MONDAY EXPORT CLASS With DR GODWIN OYEFESO (SUCCESSEDGE EXPORTERS NETWORK)

MONDAY EXPORT CLASS

With

DR GODWIN OYEFESO (SUCCESSEDGE EXPORTERS NETWORK)

Topic: CUSTOM CLEARANCE OF EXPORT CARGO (Part 1)

Every exporter is required to obtain customs clearance in respect of export goods before they are sent to buyer, irrespective of the mode of shipment. The mode of shipment could be either by sea, air, rail or road. Customs procedures in different modes of shipment are one and the same, barring minor variations. According to Section 40 of the Customs Act, person-in-charge of the conveyance vessel, aircraft or vehicle cannot permit loading of goods, without permission of the Customs Authorities. The exporter through the clearing and forwarding agent, also known as Customs House Agent (CHA), normally, obtains the customs clearance.

OBJECTIVES OF CUSTOMS CONTROL

The objectives of customs control are:

To ensure nothing goes out of the country against the laws of the land and customs authorities duly enforce stipulated prohibitions and restrictions regarding outward cargo;
To ensure authenticity of value of outward cargo according to the customs valuation rules to check over and under invoicing;
To assess and realise export duty/cess/charge according to the customs Tariff Act and any other fiscal legislation;
To check that all the regulatory provisions of Export (Control) Order, Export (Quality Control and Inspection) Act and Foreign Exchange Regulations Act are duly complied with and
To provide export data through the customs

While complying with the objectives, before granting permission, customs ensure that the goods exported are of the same type, sort and value as have been declared by the exporter and the duty or cess thereon is properly determined and paid by the exporter.

EXCHANGE CONTROL DECLARATION FORM

Under Customs Act, every exporter is required to declare export value of shipment and give an undertaking that the export proceeds would be realized within a period of six months from the date of shipment or due date, whichever is earlier. If customs clearance for the shipment is made manually, declaration is made in GR form, in duplicate. If the clearance is computerized, SDF form, in duplicate, is used in place of GR form.

CUSTOMS CLEARANCE OF EXPORT SHIPMENT

The documentary requirements and procedure for customs clearance are as under:

Documentary Requirements

For movement of goods by sea or air, customs permission for shipment of goods is given on a prescribed document known as ‘Shipping Bill’. In other cases, such as by road/rail, the prescribed document on which the customs permission given is called ‘Bill of Export’. There are four types of Shipping Bill/Bill of Export used in export of goods. These are:

Dutiable Shipping Bill/Bill of Export: Export goods attract duty/cess.
Drawback Shipping Bill/Bill of Export: Export goods fall under Duty Drawback In this case, customs duty is paid first and later duty is refunded, after shipment of goods.
Free Shipping Bill/Bill of Export: This form is used when export goods attract neither export duty/cess nor are covered under Duty Drawback scheme (Free trade samples, gift parcels, warranty replacements etc).
Ex-Bond Shipping Bill/Bill of Export: Goods are shipped from the customs bonded

Exporter or CHA has to submit the following documents to the customs department for securing customs clearance:

Shipping Bill (Appropriate type) in quadruplicate, if clearance is manual or Annexure A or B, in case clearance is given in computerized manner;
Commercial Invoice (2 copies);
Exchange Control Form- GR Form or SDF as applicable, in SDF form is used in place of GR Form where customs operations are computerized;
Copy of Letter of Credit/Copy of Export Order/ Export contract, duly attested by bank;
Packing List;
Certificate of Origin or GSP certificate of Origin;
Shipper’s declaration form for export of goods;
ARE-1, duly approved by the Central Excise office (ARE-1 has replaced AR-4);
Original copy of Certificate of Insurance, wherever necessary;
Marine Insurance Policy;
Export Licence, where required and
Any other