What is Let Export Order or LEO?
The Let Export Order (LEO) is the final step in the list of compliance requirements required to export goods out of India. As you must have seen from our previous articles, there are documents related to the commercial aspect of the export transaction, insurance, quality, logistics and compliance that must be prepared and/or submitted.
A LEO is provided when customs is satisfied with the assessment of the value of goods and their inspection. This clears your shipment for export.
Once your goods are ready for export, you will have to arrange for necessary customs clearance procedures at the location of the custom from where the products are to be shipped. Your export customs clearance procedures are done through the filing of a shipping bill and other export documents. The designated customs officer would then examine and assess the goods and documents and permit the export of the goods by authorizing the ‘Let Export Order’ in the shipping bill.
Once the LEO is obtained in the shipping bill for a particular consignment, the exporter or their customs house agent (CHA) can hand over the consignment to the carrier entrusted to take it out of the country.
When is the LEO given?
As an exporter, you will need to keep ready all the required documents that will be processed by the customs authorities. They will verify various aspects such as the value and classification of goods (in case of drawback shipping bills), duty and cess as applicable, description in invoice and actuals, sample assessment, testing the exportability under EXIM policy etc.
After your shipping bill is approved, the goods go to the shed appraiser (export) for examination at the docks, based on the aspects mentioned above. The clearance is given by passing the LEO and handing over the exporter’s copy of the shipping bill to the exporter or the customs house agent. Exporters can carry out the customs formalities and procedures on their own, but to save time and benefit from the services of an expert, many (or rather, most) hire a CHA.
The CHA will file the shipping bill online, with the help of these documents, through the centralized EDI-based system on which all customs locations are linked. Of course, there is a non-EDI-based shipping bill facility for non-EDI ports.
After the filing of the shipping bills with customs, the exportable goods are transported to the airport, port, or container freight station. The unloading slot is decided based on the carrier’s handling location.
Once the cargo is unloaded, the exporter or the CHA gets the goods registered online for inspection by the customs inspector.
The job of the customs inspector is to physically examine the cargo and make sure that all the export-related requirements and criteria are met. This inspection is documented by the customs inspector in the form of an online inspection report. This report is forwarded to the appraising officer or higher authorities for approval.
Meanwhile, the value of the goods is determined by the appraiser. This appraisal is critical as it is linked to taxes and export benefits. The exporter can be penalized for any understatement or overstatement of the invoice value.
Post the inspection and assessment, the online report is updated, and the goods are allowed by the customs to be shipped outside India. It does so by mentioning ‘Let Export’. Customs officials will now sign the hard copy of the shipping bill for the specific shipment.
Once the goods arrive at the dock, the exporter contacts the customs officer and present them with the checklist. It will have the endorsement of the port authority along with other declarations and original documents. Based on the verification of the quantity of the goods actually received, the electronic shipping bill is marked and handed over to the dock appraiser along with all original documents. The appraiser generally assigns a customs officer for the examination of the goods, and once satisfied with the examination, the LEO for the shipment is assigned.
After the LEO is passed in the EDI system, two copies of the shipping bill are generated – one for customs and the other for the exporter. On the hard copy of the shipping bill, the signatures of the customs officer and the CHA/exporter/representative is obtained, which is then stamped and signed by the appraiser. This concludes the process of getting a Let Export Order.