• Dispatching an Export Order | Export Procedure

    Dispatching Export Order

    Transactions within a region often take place with little consideration or trouble: products exchange hands with ease. However, when it comes to transacting across borders, having thorough knowledge of export and import guidelines is essential to maintain a legal and successful business.

    You receive an order from an importer in the form of an agreement, an invoice, a purchase order, or a letter of credit. It is mandatory that you receive something concrete in paperwork before you start manufacturing or procuring the goods to be exported.

    This list will help you towards dispatching an export order in a way that provides the best value to your customers and makes working with you a seamless and satisfactory experience.

    Checking and confirming the order

    This is a defining step for the rest of the process. Whatever happens henceforth depends heavily on what is written into the contract or agreement between the two parties.

    It is important to go through all the terms and conditions of the particular transaction before you confirm the order. This involves cross-checking the product description, the terms of shipment and payment terms, going through the insurance requirements, and so on.

    Once you are satisfied with all the terms and conditions of the order, confirm the order and take the opportunity further.

    Production or procurement

    Since you need enough capital to procure or produce the goods to be exported, you can reach out to banks or other financial institutions for a pre-shipment credit.

    The export credit schemes of banks empower exporters with enough capital to buy raw material and fulfil other requirements needed to complete the order. Once the credit is received, the exporter can produce the finished goods and send them for packaging, after which they are ready to be shipped overseas.

    Central excise clearance

    You can get a full rebate on the excise duty paid for your export order. There are two schemes you can avail of: either choose to pay the full amount of duty before the consignment leaves your premises, in which case you can file a claim for a rebate after the goods have been exported.

    Or you can sign an appropriate bond with the excise authorities and release the shipment without making the payment. In this scenario, you’d need to apply to the Central Excise Range Superintendent with an AR4 or AR4A form to get excise clearance.

    Once the order has shipped and the proof of shipment produced to the excise department, the refund is made to the exporter.

    Pre-shipment inspection

    Before your order ships, it is crucial to get it checked thoroughly by a competent and designated certification agency like ELBI consultancy or Sandeep Garg and company and get a PSI certificate. This is a prerequisite to meet the quality certification required for certain goods as specified by government guidelines.

    Submit the certificate obtained from this inspection to the customs authority. There’s a consignment-wise inspection, in-process quality control, and self-certification. The original copy of the certificate is to be submitted to customs, a second is sent to the importer, and a third remains with the exporter.

    Clearing and forwarding agents

    After getting the inspection certificate, you can appoint a clearing and forwarding (C&F) agent. These agents are responsible for packing, marking, and labelling the goods. They even transport them to the port and take care of the procurement of documents related to cargo clearance, transport, and others.

    The C&F agent will need 8 to 10 copies of the commercial invoice, a triplicate of the customs declaration form, packing list, letter of credit, inspection certificate, GR form, AR4/AR4A, and GP-1, GP-2 forms. They may also need Other documents based on the mode of transportation to process your certification.

    Reservation of shipping space

    Since a port sends out many export consignments, it is very important to reserve your shipping space. This space can be reserved by either the C&F agent or someone from the shipping company.

    The shipping company issues its own certificate, called the shipping order. This order serves as proof of reservation, much like a passenger ticket. The shipping order is sent along with the consignment so that the receiver of the goods can check that the items that have been sent match the order they received.

    Paperwork and final checks

    By now, your agent would have stored your shipment in a warehouse. They would then go about getting the clearance and permission from the port authorities to bring the goods into the shipment shed. They check the documents of the shipping, verify them, and issue a port trust document.

    Once permission is granted, the shipment is physically checked and clearance given to the shipping bill. After all the paperwork is over, the shipment moves to the transit shed, where it is inspected by the port appraisers. Then the order is dispatched.

    Post-dispatch formalities

    After your consignment has shipped, the agent submits the documents and paperwork to you, which you can show to the bank to claim your export incentives like service tax rebate and refund of tax paid on inputs.

    You’ll need to submit documents concerning the consignment, the shipping, and the goods need to be submitted at the customs department to avail these benefits.

    Lastly, remember to send the importer the shipment advice on the estimated time of delivery of the shipment.

    Raghav Khajuria
    Raghav Khajuria
    Leads Marketing activities for Drip Capital.
    5 min read