Chamber Project

8/2/2019 Chamber Project

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PROJECT REPORT

ON EXPORT DOCUMENTATION

AND PROCEDURES

AT

TAL MANUFACTURING SOLUTIONS LIMITED.

C/O TATA MOTORS, CHINCHWAD,

PUNE 411 033.

SUBMITTED BY

xxxxxxxxxxxxxxx

IN PARTIAL FULFILLMENT OF

19TH CERTIFICATE COURSE ON FOREIGN TRADE CONDUCTED

BY MCCIA PUNE


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PREFACE

This Project Report has been compiled in the

partial fulfilment of the19th Certificate course

in Foreign Trade, at the MCCIA Pune.

This project was completed at TAL

MANUFACTURING SOLUTIONS LTD.,

CHINCHWAD, PUNE 411 033, which is a 100%

subsidiary of TATA Motors Ltd.


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TAL MANUFACTURING SOLUTIONS LTD

A PROFILE

TAL Manufacturing Solutions Ltd was incorporated on 1 April 2000 as a separateCompany by merging the resources of the erstwhile Machine Tool and GrowthDivisions of Tata Motors.

The main business of TAL Manufacturing Solutions Ltd is to design andmanufacture complete factory automation solutions to serve industries likeautomobile OEM, automobile component, light engineering, railways and defenceproduction units. TAL manufactures machine tools, equipments, test rigs,fixtures, material handling systems, assembly and process lines for a wide rangeof industrial applications and integrates them to deliver complete manufacturingsolutions.

TAL Manufacturing Solutions Ltd (TAL) is built around three business units :

Machine Tool Business Unit

Equipment Business Unit

Material handling Business Unit

TAL's Machine Tool Business Unit, in its earlier form of Machine Tool Division,has designed, built and installed more than 2000 Machine Tools for theproduction shops of Tata Motorss Automobile and other Divisions. Since theformation of TAL the customer base as well as range of products has been

substantially enhanced. TAL machines are being intensively used for round-the-clock production and they have stood the test of time for over three decades.

TAL's Technology base has been strengthened by inputs from world renownedmanufacturers like Huller-Hille and Schaudt of Germany, Niigata EngineeringCompany and Nachi Fujikoshi Corporation of Japan through technicalcollaborations. TAL also has a collaboration with Nachi Fujikoshi Corporation ofJapan for the manufacture and integration of Robots. TAL has continuously


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updated its technology to meet the growing demands for integration ofmanufacturing facilities, upgradation of production techniques and meeting therequirements of flexible production.

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TAL's Equipment Business Unit and Material handling Business Unit, in its earlierform of Growth Division, has designed and built a large number of materialhandling systems, process equipment, washing machines, heat treatmentequipment and painting systems for Tata Motors. It has made a very substantialcontribution in the setting up of the Indica car plant. Since the formation of TAL,the customer base and range of products of both these Business Units hasincreased.

PRODUCTS

TALs product range covers a broad spectrum of Machines, Equipment andMaterial Handling Systems. The product range includes:

Machines

Special Purpose Machines

Transferlines

Flexible Manufacturing Machines- CNC Vertical Machining Centres- CNC Horizontal Machining Centres- CNC High Performance Machining Centres- CNC Inline Production Centres- CNC Special Purpose Machines- CNC Transfer lines- CNC Turning Machines

CNC Die and Mould Milling Machines

Specialised Machines- Internal and Surface Broaching Machines

- Gun Drilling machines- Special CNC Milling Machines- Precision Cylindrical Grinding Machines- Internal and Face Grinding Machines- High Speed Gear Shaping Machines- Gear Shaving Machines- Gear Tooth Rounding/Chamfering Machines- Honing Machines


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- Super Finishing Machines- Spline Milling & Grinding Machines

Water Jet Cutting Machines

Robots for welding, sealant dispensing & material handling

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Equipment

Pretreatment & cathodic electrode coat deposition systems

Painting systems including Baking oven for painting systems

Asphalt plants

Foundry equipment like core-making machines and moulding lines

Gravity die casting machines

Shot blasting machines. Heat Treatment Equipment like continuous carburising and hardening

furnaces

Quenching Press and plug-quenching machines

Welding fixtures and Stretch Welding Machines

Rivet Guns

Test Rigs for automobile aggregates.

Material Handling System

Power and free conveyors

Slat conveyors

Pusher conveyors

Scrap conveyors

Towveyor conveyors

Overhead monorail

Roller conveyors

Turn tables and swivel tables for machining lines

Packaging conveyors

Multi level lifts

Scissors lift

Destackers Plate handling system for press lines

Car parking systems

Autoloaders

Manipulators

Walking beams

Lift and carry conveyors


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STRENGTHS

TAL has adequate infrastructure to keep pace with rapidly advancing technology.

Some Highlights:

TAL employs highly qualified design engineers backed by CAD facilities and anetwork of Computerised Information Systems. These engineers designmechanical aggregates as well as hydraulic / electrical / electronic controlsystems. TAL also has highly skilled and trained operatives to support its hightechnology work.

TAL has a well equipped manufacturing set-up comparable to that of anyinternationally reputed manufacturer. This set up is common to all threebusiness units. The sophisticated and high precision machines in TALinclude

: 'WALDRICH COBURG Plano Machining Centre, PMC 2500 AT-M2,: 'DIXI' 510 5-Axis CNC Horizontal Jig Boring Machine,

: 'SIP' 6A & 7A Vertical Jig Boring Machines,

: 'MAS' WKV 100 Jig Boring Machines,

: 'WALDRICH COBURG' Slideway Grinding Machines

: 'FORTUNA' Cylindrical Fine Grinding Machine

: 'STUDER' Cylindrical Fine Grinding Machine

: 'WOTAN' Internal Grinding Machines,

: 'REISHAUER' Gear Grinding Machines,


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: A fully equipped Fabrication Shop and Heat Treatment facility.

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Quality Assurance Department is equipped with latest sophisticatedMetrological instruments such as

: Laser Beam Interferometer,

: 'Talysurf' Surface Roughness Checking Machine,

: 'Zeiss' 3 Axis Co-ordinate Measuring Machine.

The Assembly Department is provided with specialised equipment, test rigsand instruments to help in building machines and equipment of excellentquality.

Controlled temperature and dust free air-conditioned environment is provided

for

: Jig Boring & Finish Grinding machines,

: Final assembly of CNC Machines and other precision Machines.

The most important asset of TAL Manufacturing Solutions Limited is itsproduction work force - a team of talented and dedicated Artisans, Craftsmenand Engineers. Their skills are being upgraded continuously throughretraining to take on new and challenging tasks. It is their team work thatfructifies into TAL's products.

TAL has been actively involved in designing and execution of the welding andpainting facilities of Telco's "Indica" Car Plant. The state of art plant boasts of75 robotic set-ups, High-technology paint shop, SPM's and CNC machines.

TAL has also supplied high precision spindles with HSK adapters for HighVelocity Ingersoll Machining Centres having run out, ovality and taper within 2microns.


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With the onset of reforms and globalisation, Indian manufacturing industry is on

the threshold of a vast opportunity of playing a very significant international role.

However it also faces challenges in technology, quality and price. TAL, with its

vast experience in this field, is uniquely poised to offer solutions which are

optimal, cost effective and technologically advanced to meet these challenges.

As a pioneer in providing total engineering solutions, TAL can leverage

technology to meet global technology needs.

The prized customers

TAL has an impressive list of customers, both in India and abroad. Some of the

overseas customers include: IIG, and AAM of USA, EDAG and Ipsen

International of Germany, Tata International, and many others.

The Indian customers include - Ashok Leyland, Mahindra & Mahindra, Tata

Motors, Bajaj Auto, Yamaha, TVS Motors, Daimler Chrysler, Escorts JCB, ZF

Steering, Comau India, Escorts Railway Products, Hindustan Composites, Audco

and many more

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INTRODUCTION

Globalization and liberalization have opened the gates of countries in the

world for Imports and Exports. Thus International Trade plays a very important

role in Todays global economy. Today no country can survive without being apart of International Trade.

In India, liberalization started in 1991. Since then, started looking forward,

for globalization of its trade. Today India is well recognized as a major force in

International Trade.

India exports its products to almost all the countries of the world like U.S.A.

etc. Indias exports can be broadly classified into two categories.

1. Traditional products

2. Non-traditional products

Traditional products include Coffee, Tea, Tobacco, Cotton, Yarn, Spices,

Jute etc. The non-traditional products include Engineering, Ready-made

Garments, Leather & Leather Manufactures, Gems & Jewellery, Chemicals and

allied products, Computer Software etc.


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India also imports items from many countries like U.S.A., U.K., Germany,

U.A.E. etc. The main items of imports are Equipment and Machinery, Crude Oil,

Electronics, Newspaper, Computer Hardware etc.

EXPORT DOCUMENTATION

Export documentation is crucial to export trade operations. There is,

however, no denying the fact that it constitutes a heavy charge on our export

activity. This is mainly due to the involvement of a number of bodies and

agencies, from both government and trade circles, which have developed their

documents to suit their own individual convenience with little regards to the strains

and stress on the totality of export operations. Besides, because of the difference

in their size and layout, these documents have got to be prepared individually and

separately, despite commonality of information. Consequently, our export

documentation work tends to be repetitive, time consuming, and prone to errors

and discrepancies involving delays at every stage of export activity. Howevercorrect documentation is very important because it alone can secure the swift

passage of information of goods through the customer resulting in prompt

payment of goods exported.

Export Documentation plays a very crucial part in the export procedure.

One of the most important differences between Domestic trade and international

trade is the much heavier documentation involved in the latter. Documentation isperceived to be one of the most complex, difficult and crucial activities of export

from India.


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Recent developments in trade documentation and office systems have

conclusively shown that the Aligned Documentation System (ADS), based on the

UN Layout Key, can help to provide an effective alternative to the repetitive,

dilatory and unproductive method of preparation of export documents. The ADS is

a methodology of creating information on a set of standardized forms printed on

paper of the same size and in such a way that the items of identical information

occupy the same position on each form. This makes it possible to prepare one

Master Document embodying the information common to all the documents

included in the aligned series and to run off all the aligned documents from the

same Master Document with the help of suitable masking and reproduction

techniques. This now can be effectively done with the help of computers.


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WORK PLAN

EXIM OVERVIEW

FLOW OF ACTIITIES:

1. ENQUIRY, OFFER, ORDER2. Work Order, Planning , ORDER EXECUTION

3. PRESHIPMENT & POSTSHIPPMENT DOCUMENTS,

BRC, SHIPMENT INSPECTION, DECLARATIONS, RETURNS

EEPC/ECGC, ETC

EXPORT BENEFITS:

EPCG, ADVANCE LICENSE,DEPB, DFRC,ARO,

DBK(All Industry Rate and Brand Rate)

EOU OPERATIONS

EXCISE PROCEDURE, DOCUMENTATION

IMPORT PROCEDURE- DTA

IMPORT PROCEDURE- EOU


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Enquiry, Offer and Order:

For TAL Manufacturing Solutions Limited (TMSL) we have our

separate associates named TATA International in India .

For marketing we have mutual co-operation with our associates who

get clients for us. We send invoice to our associates- they add up

their margin and send another invoice to the consignee. No

advertising through media is done for marketing.

We have also appointed M/s International Industrial Group (IIG) as

our agent in USA for marketing and sales promotion activities in USA

and Canada.


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STEPS TO BE TAKEN FOR EXECUTION OF AN EXPORT ORDER:

Scrutiny of export order with reference quotation.

Intimation of order confirmation to the buyer with specific terms & conditions.

Initiate action for pre-shipment export finance like Packing Credit

Initiate action for manufacture/ procurement.

Decide on whether to apply for duty free license/duty drawback

Prepare a time schedule for order execution

Obtain the letter of credit if any, and scrutiny thereof

Confirmation of letter of credit, if any

Place purchase order on manufacture if required

Open L/C on indigenous supplier, if required

Prepare application for duty free license, if required

Obtain the duty free license, if essential and scrutiny thereof

Executions of legal undertaking, Bond, Bank, Guarantee as the case may be

Import clearance of essential input duty/free paid

Inspect packing cases for exact dimensions and weights

Appointment of CHA if required


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Pre-Shipment inspection of export product

Finalization of freight with shipping company

Nomination of vessel if required

Preshipment documentation as per letter of credit (if any), with special care

for fulfillment of export obligation under EPCG license, and duty free license

and/ or to claim duty drawback/DEPB/DFRC

Execution of bond with central excise department, if required

Ensure Octroi exemption from Octroi Naka

Central excise clearance documentation

Arrange safe and smooth transportation of goods

Obtain by fax the shipping details from CHA

Intimation of shipping details to foreign buyer, consignee and insurance

company

Ensure timely receipt of documents from the CHA, Inspection authorities,

insurance company, consulates, etc.

Preparation of post- shipment documents

Negotiation of documents with the bank

Ensure receipts of export proceeds in time.

Arrange payment of commission to overseas agent, if any

Obtain bank certificate of exports and realization

Returns to ECGC


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Application for and receipt of export benefits such as refund of excise duty/

cancellation of bond, duty drawback/DEPB/DFRC

Include shipping details in returns to EPC/commodity board/DGFT etc.

Movements of Documents

This case study is all about the movements of goods in the manufactures

company i.e. the Export Company, custom house agent (CHA), port authorities

etc.

Suppose that company X is an exporter and company Y is an importer.

Now Company X in India gets a Purchase Order for supply of CNC Machining

Centre from company Y in USA. X sends its Pro-forma Invoice toY in USA.

Once the pro-forma invoice gets accepted by , X may export the machine

against advance payment or on CAD basis or X may request Y to establish

Letter of Credit. In case Letter of Credit is established it is thoroughly scrutinized

by the exporter to see whether they can meet all the requirements of the

customer. To facilitate this the exporter has to prepare their own checklist.

The L/C is checked as per the checklist and important information such as

Terms of Payment, Date Of Expiry, special requirements if any are noted


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separately and attached along with the L/C. A new file is taken and a Work Order

number i.e. W.O. No. is given to the file. This number is entered into a register

called W.O. no. Register. The importers name, the L/C amount, last date of

delivery, etc are also entered in this register. Now this L/C is sent to the bank for

confirmation. The bank confirms the L/C in consultation with the opening bank

and returns it back to the company.

Production and Planning, Design, Stores and Engineering department plans their

activities to complete the Work Order.

For the exemption of payment of the central excise duty. Finance department

executes a b-1 bond on RS. 100 stamp paper with the excise department for the

required amount and agree to give the Excise Department proof of their exports

as soon as possible.

Then the Export Cell in Finance department decides an Invoice No. and this

number is in accordance with the serial numbers maintained by the department

for their invoices. This number is then entered into the Invoice Register, which is

separately maintained.

Then the person in charge of the documentation starts preparing the

Invoice, and the Shipping Instructions. Packing List is provided by Dispatch

Department. The information is fed into the Computer where the format of the

above documents already exists. The printouts are taken and the information is

cross-checked. The packing list preparation takes a little more time because it


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can be prepared only after the packing department sends its details of packing to

the export department.

The following set of documents (Preshipment documents) are sent to the

Companys Customs House Agent (CHA):

Purchase order

Proforma invoice

Packing list

Packing details

Shipping instructions

Self Declaration Form (SDF)/General Remittance Form (GR)

Duty Drawback Declaration

N-form

Octroi Declaration

Once the set reaches the CHA, he starts his own procedures. First of all

he prepares the Shipping Bill in set whether it is Duty Free or Duty Drawback

Shipping Bill as the case may be .


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The information of the Shipping Bill is then fed into the computer by the

CHA himself in a particular format. The CHAs computer is directly linked to the

computer at the Customs House. Thus the information which is fed by the CHA is

easily available to the customs authorities. The customs officer then verifies that

the shipping bill is in order and then gives a number, which is the Shipping Bill

No. This process is known as the noting of the shipping bill

This Shipping Bill No. is then stamped by the agent onto all the copies of

the Shipping Bill.

He then goes to the customhouse for passing of the Shipping Bill. This

entails of the cross checking the information on the Shipping Bill with the other

documents. Once the Customs Personal is satisfied that the documents and the

Shipping Bill are in order, they sign it.

Then the Bill is passed onto the next counter i.e. for pre- auditing. Here

the exchange rate mentioned on the Shipping Bill is cross-checked. Once this is

done, the customs agent removes the original copy of the shipping Bill and the

original GR form. As a proof of this, a security number is put, onto the rest of the

copies of the Shipping Bill. He then adds his signature on them.

Meanwhile at the exporter informs the Inspection Agency of the day the

goods would be ready and asks them to come for the inspection, which is


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required for the customer. For the inspection the export department has to submit

certain documents to the inspecting authorities. When the inspection is over, the

authorities take copies of the commercial invoice for the purpose of affixing on

them their stamp.

Once this is done the goods are packed and dispatched to the CHA. The

CHA has his own warehouse where the goods are then stored. Once the CHA

has completed the formalities with the customs, the goods have to cross the

Octroi Naka. It is here that the Octroi Declaration and the N form are to be

submitted.

Once the goods are taken to the shed at the Mumbai Port, the inspection

agent has to be intimated. He then checks the goods physically to see if they are

as per the description in the various documents. Once he is satisfied with the

products, he signs the Shipping Bills. He retains the Export Promotion Copy with

him and the rest are given to the CHA.

The CHA then loads the goods onto the ship and is given the Mates

Receipt and the On Board Bill of Lading.

The CHA faxes the details of the vessel along with the bill of lading to the

exporter. Two days after the ship has sailed he goes to collect the E.P Copy of

the Shipping Bill from the customs shed. The customs officer then adds the

Mates receipt number to the E.P copy and then hands it back to the CHA. This

copy is usually retained by the customs for at least two days because sometimes

the ship leaves the port but returns back immediately in a few days time, due to


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technical troubles. So this ensures that the ship has finally sailed for its final

destination.

Now the CHA makes arrangements to send a set of documents to the

Octroi Naka to close the account and the rest of the documents are sent to the

exporter.

The exporter now starts preparing the Post Shipment Documents. Firstly

the importer has to be informed that the shipment has been made and the

shipping details has to be faxed to them. This is called Shipment Intimation.

The Post Shipment Documents are prepared in two sets. One is the non

negotiable set, which is sent by Courier to the Importer. These documents are as

per the letter of Credit.

The second set is sent to the bank for negotiating. According to the law in

India, the negotiable set of documents cannot be directly sent to the importer,

they have to be routed through the Bank. This set of documents include:

Letter to the Bank for Collection/ of documents

Letter of Credit

Commercial Invoice

Packing List

Packing details


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Bill of lading/ Air waybill

Certificate of Origin

Test certificate (if required)

Purchase order

Bill of Exchange (if bill collection basis)

Insurance Cover note / Policy

Any other documents mentioned in the L/C

L/C endorsed by Exporter

The Bank checks these documents for discrepancies, if there are any. If

any discrepancies are found the Bank informs the exporter of the same and if

there are none, the bank pays to the exporter

The bank keeps the GR form and 4 copies of the Invoice for its records.

The GR form is to be sent to the RBI on receipt of the payment from the importer.

Meanwhile the bank certifies two invoices and sends it back to the exporter.

Important Notes:

1. The customs department is under the jurisdiction of

Ministry of Finance. The Ministry monitors its function

through the Central Board of Excise and Customs (CBEC).


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All policy and clarificatory circulars are issued by the Board

for effective implementation of Customs Act Provisions.

2. If import and Export activities are done between the related

persons, the valuation method, applicable would be as per

valuation code 1988. There are number of case Laws by

which various aspects of valuation are settled. The importer/

exporter needs to get familiarized with the special valuation

procedure

3. To get familiarized with the Customs Policy and Procedures

you should refer to the Customs Law Manual.

4. In the endeavor of government of India to have a common

identification for any exporter importer, based on an Importer

Exporter Code number allotted by the office of DGFT a new

Business Identification Number (BIN) is generated

electronically.

This number is required to be mentioned in all statutory

documents. Customs department will not process any import

export clearance documents without the BIN.


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