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EXIM Documentation: Terminology and Significance

Shipping port areal view , EXIM Documentation

In an import-export business, there are many documents and regulatory filing for a lot of things, customs, duties, etc. The terminology is complex and often requires the advice and services of experts. As it’s an international activity, it involves compliance with not one but regulations of two countries. There is a need to monitor every movement of the goods until it reaches the import destination. Further, there is a parallel cross border Foreign Exchange Remittance Leg – which has its own set of compliances and documents. In this article, we have tried to cover the Basics of Export Documentation.

Commercial invoice

The commercial invoice is a document that is issued by an exporter or the seller to the importer or the buyer as proof of the transaction being made. It comprises the terms and conditions of the contract of sale or purchase that take place between the two parties. It is also used to calculate the custom duties and other taxes on the transaction.

Customs invoice

A customs invoice is a document that is necessary to send with the goods or commodities that are being transported. This document is asked for whenever the carriage of goods is crossing any border of any nation or state. It facilitates custom clearance. A customs invoice is a lot like a commercial invoice, but it can contain additional details.

Bill of Lading

 the picture depicts that the bill of lading is a legal and thus necessary document in the exim businesss.

A bill of lading issued by a carrier to the shipper as a contract between them. It contains all the quantitative and qualitative details of the goods being transported. The bill of lading must be signed by the shipper, carrier, and receiver. It is also known as the shipment receipt when the goods are finally transported to their destination.

Shipping Bill (For Exports)

An exporter, to export his goods has to submit an application to the customs for the clearance for exports. This application is called the shipping bill. the carrier does not load the goods of the exporter unless the shipping bill is shown to him.

Bill of Entry (For Imports into India)

A bill of Entry is a document containing the bond number and issue date, filed by either the importers or the custom clearance agents before the goods are imported. This document is then submitted to the customs clearance department. The importer gets to claim ITC on the goods being imported when this document is submitted.

Certificate of Origin

The certificate of origin contains all the detailed information about the products that are being exported. It lists down the place where the product is manufactured, the producer of the product, the importer and exporter of the product, etc. This document is also stamped by the chamber of commerce and submitted separately from invoice and packing lists by the exporters.

There are two types of certificates of origins, one is non-preferential, which indicates that the goods cannot be tariff-free during exports. Another is preferential that lets the goods avail for tariff-free treatments.  

Phytosanitary Certificate

A phytosanitary certificate is a certificate that an importer requires from the exporting country’s department of horticulture, agriculture, food, or water. This certificate is required only when the importer wants to import regulated products from a country. This document can be issued only by the authorised government of the country.

VGM (Verified Gross Mass),

The Verified Gross Mass (VGM), which is a global requirement, is the weight of the cargo including dunnage and bracing plus the tare weight of the container carrying the cargo. It is the total weight of the container’s tare and the weight of the cargo. No content can be loaded on the ship unless its VGM is acknowledged.

EGM (Export General Manifest)

The carrier files an EGM before they dispatch the container for exports. As per the customs act 1962, the carrier has to put the details of the consignment, which is to be loaded in on ships or aircraft. EGM plays the role of a proof of export on which the exporter can claim the benefits of the exports being done.

IGM (for Imports into India)

An IGM is a document that is prepared by the carrier and contains full details of the goods that would arrive at the customs destination. It is a necessary legal document which cannot be avoided as the customs department check over it once the goods reach the location of the custom.

Bank Declarations

Banking services are the backbone of the export-import business as they facilitate all the transactions between the importers and the exporters and also all the mediators between them. 

In India, the Authorised Dealer Bank and Customs are interlinked – by RBI Systems (EDPMS and IDPMS – refer: https://blog.nuphi.trade/2021/04/29/edpms-idpms-explained-india-export-and-import-regulations/)

Wrapping up

The entire process of export is tedious and requires a lot of official work too. It is no easy thing to do even for experts as every shipment has its own nuances

 Though this has been a conventional domain with a lot of paperwork, technology is fast developing in this sector. Now Globally and in India, we have EXIM SaaS (Software-as-a-Service) solutions available that can help prepare most of these documents and enable tracking of EXIM Workflow. (Refer: https://nuphi.trade ) .

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Dipti Shaw