Export Documentation

A  Comprehensive Guide to Export Procedures from India

Introduction to Exports

Export refers to the process of taking goods out of India to destinations outside the country, as defined in Section 2(18) of the Customs Act, 1962. In India, export trade is governed by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry. The DGFT periodically announces policies and procedures necessary for exports, categorizing goods into three categories:

• Prohibited Goods: Not allowed to be exported.
• Restricted Goods: Permitted under license and compliance with conditions.
• Canalized Goods: Exported exclusively through State Trading Enterprises (STEs).

Before exporting, businesses must obtain an Importer-Exporter Code (IEC) from the DGFT to process the shipping bill for the clearance of export goods.

Export Procedure

The process of exporting goods from India involves a series of legal and procedural formalities. The exporter must adhere to these steps before the goods are cleared by Customs.

1. Registration

Exporters must obtain a PAN-based Business Identification Number (BIN) from the DGFT before filing the shipping bill. The BIN is integrated with the Customs system, and exporters are also required to register the authorized foreign exchange dealer code for repatriation of export proceeds.

2. Registration Under Export Promotion Schemes

Exporters utilizing export promotion schemes must register their relevant licenses or documents (e.g., DEEC book) at the Customs station, presenting the original documents.

3. Shipping Bill Processing – Non-EDI

In the case of non-EDI (Electronic Data Interchange), exporters must submit the shipping bill in the prescribed format with necessary documents like invoices, AR-4 forms, and packing lists. The Export Department assesses the goods, verifying value, description, and export compliance. If required, the department may request samples for inspection or testing. Once approved, a ‘let export’ order is given.

4. Shipping Bill Processing – EDI

Under EDI systems, exporters file declarations through service centers. After verification, the system generates a shipping bill number, and the exporter can submit the necessary payment for export cess (if applicable). The system generates the shipping bill and provides the necessary documents to proceed with export clearance.

5. Tax, Quota Allocation, and Certification

When applicable, exporters need to paste quota allocation labels on their invoices and submit relevant certification to Customs. If required, the export invoice may serve as a document for tax exemption.

6. Arrival of Goods at the Dock

Goods are brought to the dock for examination with a checklist and other declarations filed. Port authorities verify the quantity and endorse the checklist accordingly.

7. System Appraisal of Shipping Bills

In some cases, the system processes the shipping bill without human intervention, but when necessary, the Customs Officer may request samples for further verification. Special instructions for the examination may be provided if required.

8. Status of Shipping Bill

Exporters or Customs House Agents (CHAs) can check the status of the shipping bill at the service center. Queries raised must be answered before the bill can be cleared.

9. Customs Examination of Export Cargo

Upon arrival, the goods are examined by the Customs Officer. After verifying all documents, the officer may provide a “let export” order. In case of discrepancies, the bill is sent back to the export department for reassessment.

10. Variation Between Declaration & Physical Examination

If the description on the shipping bill doesn’t match the physical examination, the issue is escalated to senior Customs officers for resolution. Any disagreement between the exporter and Customs will be settled through the principles of natural justice.

11. Stuffing and Loading of Goods in Containers

The goods are stuffed into containers under the supervision of the Preventive Officer, ensuring all details are entered into the system. If there are discrepancies in the loaded goods, the shipping bill will be amended before moving forward.

12. Drawing of Samples

For goods requiring testing, Customs officers draw samples, which are sent for testing with copies of the test memo provided to the exporter.

13. Amendments to Shipping Bill

Corrections or amendments can be made to the shipping bill at the service center, with approvals depending on the stage of the process. Changes made after the “let export” order require higher-level approvals.

14. Export of Goods Under Claim for Drawback

Exporters can claim a drawback on duties through the EDI system after the goods are exported. The claim process involves addressing any queries raised by Customs and ensuring the details are properly entered into the system.

15. Generation of Shipping Bill

Once the “let export” order is given, the system generates the shipping bill in two copies: one for Customs and one for the exporter. These are signed and stamped, after which the exporter can proceed with the export procedure.

16. Export General Manifest (EGM)

Shipping lines and agents must submit the Export General Manifest electronically to Customs within seven days of vessel departure. This confirms the physical export of goods, allowing Customs to sanction drawback claims.

General Guidelines for Exports

1. Exemption from Declarations

Exporters can be exempt from declaring export under certain regulations, such as exporting goods free of cost for promotional purposes or transactions not involving foreign exchange.

2. Manner of Receipt and Payment

Export payments must be received through authorized banks, with options including drafts, pay orders, and credit cards. These payments must adhere to Foreign Exchange Management regulations.

3. Realisation & Repatriation of Export Proceeds

Exporters are required to repatriate full export proceeds within a stipulated period, with specific timelines depending on the type of exporter and goods.

4. Foreign Currency Account

Exporters may open foreign currency accounts under certain conditions, including those involved in international exhibitions or trade fairs.

5. Export of Goods on Lease or Hire

Exports on a lease or hire basis require prior approval from the Reserve Bank of India.

6. Export of Currency

Exporting Indian currency exceeding Rs. 7,500 requires prior approval from the Reserve Bank of India.

7. Exports to Neighboring Countries

Specific procedures apply for exports to neighboring countries by road, rail, or river, including filing the necessary forms at border customs stations.

By following these outlined procedures and complying with the required documentation, exporters can navigate the legalities of exporting goods from India with ease. These guidelines aim to facilitate smooth exports and support the national and global trade ecosystem.