Impex Procedures And Documentation

1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – MARCH/APRIL 2014

M.I.B – II SEMESTER

IMPEX PROCEDURES AND DOCUMENTATION

 

Duration: 3Hrs.                                                                              Max. Marks: 100

                                                                      Section – A

1. Answer any SEVEN Each carries 5 marks            (7×5=35)
2. What are the types of financial guarantees provided by ECGC?
3. Explain the registration formalities required for an exporter.
4. What is Bill of Lading? Explain its purpose and types.
5. Differentiate FOB Contract and CIF Contract.
6. What is Aligned Documentation System? How are the export documents classified under this system? Give three examples of each.
7. What are the objectives and important services of EXIM Bank?
8. What are the excise clearance requirements and procedures for exportable goods?
9. Explain the meaning and scope of Marine Insurance.
10. What are the essential and desirable services expected by exporters from C & F Agents?
11. What are the 3 methods of Quality Control and Pre-shipment Inspection?

 

Section – B

1. Answer any THREE Each carries 15 marks. (3×15=45)

 

11. Explain in detail the three stages in export procedure.
12. Explain the meaning, parties involved and types of Letter of Credit.
13. Discuss the institutional framework available in India for Pre-shipment and Post-shipment finance.
14. Discuss the major Export Promotion measures in India.
15. Write short notes on any 3(Three) of the following. (5marks each)
16. Duty draw back scheme
17. EPCG Scheme
18. Export Promotion Councils
19. Special Economic Zones

                                                                Section – C

• Case Study – Compulsory question.                                      (20 marks)

Gokak Textiles is exporting a consignment of textiles from Karwar Port in Karnataka to Singapore Port, Singapore. The registered office of the company is at 139, Market Road, Gokak, Belgaum District, Karnataka, India.

From Gokak, the goods are to be received and transported by road in trucks to Karwar Port by the  C&F Agent, KK Export Agencies. Shipping space has been booked on the ship M.V 33001- Seven Seas. The company has not used any imported items in the products to be exported or in manufacture.

The consignment has to be sent as per the order received from Fashion Garments, 303, Little India Road, Singapore, vide Order No: 98867- 42246, dt 18^th March 2014.

The export contract stipulates the importer opening an Irrevocable Documentary L/C for the full chargeable value under the CIF contract.

Details of Cargo:

1. Gokak Textiles’ IEC Ref.No : GOI 235544221BGK
2. Trade mark/brand        : Gokak Textiles
3. Container No : SPSSP 3001122
4. Packing List :  600 packages – thick card board
5. Description of goods :  Assorted textiles/ 42,000 numbers
6. Rate                          :  US$  1000 / package
7. Amount :  US$  6,00,000
8. Marine Insurance Premium paid: US$ 30.000
9. Ocean freight paid :  US$  50,000
10. Certificate of Origin : Made in India

Questions: (10 marks each)

1. Prepare a Commercial Invoice based on the details provided in the case, using the blank form given.

 

1. In the case of documentary L/C, what are the documents to be enclosed by Gokak Textiles to receive payment? Explain each briefly.

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Answer Key : IMPEX PROCEDURES and DOCUMENTATION.   MIB II Sem ESE

Section A

1. Export Credit Guarantee Corporation of India provides following guarantees: Packing credit guarantee, Post shipment export credit guarantee, Export production finance  guarantee, Export finance guarantee, Export performance guarantee, Export finance (overseas lending) guarantee.
2. Registration of organisation, opening bank account, obtaining Importer-Exporter Code Number, obtaining PAN number, registration with value added tax authority and sales tax authority, registration with export promotion council, registration with Export Credit Guarantee Corporation of India, registration with other authorities.
3. BOL is a document of title to the goods, a receipt from the shipping company, and a contract for transportation of goods. Types: Clean BOL, claused BOL, transhipment BOL, stale BOL, freight paid BOL, freight collect BOL.
4. Free on board is most frequently used contract in international market. Under this quotation, exporter undertakes to pay all expenditure till loading of goods on board ship, including documentation charges. All expenditure thereafter, like ocean freight, marine insurance, unloading charges etc are borne by importer. Under cost, insurance and freight contract, seller meets all expenses as in FOB , above, plus insurance and freight also.
5. ADS is based on UN layout key under which different form used in international trade transactions are printed on paper of same size and common items of information are given same relative slots in each document. documents classified Commercial and Regulatory.
6. Export Import Bank of India. Objectives: to translate national foreign trade policies into concrete action plans,provide alternate financing solutions to Indian exporters ,to develop mutually beneficial relationships with international community, to forge relationships with other export development and financing agencies, to be responsive to problems of Indian exporters. Services: Fund based assistance and Non fund based assistance – details of each.
7. Excise duty is exemption is given for all exporters. But clearance to be obtained in following ways: 1) export under rebate, 2) export under bond. To explain each.  Procedure: application to asst collector of central excise, information to range superintendant, sealing of goods, processing of ARE-I forms, examination of goods at place of export, submission of claim, verification of application, refund of duty, cancellation of documents.
8. Marine insurance is a contract under which the insurer undertakes to indemnify the insured against losses caused due to perils of the sea including : sinking of ship, damage to ship and cargo due to dashing of waves, dashing of ships on the rocks, fire of explosion on ship, spoilage of cargo due to sea water, destruction of ship and cargo by crew or captain , piracy and such other risks. As per Marine Insurance Act 1963, a contract of marine insurance is an insurance cover for marine cargo, air cargo and post parcels. Marine insurance is used to cover transportation by any of the following modes: sea, air or land, inland water voyages, rail/road, air, post.GIC issues policies for MI.
9. Clearing and forwarding agents. Essential services: transportation to docks and warehousing, booking of space on ship, arrange loading goods on board, information on shipping lines, freight, charges, preparation and processing of  shipping documents, bills of lading, COO,obtaining marine insurance, forwarding of banking collection papers. Desirable services: Storage facilities abroad, tracing of goods if shipment goes astray, through connections, arrangement for assessing damage to shipment enroute.
10. Self- certification, in-process quality control and consignment wise inspection.

Section B

11. Pre-shipment stage, Shipment stage and post-shipment stage. To explain procedures in each.
12. L/C is a document issued by importers bank in favour of exporter giving him authority to draw up to a particular amount as per contract price, covering a specified shipment of goods and assuring him pf payment against delivery of shipping documents. Parties: applicant or opener, beneficiary, issuing bank, advising bank, confirming bank, negotiating bank. Types: revocable and irrevocable L/C, with recourse or without recourse, confirmed and unconfirmed, transferable and non transferable, fixed and revolving, clean and restricted,red clause and green clause, back to back, documentary L/C.
13. Reserve Bank of India, Commercial Banks, Export Import Bank of India, Export Credit Guarantee Corporation of India. To explain role of each.
14. Import facilities for exporters: EPCGScheme, advance authorisation scheme, duty free import authorisation scheme. Duty remission scheme: duty entitlement passbook scheme, duty drawback scheme, excise duty refund, central sales tax exemption, exemption from service tax. Fiscal incentives: exemption from income tax,. Marketing assistance: market development assistance, market access initiative,. Supply of raw materials: industrial raw material assistance centres scheme, back-to-back inland letter of credit. Institutional measures:
15. a) Exporters can claim refund of customs duty and excise duty paid on raw materials, components and consumables used in manufacture of goods meant for export. Rate of DDBK : all industry rates, brand rates, special brand rates.
16. b) EPCG introduced by EXIM policy 1992-97 to enable manufacturer exporters to import machinery and other capital goods for export production at concessional or no customs duty .Facility is subject to export obligation. Schemes: zero duty scheme, concessional 3% duty scheme,.
17. c) SEZ started in India from 2000. A Specifically delineated duty free enclave, which shall be deemed to be a foreign territory for the purpose of trade operations and duties and tariffs, Set up in public, private and joint sectors or by State Govts. Kandla, Surat, Cochin, Chennai, Santa Cruz, Vizag , Noida examples. Many tax and duty concessions and promotion packages available.

d)Non profit organisations registered under companies act or societies registration act. Non profit, autonomous and professional bodies. Main role to promote Indias foreign trade, encourage and monitor observance of international standards by exporters, look for trend and opportunities in global market and assist exporters.

Section C         Case study

16. Students to fill up relevant details in relevant columns.
17. Documents to be submitted for getting payment:

Bill of Lading, Shipping Bill,Commercial Invoice,Packing List,Certificate of Origin,Certificate of pre-shipment inspection,Marine Insurance Policy,GSP/CWP certificate,Bill of Exchange.Any other document if required