's end, and the delivery of goods to the final point at destination, which is often the project site or buyer's premises. The seller may opt not to insure the goods at his/her own risks. In the export quotation, indicate the point of destination (discharge) after the acronym DDP, for example DDP Bujumbura and DDP Mbabane.
61
CHAPTER IX FINDINGS, SUGGESTION & CONCLUSION
62
FINDINGS
? M/S WIN PET & POLYMERS.is one of the growing custom house agent companies in
UTTRAKHAND & UTHER PARDESHM/S
WIN
PET
&POLYMERScaptures wide market due to his services, facilities, relationship with customers. ? It has skilled, trained & experienced staff, which takes care of whole activities of export. ? M/s win pet &polymers provides services like consultant for Advance license; DEPB, EPCG, DBK etc, custom clearance, Cargo handling, Coordination with overseas agents. ? Strives for continuous improvement. ? M/s win pet &polymers has IATA & FIATA certifications. ? M/S WIN PET & POLYMERS. Provide services to his customer with very affordable competitive charges. ? It is an internationally recognized CUSTOM HOUSE AGENT for custom clearance of cargo from Indian Customs.
63
BENEFITS AT M/S WIN PET & POLYMERS:-
1. Different Service facilities are provided within shorter period of time. 2. Customs clearance facility available near the M/s win pet & polymersoffice. 3. Reduced level of burden on Importer OR Exporter. 4. Competitive clearance cost. 5. Increased trade flows. 6. One of the internationally recognized organization in Import-Export clearance which have highly skilled & dedicated staff.
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CHAPTER- X BIBLIOGRAPHY
65
BIBLIOGRAPHY
BOOKS
? BY R.K. Jain Foreign Trade Policy and Handbook of Procedures Centex Publications Pvt Ltd. As on 23rd Aug 2010.
? By Kothari. C.R Research Methodology 2nd edition 2004.
? By Michael Vaz Export Marking Manan Prakashan Pvt Ltd. 2nd edition June 2011.
66
REFERENCES:-
[A] WWW.M/s win pet & polymers.com Import-Export Provisions Handbook. [C] Customs Law. [D] Customs Tariff.
67
ANNEXURE
? ? ? ? ?
www.eouindia.gov.in www.tradeindia.com www.indianjournals.com www.commerce.nic.in/annual2006-07html/chapter6.html www.vsez.gov.in
68
doc_157657991.docx
its very useful to international bushiness students in behalf of making (SIP) project.
thank you.
A PROJECT REPORT ON
“A STUY OF EXPORT PROCESS & DOCUMENTS OF GIVEN M/S WIN PET & POLYMERS. IN UTHRAKHAND AREA IN ROORKEE CITY”
FOR
“M/S WIN PET & POLYMERS”
SUBMITTED TO
“UNIVERSITY OF PUNE”
IN PARTIAL FULFILLMENT OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (M.B.A.)
BY
MOHD.AHMED
UNDER THE GUIDANCE OF
PROF. RAGHUNUNDAN HELWADE
THROUGH
NBN SINHGAD SCHOOL OF MANAGEMENT STUDIES, AMBEGAON (BK.), PUNE-411041 2012-2014
1
ACKNOWLEDGEMENT
It gives me immense pleasure to present a report on export procedure & documentation involved at M/S WIN PET & POLYMERS. This project report could not be possible without the able guidance of Mr. MUDASSIR HASSAN. I am also thankful to my college placement cell for providing me opportunity for working with this organization. I thank my parents who every time supported & motivated me during my summer internship project. I am heartily thankful to the whole unit of m/s win pet & polymers for the warm response they had given To complete my summer training . I am also thankful to the MR.RAFIQ SHABAN (GENERAL MANEGER ) to give this opportunity to undertake this project in his reputed organization. I am extremely thankful to those who were directly OR indirectly involved for providing me necessary support and encouragement during my project.
MOHD.AHMED
2
EXECUTIVE SUMMARY/ABSTRACT
The M/S WIN PET & POLYMERS is a Custom house agent company which provides quality services. This can be gauged from the fact that every year many clients are adding up & exporting through this company. This organization has modern equipments with highly skilled & trained officials. Company operates its business in Roorkee and provides global exposure to the people who want to import or export. It also does the work of custom clearance. It charges affordable fees for this activity. The greater Advantage Company has is it has custom office situated in its premises, so minimum time is required for clearance work. Quick dispatch of goods is possible from ICD to the port. It avoids the delay in further processes. I spoke with different operation people of the company regarding their rules and procedures of export & I found that the overall procedure is easy and simple. I have also gone through the list of the clients who are regular exporter or importer through M/S WIN PET & POLYMERS. I spoke with some of their clients & most of them were satisfied by the service provided by company. By discussion with officials, I came to know that their clients were increasing in number over the period of time. This is one of the growing companies in India and it needs some time to expand its business. By providing quality services, I am sure that this corporation will achieve the no. 1 position as a CUSTOM HOUSE AGENT.
3
INDEX
SR.NO CHAPTER I CHAPTER II CHAPTER III CHAPTER IV CHAPTER V
PARTICULARS INTRODUCTION COMPANY PROFILE INDUSTRIAL PROFILE RESEARCH DESIGN & METHODOLOGY DATA PRESENTATION,ANALYSIS & INYERPRETATION EXPORT PROCEDURE DOCUMENTATION
PAGE NO. 5-8 9-12 13-18 19-20 21-31
CHAPTER VI CHAPTER VII CHAPTER VIII
32-38 39-51 52-61
INCOTERMS 2011
CHAPTER IX CHAPTER X CHAPTER XI
FINDINGS, SUGGESTION & CONCLUSION BIBLIOGRAPHY ANNEXURE
62-64 65-67 68
4
CHAPTER-I INTRODUCTION
5
INTRODUCTION TO THE TOPIC
In today’s world of globalization, the importance of IMPORT & EXPORT is increasing at a faster rate. Almost every country in the, now-a-days, engages itself in international trade. A Nation gains particularly due to export because lots of foreign exchange reserves are generated through export & its industries get profit after export.
Exports have direct impact on Balance of trade& Balance of payment positions, of any nation. Day by day, India’s export is mounting at a faster rate.
As I have chosen, International business as my specialization area, in MBA, by studying export procedure & documentation, I will get thorough knowledge of how export takes place? what are the different documents required for export? How the work of customs examination & clearance takes place?
I would also know, what are the different benefits/incentives exporter gets from government after export. In addition to this, I would also know what is current trend of export of India & its Balance of payment position.
In addition to that, I will also get the practical exposure to study the whole export procedure, under the able guidance of skilled & trained officials of CUSTOM HOUSE AGENT.
6
OBJECTIVES
1 .To study the 100% Export Oriented Unit (E.O.U) Scheme of M/s win pet polymers pvt Ltd. 2. To study the export procedure and the documents maintained for implementation of Export Oriented Unit (EOU) Scheme. 3. To understand the benefits associated with the Export Oriented Unit (EOU) Scheme which gives a competitive edge of these exporting companies. 4. To know the distribution of Export Oriented under the various states India. 5. To understand the contribution and share of Export process & documentation in India’s international trade especially exports. of &
7
SCOPE
The scope of project of 100% Export process Scheme consists of the study of the documents maintained by the company. It has been observed that various types of documents maintained by the company. The study involved verification of records and checking of various documents, core functioning of Export Oriented Unit.
Limitations
1. Due to confidentiality policy of the company, some of the information related to the export scheme was not shared by the company. 2. The company representative had limited time for interaction because of their busy schedule.
3. The time period for the completion of the project was limited to two months.
8
CHAPTER-II COMPANY PROFILE
9
COMPANY PROFILE
[PROFESSIONALS IN CUSTOM CLEARANCE & FREIGHT FORWARDING]
M/S WIN PET & POLYMERS introduce themselves as
pioneer’s in the field of
Licensed Customs House Agent (Tin No. 05009493609) and International Freight Forwarders, and allied activities connected to Government Bodies. Since 1987 company specialize for clearance of New and Second hand Machineries. Company have the recognition from IATA//FIATA and DG Shipping Registration. M/S WIN PET & POLYMERS. is in this field with a team of Professionally skilled, dedicated and highly experienced personnel and extending economic, competitive and best services to our value to customers on permanent basis.
M/s win pet & polymers have good associations with Customs and Airlines, Shipping Companies and overseas agents.
Govt. Depts,
PHILOSOPHY:By giving best premium quality services, M/s win pet & polymers. get recommendation from trade & enabling business growth.
MISSION:Be a global engineering company with leadership in our chosen fields in niche markets with commitment to deliver quality products and services to our customers’ delights and focus on creating shareholders value.
10
VALUES:[1] Commitment to customer satisfaction. [2] Steady growth of business with growth profit. [3] People are main resources, we encourage & appreciate resourceful employee. [4] Provide environment to foster creativity & innovation. [5] Encourage involvement of people through trust, communication, delegation. [6] Continuous introduction of modern & appreciate technology, products of good quality backed by efficient after sale service.
SERVICES:[A] Ocean Freight. Air Freight. [C] Door-To-Door Pick up & Delivery. [D] Customs clearance. [E] Transport. [F] Import licensing. [G] Insurance. [H] LCL Consolidation.
11
Warehousing. [J] Projects Handing. [K] Complete Logistics.
ACHIVEMENTS:-
[A]
2007:- M/S WIN PET & POLYMERS takes over AESA, PREMIER Air
Engineering company Headquarter in Armenia. 2007:- M/S WIN PET & POLYMERS acquires Quick mill Inc, leading machine tool company in Canada. [C] 1996:- M/S WIN PET &POLYMERSForas was set up. [D] 1992:- M/S WIN PET & POLYMERS celebrated its centenary year. [E] 1993:- M/S WIN PET & POLYMERS International created. [F] 1988:- M/S WIN PET &POLYMERSImpex was set up. operation. [H] 1989:- Export Division was formed. 1992:- Manufacturing division was started in Ghaziabad. [J ]1991:- M/S WIN PET & POLYMERS was incorporated as LTD. Company. [L] 1892:- M/S WIN PET & POLYMERS Established as selling organization in Mumbai.
12
CHAPTER-III INDUSTRIAL PROFILE
13
INDUSTRY PROFILE
CUSTOM HOUSE AGENT & LOGISTIC industry is growing day-by-day. Due the concept of “Borderless World”, growth of country’s international trade is rising at a faster rate. If we look for India, its international trade is been rising at a rapid rate.
LOGISTICS
Origin of logistics goes back to France where it was used for military organizations. Importance of logistics emerged during 1st& 2nd world war. Logistics is the flow of goods and services & information from point of origin to the point of consumption. It is the part of supply chain management. TWO TYPES:[1]Inbound logistics:It involves all activities in inflow of raw material from supplier to manufacturing site and through different stages of production. [2] Outbound logistics:It involves all activities in outflow of final product from manufacture through various stages to the final consumer.
14
[A] Custom Clearance: - For Imports and Exports
Freight Forwarding:– Imports and Exports – Having principals around the globe where M/s win pet & polymers can handle carriages on warehouse –to warehouse basis stuffing the container – custom clearance at port of loading / issuance of bill of lading / Follow up for non negotiable documents and on receiving documents / checking & tracking of container / arrival of vessel / planning for custom clearance etc. and viceversa for exports
[C] Consultant for Licenses with DGFT: – Have Good consultant who can help you for various licenses / advance licenses / selling of licenses (DEPB) after receiving your inputs with data of your products can help you to know the incentives / licenses.
[D] Consultant for Customs and Central Excise: – Have Good consultant who can guide you various procedures involved in the trade.
[E] Shipping Lines:-Since last three decades – having good contacts with shipping lines for exports and imports.
[F] Transporter: – Having good reputed Transporters who can provide good trailers of 20’ ft and 40’ ft with reliability.
15
M/S WIN PET & POLYMERS .gives complete Logistics to its customers under one Roof from Delhi/Mumbai (JNPT Sea Port / Mumbai Sea Port/ Sahara other metropolitan cities. Airport ) and
CUSTOM HOUSE AGENT
Custom house agent is one who makes the export/Import process easier for exporter/Importer. He is the connecting link between exporter/Importer and custom officers. He makes cargo examination through custom officers & its clearance and makes sure that goods reach the port without delay. He makes sure that, all the documents are attached and have necessary stamps and signature of custom officers. He also makes sure that all necessary documents are attached. CUSTOM HOUSE AGENT is appointed by customs. He makes Import/Export process simpler. He acts as a mediator. For clearing the cargo customs ; CHAs charge competitive fees. When out of charge is given to cargo and it moves to the respective port. The responsibility gets transferred to the clearing & forwarding agent. The material/cargo goes in the custody of freight forwarder; Here the role of CHA ends.
16
TRENDS IN EXPORT OF INDIA SINCE LAST FIVE YEARS:-(2005-2012)
17
18
CHAPTER-IV RESEARCH DESIGN & METHODOLOGY
19
RESEARCH METHODOLOGY
The very common meaning of research is “a research for knowledge”. Research is an art of scientific investigation. It is a movement from the known to the unknown. Curiosity is an essential natural feeling of every human being. Research is defined as “the process which includes defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis” Whether the unknown fact confronts us, we try to find the meaning and cause of that fact. This feeling of human being is the mother of all knowledge and the method which he employs for obtaining the knowledge of whatever the unknown is called as Research. Thus, research is voyage of discovery. It is a scientific systematic search for pertinent information on a specific topic. It is an organized enquiry. It clarifies doubtful facts. It corrects the misconceived facts or ideas. It seeks to find explanation to unexplained phenomenon. In fact, research is an original contribution to the existing stock of knowledge making for its advancement. It is the pursuit of truth with the help of study, observation, comparison and experiment. In short, research is nothing but the search for knowledge though objective. It is a systematic method of finding solution to a problem.
20
CHAPTER-V DATA PRESENTATION,ANALYSIS & INYERPRETATION
21
Data Collection:-
TYPES OF DATA
i.)
Primary Data
rimary data are obtained by study specifically designed to fulfill the data needs of the problems at hand. Such data are original in character and are generated in large number of surveys conducted mostly by Government and also by some individuals, institutions and research bodies.Methods of Collecting Primary Data:
i. ii. iii. iv. v. Direct personal interviews. Indirect oral interviews Mailed questionnaire method Information from correspondents Schedules sent through enumerator.
ii.)
Secondary Data:It is the data which are not originally collected but rather obtained from published or unpublished sources are known as secondary data. The secondary data constitutes the chief material on the basis of which stastical work is carried out in many investigations.
22
Methods of Collecting Primary Data:
? ? ? ? ? ? ? ? ?
Books Records Biographies Newspapers Published censuses or other statistical data Data archives Internet articles Research articles by other researchers (journals) Databases
? ?
Published sources and Unpublished sources.
Methods used to collect data in project:-
Primary Data:
i. Personal Interview with officials.
? Secondary Data
i. ii. iii. Company magazine Company website. Reference books.
23
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
Salient Features of EOU ( EXPORT ORIENTED UNIT) Scheme
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? No license required for import. Exemption from Central Excise Duty in procurement of capital goods, raw-materials, consumables spares etc. from the domestic market. Exemption from customs duty on import of capital goods, raw materials, consumables spares etc. Reimbursement of Central Sales Tax (CST) paid on domestic purchases. Supplies from DTA to EOUs treated as deemed exports. Reimbursement of duty paid on furnace oil, procured from domestic oil companies to EOUs as per the rate of drawback notified by the Directorate General of Foreign Trade. 100%ForeignDirectInvestmentpermissible. Exchange earners foreign currency (EEFC) Account Facility to retain 100% foreign exchange proceeds in EEFC Account. Facility to realize and repatriate export proceeds within twelve months. Re-export of imported goods found defective, goods imported from foreign suppliers on loan basis etc. Exemption from industrial licensing requirement for items reserved for SSI Sector. Access to Domestic market up to 50% of FOB value of export on concessional rate of duty. Profits allowed to be repatriated freely without any dividend balancing requirement. Duty free goods to be utilised in two years. Further extension granted on liberal basis. Conversion of existing Domestic Tariff Area (DTA) unit into EOU permitted.
24
ENTITLEMENT FOR SUPPLIESFROM THE DOMESTIC TARIFF AREA
Supplies from the DTA to EOU units will be regarded as “Deemed Exports” and domestic suppliers will be eligible for the following entitlements:? Reimbursement of Central ales Tax; ? Exemption from payment of Central Excise Duty on all goods as per entitlement under paragraph 6.2 of the policy. ? Discharge of export performance (EP), if any, on the supplier. ? Reimbursement of duty paid on fuels procured from domestic Oil C ? Deemed Exports Drawback. ? Refund of Terminal Excise Duty.
EXIT FOR EXPORT ORIENTEDUNIT (EOU) SET UP
With approval of DC, an EOU may opt out of scheme. Such exit shall be subject to payment of Excise and Customs duties and industrial policy in force. If unit has not achieved obligations, it shall also be liable to penalty at the time of exit. An EOU/ STP unit may also be permitted by DC to exit from the scheme at any time on payment of duty on capital goods under the prevailing EPCG Scheme for DTA Units. This will be subject to fulfilment of positive NFE criteria under EOU Scheme, eligibility criteria under EPCG scheme. Unit proposing to exit out of EOU Scheme shall intimate DC and customs and Central Excise.
25
26
Table NO.2 Distribution of Export Oriented Unit (EOU) Scheme in India
EOUs n Nos
Rajasthan 3% Uttar Pradesh 4% Haryana 4% Other 12%
Maharashtra 16% Andra Pradesh 10% West Bengal 3% Gajrat 11%
Tamil Nadu 18%
Karnataka 19%
INTERPRETATION
The Distribution of EOUs in India can be best explained through the above Pie Chart. Maharashtra, Andhra Pradesh, Tamil Nadu and Gujarat top the list in the total Number of EOUs in the region.
27
Table No.3 Export from EOUs & its share in Country’s export and Net Foreign Exchange earned by EOUs. (Values in Crores)
YEAR EOUs Export Growt h Rate % India’s Export
Growth
Rate%
EOUs EOUs % Imports
India share in Export
NFEs by EOUs
NFE as % of Export 75.03 74.25 78.00 77.00 68.30 70.44 65.56 57.45 38.37 56.90 35.91 34.86
1998-99 1999-2000 2000-2001 2001-02 2002-03 2003-04 2004-05 2005-06 2006-08 2008-09 2009-10 2010-12
10278.51 12058.27 13701.29 15912.00 18743.45 23590.60 28827.58 39228.40 49462.35 69964.60. 168838.80 171498.20 17.32 13.63 16.14 17.79 25.86 22.20 36.08 26.09 41.45 141.32 1.58
130101 139579 159561 203571 209018 255137 293367 375340 456418 571779 655863 839978
9.50 7.40 14.20 27.60 2.70 22.06 14.98 27.94 21.60 25.28 14.71 28.07
7.90 8.63 8.59 7.82 8.97 9.25 9.83 10.45 10.84 12.24 25.74 20.42
2566.68 3104.80 3014.70 3659.01 5940.81 6973.00 9928.00 16692.11 30485.96 30154.50 108209.59 111707.17
7711.63 8953.47 10686.59 12252.99 12802.64 16617.60 18899.58 22536.29 18976.39 39810.10 60629.19 59791.04
28
INTERPRETATION
The Net Foreign Exchange earned by EOUs over several years needs to be analysed from the data to evaluate the exact impact of EOU Scheme over foreign exchange reserves of India. Analysis of the contribution of EOUs in Indian Exports would also be done in the further upcoming part as it is very important factor which will positively contribute to balance of trade of India.
Table No.4 Net Foreign Exchange earned in % of Total exports
90 80 70 60 50 40 30 20 10 0
99-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12
EOUs % Column1 Column2
29
INTERPRETATION
From the above diagram we get to know that, though initially EOUs had a great share in earning foreign exchange, a consistent fall in that share is observed. But considering the years of declining foreign exchange earnings, it can also be concluded that the reason mainly lies in the economic showdown which had affected in the given years after recession in US and EU after 2006.
Table No. 5 Export Oriented Unit (EOUs) share of India’s export
40 35 30 25 EOUs nos 20 15 10 5 0 Column1 Column2
99-01
01-02
02-03 03-04 04-05 05-06
06-07
07-08 08-09
09-10 10-11 11-12
30
INTERPRETATION
In the previous analysis we analysed that the Net Foreign Exchange earned is decreasing these years. But recently opposite trend can be seen in the contribution to total exports. Hence we can say that though EOU Scheme has been successful in increasing the exports it has been not as successful to generate the net foreign exchange. The increase in exports may have been accompanied by increase in imports by the EOUs in the given period.
31
CHAPTER VI EXPORT PROCEDURE
32
* EXPORT PROCEDURE*
MOVEMENT OF CARGO
EXPORTEREX
PORTER.
CHA
ANNEXURE PREPARED DOCKS STUFFING
EDI SUBMISSION FOR S/BILL PROCESS
CARTING
S/BILL GENERATION
CUSTOMS OFFICE DYNAMIC LOGISTICS APPRAISEE
CARGO DESTUFFED IN WAREHOUSE
CARGO EXAMINATION
LET EXPORT ORDER
PRINT OF SHIPPING BILL STUFFING INTO CONTAINER/CBT OUT OF CHARGE
CARGO MOVES FOR PORT
33
EXPORT PROCEDURE
[A] FILING OF SHIPPING BILL:[1] Exporter will first contact CHA for the clearance of the goods from Indian Customs. [2] Exporter will mail/fax documents such as invoice, packing list etc. to concerned
CHA for Scrutiny. [3] CHA check details provided for export like,EDI Registration, IEC code, Bank A/C details product details, scheme detailsetc.
[4] Exporter gives the Export Instruction to CHA regarding exports. [5] Based on the details submitted, annexure is prepared which is submitted CMC for shipping bill number. [6] These details are forwarded to EDI service centrefor the generation of Checklist. CHA/Exporter checks& confirms for the final SB print.
CARTING:[1] In of carting, print of shipping bill number is taken. [2] Intimation is given to Dynamic logistics regarding cargo, FCL or LCL etc. [3] based on information provided, Dynamic logistic issues Gate Pass for cargo. [4] After this container is GATE IN. If container comes out of PCMC area, it first pays octroi at octroi post and then comes in. [5] Finally cargo is stuffed in the warehouse; this is known as CARTING.
34
[C] CUSTOM CLEARANCE:[1] After generationof Shipping billnumber & shipping bill copy , file goes to custom officer(screen) for the appraisal. Custom officer (Appraiser) verifies the
documents,checks the claimed schemes. [ 2] If information is correct, then it is forwarded to Asst. commissioner, custom. He checks all the details case & permits for the further process .Once the commissioners approvalreceived, file goes for goods registration. [3 ] Appraise have signing authority (assessment )for the export value up to Rs.10 laces. [4] In case of value more than Rs.10 lacs, Asst. commissioner of customs use toassess the shipment. [5] After the completion of assessment process, shade appraiser (custom officer) registers thegoods. [6] Once the cargo gets registered, the next step of examination get started under the supervision of custom officer(Inspector).Physical examination of cargo is done, after which examination report is prepared, which is duly signed by the inspector. [7] Container stuffing report is prepared. In this container size, custom seal number, whether it is FCL or LCL is checked, no. of packages is checked. [8] Again the Shade appraise checks all the information, & ifinformation is correct, he issues LET EXPORT ORDER (LEO) for the movement of cargo. [9] After the receipt of LEO, cargo stuffing is done in CBT/Container by the port handling authority (Dynamic logistics). [10] Finally, out of charge print is taken from EDI & out of charge is given to cargo.
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[11] Custom seal is applied to the CBT/Container under the supervision of custom officer (Inspector) and shipment moves further for JNPT/NSICT/MUMBAI PORT (for loading on the respective Vessel)
[D] PROCEDURE INVOLVED IN FACTORY STUFF CONTAINER:For the factory stuffing permission, shipper has to apply with the customs. Once he gets the permission, he can arrange for the factory stuffing of the cargo under the supervision of excise officer. [1] At the time of loading of cargo in the container in factory, excise officers examines the material, then report is prepared & same is printed on the commercial invoice cargo. Lock it with excise seal& permit for the movement of container to the respective ICD/PORT for custom clearance & related formalities. [2] When factory stuff container report to the ICD/Port, after following the custom clearance procedure. Inspector removes the excises seal& applies custom seal followed by the out of charge process without physical examination of cargo at docks.
[E] MOVEMENT OF CARGO:- (OUTWARD) Once the custom formalities get over, CBT /Container movement procedure are handled by the handling agent .In case of ICD clearance. Here in ICD, Dihi , Dynamic logistic plays the role of handling agent with the following procedures. [1] When print is taken from EDI; out of charge is given for the cargo. [2] Along With cargo, two copies of TR1 & TR2 are sent in custom seal envelop.
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[3] Checkingof documents at the port gate is done by the port officer. There Form No.13 is collected &filled bythe transporter and it is submitted at the port gate.
[4] After checking all details & filling up of form no. 13, Transporter is allowed to gate in container inside the port where the respective vessel is birthing.[PORT IN PROCEDURE]. [5] When vessel comes at port, concerned personchecks, onwhich vessel line container is to be loaded. Accordingly he files Export Goods Manifest [EGM] of that cargo for that particular vessel in port. [6] After the container is loaded on the vessel, Original copy of TR 1 document is send to NHAVA-SHEVA /JNPT/MUMBAI PORT for their record & one copy of TR 2 is send back to ICD (To concern CHA) for the assurance that cargo has been loaded & exported to respective destination. [7] When the concern CHA receives the TR 2 copy, on that basis A.R.E. copy and E. P. copy as well scheme copy (if applicable) is released form the customs and given to concerned party for their confirmation that their goods have been exported.
[F] BIFERCATION OF SHIPPING BILL:Normally there are seven copies of shipping bill get generated, in case of scheme benefit number of copies are Eight by customs. Earlier in manual filing of shipping bill the colour code was given for the scheme wise .But in case of online submission(EDI) there is no colour code for the scheme all are in white colour only .The bifurcation of shipping bill copies is as below:-
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[1] First original:- it is a customs copy which are keep with customs for their record & are not returnable. [2] Second original:-Which is Exchange control copy which is for the exporter’s record returned to exporter after the movement of cargo from the customs.
[3] Third original:- It is called Export promotion copy(EP).This s copy is also given to the Exporter for his record. [4] Fourth original:-This is the scheme copy (if any) given to the customs; by which exporter gets benefit after the export. Exporter can get certain amount of incentives from Government of India, against the export. [5] Fifthoriginal:-It is called as Examination Report, this copy is given to the customs; which indicates that goods have been examined under the supervision of custom officer (Inspector), and goods are ready for their further movement. [6] Sixth original:-Which is Exporter copy; given to the therespectiveparty(Exporter) for their confirmation that goods have been moved for the port for further export. [7] Seventh original:- These are called as Transference 1&Transference 2 copies which are given with the cargo which required to show at the container/CBT reach their for further export. port gate when
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CHAPTER VII DOCUMENTATION
39
DOCUMENTS
A.
INVOICE NO.
B. PAKAGING LIST.
C. CHECK LIST.
D.A.R.E FORM.
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E.SDF FORM.
F. DECLARATION
FORM.
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[H] SHIPPING BILL:{1} Exporter copy. {2} Custom copy. {3}Export Promotion copy. {4} Exchange control copy. {5}Transference 1. {6} Transference 2. {7} Examination Report. {8} DEPB copy: if any.
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NATURE OF PAYMENTS FOR EXPORT:-
[A] Letter of credit- {LC}.
Not Applicable - {NA}. [C] Direct Payment - {DP}. [D] Advance Payment- {AP}.
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EXPORT CLIENTS
[1] DSM India pvt.ltd. [2] Filtrum polymers pvt, ltd. [3] Korou services. [4] POLYBOND India pvt.ltd. [5] Mapro foods pvt.ltd. [6] Water treatment equipments. [7] Super thermotech. [8] Electro lead Pune pvt.ltd. [9] Pushpam foods and beverages pvtltd. [10] Master handler’s pvt.ltd. [11] Green ways health care pvt.ltd. [12] Uniklinger ltd. [13] ACME tools.
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MATERIAL HANDLING TOOLS
TYPES OF CONTAINERS USED IN SHIPMENT
45
46
PACKING OF MATERIAL
47
CUSTOM SEAL
HANDLING AT THE PORT
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EXPORT BY SEA WAYS
49
EXPORT BY LAND WAYS
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EXPORT BY AIRWAYS
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CHAPTER VIII INCOTERMS 2011
52
INCOTERMS 2011
Published by the International Chamber of Commerce (ICC) to be used in international transactions:? First published in 1936. ? Reviewed every 10 years to ensure that they are kept up to date with current trade practices. Inco terms 2011 will be effective from January 2012. ? Post 1st January 2012 the number of categories has been reduced from four to two. ? These categories cover:? ? Terms for any mode or modes of transport, or: Terms for sea and inland waterway transport.
? Current number of 13 Inco terms will be reduced to 11.
In international trade, it would be best for exporters to refrain, wherever possible, from dealing in trade terms that would hold the seller responsible for the import customs clearance and/or payment of import customs duties and taxes and/or other costs and risks at the buyer's end, for example the trade terms DEQ (Delivered Ex Quay) and DDP (Delivered Duty Paid). Quite often, the charges and expenses at the buyer's end may cost more to the seller than anticipated. To overcome losses, hire a reliable customs broker or freight forwarder in the importing country to handle the import routines. Similarly, it would be best for importers not to deal in EXW (Ex Works), which would hold the buyer responsible for the export customs clearance, payment of export customs charges and taxes, and other costs and risks at the seller's end.
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? The following Inco terms will be removed:[A] DAF. DES. [C] DEQ. [D] DDU.
• The new Inco terms are being introduced:
[A] DAT. DAP.
? Reduction in the number of Terms for any Mode of Transport:-
• These consists of the following seven terms:[A] CIP: Carriage and Insurance Paid To. CPT: Carriage Paid To. [C] DAP: Delivered At Place. [D] DAT: Delivered At Terminal. [E] DDP: Delivered Duty Paid. [F] EXW: Ex Works. [G] FCA: Free Carrier.
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Terms for Sea & Inland Waterways:• These consists of the following four terms:[A] CFR: Cost and Freight to. CIF: Cost, Insurance and Freight to. [C] FAS: Free Alongside Ship. [D] FOB: Free On Board.
[A] EXW :-{Ex Works}
Ex means from. Works means factory, mill or warehouse, which is the seller's premises. EXW applies to goods available only at the seller's premises. Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks. In practice, it is not uncommon that the seller loads the goods on truck or container at the seller's premises without charging loading fee. In the quotation, indicate the named place (seller's premises) after the acronym EXW, for example EXW Kobe and EXW San Antonio. The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works.
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FCA:-{Free Carrier}
The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller's premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller's expense. The point (depot) at origin may or may not be a customs clearance center. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks. In the air shipment, technically speaking, goods placed in the custody of an air carrier is considered as delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air shipment. The term FCA is also used in the RO/RO (roll on/roll off) services. In the export quotation, indicate the point of departure (loading) after the acronym FCA, for example FCA Hong Kong and FCA Seattle. Some manufacturers may use the former terms FOT (Free On Truck) and FOR (Free On Rail) in selling to export-traders.
[C] FAS:-{Free Alongside Ship}
Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard the ship, at seller's expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks. In the export quotation, indicate the port of origin (loading) after the acronym FAS, for example FAS New York and FAS Bremen. The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels.
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[D]FOB:-{Free
On
Board}
The delivery of goods on board the vessel at the named port of origin (loading), at seller's expense. Buyer is responsible for the main carriage /freight, cargo insurance and othercosts and risks. In the export quotation, indicate the port of origin (loading) after the acronym FOB, for example FOB Vancouver and FOB Shanghai. Under the rules of the INCOTERMS 1990, the term FOB is used for ocean freight only. However, in practice, many importers and exporters still use the term FOB in the air freight. In North America, the term FOB has other applications. Many buyers and sellers in Canada and the U.S.A. dealing on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and FOB Destination. FOB Origin means the buyer is responsible for the freight and other costs and risks. FOB Destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyer's premises, which may include the import customs clearance and payment of import customs duties and taxes at the buyer's country, depending on the agreement between the buyer and seller. In international trade, avoid using the shipping terms FOB Origin and FOB Destination, which are not part of the INCOTERMS (International Commercial Terms).
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[E] CFR :-{Cost and Freight}
The delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the cargo insurance and other costs and risks. The term CFR was formerly written as C&F. Many importers and exporters worldwide still use the term C&F. In the export quotation, indicate the port of destination (discharge) after the acronym CFR, for example CFR Karachi and CFR Alexandria. Under the rules of the INCOTERMS 1990, the term Cost and Freight is used for ocean freight only. However, in practice, the term Cost and Freight (C&F) is still commonly used in the air freight.
[F] CIF:-{Cost, Insurance and Freight}:The cargo insurance and delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the import customs clearance and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym CIF, for example CIF Pusan and CIF Singapore. Under the rules of the INCOTERMS 1990, the term CIF is used for ocean freight only. However, in practice, many importers and exporters still use the term CIF in the air freight.
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[G] CPT:-{Carriage Paid To} The delivery of goods to the named place of destination (discharge) at seller's expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks. In the export quotation, indicate the place of destination (discharge) after the acronym CPT, for example CPT Los Angeles and CPT Osaka.
[H] CIP:-{Carriage
and Insurance Paid To}
The delivery of goods and the cargo insurance to the named place of destination (discharge) at seller's expense. Buyer assumes the import customs clearance, payment of customs duties and taxes, and other costs and risks. In the export quotation, indicate the place of destination (discharge) after the acronym CIP, for example CIP Paris and CIP Athens.
DAF:-{Delivered At Frontier}
The delivery of goods to the specified point at the frontier at seller's expense. Buyer is responsible for the import customs clearance, payment of customs duties and taxes, and other costs and risks. In the export quotation, indicate the point at frontier (discharge) after the acronym DAF, for example DAF Buffalo and DAF Welland.
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[J] DES:-{Delivered Ex Ship}
The delivery of goods on board the vessel at the named port of destination (discharge), at seller's expense. Buyer assumes the unloading fee, import customs clearance, payment of customs duties and taxes, cargo insurance, and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym DES, for example DES Helsinki and DES Stockholm.
[K] DEQ:-{Delivered Ex Quay}
The delivery of goods to the quay (the port) at destination at seller's expense. Seller is responsible for the import customs clearance and payment of customs duties and taxes at the buyer's end. Buyer assumes the cargo insurance and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym DEQ, for example DEQ Libreville and DEQ Maputo.
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[L] DDU:-{Delivered Duty Unpaid}
The delivery of goods and the cargo insurance to the final point at destination, which is often the project site or buyer's premises, at seller's expense. Buyer assumes the import customs clearance and payment of customs duties and taxes. The seller may opt not to insure the goods at his/her own risks. In the export quotation, indicate the point of destination (discharge) after the acronym DDU, for example DDU La Paz and DDU Ndjamena.
[M] DDP:-{Delivered Duty Paid}
The seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer's end, and the delivery of goods to the final point at destination, which is often the project site or buyer's premises. The seller may opt not to insure the goods at his/her own risks. In the export quotation, indicate the point of destination (discharge) after the acronym DDP, for example DDP Bujumbura and DDP Mbabane.
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CHAPTER IX FINDINGS, SUGGESTION & CONCLUSION
62
FINDINGS
? M/S WIN PET & POLYMERS.is one of the growing custom house agent companies in
UTTRAKHAND & UTHER PARDESHM/S
WIN
PET
&POLYMERScaptures wide market due to his services, facilities, relationship with customers. ? It has skilled, trained & experienced staff, which takes care of whole activities of export. ? M/s win pet &polymers provides services like consultant for Advance license; DEPB, EPCG, DBK etc, custom clearance, Cargo handling, Coordination with overseas agents. ? Strives for continuous improvement. ? M/s win pet &polymers has IATA & FIATA certifications. ? M/S WIN PET & POLYMERS. Provide services to his customer with very affordable competitive charges. ? It is an internationally recognized CUSTOM HOUSE AGENT for custom clearance of cargo from Indian Customs.
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BENEFITS AT M/S WIN PET & POLYMERS:-
1. Different Service facilities are provided within shorter period of time. 2. Customs clearance facility available near the M/s win pet & polymersoffice. 3. Reduced level of burden on Importer OR Exporter. 4. Competitive clearance cost. 5. Increased trade flows. 6. One of the internationally recognized organization in Import-Export clearance which have highly skilled & dedicated staff.
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CHAPTER- X BIBLIOGRAPHY
65
BIBLIOGRAPHY
BOOKS
? BY R.K. Jain Foreign Trade Policy and Handbook of Procedures Centex Publications Pvt Ltd. As on 23rd Aug 2010.
? By Kothari. C.R Research Methodology 2nd edition 2004.
? By Michael Vaz Export Marking Manan Prakashan Pvt Ltd. 2nd edition June 2011.
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REFERENCES:-
[A] WWW.M/s win pet & polymers.com Import-Export Provisions Handbook. [C] Customs Law. [D] Customs Tariff.
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ANNEXURE
? ? ? ? ?
www.eouindia.gov.in www.tradeindia.com www.indianjournals.com www.commerce.nic.in/annual2006-07html/chapter6.html www.vsez.gov.in
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