INTERNSHIP ON EXPORT-IMPORT PROCEDURES AT MARKS CARGO PRIVATE LIMITED, PUDUCHERRY

SANTHAN R, MBA IB 2013-15

PONDICHERRY UNIVERSITY

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INTRODUCTION

The logistics industry in India is evolving rapidly and it is the interplay of infrastructure,

technology and new types of service providers that will define whether the industry is able to

help its customers reduce their logistics costs and provide effective services (which are also

growing). Changing government policies on taxation and regulation of service providers are

going to play an important role in this process. Coordination across various government

agencies requires approval from multiple ministries and is a road block for multi modal

transport in India. At the firm level, the logistics focus is moving towards reducing cycle times in

order to add value to their customers. Consequently, better tools and strategies are being

sought by firms in order to enhance their decision making. In this paper, we provide a

perspective on these issues, outline some of the key challenges with the help of secondary

information, and describe some interesting initiatives that some firms & industries are taking to

compete through excellence in managing their logistics.

The Indian economy has been growing at an average rate of more than 8 per cent over

the last four years (Srinivas, 2006) putting enormous demands on its productive infrastructure.

Whether it is the physical infrastructure of road, ports, water, power etc. or the digital

infrastructure of broadband networks, telecommunication etc. or the service infrastructure of

logistics – all are being stretched to perform beyond their capabilities. Interestingly, this is

leading to an emergence of innovative practices to allow business and public service to

operate at a higher growth rate in an environment where the support systems are getting

augmented concurrently. In this paper, we present the status of the evolving logistics sector in

India, innovations therein through interesting business models and the challenges that it faces

in years to come.

Broadly speaking, the Indian logistics sector, as elsewhere, comprises the entire

inbound and outbound segments of the manufacturing and service supply chains. Of late, the

logistics infrastructure has received lot of attention both from business and industry as well as

policy makers. However, the role of managing this infrastructure (or the logistics management

regimen) to effectively compete has been slightly under-emphasized. Inadequate logistics

infrastructure has an effect of creating bottlenecks in the growth of an economy, the logistics



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management regimen has the capability of overcoming the disadvantages of the infrastructure

in the short run while providing cutting edge competitiveness in the long term. It is here that

exist several challenges as well as opportunities for the Indian economy. There are several

models that seem to be emerging based on the critical needs of the Indian economy that can

stand as viable models for other global economies as well.

Chandra and Sastry (2004) have pointed towards two key areas that require attention

in managing the logistics chains across the Indian business sectors – cost and reliable value add

services. Logistics costs (i.e., inventory holding, transportation, warehousing, packaging, losses

and related administration costs) have been estimated at 13-14 per cent of Indian GDP which

is higher than the 8 per cent of USA’s and lower than the 21 per cent of China’s GDP (Sanyal,

2006a). Service reliability of the logistics industry in emerging markets, like India, has been

referred to as slow and requiring high engagement time of the customers, thereby, incurring

high indirect variable costs 2005). However, the Indian logistics story is one with islands of

excellence though there has been a general improvement on almost all parameters. It is this

aspect that we explore further in this paper. The paper is organized as follows: the next

section gives a brief introduction of some of the peculiarities of the Indian logistics sector. In

section 3 we discuss the determinants of growth in this industry. In section 4 we provide some

interesting initiatives that point towards a renewal of the sector. The challenges facing the

sector are discussed in the last section.

Some Peculiarities of the Indian Supply Chains

The Indian logistics sector has typically been driven by the objective of reducing transportation

costs that were (and often continue to be) inordinately high due to regional concentration of

manufacturing and geographically diversified distribution activities as well as inefficiencies in

infrastructure and accompanying technology. Freight movement has slowly been shifting from

rail to road with implications on quality of transfer, timeliness of delivery and consequently

costs except for commodities which over long distances, predominantly, move through the

extensive rail network. More on the infrastructure issues later.

The transportation industry is fragmented and largely un-organized – a large number of

independent players with regional or national permits that carry freight, often with small fleet



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size of one or two single-axle trucks. This segment carries a large percent of the national load

and almost all of the regional load. This fragmented segment comprises owners and

employees with inadequate skills, perspectives or abilities to organize or manage their

operations effectively. Low cost has been traditionally achieved by employing low level of

technology, low wages (due to lower education levels), poor maintenance of equipment,

overloading of the truck beyond capacity, and price competition amongst a large number of

service providers in the industry. Often, one finds transportation cartels that regulate supply of

trucks and transport costs. However, the long run average cost of transport operations across

the entire supply chain may not turn out to be low.

Multi-modal transport in India was a monopoly of the Container Corporation of India till

2005. With licenses being given to 13 new private players (Acharya, 2006b), rail trade should

improve considerably. In order to encourage trade by small scale industries, Indian Railways

has started a “road-railer”system where container vehicles are capable of running both on

highways hauled by trucks and on rail (Guha and Sinha, 2006). In 1998-99, the Konkan Railway

(one of the railway zones in South-Western India) pioneered the 'roll-on, roll-off' ('RO-RO')

concept between Mumbai (Kolad) and Goa (Verna). Privately owned trucks are loaded with

their goods which are driven on to a rake of flat cars and are carried (trucks and their cargo) to

the destination.

In 2005-06, the ports handled 456.20 million tonnes of cargo traffic. This is expected to

increase to 700 million tonnes by 2011-12. In keeping pace with the growing demand, the

government plans to increase port capacities to around 1 billion tonnes per annum in the next

six years (Raja, 2006). Under the National Maritime Development Programme (NMDP), the

government is encouraging public-private partnership to build and maintain ports. This

scheme will cover 276 port related projects at an investment of $12.40 bn (Raja, 2006). With

rising congestion levels at major ports and with high average turnaround time, the

government has decided to develop minor ports in seven states to ease the traffic of major

ports (Financial Express, 20006b). Tables 3 the operational performance of various ports in

India – while there is an improvement in performance, the pace is slow.



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The estimated cost of this development is expected to be around $350 mn. Further, private

sector is likely to invest $ 7.67 billion over the next six years. The entry of large third party

logistics (3PL) carriers like Federal Express and DHL and the expansion of domestic networks of

Indian firms like Gati and Shreyas Shipping is also transforming the nature of services and the

business practices across the sector. Table 4 gives an idea of the investment plans announced

by the various firms for the coming financial year and gives a sense of their increasing activity.

Another trend driving growth in this sector has been the consolidation amongst the logistics

player. Mergers & Acquisitions amongst Indian and MNC logistics firms is starting to increase

the reach of MNC 3PLs in the domestic market while consolidating the business (e.g., DHL

acquired Blue Dart, TNT acquired Sppedage Express Cargo Service, Fedex bought over Pafex

etc.). Consolidation is expected to be beneficial to both the service providers as well as the

consumers. Initially MNC 3PL firms were providing only custom clearance and freight

forwarding facility to their international clients. With the logistics market growing we should

see a shift in this trend.

Government policies have been another driver of change in the logistics industry. The

trend towards a higher road cargo traffic as compared to rail is going to require better logistics

control and coordination. The golden quadrilateral road project and the east & west rail

corridors are expected to change the reactiveness of Indian firms through shorter lead times

as well as lower maintenance costs on the transport equipment. They also have the potential

of reducing the procedural delays on highways by reducing the number of checks and related

stoppages of vehicles. Its impact on perishable good will be most significant. Thirteen States

and three UTs have already amended the State laws allowing private sector participation in

direct purchases of farm produce from farmers (Ahya, 2006) which is making procurement

more efficient and is bringing better technology as well as products in the rural production and

distribution network (e.g., see ITC echoupal in the next section). Banks have developed

venture capital funds for logistics players. Small Industries Development Bank of India or SIDBI,

for instance, has invested $ 2.3 mn in the Mumbai based firm Direct Logistics (Baxi, 2006).



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COMPANY PROFILE

Marks Cargo Private Limited was established in 2006 with 5 branches, and has since grown into

the leading cargo handlers. To meet the growing demands of their valuable and supporting

customers they have established 9 branches at present. At each step they take towards

advancement and always realize that customers are the foundation stone of the success. With

unique combination of expertise, infrastructure and dedicated personnel Marks Cargo Private

Limited ensure value added service with all the benefits being transferred to our clients.

The goal is to build long term association with our valued customers for mutual benefits and

understand well about their requirements, to serve them better. Main objective is the

satisfaction of the customers by providing timely service, information and guidance. The office

at Pondicherry doing India distribution and worldwide Logistics solutions.

As Logistics is a part of Product offering, Marks Cargo Private Limited is committed to provide a

real value for money, by way of giving critical information, so as to contribute to their winning

advantage. Marks Cargo Private Limited, is well-versed in providing prompt, reliable and

consistent service, also assured to their customers with affordable and comprehensive business

solutions. Marks Cargo Private Limited is mounting firm headquartered at Pondicherry, India,

amongst the renowned global logistics service providers.

Marks Cargo Private Limited is committed to become a full fledged third party logistic solution

provider, attributing world-class service to their customers, across globe.

Integrity

Commitment

Professionalism

Innovation

Adaptability

Consistency

Dedicated Customer service

Understanding & Development



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Global Supply Chain

Managing inventory is a very big challenge now‐a‐days to manage within their budget and its

time-sensitive. And now it is very common to go global sourcing for most of the business

houses. However, they are committed to provide the valued customers for fruitful, reliable

business partner for end‐to‐end supply chain activity, as well.

Value Chain

Marks Cargo Private Limited is designed to ensure that each and every stages of the supply

chain activity will carefully planned and coordinated well. An outstanding team of professionals,

committed to the excellence by way of providing timely and accurate information and

guidance, as real value for the customer’s money.

To make use of their agent network and Logistics partners across the globe, they obviously

support all the customer’s sourcing and selling anywhere to anywhere in the globe.

SOP – Standard Operating Procedures

To understand well about the specific logistics needs and requirements. The study is conducted

all expectations of a customer in order to setting up a detailed process flow to check all the

deviations and ensure a reliable business module to the industry specific.

The effective way of implement standardized operating procedure, the firm develops and

implement and maintain a real‐ time solution, which is fundamental and instrumental to all

customer’s supply chain management.

GROUPING (CONSOL)

A cost‐effective way of freight management to do advance space block in the respective

airlines.

Marks Cargo Private Limited facilitate to their customers by doing cargo consolidation air/sea

which includes the transportation of cargo to the loading point, loading the cargo into

containers, processing the shipping documents with execution of necessary custom formalities,



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use premium air/sea carriers and make sure that the cargo will in‐time to the respective

destinations well before the stipulated time indicated by the most of their customers.

List of Services

Customs Clearance

World-Wide Sea-Freight and Air-Freight

Warehousing and Packaging solutions

Value Added Services for companies who require a reliable partnership with a credible

global logistics business

Door to Door

Reverse Logistics

Sea Freight Services

Reliable, safe, competitive sea-freight solutions

LCL (Less than Container Load)

FCL (Full Container Load) – Standard, Open Top, Flat-Rack, Tanker, Reefer containers

available

Break-Bulk

Roll-On-Roll-Off

Out-of-Gauge cargo

Hazardous cargo

Specialists in large project shipments, but at Marks Cargo no shipment is too small

World-Wide Import/Exports, including Cross-Trade shipments

Regular sailings utilizing their network of overseas partners and all major carriers

Air Freight Services

Fast, reliable, secure and competitive air-freight solutions

Flights to all major international destinations

We regularly handle anything from heavy plant – industrial – light domestic Equipment

Daily low cost consolidations world-wide, all-cargo carriers, and charters are utilized



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Services include door-destination airport, and door-door

Packaging suitable for Air-Freight is an important issue –can offer solutions

Custom Clearance Services

Marks Cargo Private Limited expert team files many of customs entries, and handle all aspects

of customs process, including: import / export clearance, declarations, proforma invoices and

certificates of origin. The expertise in the field also covers customs regulations, bond

requirements, and duty rates.

The customs clearance services for various import and export consignments include the

following:

Guidance and consultation, liaisioning and follow up with various reputed Organizations.

All post shipment formalities and endorsements.

Documentation procedures i.e. preparation and handling of documents.

Drawback and several other export benefits.

Clients who have their freight and Customs clearances combined with Marks Cargo,

enjoy smoother transits through international border countries.

The clients have access to a specialist 24/7 service meaning you can ask us a question

any time of day.

Contact Marks Cargo Private Limited to discuss how assistance can be provided with all

the Customs Formalities.

WAREHOUSING SOLUTIONS

Marks Cargo Private Limited, can deal into various projects of the supply chain Management for

simple storage.

The customs clearance services for various import and export consignments include the entire

inventory management of packing and distribution solutions. The company is equipped to

handle various types and sizes of your stocks from fire, pilferage, damage, shortage… etc....



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Marks Cargo Private Limited has a team of experienced in all the aspects of duties and

responsibilities of receiving, documenting, storage, billing and distribution by end to end.

3PL Services

Pick & pack

Custom bonded warehousing

Dangerous goods handling and storage

Expertise in handling FMCG/Pharma/Engg/Autoparts. Consumer Electronics, Etc.,

Just-In-Time Inventory management

Temperature controlled storage.

Consulting – Optimising the Logistics process

Factory Logistics

Project Logistics

Marks Cargo Private Limited is equipped with handling pin to the extraordinary size of

inventory to customize a unique warehousing solution that fit into your real needs, as well. To

facilitate real value for the customer money, Marks Cargo Private Limited engages the existing

warehouse setup itself; and will provide exclusive arrangement to store your cargo.

As third party Logistics solutions provider, Marks Cargo Private Limited can give customer, their,

best possible and reliable solutions to reduce your warehousing budget and time significantly

and efficiently.

TRANSPORT LOGISTICS

Marks Cargo Private Limited, can move customer shipments from one place to another place at

the right time and right mode and the right cost by within the country or across the borders by

simple cargo or individual truck loads by regular or express mode of transshipment.

They are able to manage complex and dedicated distribution mechanism, also provide cost

effective time bound solutions to manage client inventory planning. They are supported by a



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wide range of additional solutions like Insurance, Import and Export customs processes and

export pacing solutions.

Marks Cargo Private Limited can offer client the standardized and tailor-made solutions to

manage the supply chain management. They establish necessary arrangements for truck

transport operations with fleet owners, in which consist of many kinds of vehicles ranging from

small, medium and heavy trucks carrying small packets to mega tankers and a special

equipments like Liquids, Fragile cargo, ODD size cargo, special containers, tankers dangerous

goods handling and storage and break bulk cargo.

Distribution Logistics

Document related Services

Dangerous Goods Handling

Dangerous Goods Handling

Special / Heavy Transport

Supply Chain Management

Temperature controlled Transport

Time Bound Transport.

Package Solutions.

Insurance

Interim Storage.

TRADE LOGISTICS

Can work as an “Importer” and Marks Cargo Private Limited can provide complete

Logistics support to many of their customers

Give them consulting and advisory services to our customers who is wishing to source

their requirements in Indian Market.

Vendor selection and maintaining business agreements

Overseas quality aspects and ensure compliances to all the above.

All the Logistics related supports including consolidation of shipment from multiple

buyers and seller



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Identifying channel partners who is willing to supply to fulfill customer’s requirements

Industry Specific Solutions

Marks Cargo Private Limited experience in the Logistics industry comes into play both in the

multi-user facilities like customer specific with dedicated user sites. It is being extended

includes comprehensive value added services to the best suited for all customers in all the

industry and also for real-time retail distribution modules.

Marks Cargo Private Limited having the ability to source the new locations as well as able to

manage existing customer’s warehouse based on customer requirements/commitments. Also,

they offer to customers both dedicated as well as shared warehouse locations.

Pick & pack

In-plant stores Management.

In-Plant Logistics Management

Kitting

Line Feeding

Order management

Insurance.

Receivable Management

Meeting tax compliances

Cash Management.

To facilitate the above, customers only can focus on their core-competencies and production

Management alone and leave us the entire inventory management to us. They also have the

expertise in in-plant management and can engage the activity of supplying raw-materials to

client production-line to deliver the finished goods to the end user, as well. Marks Cargo owns /

has access to warehouses and storage spaces to adapt to emerging services. All trucks owned

by us are maintained on a regular basis and undergo periodic overhauls to ensure trouble-free

operation at all times.



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Company Factsheet

Nature of Business Logistics

Additional Business

Manufacturer

Supplier

Wholesaler

Importer

Exporter

Year of Establishment 2006

Total Number of Employees 51 to 100 People

Infrastructure

Location Type - Urban

Building Infrastructure - Permanent

Size of Premises - 1,500 square feet

Space Around - 1500 sqft

Statutory Profile

Banker - Indian Overseas Bank

PAN No. - AADFU0687L

DGFT/IE Code - 2511001551

Central Sales Tax No. - 34350015548C

Value Added Tax Registration No. - 34350015548V

Mission Statement:

To Emerge as India's top Cargo Company that provides World Class Quality Service at

astonishing economical rate, that adds to the pride of India.

To Our Customers; A prompt and efficient service with courtesy.

To Our Workforce; promote a sense of participation and make them partners in

progress and also provide opportunities for personal growth.

To the Community; A responsible corporate citizen



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Management Structure

Profile of the Managing Director

1986 to 1991 – Corporate Couriers, Chennai.

1991 to 2000 – First Flight Couriers Ltd, Chennai.

2001 to 2007 - Hall Mark Cargo, Cofounder.

2006 to Present - Marks Cargo Pvt Ltd, Founder & MD.

Quality Commitment:

Marks Cargo’s reputation is aptly based on the quality of services offered. Customer

satisfaction continues to be the guiding principle of the company’s strategy for growth achieved

through innovation, commitment and performance. The professionals take special measures to

transport your shipment safely and securely.



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EXPORT AND IMPORT PROCEDURES

A.STARTING AN EXPORT & IMPORT FIRM

a) Registration

Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering the

various States and Union Territories, are vested with the primary duty of registering companies

floated in the respective States and Union Territories and of ensuring that such companies

comply with statutory requirements under the Act. These offices function as registries of

records relating to the companies registered with them, which are available for inspection by

members of the public on payment of the prescribed fee.

The Registrars of Companies in different States primarily deal with the Incorporation of

companies, change of name of companies, change of financial year, conversion of companies

from Private to Public and vice versa, striking off of the names of companies, and default action

against companies.

The steps to be followed for registering a private limited or a public limited company are

enlisted here.

Steps to be taken to get incorporated a private limited Company:

Select, in order of preference, a few suitable names, not less than four, indicative of the

main objects of the company.

Ensure that the name does not resemble the name of any other company already

registered and also does not violate the provisions of Emblems and Names (Prevention

of Improper Use) Act, 1950.

Apply to the concerned ROC to ascertain the availability of a name in the General Rules

and Forms along with a fee of Rs.500/- If the proposed name is not available apply for a

fresh name on the same application.

Arrange for the drafting of the Memorandum and Articles of Association by the

solicitors, the vetting of the same by the ROC and the printing of the same.



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Arrange for the stamping of the Memorandum and Articles with the appropriate stamp

duty.

Get the Memorandum and Articles signed by at least two subscribers in his own hand,

his father's name, occupation, address and the number of shares subscribed for and

witnessed by atleast one person.

Ensure that the Memorandum and Articles are dated after the date of stamping.

Get the following forms duly filled up and signed:

i. Declaration of Compliance

ii. Notice of the situation of the registered office of the company

iii. Particulars of the Director, Manager or Secretary

Present the following documents to the ROC with the filing fee and the registration fee:

The stamped and signed copies of the Memorandum and Articles of Association (3

copies).

i. Form-1, 18 & 32 in duplicate.

ii. Any agreement referred to in the M & A.

iii. Any agreement proposed to be entered into with any individual for appointment

as Managing or whole time Director.

iv. Name availability letter issued by the ROC.

v. Power of Attorney from the subscribers in favour of any person for making

corrections on their behalf in the documents and papers filed for registration.

vi. Pay the Registration and Filing Fee by Demand Draft/Banker's Cheque if it

exceeds Rs.1000/-

vii. Obtain the Certificate of Incorporation from ROC.

Additional Steps to be taken for formation of a Public Limited Company

i. Consent of Directors to act as such in Form No.29.

ii. Arrange for payment of application and allotment money by Directors on shares

taken or agreed to be taken.

iii. File the Statement in Lieu of Prospectus with the ROC in schedule-iv of the

Companies Act.



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b) Procedure

General Provisions about Customs Procedures

Basic document is

‘Entry’

Entry’ in relation to goods means entry made in Bill of Entry, Shipping Bill

or Bill of Export. In case of import by post, label or declaration

accompanying goods is ‘entry’

Loading and

unloading at specified

places only

Imported goods can be unloaded only at specified places. Goods can be

exported only from specified places.

Computerisation of

customs procedures

Customs procedures are largely computerised. Most of documents have

to be e-filed.

Amendment to

documents

Documents submitted to customs can be amended with permission In

case of bill of entry, shipping bill or bill of export, it can be amended after

clearance only on the basis of documentary evidence which was in

existence at the time the goods were cleared, warehoused or exported,

and not on basis of any subsequent document. [proviso to section 149].

ICD and CFS Imported and export goods are usually handled in containers. These can

be stored in Inland Container Depot (ICD) or Container Freight Station

(CFS). They function like dry port for handling and temporary storage of

imported/export goods and empty containers.

Boat Notes ‘Boat Notes’ are used for transferring small cargo from ship to shore, or

from shore to ship, without berthing the ship.

Transshipment of

goods

Goods can be transshipped from one conveyance to other after following

required procedure. Such transhipment may be to any major port or

airport in India. The goods can be transshipped to any other customs

station in India if Customs Officer is satisfied that the goods are bona

fide intended for transhipment to any customs station. The facility is

available at all customs ports and Inland Container Depots (ICDs).



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c) Imports Process

e-filing of documents Goods should arrive at customs port/airport only. Most of customs

procedures are computerised. E-filing of documents is required.

Import manifest or Import

Report

‘Person in charge of conveyance’ is required to submit Import

Manifest or Import Report.

Entry Inwards Goods can be unloaded only after grant of ‘Entry Inwards’.

Risk Management System Self Assessment on basis of ‘Risk Management System’ (RMS) has

been introduced in respect of specified goods and importers.

Bill of Entry for home

consumption on payment

of customs duty

Importer has to submit Bill of Entry giving details of goods being

imported, along with required documents. Electronic submission of

documents is done in major ports. White Bill of Entry is for home

consumption.

Bill of Entry for

warehousing

Yellow Bill of Entry is for warehousing. It is also termed as ‘into

bond Bill of Entry’ as bond is executed. Duty is not paid and

imported goods are transferred to warehouse where these are

stored.

Noting, examination and

assessment

Bill of Entry is noted, Goods are assessed to duty, examined and

pre-audit is carried out. Customs duty is paid after assessment.

Bond Bond is executed if required if assessment is provisional or

concessional rate of customs duty is subject to certain post import

conditions.

Out of customs charge

order

Goods can be cleared outside port after ‘Out of Customs Charge’

order is issued by customs officer. After that, port dues, demurrage

and other charges are paid and goods are cleared.

Demurrage if clearance

from port delayed

Demurrage is payable if goods are not cleared from port/airport

within three days. Goods can be disposed of if not cleared from port

within 30 days.



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d) Export Process

Entry Outward Loading in conveyance can start after ‘Entry Outward’ is given by

customs officer.

Export manifest/Export

report

Person in charge of conveyance is required to submit ‘Export Manifest’

or ‘Export Report’.

Registration with DGFT

and EPC

Exporter has to be obtain IEC number from DGFT is advance. He

should be registered with Export Promotion Council if he intends to

claim export benefits.

Third party exports Export can be by manufacturer himself or third party (i.e. by exporter

on behalf of another). Merchant exporter means a person engaged in

trading activity and exporting or intending to export goods [para 9.40

of FTP]

Registration of

documents under

Export Promotion

Scheme

Advance authorisation, DEPB etc. should be registered if exports are

under Export Promotion Scheme.

Shipping Mill Export is required to submit Shipping Bill with required documents for

obtaining permission to export. There are five forms : (a) Shipping Bill

for export of goods under claim for duty drawback – these should be in

Green colour (b) Shipping Bill for export of dutiable goods – this should

be yellow colour (c) Shipping bill for export of duty free goods – it

should be white colour (d) shipping bill for export of duty free goods

ex-bond – i.e. from bonded store room – it should be pink colour (e)

Shipping Bill for export under DEPB scheme – Blue colour.

FEMA formalities GR/SDF/Softex form (under FEMA) is required to be submitted.

Noting, assessment,

examination

The shipping bill is noted, goods are assessed and examined. Export

duty is paid, if applicable.

Certification of If export is under export incentives, relevant documents are checked



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documents for export

incentives

and certified. Then proof of export is obtained on ARE-1.

Let export order Conveyance can leave only after ‘Let Export’ order is issued.



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B.IMPORTS

Import of goods helps to boost the economy by providing capital good for infrastructure or

industrial development, meeting shortages and improving quality of production. It also helps

improving living standards by making available good and products not produced in the country.

With the rise in disposable incomes in India, the marked for imported goods is growing. Starting

a business of importing goods can be a profitable venture, but requires that the rules and

regulations governing such trade and the markets in respect of both the countries, and the

trade agreements with the country of interest, are studied and understood well.

a) Preliminary Actions

Market Survey

The first step for an importer is to do a market survey to decide on the goods or commodities

that he wants to import. He needs to study the domestic market for items that are in demand,

or for which a demand is likely to arise. These could include finished goods for the consumer or

secondary market, or ancillaries for other industries. He should also study the present

competition and future prospects. The following are some sources of data/information can be

tapped for carrying out such studies:-

Export Import Data Bank of Ministry of Commerce

Foreign Trade Performance Analysis

Directorate General of Commercial Intelligence and Statistics

India Trade Journal

Directory of Indian Importers

Exim Bulletins

Familiarisation with Policies, Procedures and Agreements

It is very important to be familiar with all the policies, regulations and procedures governing

foreign trade, as well as foreign trade agreements between India and other countries and

international trade organisations, before embarking on a venture.



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Registration

Before commencing business, you need to register with the Directorate General of Foreign

Trade (DGFT) and obtain Importer Exporter Code Number. IEC Code is unique 10 digit code

issued by DGFT to Indian Companies. This is a mandatory requirement to carry out import from

or export to India.

Identification of Source

Having identified the possible items to import, the source has to be identified. It is imperative

to ascertain the legal implications of trading in the selected items in both the countries as well

as the credibility of the overseas suppliers. Assistance for this is provided by the Indian

Commercial Missions abroad and the International Trade Promotion Organisation (ITPO)

through various exhibitions and trade fairs organised in India and abroad. It is important to

keep abreast with Important Notifications by DGFT related to imports. Care must also be taken

to remain updated on applicability of standards laid down by Bureau of Indian Standards for

specific items to be imported.

Categories of Items

Items that can be imported fall under four categories:

Freely importable: Majority of the goods come under this category. These do not

require import licenses.

Licensed Items: There are number of goods, which can only be importer under an

import license. These include some consumer goods; precious and semi-precious

stones; products related to safety and security; seeds, plants and animals; some

insecticides, pharmaceuticals and chemicals; some electronically items; several items

reserved for production by the small-scale sector. Licence for import of these items is

issued by the Directorate General of Foreign Trade.

Canalised Items: These can only be imported by specified channels or government

agencies such as the State Trading Corporation (STC).



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Prohibited items: Tallow fat, animal rennet, wild animals and unprocessed ivory-are

prohibited to be imported.

Import of Samples

Commercial samples are specimens of goods that may be imported by the traders in India, to

know its characteristics and usage and to assess its marketability in India. The bona fide trade

samples can be imported provided the said goods have been supplied free of charge. Samples

in respect of Prohibited items mentioned above cannot be imported. Further details about

importing samples can be found here.

b) Import Duties

The government levies import duties on most of the items imported for trade purposes. These

are of different types including Basic Duty, Additional Customs Duty, True Countervailing Duty,

Anti Dumping or Safeguard Duty and Education Cess. Details about these can be viewed here.

Payment of Duty

Provisional Deposit Account with Bank: Facilities are available to debit duty amounts

directly from the Banks nominated by Customs. This facility reduces delays in receipt of

customs duties from Importers and also payment of interest after 2 days. Importers are

required to open a deposit account with the nominated Bank and maintain a minimum

balance as per the Banks guidelines. On completion of assessment of the Entries, the

importer can authorize debit of the duty amount against authorization slips.

Payment by Draft/Bankers Cheque: RBI has issued new guidelines to the nominated

banks for acceptance of payments against instruments from nationalized banks only.

Interest: Interest is charged on duties not paid within 2 days.

Bill of Entry

It is a document certifying that the goods of specified description and value are entering into

the country from abroad.



29

If the goods are cleared through the Electronic Data Interchange (EDI) System no formal Bill of

Entry is filed as it is generated in the computer system, but the importer is required to file a

cargo declaration having prescribed particulars required for processing of the entry for customs

clearance.

The Bill of entry, where filed, is to be submitted in set, different copies meant for different

purposes and also given different color scheme. Bills of Entry are of three types:-

Bill of Entry for home consumption

Bill of Entry for Warehouses

Bill of Entry for Ex-Bond Clearance

Details about these and the documents to be filed in case of Non-EDI system can be found here.

The Bill of entry, where filed, is to be submitted in set, different copies meant for different

purposes and also given different colour schemes. Bill of Entry are of three types:-

Bill of Entry for home consumption: is to be submitted when the imported goods are to

be cleared on payment of full duty for consumption of the goods in India. It is white

colored.

Bill of Entry for Warehouses : is to be submitted when the imported goods are not

required immediately by the importer but here they are to be stored in a warehouse

without payment of duty under a bond and cleared later when required on payment of

duty.

Bill of Entry for Ex-Bond Clearance : is used for clearing goods from the warehouse on

payment of duty. The goods are classified and valued at the time of clearance from the

Customs Port. Value and classification are not determined on such Bill of Entry.

In the non-EDI system along with the bill of entry filed by the importer or his representative the

following documents are also generally required:-

Signed invoice

Packing list



30

Bill of Lading or Delivery Order/Airway Bill

GATT declaration form duly filled in

Importers declaration

License wherever necessary

Letter of Credit/Bank Draft/wherever necessary

Insurance document

Import license

Industrial License, if required

Test report in case of chemicals

Adhoc exemption order

DEEC Book/DEPB in original

Catalogue, technical write up, literature in case of machineries, spares or chemicals as

may be applicable

Separately split up value of spares, components machineries

Certificate of Origin, if preferential rate of duty is claimed

No Commission declaration

Green Channel facility

Some major importers have been given the green channel clearance facility. It means clearance

of goods is done without routine examination of the goods. They have to make a declaration in

the declaration form at the time of filing of bill of entry. The appraisement is done as per

normal procedure except that there would be no physical examination of the goods. Only

marks and number are to be checked in such cases. However, in rare cases, if there are specific

doubts regarding description or quantity of the goods, physical examination may be ordered.

This facility can be claimed by the Importers who have been approved by the Customs as

eligible for claiming the facility. Importers having a clean record can apply to the Customs (EDI)

with a request for Green Channel facility against a covering letter and enclosing copy of Balance

Sheet showing proof of Duty paid in a year.



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Dumping

Dumping is said to have taken place when an exporter sells a product to India at a price less

than the price prevailing in its domestic market. However, the phenomenon of dumping is per

se not condemnable as it is recognized that producers sell their goods at different prices to

different market. However, where dumping causes or threatens to cause material injury to the

domestic industry of India, the Designated Authority initiates necessary action for investigations

and subsequent imposition of anti-dumping duties.

Anti Dumping Guidelines issued by the Government of India must be understood and complied

with while carrying out import of goods.

c) Forms

DGFT

ANF 1 Profile of importer / exporter

ANF 2 A Importer Exporter Code Number (IEC)4

ANF 2 B Import Licence for Restricted Items

ANF 2 C Import Certificate under Indo-US Memorandum

ANF 2F Refund of Application Fee

ANF 3 A Grant of Status Certificate

ANF 3 D Focus Market Scheme (FMS)

ANF 3 E Focus Product Scheme (FPS)

ANF 3 G Vishesh Krishi And Gram Udyog Yojana (VKGUY) - Para 3.8.6 application

ANF 4 A Advance Authorisation (Including Advance authorisation for Annual

Requirement) / Advance Release Order (ARO)/ Invalidation letter

ANF 4 B Fixation / Modification of Standard Input Output Norms (SION)

ANF 4 C Fixation of DEPB Rates / Fuel rates

ANF 4 D Clubbing of Advance Authorisations

ANF 4 E Enhancement in CIF / FOB Value or Revalidation or EO extension of

Authorisation



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Customs & Excise

ATA Carnet Form of Bill of Entry or the Shipping Bill

Shipping Bill for export of goods under claim for duty drawback

Bill of Entry for Home Consumption

Bill of Entry for Warehousing

Bill of Entry for Ex-bond Clearance for Home consumption

EDI

Application Form for Grant of a temporary Customs House Agent's License

Application Form for Grant of a permanent Customs House Agents' License

Form of application for settlement of a case under section 127B

Application for refund of duty/interest

Form of Appeal to the Collector (Appeals) under Section 128

Form of Appeal to the Collector (Appeals) under Section 129D(4)

Form of Appeal to the Appellate Tribunal under Section 129A(1)

Form of Memorandum of Cross Objections to the Appellate Tribunal under Section

129A(4)

Form of Application to the Appellate Tribunal under Section 129D(4)

Form of An Application to the High Court under Section 130A

Form of Memorandum of Cross Objections under Section 130A(3) in the matter of an

Application before the High Court under Section 130A(1)

Form of Revision Application to the Central Government under Section 129DD

Performa for claiming drawback on re-export of duty paid goods under Section 74

Form of Application for permission to remove goods from one Warehouse to another in

the same Port or to another Warehousing Port to be Warehoused there

RBI Forms

FEMA Forms

Exchange Control Forms



33

d) Other Incentives and Facilities

Online Services

SMS Query - www.cbec.gov.in/sms/sms_query.htm

Help Mail - www.cbec.gov.in/helpmail.htm

E-filing - www.cbec.gov.in/e-filing.htm

Software for Remote Filing (RES Package) – http://ices.nic.in/

Document Tracking at ICEGATE - www.icegate.gov.in/jsp/Tracking_at_ICES.jsp

IE CODE/BIN status - www.icegate.gov.in/moreinfo/check_IE_code_status.html

Online filing through ICEGATE - www.icegate.gov.in/

DGFT Helpdesk – www.dgftcom.nic.in/exim/2000/helpdesk.htm



34

C.EXPORTS

a) Preliminary Actions

Market Survey

The first step for an exporter is to carry out a survey of the International market to identify

suitable markets for the goods he wants to export. Alternatively, he could study a specific

market to identify the goods suitable for export to that particular market. He should also study

the present competition and future prospects. The following are some sources of data /

information can be tapped for carrying out such studies:-

Export Import Data Bank of Ministry of Commerce

Foreign Trade Performance Analysis

Directorate General of Commercial Intelligence and Statistics

India Trade Journal

Directory of Indian Exporters

Exim Bulletins

Familiarization with Policies, Procedures and Agreements

It is very important to be familiar with all the policies, regulations and procedures governing

foreign trade, as well as foreign trade agreements between India and other countries and

international trade organisations, before embarking on a venture. Assistance of Indian

Commercial Missions abroad can be sought to gain desired information about the regulations,

standards and trade data of the countries of interest.

Exporters must also be aware of Non Tariff Measures (NTM), which are all measures other than

normal tariffs namely trade related procedures, regulations, standards, licensing systems and

even trade defence measures such as anti-dumping duties etc which have the effect of

restricting trade between nations. With the lowering of tariffs across the globe, NTMs have

come into prominence with Members using these measures to erect entry barriers for goods

and services. Database of country wise and product wise NTMs.



35

Registration

Before commencing business, you need to register with the Directorate General of Foreign

Trade (DGFT) and obtain Importer Exporter Code Number. IE Code is unique 10 digit code

issued by DGFT to Indian Companies. This is a mandatory requirement to carry out import from

or export to India. Exporters also have to obtain PAN based Business Identification Number

(BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance

of export goods.

Exploring Export Opportunities

The Government actively assists exporters by through Trade Promotion Programmes and

Schemes and by providing Trade Promotion Assistance. These include programmes for

enhancing bilateral trade by entering into agreements with countries or trade blocks such as

the CIS and ASEAN. While selecting the goods to export, it is important to ascertain that it

meets the quality and other specifications laid down in the chosen country / countries. It must

meet the standards laid down by Bureau of Indian Standards or Agmark as applicable, besides

other International certification bodies.

b) Export Procedures

Export License

Majority of goods are allowed to be exported without obtaining a license. Export licenses are

only required for items listed in the Schedule 2 of ITC (HS) Classifications of Export and Import

items. An application for grant of Export License for such items must be submitted to the

Director General of Foreign Trade (DGFT). The Export Licensing Committee under the

Chairmanship of Export Commissioner considers such applications on merits for issue of export

licenses.

Export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET)

items are also permitted under a license or prohibited altogether. Guidelines for Export of

SCOMET items can be viewed here..



36

Export of Samples

Export of samples up to specified limits are allowed free. The exporter is required to be

registered with the appropriate Export Promotion Council to avail of this benefit. Samples with

permanent marking as "sample not for sale" are allowed freely for export without any limit.

Processing of Shipping Bill

In case of export by sea or air, the exporter must submit the 'Shipping Bill', and in case of export

by road he must submit 'Bill of Export' in the prescribed form containing the prescribed details

such as the name of the exporter, consignee, invoice number, details of packing, description of

goods, quantity, FOB value, etc. Along with the Shipping Bill, other documents such as copy of

packing list, invoices, export contract, letter of credit, etc. are also to be submitted. There are 5

types of shipping bills:-

Shipping Bill for export of duty free goods. This shipping bill is white coloured.

Shipping bill for export of goods under claim for duty drawback. This shipping bill is

green coloured.

Shipping bill for export of duty free goods ex-bond i.e. from bonded warehouse. This

shipping bill is pink coloured.

Shipping Bill for export of dutiable goods. This shipping bill is yellow coloured.

Shipping bill for export under DEPB scheme. This shipping bill is blue in colour.

The Bills of Export are:-

Bill of export for goods under claim for duty drawback

Bill of export for dutiable goods

Bill of export for duty free goods

Bill of export for duty free goods ex-bond



37

Let Export Order

After the receipt of the goods in the dock, the exporter may contact the Customs Officer

designated for the purpose and present the checklist with the endorsement of Port Authority

and other declarations along with all original documents. Customs Officer may verify the

quantity of the goods actually received and thereafter mark the Electronic Shipping Bill and also

hand over all original documents to the Dock Appraiser, who may assign a customs officer for

the examination of the goods. If the Dock Appraiser is satisfied that the particulars entered in

the system conform to the description given in the original documents, he may proceed to

allow "let export" for the shipment.

Common Issues

Important Policies, Regulations and Procedures Governing Foreign Trade

Customs Act 1962

Customs Tariff Act 1975

India Foreign Trade (Development and Regulation) Act (1992)

Foreign Trade (Regulation) Rules 1993

Foreign Trade Policy – 2009 - 14

Foreign Trade Procedures – 2009 - 14

International Trade Agreements

Foreign Exchange Management Act 1999

Getting IEC Code

Application to be made by the Registered/Head Office of the applicant to the nearest

Regional Authority of Directorate General Foreign Trade in the 'Aayaat Niryaat Form -

ANF2A' along with Appendix-18B .

Application Fee of Rs 250/- has to be paid by Demand Draft or through Electronic Fund

Transfer to nominated bank.

Only one IEC is issued against a single PAN number.



38

c) Forms

DGFT

ANF 1 Profile of importer / exporter

ANF 2 A Importer Exporter Code Number (IEC)4

ANF 2 D Export Licence for Restricted items

ANF 2 E Export Licence for SCOMET items

ANF 2F Refund of Application Fee

ANF 3 A Grant of Status Certificate

ANF 3 C Vishesh Krishi and Gram Udyog Yojana (VKGUY)

ANF 3 D Focus Market Scheme (FMS)

ANF 3 E Focus Product Scheme (FPS)

ANF 3 G Vishesh Krishi and Gram Udyog Yojana (VKGUY) - Para 3.8.6 application

ANF 4 A Advance Authorisation (Including Advance authorisation for Annual

Requirement) / Advance Release Order (ARO)/ Invalidation letter

ANF 4 B Fixation / Modification of Standard Input Output Norms (SION)

ANF 4 C Fixation of DEPB Rates / Fuel rates

ANF 4 D Clubbing of Advance Authorisations

ANF 4 E Enhancement in CIF / FOB Value or Revalidation or EO extension of

Authorisation

ANF 4 F Redemption / No Bond Certificate against Advance Authorisation

ANF 4 G Duty Entitlement Pass Book (DEPB) Application

ANF 4 I GEM REP Authorisation

ANF 5A Export Promotion Capital Goods (EPCG) Authorisation

ANF 5 B Statement of Export for Redemption of EPCG Authorisation

ANF 5 C EO Refixation under EPCG Scheme

ANF 5 D Clubbing of EPCG Authorisations

ANF 8 for Claiming Duty Drawback on All Industry Rates/Fixation of Drawback

Rates/Refund of Terminal Excise Duty.



39

Customs & Excise

Application for refund of duty/interest

Form of Appeal to the Collector (Appeals) under Section 128

Form of An Application to the High Court under Section 130A

Form of Memorandum of Cross Objections under Section 130A(3) in the matter of an

Application before the High Court under Section 130A(1)

Form of Revision Application to the Central Government under Section 129DD

Form for claim of drawback under Section 74 on goods exported by post

Performa for claiming drawback on re-export of duty paid goods under Section 74

Form for claim of drawback under Rule 11

Application for supplementary claim for drawback under Rule 15 of Customs and Central

Excise Duties Drawback Rules, 1995

Statement - DBK-I

Statement - DBK-II

Statement - DBK-III

Shipping Bill for export of duty free goods

Shipping Bill for export of duty free goods ex-bond

Bill of export for goods under claim for duty drawback

Bill of export for dutiable goods

Bill of export for duty free goods

Bill of export for duty free goods ex-bond

Bond for CHA Licence

Surety Bond for a CHA Licence

Indemnity Bond for Simplified Brand Rate Fixation Scheme

Form of application for settlement of a case under section 127B

RBI Forms

FEMA Forms

Exchange Control Forms



40

D.TAXATION

India has a well developed tax structure. The power to levy taxes and duties is distributed

among the three tiers of Government, in accordance with the provisions of the Indian

Constitution. The main taxes/duties that the Union Government is empowered to levy are:-

Income Tax (except tax on agricultural income, which the State Governments can levy),

Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the

State Governments are:- Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on

transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land

used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions

& Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi

(tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets

and Tax/User Charges for utilities like water supply, drainage, etc.

In the wake of economic reforms, the tax system in India has under gone a radical change, in

line with the liberal policy. Some of the changes include:- rationalization of tax structure;

progressive reduction in peak rates of customs duty ; reduction in corporate tax rate; customs

duties to be aligned with ASEAN levels; introduction of value added tax ; widening of the tax

base; tax laws have been simplified to ensure better compliance. Tax policy in India provides tax

holidays in the form of concessions for various types of investments. These include incentives

to priority sectors and to industries located in special area/ regions. Tax incentives are available

also for those engaged in development of infrastructure.

Taxation of Individuals

Individuals are subject to income tax. Income tax is a direct tax levied on the income earned by

individuals, corporations or on other forms of business entities. The Indian constitution has

empowered only the Central Government to levy and collect income tax. The Income Tax

department set up by the Government, is governed by the Central Board for Direct Taxes

(CBDT). The CBDT is a part of Department of Revenue in the Ministry of Finance.



41

It has been charged with all the matters relating to various direct taxes in India. It provides

essential inputs for policy and planning of direct taxes in India and is also responsible for

administration of direct tax laws through the Income Tax Department. For all the matters

relating to Income tax, the Income Tax Act, 1961 is the umbrella Act which empowers the

Central Board of Direct Taxes to formulate rules (The Income Tax Rules, 1962) for implementing

the provisions of the Act.

The Income Tax Act provides that in respect of the total income of the previous year of every

person, income tax shall be charged for the corresponding assessment year at the rates laid

down by the Finance Act for that assessment year. In other words, the income earned in a year

is taxable in the next year and the income-tax rates prescribed for an assessment Year are

applicable in respect of income earned during the previous Year.

Note that: - The financial year in which the income is earned is known as the previous year. The

financial year following a previous year is known as the assessment year. The assessment year

is the year in which the salary earned in the previous year is taxable. Any financial year begins

from 1st of April of every year and ends on 31st of March of the subsequent year.

In case of a business or profession which is newly started, the previous year commences from

the date of commencement of the new business or profession up to the next 31st March,

unless the person is an existing assessee.

The Income Tax Act is subjected to annual amendments by the Union Budget every year. The

Finance Bill in the budget contains various amendments which are sought to be made in direct

and indirect taxes levied by the Central Government. The bill also mentions the rates of income

tax and other taxes. The bill once approved becomes a Finance Act and provisions in it are

incorporated in the Income Tax Act.

Taxation of Partnerships

Partnership is the most common form of business organization in India. Partnership firms are

governed by the provisions of the Indian Partnership Act, 1932. The Act lays down the rules

relating to formation of partnership, the rights and duties of partners and dissolution of



42

partnership. It defines partnership as a "relationship between persons who have agreed to

share the profits of business carried on by all or any of them acting for all".

This definition gives three minimum requirements to constitute a partnership:-

There must be an agreement entered into orally or in writing by the persons who desire

to form a partnership.

The object of the agreement must be to share the profits of business intended to be

carried on by the partnership.

The business must be carried on by all the partners or by any of them acting for all of

them.

Under the Act, persons who have entered into partnership with one another are individually

called as 'partners' and collectively as 'firm' and the name under which they run their business

is called the 'firm name'.

Customs Duties (Import Duty and Export Tax)

Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods

exported from India. Taxable event is import into or export from India. Import of goods means

bringing into India of goods from a place outside India. India includes the territorial waters of

India which extend upto 12 nautical miles into the sea to the coast of India. Export of goods

means taking goods out of India to a place outside India.

In India, the basic law for levy and collection of customs duty is Customs Act, 1962. It provides

for levy and collection of duty on imports and exports, import/export procedures, prohibitions

on importation and exportation of goods, penalties, offences, etc.

The Constitutional provisions have given to Union the right to legislate and collect duties on

imports and exports. The Central Board of Excise & Customs (CBEC) is the apex body for

customs matters. Central Board of Excise and Customs (CBEC) is a part of the Department of

Revenue under the Ministry of Finance, Government of India. It deals with the task of

formulation of policy concerning levy and collection of customs duties, prevention of smuggling



43

and evasion of duties and all administrative matters relating to customs formations. The Board

discharges the various tasks assigned to it, with the help of its field organizations namely the

Customs, Customs (preventive) and Central Excise zones, Commissionerate of Customs,

Customs (preventive), Central Revenues Control Laboratory and Directorates. It also ensures

that taxes on foreign and inland travel are administered as per law and the collection agencies

deposit the taxes collected to the public exchequer promptly.

Classification of Goods and the Rates of Customs Duty

All goods must be classified into groups and sub-groups in order to levy the customs duty. The

Customs Tariff Act 1975, gives the classification of goods and accordingly specifies the rate of

duty. The act contains two schedules:-

Schedule 1 classifies the goods for import and prescribes the rate of import duties. It

specifies the various categories of import items in a systematic and in accordance with

an international scheme of classification of internationally traded goods – termed as

‘harmonized system of commodity classification'.

Schedule 2 classifies the goods for export and prescribes the rate of export duties.

In addition, the Customs Tariff Act makes provisions for duties like additional duty(CVD),

preferential duty, anti-dumping duty, protective duties,etc.

The duties are levied both on specific and ad-valorem basis, while there are few cases where at

times specific-cum-ad valorem duties are also collected on imported items. Where ad-valorem

duties (i.e. duties with reference to value) are collected, which are the predominant mode of

levy, the value of the goods has to be determined for customs duty purposes as per provisions

laid down under the Customs Act and the Customs Valuation (determination of prices of

imports goods) Rules, 1988 issued thereunder. These provisions are essentially adoption of

GATT based valuation system and followed internationally (now termed WTO Valuation

Agreement). The importer as well as the assessing officer has to carefully study and apply these

provisions so that the duties as due after proper valuation as per law get discharged before the

goods get out of customs control.



44

Valuation

When customs duties are levied at ad-valorem rates, i.e. depending upon its value, it

becomes essential to lay down the broad guidelines for such valuation to avoid arbitrariness

and to ensure that there is uniformity in approach at different customs formations. The

Customs Act,1962 lays down the basis for valuation of import & export goods in the country.

Provisions for Customs Valuation:-

Tariff value :The Central Government has been empowered to fix values for any product which

are called Tariff Values. If tariff values are fixed for any goods, ad valorem duties are to be

calculated with reference to such tariff values. The tariff values may be fixed for any class of

imported or export goods having regard to the trend of value of such or like goods and the

same has to be notified in the official gazette.

When no tariff values are fixed:-

In case of exported goods, provisions of sub-section (1) of Section 14 provide a complete

code of valuation. For valuation of Export goods the criteria specified in the section is fully

applicable and normally "FOB" i.e. Free on Board value is considered after excluding cost of

international insurance and freight.

According to the section, the value of the good shall be deemed to be:-

Price at which such or like goods are ordinarily sold or offered for sale.

Price for delivery at the time of importation and exportation. The price at the time and

place of importation must be considered for determining the customs value. All

expenses upto the destination of goods including freight, transit insurance, unloading

and handling charges are to be considered.

Price should be in the course of international trade.

Seller and buyer should have no interest in the business of each other.

Price should be the sole consideration for sale or offer for sale.



45

Rate of exchange as on the date of presentation of bill of entry as fixed by the Central

Government must be considered. Foreign Exchange rate as applicable at the time of

presentation of the bill of entry as prescribed by the central government must be

considered. This rate may or may not be the market rate prevailing on that date. The

relevant date for determining foreign exchange rate is the date of presentation bill of

entry.

In case of imported goods , the valuation is done according to the Customs Valuation

(Determination of Price of Imported Goods) Rules, 1988. The Customs Valuation rules, follow

the WTO Customs Valuation Agreement. According to the rules, the value of imported goods

shall be the "transaction value" i.e. the price actually paid or payable for the goods when they

are sold for export to India, after adjustment by valuation factors and subjected to:-

Compliance with valuation conditions

Customs authorities being satisfied with the truth and accuracy of the declared value

Excise Duty

Central Excise duty is an indirect tax levied on those goods which are manufactured in India and

are meant for home consumption. The taxable event is 'manufacture' and the liability of central

excise duty arises as soon as the goods are manufactured. It is a tax on manufacturing, which is

paid by a manufacturer, who passes its incidence on to the customers.

The term "excisable goods" means the goods which are specified in the First Schedule and the

Second Schedule to the Central Excise Tariff Act, 1985 , as being subject to a duty of excise and

includes salt.

i. The term "manufacture" includes any process,

ii. Incidental or ancillary to the completion of a manufactured product and

iii. Which is specified in relation to any goods in the Section or Chapter Notes of the First

Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture or



46

Which, in relation to the goods specified in the Third Schedule, involves packing or repacking of

such goods in a unit container or labelling or re-labelling of containers including the declaration

or alteration of retail sale price on it or adoption of any other treatment on the goods to render

the product marketable to the consumer.

As incidence of excise duty arises on production or manufacture of goods, the law does not

require the sale of goods from place of manufacture, as a mandatory requirement. Normally,

duty is payable on 'removal' of goods. The Central Excise Rules provide that every person who

produces or manufactures any 'excisable goods', or who stores such goods in a warehouse,

shall pay the duty leviable on such goods in the manner provided in rules or under any other

law. No excisable goods, on which any duty is payable, shall be 'removed' without payment of

duty from any place, where they are produced or manufactured, or from a warehouse, unless

otherwise provided. The word 'removal' cannot be necessarily equated with sale.

The removal may be for:-

i. Sale

ii. Transfer to depot etc.

iii. Captive consumption

iv. Transfer to another unit

v. Free distribution

Thus, it can be seen that duty becomes payable irrespective of whether the removal is for sale

or for some other purpose.

Rules for Levy of Central Excise

In India, excise duty is levied in accordance with the provisions of Central Excise Act, 1944. It is

the basic Act which lays down the law relating to levy and collection of Central Excise duty. The

Act empowers the Central Government to make rules in pursuance of the Act. Accordingly, the

following set of rules has been framed:-

The Central Excise Rules, 2002 (Section 143 of the Finance Act, 2002)



47

The Central Excise (Settlement of Cases) Rules, 2001

The Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of

Excisable Goods) Rules, 2001

Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000

Consumer Welfare Fund Rules, 1992

The Central Excise (Advance Rulings) rules, 2002

Central Excise (Compounding of Offences) Rules, 2005

The Central Excise law is administered by the Central Board of Excise and Customs (CBEC).

Central Board of Excise and Customs is a part of the Department of Revenue under the Ministry

of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy

and collection of Customs and Central Excise duties, prevention of smuggling and

administration of matters relating to Customs, Central Excise and Narcotics to the extent under

CBEC's purview.

Classification of Goods and Rates of Excise Duty

In order to determine the rate of excise duty on goods, classification is prerequisite. Excise duty

payable is based on the classification of goods given in the Central Excise Tariff Act, 1985

(CETA). The Act gives a list of items chargeable to Central Excise duty. It is divided into 96

Chapters grouped in twenty Sections. Each of these twenty sections relates to broader class of

goods such as Section I relates to Animal and Dairy Products, Section VI relates to Products of

Chemical and Allied Industries, while Chapter XI relates to Textiles and Textile Articles.

The Central Excise Tariff Act was amended in 2004. Earlier there was six digits classification

code for classification of the goods, which has been replaced by 8 digits classification code.

With introduction of this 8 digits classification code, a detailed classification of the goods is now

available. The classification of items is significant because it is only the proper classification,

which leads to determination of rate of duty.

In Central Excise Tariff, against each item a rate of duty has been prescribed. These are

normally termed as "tariff rates". In order to determine the rate of duty on a particular product,



48

first find out the chapter heading under which the item is classifiable. Against that classification,

the corresponding tariff rate has to be read with the exemption notification, if any. Thus,

effective rate of duty on an item is obtained.

Some commodities may be subject to ‘special duty of excise' prescribed under the Central

Excise Tariff Act, 1985. Certain goods may also be subject to duty under some other Acts such

as Additional Duty of Excise (Goods of Special Importance) Act, 1957 or certain Cess.

Different kinds of Excise Duties

Basic Excise Duty : This is the duty leviable under First Schedule to the Central Excise

Tariff Act, 1985 at the rates mentioned in the said Schedule.

Special Excise Duty : This is the duty leviable under Second Schedule to the Central

Excise Tariff Act, 1985 at the rates mentioned in the said Schedule. At present this is

leviable on very few items.

Additional Duties of Excise (Textiles and textile Articles) : his duty is leviable under

section 3 of the Additional Duties of Excise (Textiles and Textile Articles ) Act, 1978. This

is leviable at the rate of fifteen percent of Basic Excise Duty payable on specified textile

articles.

Additional Duties of Excise (Goods of Special Importance) : duty is leviable under the

Additional Duties of Excise (Goods of Special Importance) Act, 1957 on the specified

goods mentioned in its First Schedule.

National Calamity Contingent Duty - Normally known as NCCD. This duty is levied as per

section 136 of the Finance Act, 2001, as a surcharge on specified goods.

Excise Duties and Cesses Leviable Under Miscellaneous Act - On certain specified goods,

in addition to the aforesaid duties, prescribed rate of excise duty and cess is also

leviable.

Education Cess on excisable goods is levied in addition to any other duties of excise

chargeable on such goods, under the Central Excise Act, 1944 or any other law for the

time being in force.



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Wealth Tax

Wealth tax is a direct tax, which is charged on the net wealth of the assessee. It is a tax on the

benefits derived from ownership of property. The tax is to be paid year after year on the same

property on its market value, whether or not such property yields any income. Wealth tax, in

India, is levied under Wealth-tax Act, 1957. The Income tax department under the Department

of Revenue in the Ministry of Finance administers the Wealth Tax Act, 1957 as well as the

Wealth Tax Rules framed there under.

Under the Act, the tax is charged in respect of the wealth held during the assessment year by

the following persons :-

Individual

Hindu Undivided Family(HUF)

Company

Chargeability to tax also depends upon the residential status of the assessee same as the

residential status for the purpose of the Income Tax Act.

Wealth tax is not levied on productive assets, hence investments in shares, debentures, UTI,

mutual funds, etc are exempt from it. The assets chargeable to wealth tax are :-

Guest house, residential house, commercial building

Motor car

Jewellery, bullion, utensils of gold, silver etc

Yachts, boats and aircrafts

Urban land

Cash in hand(in excess of 50,000), only for Individual & HUF

The following will not be included in Assets :-

Any of the above if held as Stock in trade.

A house held for business or profession.

Any property in nature of commercial complex.



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A house let out for more than 300 days in a year.

Gold deposit bond.

A residential house allotted by a Company to an employee, or an Officer, or a Whole

Time Director ( Gross salary i.e. excluding perquisites and before Standard Deduction of

such Employee, Officer, Director should be less than Rs. 5,00,000).

The Assets exempt from Wealth tax are :-

Property held under a trust.

Interest of the assessee in the coparcenary property of a HUF of which he is a member.

Residential building of a former ruler.

Assets belonging to Indian repatriates.

One house or a part of house or a plot of land not exceeding 500sq.mts,for individual &

HUF assessee.

Wealth tax is chargeable in respect of Net wealth corresponding to Valuation date.(Net wealth

means all assets less loans taken to acquire those assets. Valuation date means 31st March of

immediately preceding the assessment year). In other words, the value of the taxable assets on

the valuation date is clubbed together and is reduced by the amount of debt owed by the

assessee. The net wealth so arrived at is charged to tax at the specified rates. Wealth tax is

charged @ 1% of the amount by which the net wealth exceeds Rs. 15 Lakhs.

Taxation of Corporates

Company whether Indian or foreign is liable to taxation, under the Income Tax Act,1961.

Corporation tax is a tax which is levied on the incomes of registered companies and

corporations.

A Company means:-

Any Indian company, or

Any corporate body, incorporated by or under the laws of a country outside India, or



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Any institution, association or a body which was assessed as a company for any

assessment year under the Income Tax Act,1922 or was assessed under this Act as a

company for any assessment year commencing on or before April 1, 1970,or

Any institution, association, or body, whether incorporated or not and whether Indian

or Non-Indian, which is declared by a general or special order of the Central Board of

Direct Taxes to be a company.

Companies in India, whether public or private are governed by the Companies Act, 1956. The

registrar of companies and the company law board administers the provisions of the Act.

However, for the purpose of taxation, companies are broadly classified as:-

Domestic company [Section 2(22A)]:- means an Indian company (i.e. a company formed

and registered under the Companies Act,1956) or any other company which, in respect

of its income liable to tax, under the Income Tax Act, has made the prescribed

arrangement for declaration and payments within India, of the dividends payable out of

such income. A domestic company may be a public company or a private company.

Foreign company [Section 2(23A)] :- means a company whose control and management

are situated wholly outside India, and which has not made the prescribed arrangements

for declaration and payment of dividends within India.

Taxation of Agents

An 'agent' is a person who agrees and is authorized to act on behalf of another. This another

person is known as 'Principal' who authorizes and empowers the agent as his representative to

carry out his legal acts. When the agent and the principal mutually agree, an 'agency

relationship' starts between them. This relationship empowers the agent to carry out business

transactions on behalf of the principal. Infact while dealing with the third parties, the agent

steps into the shoes of his principal and all his legal acts are binding on the principal.

An agent can be an individual, a company or any association of individuals. The document

which empowers the agent is known as 'Power of Attorney', which is executed by the principal

in favour of the agent. When the power of attorney relates to a particular transaction and for a



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specific purpose, it is known as 'Specific Power of Attorney'. Whereas, when power of attorney

relates to transactions in general, it is known as 'General Power of Attorney'. The power of

attorney may or may not be registered.

An agent enjoys all the powers of the principal and binds the principal for all his legal acts. He

can sue the third parties in the name of the principal and has a right to get reimbursement for

the expenses incurred by him related to the business. But at the same time, an agent should act

as per the powers vested in him and should act in the best interests of his principal. He should

maintain proper accounts of all transactions and submit them to the principal.

Provisions for Taxation of Agents

An agent is subjected to taxation under the provisions of the Income Tax Act,1961. It is the

umbrella Act for all the matters relating to income tax and empowers the Central Board of

Direct Taxes (CBDT) to formulate rules ( The Income Tax Rules,1962 ) for implementing the

provisions of the Act. The CBDT is a part of Department of Revenue in the Ministry of Finance .

It has been charged with all the matters relating to various direct taxes in India and is

responsible for administration of direct tax laws through the Income Tax Department .

An agent may be taxed depending upon the category of "persons" in which it falls under the

Income Tax Act. The term "person" under the Act includes:-

Individuals

Corporates

Firms

Association of Persons or Body of Individuals

Hindu Undivided Families

Assessment of non-residents through Agents

A non-resident may be assessed to tax in India either directly or through agents. Under the

Income Tax act (Section 163), there is a provision to assess a non-resident through his agent



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due to the inherent difficulties in ensuring his physical presence during the assessment

proceedings and the possibilities of effecting recovery of the due taxes.

Persons in India who may be treated as 'agent' of a non-resident are:-

Employee or trustee of the non-resident

Any person who has any business connection with the non-resident

Any person from or through whom the non-resident is in receipt of any income

Any person who has acquired a capital asset in India from the non-resident.

If a person is assessed as an agent, he may retain out of any money payable by him to the

person residing outside India on whose behalf he is liable to pay tax (the principal), a sum equal

to his estimated liability. In case of any disagreement between the principal and the agent

regarding the amount to be retained, the agent may secure from the assessing Officer a

certificate stating the amount to be retained pending final settlement of the liability, and the

certificate obtained will be his warrant for retaining that amount.

Permanent Account Number (PAN)

PAN is an all India, unique ten-digit alphanumeric number, issued in the form of a laminated

card by the Income Tax Department. It does not change with changes in address or place where

you are being assessed. For obtaining PAN related information the Income Tax department has

authorized :- (i) UTI Technology Services Ltd (UTITSL) to set up and manage IT PAN Service

Centers in all those cities or towns where there is an Income Tax office and (ii) National

Securities Depository Limited (NSDL) to dispense PAN services from Tax Information Network

(TIN) Facilitation Centers.

Transactions in which quoting of PAN is mandatory :-

Purchase and sale of immovable property.

Purchase and sale of motor vehicles.

Transaction in shares exceeding Rs. 50,000.

Opening of new bank accounts.



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Fixed deposits of more than Rs. 50,000.

Application for allotment of telephone connections.

Payment to hotels exceeding Rs. 25,000.

Provided that till such time PAN is allotted to a person, he may quote his General Index

register Number or GIR No.

The following changes must be intimated to the assessing officer :-

Death of the assessee.

Discontinuation of business.

Dissolution of a firm.

Partition of a Hindu Undivided Family(HUF).

Liquidation or winding up of a company.

Merger or amalgamation or acquisition of companies.

Service Tax

Service tax is a tax levied on services rendered by a person and the responsibility of payment of

the tax is cast on the service provider. It is an indirect tax as it can be recovered from the

service receiver by the service provider in course of his business transactions. Service Tax was

introduced in India in 1994 by Chapter V of the Finance Act, 1994. It was imposed on a initial set

of three services in 1994 and the scope of the service tax has since been expanded continuously

by subsequent Finance Acts. The Finance Act, extends the levy of service tax to the whole of

India, except the State of Jammu & Kashmir.

The Central Board of Excise & Customs (CBEC) under Department of Revenue in the Ministry of

Finance, deals with the task of formulation of policy concerning levy and collection of Service

Tax. In exercise of the powers conferred, the Central Government makes service tax rules for

the purpose of the assessment and collection of service tax. The Service Tax is being

administered by various Central Excise Commissionerates, working under the Central Board of

Excise & Customs. There are six Commissionerates located at metropolitan cities of Delhi,

Mumbai, Kolkata, Chennai, Ahmedabad and Bangalore which deal exclusively with work related



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to Service Tax. Directorate of Service Tax at Mumbai over sees the activities at the field level for

technical and policy level coordination.

In case a registered assessee starts providing any new service from the same premises, he need

not apply for a fresh registration. He can simply fill in the Form S.T.1 for necessary amendments

he desires to make in his existing information. The new form may be submitted to the

jurisdictional Superintendent for necessary endorsement of the new service category in his

Registration certificate. In case of Individuals or Proprietary Concerns and Partnership Firm,

service tax is to be paid on quarterly basis. The due date for payment of service tax is the 5th of

the month immediately following the respective quarter. (Quarters are : April to June, July to

September, October to December and January to March). However, payment for the last

quarter i.e. January to March is required to be made by 31st of March itself. In case of any

other category of service provider than specified above, service tax is to be paid on a monthly

basis, by the 5th of the following month.

The unique feature of Service Tax is reliance on collection of tax, primarily through voluntary

compliance. System of self-assessment of Service Tax Returns by service tax assesses was

introduced w.e.f. 01.04.2001. The jurisdictional Superintendent of Central Excise is authorized

to cross verify the correctness of self assessed returns. Tax returns are expected to be filed half

yearly. Central Excise officers are authorized to conduct surveys to bring the prospective service

tax assesses under the tax net.

Service tax is payable @ 12% of the ‘gross amount' charged by the service provider for

providing such taxable service. The Education Cess is payable @ 2% of the service tax payable.

Service Tax Exemptions

The Central Government can grant partial or total exemption by issuing an exemption

notification. But it cannot be granted by the Government with retrospective effect. The general

exemptions are :-

Small service providers whose turnover is less than Rs 4 lakhs per annum are exempt

from service tax.



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There is no service tax on export of services.

Services provided to UN and International Agencies and supplies to SEZ(Special

Economic Zones) are exempt from service tax.

Service tax is not payable on value of goods and material supplied while providing

services. Such exclusion is permissible only if Cenvat credit on such goods and material

is not taken.

Direct Tax Code

The direct tax code seeks to consolidate and amend the law relating to all direct taxes, namely,

income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an

economically efficient, effective and equitable direct tax system which will facilitate voluntary

compliance and help increase the tax-GDP ratio. Another objective is to reduce the scope for

disputes and minimize litigation.

It is designed to provide stability in the tax regime as it is based on well accepted principles of

taxation and best international practices. It will eventually pave the way for a single unified

taxpayer reporting system.

The salient features of the code are:

Single Code for direct taxes: all the direct taxes have been brought under a single Code

and compliance procedures unified. This will eventually pave the way for a single unified

taxpayer reporting system.

Use of simple language: with the expansion of the economy, the number of taxpayers

can be expected to increase significantly. The bulk of these taxpayers will be small,

paying moderate amounts of tax. Therefore, it is necessary to keep the cost of

compliance low by facilitating voluntary compliance by them. This is sought to be

achieved, inter alia, by using simple language in drafting so as to convey, with clarity,

the intent, scope and amplitude of the provision of law. Each sub-section is a short

sentence intended to convey only one point. All directions and mandates, to the extent

possible, have been conveyed in active voice. Similarly, the provisos and explanations



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have been eliminated since they are incomprehensible to non-experts. The various

conditions embedded in a provision have also been nested. More importantly, keeping

in view the fact that a tax law is essentially a commercial law, extensive use of formulae

and tables has been made.

Reducing the scope for litigation: wherever possible, an attempt has been made to

avoid ambiguity in the provisions that invariably give rise to rival interpretations. The

objective is that the tax administrator and the tax payer are ad idem on the provisions

of the law and the assessment results in a finality to the tax liability of the tax payer. To

further this objective, power has also been delegated to the Central Government/Board

to avoid protracted litigation on procedural issues.

Flexibility: the structure of the statute has been developed in a manner which is capable

of accommodating the changes in the structure of a growing economy without resorting

to frequent amendments. Therefore, to the extent possible, the essential and general

principles have been reflected in the statute and the matters of detail are contained in

the rules/schedules.

Ensure that the law can be reflected in a Form: for most taxpayers, particularly the small

and marginal category, the tax law is what is reflected in the Form. Therefore, the

structure of the tax law has been designed so that it is capable of being logically

reproduced in a Form.

Consolidation of provisions: in order to enable a better understanding of tax legislation,

provisions relating to definitions, incentives, procedure and rates of taxes have been

consolidated. Further, the various provisions have also been rearranged to make it

consistent with the general scheme of the Act.

Elimination of regulatory functions: traditionally, the taxing statute has also been used

as a regulatory tool. However, with regulatory authorities being established in various

sectors of the economy, the regulatory function of the taxing statute has been

withdrawn. This has significantly contributed to the simplification exercise.



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OVERSEAS DOCUMENTATION

Zero Amount Tax Returns

A zero amount tax return could mean there is no income to report, because:

There is no US source income

The US source income is reduced to zero taxable income due (either in combination or

individually) to personal exemption, allowed deductions, or treaty benefits.

When making some of its determinations with regard to the status of certain aliens, the United

States Citizenship and Immigration Service (USCIS) sometimes ask an alien to prove that he has

complied with all his U.S. tax obligations. This is easy to do in cases in which the alien has filed a

U.S. federal individual income tax return for every year he has been in the USA, since the

Internal Revenue Service (IRS) has assigned a document locator number (DLN) to each tax

return filed. It can easily retrieve the alien's original tax return if asked to do so.

More frequently, however, the IRS proves that a taxpayer has filed a return by accessing the

computerized filing record of the taxpayer, and printing out "transcripts" which list the content

of returns filed. If requested, some of these transcripts actually depict the line-by-line entries

made by the taxpayer on his federal tax returns. The IRS usually can provide transcripts very

quickly.

Those reports normally are sufficient to prove to USCIS that the alien taxpayer has filed all of his

required federal returns.

A taxpayer may use IRS Form 4506 to request a copy of his original tax return; or

he may use Form 4506-T to request a transcript which proves the filing of a tax

return, and lists all the transactions which have transpired with respect to the

return.

You may download these forms from the IRS website at

http://www.irs.gov/app/picklist/list/formInstruction.html.



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W8Ben- compliance form from US

Forms W-8BEN and W-9 Compliance in Foreign and U.S. Business Transactions

Under U.S. federal tax law, businesses making certain payments must request a Form W-8BEN

or other W-8 (foreign entities or individuals), or a Form W-9 (U.S. taxpayers), bearing certain

information about the payee. Otherwise, the pay or may have to withhold tax from the

payment.

Compliance in this area became more complex when the IRS released two draft forms to

replace the former W-8BEN when FATCA rules were issued in Jan. 2013. One was a streamlined

W-8BEN for individuals, the other a more complex version for business entities with 25

separate parts and six pages (vs. one now).

With IRS audit activity aggressive in this area, tax professionals must ramp up their knowledge

of the evolving Form W-8BEN. Meanwhile, ongoing issues command attention, such as when

the forms are required from foreign and U.S. payees and when back-up withholding is or isn't

required.

Listen as our panel of experienced tax advisors analyzes the upcoming new Form W-8BEN and

provides insights for compliance with W-8BEN and W-9 for U.S. taxpayers.

Outline

I. Terms of revised Form W-8BEN draft forms

(a) Form for individuals

Four major changes: country of citizenship, no checkbox to choose entity type, no

checkbox for list of swaps, scaled-back section on treaty benefits.

(b) Form for entities

i. Six pages and 25 separate parts

ii. Many new data elements to be validated and possibly stored

iii. Separate checkboxes to indicate status



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II. Significant ongoing compliance challenges with W-8BEN and W-9

III. Best practices for validating forms

IV. Current IRS audit imperatives

Benefits

The panel will explore these and other on-point topics:

Implications of the new requirement for a foreign tax identifying number.

Circumstances that require pay or companies to obtain a form from payees or to

withhold because they haven't received a valid form.

Tactics for performing a line-by-line review to ensure a form is accurate and

complete.

Red flags for IRS auditors right now when they look at a W-8BEN, W-9 or W-8

pulled from your company's files.

Applicable to the United States, an Employer Identification Number or EIN (also known as

Federal Employer Identification Number or FEIN) is the corporate equivalent to a Social Security

number, although it is issued to anyone, including individuals, who have to pay withholding on

employees. It is also issued to entities, such as states, government agencies, corporations,

limited liability companies, and any other organization that must have a number for a purpose

in addition to reporting withholding tax, such as for opening a bank or brokerage account.

Memorandum of Association

The memorandum of association is a statement made by each subscriber confirming their

intention to form a company and become a member of that company. If the company is to have

a share capital on formation, each member also agrees to take at least one share. The form of

memorandum is included in schedules 1 and 2 of The Companies (Registration) Regulations

2008 (SI 3014). You can download a pro-forma memorandum for a company limited by shares

or guarantee from our forms online page.



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Articles of Association

A document that specifies the regulations for a company's operations. The articles of

association define the company's purpose and lays out how tasks are to be accomplished within

the organization, including the process for appointing directors and how financial records will

be handled.

Pre Shipment Documents :-

Cost Sheet

Order Acceptance

Proforma Invoice

Invoice

Packing lists (5 types)

Special customs Invoice

Drafts bill of Lading

Form SDF

Certificate of Origin (7 Chambers)

GSP Certificate

Marine Insurance Declaration

Shipping Instructions

Shipment Advice

Intimation for Inspection

Certificate for Inspection

Certificate of Health

Certificate of Analysis

Post Shipment Documents :-

Bank Invoice

Commercial Invoice

Commercial packing List



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Bank Certificate – Horizontal format (Form No. 1)

Bank Certificate – Vertical Format (Form No. 1)

Letter to bank for Collection/Negotiation

Bills of Exchange

Cost Sheet

Excise Documents :-

AREI

Form C

Form CTI

Proof of exports

EDI Shipping Bills :-

Annexure A

Annexure B

Annexure C

Annexure D DEPB Declaration

DEPB / DEEC / DBK documents

- Appendix 10 A - DBK application

- Appendix 10 C - DEPB application

- Appendix 10D - DFRC application

Reports :-

Export Register

Country wise Exports

Item wise Exports

Pending Order details

LC Register



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FINDINGS

The documentation paper works are simplified than the previous years and this has led

to the emergence of a business environment, widening both the scope and scale of

opportunities open to sellers.

Though many documents prevail in documentation, only certain documents play a vital

part in the company

Central Government is empowered the to make provisions for development and

regulation of foreign trade by facilitating imports into, and augmenting exports from

India and for all matters connected therewith or incidental thereto.

The Central Government can prohibit, restrict and regulate exports and imports, in all or

specified cases as well as subject them to exemptions.

The Director General or any other officer so authorized can suspend or cancel a license

issued for export or import of goods in accordance but he does it after giving the license

holder a reasonable opportunity of being heard.

Government of India formulates and announces an Export and Import policy (EXIM

policy) and amends it from time to time. EXIM policy refers to the policy measures

adopted by a country with reference to its exports and imports.

Custom duty has to paid for certain goods which have demand in India and the duty rate

various depending upon the current demand of the good.



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CONCLUSION

Thus, the internship proved to be a very enlightening experience. Through this many practical

aspects of documentation and export procedures could be understood. The study explores the

importance of the documents used for exports and imports based on the procedures of

Government of India. The Marks Cargo Private Limited deals with the documents like Bill of

Lading, Proforma Invoice, Consular Invoice, Insurance Certificate, Inspection Certificate, Bill of

Entry etc., Marks Cargo Private Limited is a well known multimodal logistics company in India ,

it has 8 branches all over India. The company is engaged in processing clearance, forwarding for

export and exports.

The internship programme was a great learning experience since it helped me to

understand various procedures involved in the export and import of goods, various documents

required to carry out exports and import financing modes. I was able to gain knowledge about

the format to be followed in the documentation of export and import documents.

Marks Cargo Private Limited from Pondicherry office does clearance and forwarding of imports

and exports for all leading companies having global operations. it exports to countries like

china, hong kong, myanmar, singapore, vietnam, canada, sri lanka, malaysia, yangon and etc.



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BIBLIOGRAPHY

www.commerce.nic.in

www.sezindia.nic.in

www.investindia.gov.in

www.indiainbusiness.nic.in

Handbook of International Trade - E Kwan Choi , James Harrigan

Import Do It Yourself - M I Mahajan

http://www.investindia.gov.in/

http://www.indiainbusiness.nic.in/

INTERNSHIP ON EXPORT-IMPORT PROCEDURES AT MARKS CARGO PRIVATE LIMITED, PUDUCHERRY

Education

Transcript of INTERNSHIP ON EXPORT-IMPORT PROCEDURES AT MARKS CARGO PRIVATE LIMITED, PUDUCHERRY