Proper documentation is an integral part of the life cycle of an export business and to keep track of various export transactions. At every stage of setting up and running an export business, you will have to apply, submit, obtain and produce documents along the way. Be it the partnership deed of your export firm, your PAN, bank account documents, the Import-Export Code or the Registration-cum-Membership Certificate, you will have to wade your way through a pile of documents and paperwork to become export ready. Also don’t forget the documents that you will need every time you accept an export order. (Link with articles corresponding to titles)
As per the Foreign Trade Policy (FTP) 2015-2020, the mandatory documents required for export of goods from India are:
Bill of Lading/Airway Bill/Lorry Receipt/Railway Receipt/Postal Receipt
Commercial Invoice cum Packing List (As per the Central Board of Excise and Customs circular under the Customs Act, separate commercial invoice and packing list are acceptable)
Shipping Bill/Bill of Export/Postal Bill of Export
However, besides these core three, there are other documents which you may require when you try to ship overseas. A list of the paperwork typically required in the export of goods is given below. Do note that this is only an indicative list, and not intended to be exhaustive in any form; the exact documentation list for your business will depend on the requirements of the Government of India at that time and that of the importing country, along with any specific requirements of your export sector.
The list below mentions documents in the order of their requirement in a typical export operation:
Proforma Invoice: The first document in many cases is the proforma invoice, which will give the buyer all the information about the item, price, delivery, payment terms. etc.
Export Order/Purchase Order: Based on the proforma invoice, the buyer places the order with the exporter, specifying their details and requirements, in the Purchase Order.
Commercial Invoice: Once the goods are packed and ready, a Commercial Invoice is prepared by the exporter. The Customs counter signs it before shipping.
Packing List: If there is more than one item to be exported, a packing list, listing the various items to be shipped, is mandatory.
Certificate of Origin: This notarized affidavit indicates the place where the goods are manufactured.
Bill of exchange: This is an internal document that is generated by the exporter which instructs the importer to pay the amount mentioned to the exporter or the payee bank.
Letter of Credit: Although not part of the shipment process, a Letter of Credit is an essential document generated while honoring a buyer’s purchase order. It is issued by the buyer’s bank, which undertakes to pay you at the end of the credit period on behalf of the buyer. However, it is not required if the payment is in the Documents against Payments or Documents against Acceptance modes.
Inspection/Quality check: An importer can insist on inspection or QC of the goods before shipping to verify quality, as well as check for adherence to proper packing parameters. The exporter should keep documents verifying such fulfilment ready as well.
Phyto-sanitary certificates and fumigation certificates: These certificates can be demanded by the buyer, with the latter being even mandatory in many countries. These quality and goodness tests may be named differently depending on product and country but are essentially documentation proving adherence to international quality standards and norms. Exporters must ensure they keep them ready before packaging.
Marine Insurance policy: This is required for the safety coverage of the goods dispatched overseas.
Mate’s Receipt: With documents like a Certificate of Origin, Commercial Invoice, Export Order, Letter of credit, Certificate of Inspection and Marine Insurance Policy in place, the cargo can enter the port and onto the dock. Once the shipment is loaded into the carrier, the Mate’s Receipt is issued, confirming the same.
Airway Bill (AWB) or Bill of Lading (BL): An AWB or BL is issued by the carrier of the goods, after the C&F (Cost and Freight) agent hands over the Mate’s Receipt to the carrier, who analyzes it against the cargo. A master AWB/BL is issued by the main carrier of the goods while a House AWB/BL is issued by the freight forwarder.
FEMA Declaration for exporters: This declaration is a requirement which replaced the erstwhile Self-Declaration Form, as per the notifications of Indian customs, indicating the exporter’s agreement to adhere to the tenets of the Foreign Exchange Management Act (FEMA), 1999.
Shipping bill: This is a customs document which can be generated from the dedicated portal electronically. All exporters must submit this document to acquire clearance for exports from Customs.
Let Export Order: The LEO is issued by the customs officer after the completion of export customs clearance procedures. It is proof that all export customs formalities have been completed.
Export General Manifest: The Manifest is filed by the shipping carrier after the movement of goods from the exporting country. It is registered with Customs and initiates the generation of the official proof of export, i.e. the export promotion copy of the shipping bill.
Also Read: How – and why – to register with your EPC
Once the Manifest is generated and the goods have left the shipping port, the C&F agent forwards the three mandatory documents listed above to you, after getting them approved by Customs. You need to share these documents with your bank, which will then scrutinize and forward them to the importer’s bank. The authorized dealers of the Reserve Bank of India are also involved in this exercise. Simultaneously the exporter also must provide proof of export to the Central Excise authorities, based on the Customs endorsements. On the receipt of payment from the importer, an e-Bank Realization Certificate is issued by the exporter’s banker, with which the export transaction concludes.
Important Note: It must be noted that these document requirements may evolve over time, depending on the prevalent statutes and amendments therein. Exporters can voice their opinion on these requirements to their respective EPCs and FIEO, who in turn can pass on these comments and feedback to the government. Although there are no established routes for exporters to ‘influence’ or reach out to policymakers, these bodies act as a bridge between the government and exporters, and their lines of communication are always open for exporters in the form of websites and physical offices.
Avail the services of a custom house agent who can ensure that your customs and dispatch procedure is carried out smoothly and speedily.
Do a thorough check of information you declare to avoid mismatch of information between different documents.
To avoid confusion and delay, ensure you know ahead of time which products are to be scrutinized and by which agencies.
Be careful while selecting the product category on your documents – incorrect selection can cause a problem with customs clearance, and while availing export benefits as well.
Ensure the availability of accepted quality certifications if there is a risk of stringent quality checks and/or scrutiny.
Maintain constant coordination with your C&F agent to avoid delay of clearance in ports. Delays can turn out to be expensive for you.