INTERNSHIP ON EXPORT-IMPORT PROCEDURES AT MARKS CARGO PRIVATE LIMITED, PUDUCHERRY

SANTHAN R, MBA IB 2013-15
PONDICHERRY UNIVERSITY
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INTRODUCTION
The logistics industry in India is evolving rapidly and it is the interplay of infrastructure,
technology and new types of service providers that will define whether the industry is able to
help its customers reduce their logistics costs and provide effective services (which are also
growing). Changing government policies on taxation and regulation of service providers are
going to play an important role in this process. Coordination across various government
agencies requires approval from multiple ministries and is a road block for multi modal
transport in India. At the firm level, the logistics focus is moving towards reducing cycle times in
order to add value to their customers. Consequently, better tools and strategies are being
sought by firms in order to enhance their decision making. In this paper, we provide a
perspective on these issues, outline some of the key challenges with the help of secondary
information, and describe some interesting initiatives that some firms & industries are taking to
compete through excellence in managing their logistics.
The Indian economy has been growing at an average rate of more than 8 per cent over
the last four years (Srinivas, 2006) putting enormous demands on its productive infrastructure.
Whether it is the physical infrastructure of road, ports, water, power etc. or the digital
infrastructure of broadband networks, telecommunication etc. or the service infrastructure of
logistics – all are being stretched to perform beyond their capabilities. Interestingly, this is
leading to an emergence of innovative practices to allow business and public service to
operate at a higher growth rate in an environment where the support systems are getting
augmented concurrently. In this paper, we present the status of the evolving logistics sector in
India, innovations therein through interesting business models and the challenges that it faces
in years to come.
Broadly speaking, the Indian logistics sector, as elsewhere, comprises the entire
inbound and outbound segments of the manufacturing and service supply chains. Of late, the
logistics infrastructure has received lot of attention both from business and industry as well as
policy makers. However, the role of managing this infrastructure (or the logistics management
regimen) to effectively compete has been slightly under-emphasized. Inadequate logistics
infrastructure has an effect of creating bottlenecks in the growth of an economy, the logistics

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management regimen has the capability of overcoming the disadvantages of the infrastructure
in the short run while providing cutting edge competitiveness in the long term. It is here that
exist several challenges as well as opportunities for the Indian economy. There are several
models that seem to be emerging based on the critical needs of the Indian economy that can
stand as viable models for other global economies as well.
Chandra and Sastry (2004) have pointed towards two key areas that require attention
in managing the logistics chains across the Indian business sectors – cost and reliable value add
services. Logistics costs (i.e., inventory holding, transportation, warehousing, packaging, losses
and related administration costs) have been estimated at 13-14 per cent of Indian GDP which
is higher than the 8 per cent of USA’s and lower than the 21 per cent of China’s GDP (Sanyal,
2006a). Service reliability of the logistics industry in emerging markets, like India, has been
referred to as slow and requiring high engagement time of the customers, thereby, incurring
high indirect variable costs 2005). However, the Indian logistics story is one with islands of
excellence though there has been a general improvement on almost all parameters. It is this
aspect that we explore further in this paper. The paper is organized as follows: the next
section gives a brief introduction of some of the peculiarities of the Indian logistics sector. In
section 3 we discuss the determinants of growth in this industry. In section 4 we provide some
interesting initiatives that point towards a renewal of the sector. The challenges facing the
sector are discussed in the last section.
Some Peculiarities of the Indian Supply Chains
The Indian logistics sector has typically been driven by the objective of reducing transportation
costs that were (and often continue to be) inordinately high due to regional concentration of
manufacturing and geographically diversified distribution activities as well as inefficiencies in
infrastructure and accompanying technology. Freight movement has slowly been shifting from
rail to road with implications on quality of transfer, timeliness of delivery and consequently
costs except for commodities which over long distances, predominantly, move through the
extensive rail network. More on the infrastructure issues later.
The transportation industry is fragmented and largely un-organized – a large number of
independent players with regional or national permits that carry freight, often with small fleet

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size of one or two single-axle trucks. This segment carries a large percent of the national load
and almost all of the regional load. This fragmented segment comprises owners and
employees with inadequate skills, perspectives or abilities to organize or manage their
operations effectively. Low cost has been traditionally achieved by employing low level of
technology, low wages (due to lower education levels), poor maintenance of equipment,
overloading of the truck beyond capacity, and price competition amongst a large number of
service providers in the industry. Often, one finds transportation cartels that regulate supply of
trucks and transport costs. However, the long run average cost of transport operations across
the entire supply chain may not turn out to be low.
Multi-modal transport in India was a monopoly of the Container Corporation of India till
2005. With licenses being given to 13 new private players (Acharya, 2006b), rail trade should
improve considerably. In order to encourage trade by small scale industries, Indian Railways
has started a “road-railer”system where container vehicles are capable of running both on
highways hauled by trucks and on rail (Guha and Sinha, 2006). In 1998-99, the Konkan Railway
(one of the railway zones in South-Western India) pioneered the 'roll-on, roll-off' ('RO-RO')
concept between Mumbai (Kolad) and Goa (Verna). Privately owned trucks are loaded with
their goods which are driven on to a rake of flat cars and are carried (trucks and their cargo) to
the destination.
In 2005-06, the ports handled 456.20 million tonnes of cargo traffic. This is expected to
increase to 700 million tonnes by 2011-12. In keeping pace with the growing demand, the
government plans to increase port capacities to around 1 billion tonnes per annum in the next
six years (Raja, 2006). Under the National Maritime Development Programme (NMDP), the
government is encouraging public-private partnership to build and maintain ports. This
scheme will cover 276 port related projects at an investment of $12.40 bn (Raja, 2006). With
rising congestion levels at major ports and with high average turnaround time, the
government has decided to develop minor ports in seven states to ease the traffic of major
ports (Financial Express, 20006b). Tables 3 the operational performance of various ports in
India – while there is an improvement in performance, the pace is slow.

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The estimated cost of this development is expected to be around $350 mn. Further, private
sector is likely to invest $ 7.67 billion over the next six years. The entry of large third party
logistics (3PL) carriers like Federal Express and DHL and the expansion of domestic networks of
Indian firms like Gati and Shreyas Shipping is also transforming the nature of services and the
business practices across the sector. Table 4 gives an idea of the investment plans announced
by the various firms for the coming financial year and gives a sense of their increasing activity.
Another trend driving growth in this sector has been the consolidation amongst the logistics
player. Mergers & Acquisitions amongst Indian and MNC logistics firms is starting to increase
the reach of MNC 3PLs in the domestic market while consolidating the business (e.g., DHL
acquired Blue Dart, TNT acquired Sppedage Express Cargo Service, Fedex bought over Pafex
etc.). Consolidation is expected to be beneficial to both the service providers as well as the
consumers. Initially MNC 3PL firms were providing only custom clearance and freight
forwarding facility to their international clients. With the logistics market growing we should
see a shift in this trend.
Government policies have been another driver of change in the logistics industry. The
trend towards a higher road cargo traffic as compared to rail is going to require better logistics
control and coordination. The golden quadrilateral road project and the east & west rail
corridors are expected to change the reactiveness of Indian firms through shorter lead times
as well as lower maintenance costs on the transport equipment. They also have the potential
of reducing the procedural delays on highways by reducing the number of checks and related
stoppages of vehicles. Its impact on perishable good will be most significant. Thirteen States
and three UTs have already amended the State laws allowing private sector participation in
direct purchases of farm produce from farmers (Ahya, 2006) which is making procurement
more efficient and is bringing better technology as well as products in the rural production and
distribution network (e.g., see ITC echoupal in the next section). Banks have developed
venture capital funds for logistics players. Small Industries Development Bank of India or SIDBI,
for instance, has invested $ 2.3 mn in the Mumbai based firm Direct Logistics (Baxi, 2006).

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COMPANY PROFILE
Marks Cargo Private Limited was established in 2006 with 5 branches, and has since grown into
the leading cargo handlers. To meet the growing demands of their valuable and supporting
customers they have established 9 branches at present. At each step they take towards
advancement and always realize that customers are the foundation stone of the success. With
unique combination of expertise, infrastructure and dedicated personnel Marks Cargo Private
Limited ensure value added service with all the beneﬁts being transferred to our clients.
The goal is to build long term association with our valued customers for mutual benefits and
understand well about their requirements, to serve them better. Main objective is the
satisfaction of the customers by providing timely service, information and guidance. The office
at Pondicherry doing India distribution and worldwide Logistics solutions.
As Logistics is a part of Product offering, Marks Cargo Private Limited is committed to provide a
real value for money, by way of giving critical information, so as to contribute to their winning
advantage. Marks Cargo Private Limited, is well-versed in providing prompt, reliable and
consistent service, also assured to their customers with affordable and comprehensive business
solutions. Marks Cargo Private Limited is mounting firm headquartered at Pondicherry, India,
amongst the renowned global logistics service providers.
Marks Cargo Private Limited is committed to become a full fledged third party logistic solution
provider, attributing world-class service to their customers, across globe.
 Integrity
 Commitment
 Professionalism
 Innovation
 Adaptability
 Consistency
 Dedicated Customer service
 Understanding & Development

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Global Supply Chain
Managing inventory is a very big challenge now‐a‐days to manage within their budget and its
time-sensitive. And now it is very common to go global sourcing for most of the business
houses. However, they are committed to provide the valued customers for fruitful, reliable
business partner for end‐to‐end supply chain activity, as well.
Value Chain
Marks Cargo Private Limited is designed to ensure that each and every stages of the supply
chain activity will carefully planned and coordinated well. An outstanding team of professionals,
committed to the excellence by way of providing timely and accurate information and
guidance, as real value for the customer’s money.
To make use of their agent network and Logistics partners across the globe, they obviously
support all the customer’s sourcing and selling anywhere to anywhere in the globe.
SOP – Standard Operating Procedures
To understand well about the specific logistics needs and requirements. The study is conducted
all expectations of a customer in order to setting up a detailed process flow to check all the
deviations and ensure a reliable business module to the industry specific.
The effective way of implement standardized operating procedure, the firm develops and
implement and maintain a real‐ time solution, which is fundamental and instrumental to all
customer’s supply chain management.
GROUPING (CONSOL)
A cost‐effective way of freight management to do advance space block in the respective
airlines.
Marks Cargo Private Limited facilitate to their customers by doing cargo consolidation air/sea
which includes the transportation of cargo to the loading point, loading the cargo into
containers, processing the shipping documents with execution of necessary custom formalities,

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use premium air/sea carriers and make sure that the cargo will in‐time to the respective
destinations well before the stipulated time indicated by the most of their customers.
List of Services
 Customs Clearance
 World-Wide Sea-Freight and Air-Freight
 Warehousing and Packaging solutions
 Value Added Services for companies who require a reliable partnership with a credible
global logistics business
 Door to Door
 Reverse Logistics
Sea Freight Services
 Reliable, safe, competitive sea-freight solutions
 LCL (Less than Container Load)
 FCL (Full Container Load) – Standard, Open Top, Flat-Rack, Tanker, Reefer containers
available
 Break-Bulk
 Roll-On-Roll-Off
 Out-of-Gauge cargo
 Hazardous cargo
 Specialists in large project shipments, but at Marks Cargo no shipment is too small
 World-Wide Import/Exports, including Cross-Trade shipments
 Regular sailings utilizing their network of overseas partners and all major carriers
Air Freight Services
 Fast, reliable, secure and competitive air-freight solutions
 Flights to all major international destinations
 We regularly handle anything from heavy plant – industrial – light domestic Equipment
 Daily low cost consolidations world-wide, all-cargo carriers, and charters are utilized

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 Services include door-destination airport, and door-door
 Packaging suitable for Air-Freight is an important issue –can offer solutions
Custom Clearance Services
Marks Cargo Private Limited expert team files many of customs entries, and handle all aspects
of customs process, including: import / export clearance, declarations, proforma invoices and
certificates of origin. The expertise in the field also covers customs regulations, bond
requirements, and duty rates.
The customs clearance services for various import and export consignments include the
following:
 Guidance and consultation, liaisioning and follow up with various reputed Organizations.
 All post shipment formalities and endorsements.
 Documentation procedures i.e. preparation and handling of documents.
 Drawback and several other export benefits.
 Clients who have their freight and Customs clearances combined with Marks Cargo,
enjoy smoother transits through international border countries.
 The clients have access to a specialist 24/7 service meaning you can ask us a question
any time of day.
 Contact Marks Cargo Private Limited to discuss how assistance can be provided with all
the Customs Formalities.
WAREHOUSING SOLUTIONS
Marks Cargo Private Limited, can deal into various projects of the supply chain Management for
simple storage.
The customs clearance services for various import and export consignments include the entire
inventory management of packing and distribution solutions. The company is equipped to
handle various types and sizes of your stocks from fire, pilferage, damage, shortage… etc....

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Marks Cargo Private Limited has a team of experienced in all the aspects of duties and
responsibilities of receiving, documenting, storage, billing and distribution by end to end.
3PL Services
 Pick & pack
 Custom bonded warehousing
 Dangerous goods handling and storage
 Expertise in handling FMCG/Pharma/Engg/Autoparts. Consumer Electronics, Etc.,
 Just-In-Time Inventory management
 Temperature controlled storage.
 Consulting – Optimising the Logistics process
 Factory Logistics
 Project Logistics
Marks Cargo Private Limited is equipped with handling pin to the extraordinary size of
inventory to customize a unique warehousing solution that fit into your real needs, as well. To
facilitate real value for the customer money, Marks Cargo Private Limited engages the existing
warehouse setup itself; and will provide exclusive arrangement to store your cargo.
As third party Logistics solutions provider, Marks Cargo Private Limited can give customer, their,
best possible and reliable solutions to reduce your warehousing budget and time significantly
and efficiently.
TRANSPORT LOGISTICS
Marks Cargo Private Limited, can move customer shipments from one place to another place at
the right time and right mode and the right cost by within the country or across the borders by
simple cargo or individual truck loads by regular or express mode of transshipment.
They are able to manage complex and dedicated distribution mechanism, also provide cost
effective time bound solutions to manage client inventory planning. They are supported by a

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wide range of additional solutions like Insurance, Import and Export customs processes and
export pacing solutions.
Marks Cargo Private Limited can offer client the standardized and tailor-made solutions to
manage the supply chain management. They establish necessary arrangements for truck
transport operations with fleet owners, in which consist of many kinds of vehicles ranging from
small, medium and heavy trucks carrying small packets to mega tankers and a special
equipments like Liquids, Fragile cargo, ODD size cargo, special containers, tankers dangerous
goods handling and storage and break bulk cargo.
 Distribution Logistics
 Document related Services
 Dangerous Goods Handling
 Dangerous Goods Handling
 Special / Heavy Transport
 Supply Chain Management
 Temperature controlled Transport
 Time Bound Transport.
 Package Solutions.
 Insurance
 Interim Storage.
TRADE LOGISTICS
 Can work as an “Importer” and Marks Cargo Private Limited can provide complete
Logistics support to many of their customers
 Give them consulting and advisory services to our customers who is wishing to source
their requirements in Indian Market.
 Vendor selection and maintaining business agreements
 Overseas quality aspects and ensure compliances to all the above.
 All the Logistics related supports including consolidation of shipment from multiple
buyers and seller

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 Identifying channel partners who is willing to supply to fulfill customer’s requirements
Industry Specific Solutions
Marks Cargo Private Limited experience in the Logistics industry comes into play both in the
multi-user facilities like customer specific with dedicated user sites. It is being extended
includes comprehensive value added services to the best suited for all customers in all the
industry and also for real-time retail distribution modules.
Marks Cargo Private Limited having the ability to source the new locations as well as able to
manage existing customer’s warehouse based on customer requirements/commitments. Also,
they offer to customers both dedicated as well as shared warehouse locations.
 Pick & pack
 In-plant stores Management.
 In-Plant Logistics Management
 Kitting
 Line Feeding
 Order management
 Insurance.
 Receivable Management
 Meeting tax compliances
 Cash Management.
To facilitate the above, customers only can focus on their core-competencies and production
Management alone and leave us the entire inventory management to us. They also have the
expertise in in-plant management and can engage the activity of supplying raw-materials to
client production-line to deliver the finished goods to the end user, as well. Marks Cargo owns /
has access to warehouses and storage spaces to adapt to emerging services. All trucks owned
by us are maintained on a regular basis and undergo periodic overhauls to ensure trouble-free
operation at all times.

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Company Factsheet
Nature of Business Logistics
Additional Business
 Manufacturer
 Supplier
 Wholesaler
 Importer
 Exporter
Year of Establishment 2006
Total Number of Employees 51 to 100 People
Infrastructure
 Location Type - Urban
 Building Infrastructure - Permanent
 Size of Premises - 1,500 square feet
 Space Around - 1500 sqft
Statutory Profile
 Banker - Indian Overseas Bank
 PAN No. - AADFU0687L
 DGFT/IE Code - 2511001551
 Central Sales Tax No. - 34350015548C
 Value Added Tax Registration No. - 34350015548V
Mission Statement:
 To Emerge as India's top Cargo Company that provides World Class Quality Service at
astonishing economical rate, that adds to the pride of India.
 To Our Customers; A prompt and efficient service with courtesy.
 To Our Workforce; promote a sense of participation and make them partners in
progress and also provide opportunities for personal growth.
 To the Community; A responsible corporate citizen

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Management Structure
Profile of the Managing Director
 1986 to 1991 – Corporate Couriers, Chennai.
 1991 to 2000 – First Flight Couriers Ltd, Chennai.
 2001 to 2007 - Hall Mark Cargo, Cofounder.
 2006 to Present - Marks Cargo Pvt Ltd, Founder & MD.
Quality Commitment:
Marks Cargo’s reputation is aptly based on the quality of services offered. Customer
satisfaction continues to be the guiding principle of the company’s strategy for growth achieved
through innovation, commitment and performance. The professionals take special measures to
transport your shipment safely and securely.

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EXPORT AND IMPORT PROCEDURES
A.STARTING AN EXPORT & IMPORT FIRM
a) Registration
Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering the
various States and Union Territories, are vested with the primary duty of registering companies
floated in the respective States and Union Territories and of ensuring that such companies
comply with statutory requirements under the Act. These offices function as registries of
records relating to the companies registered with them, which are available for inspection by
members of the public on payment of the prescribed fee.
The Registrars of Companies in different States primarily deal with the Incorporation of
companies, change of name of companies, change of financial year, conversion of companies
from Private to Public and vice versa, striking off of the names of companies, and default action
against companies.
The steps to be followed for registering a private limited or a public limited company are
enlisted here.
Steps to be taken to get incorporated a private limited Company:
 Select, in order of preference, a few suitable names, not less than four, indicative of the
main objects of the company.
 Ensure that the name does not resemble the name of any other company already
registered and also does not violate the provisions of Emblems and Names (Prevention
of Improper Use) Act, 1950.
 Apply to the concerned ROC to ascertain the availability of a name in the General Rules
and Forms along with a fee of Rs.500/- If the proposed name is not available apply for a
fresh name on the same application.
 Arrange for the drafting of the Memorandum and Articles of Association by the
solicitors, the vetting of the same by the ROC and the printing of the same.

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 Arrange for the stamping of the Memorandum and Articles with the appropriate stamp
duty.
 Get the Memorandum and Articles signed by at least two subscribers in his own hand,
his father's name, occupation, address and the number of shares subscribed for and
witnessed by atleast one person.
 Ensure that the Memorandum and Articles are dated after the date of stamping.
 Get the following forms duly filled up and signed:
i. Declaration of Compliance
ii. Notice of the situation of the registered office of the company
iii. Particulars of the Director, Manager or Secretary
 Present the following documents to the ROC with the filing fee and the registration fee:
The stamped and signed copies of the Memorandum and Articles of Association (3
copies).
i. Form-1, 18 & 32 in duplicate.
ii. Any agreement referred to in the M & A.
iii. Any agreement proposed to be entered into with any individual for appointment
as Managing or whole time Director.
iv. Name availability letter issued by the ROC.
v. Power of Attorney from the subscribers in favour of any person for making
corrections on their behalf in the documents and papers filed for registration.
vi. Pay the Registration and Filing Fee by Demand Draft/Banker's Cheque if it
exceeds Rs.1000/-
vii. Obtain the Certificate of Incorporation from ROC.
 Additional Steps to be taken for formation of a Public Limited Company
i. Consent of Directors to act as such in Form No.29.
ii. Arrange for payment of application and allotment money by Directors on shares
taken or agreed to be taken.
iii. File the Statement in Lieu of Prospectus with the ROC in schedule-iv of the
Companies Act.

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b) Procedure
General Provisions about Customs Procedures
Basic document is
‘Entry’
Entry’ in relation to goods means entry made in Bill of Entry, Shipping Bill
or Bill of Export. In case of import by post, label or declaration
accompanying goods is ‘entry’
Loading and
unloading at specified
places only
Imported goods can be unloaded only at specified places. Goods can be
exported only from specified places.
Computerisation of
customs procedures
Customs procedures are largely computerised. Most of documents have
to be e-filed.
Amendment to
documents
Documents submitted to customs can be amended with permission In
case of bill of entry, shipping bill or bill of export, it can be amended after
clearance only on the basis of documentary evidence which was in
existence at the time the goods were cleared, warehoused or exported,
and not on basis of any subsequent document. [proviso to section 149].
ICD and CFS Imported and export goods are usually handled in containers. These can
be stored in Inland Container Depot (ICD) or Container Freight Station
(CFS). They function like dry port for handling and temporary storage of
imported/export goods and empty containers.
Boat Notes ‘Boat Notes’ are used for transferring small cargo from ship to shore, or
from shore to ship, without berthing the ship.
Transshipment of
goods
Goods can be transshipped from one conveyance to other after following
required procedure. Such transhipment may be to any major port or
airport in India. The goods can be transshipped to any other customs
station in India if Customs Officer is satisfied that the goods are bona
fide intended for transhipment to any customs station. The facility is
available at all customs ports and Inland Container Depots (ICDs).

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c) Imports Process
e-filing of documents Goods should arrive at customs port/airport only. Most of customs
procedures are computerised. E-filing of documents is required.
Import manifest or Import
Report
‘Person in charge of conveyance’ is required to submit Import
Manifest or Import Report.
Entry Inwards Goods can be unloaded only after grant of ‘Entry Inwards’.
Risk Management System Self Assessment on basis of ‘Risk Management System’ (RMS) has
been introduced in respect of specified goods and importers.
Bill of Entry for home
consumption on payment
of customs duty
Importer has to submit Bill of Entry giving details of goods being
imported, along with required documents. Electronic submission of
documents is done in major ports. White Bill of Entry is for home
consumption.
Bill of Entry for
warehousing
Yellow Bill of Entry is for warehousing. It is also termed as ‘into
bond Bill of Entry’ as bond is executed. Duty is not paid and
imported goods are transferred to warehouse where these are
stored.
Noting, examination and
assessment
Bill of Entry is noted, Goods are assessed to duty, examined and
pre-audit is carried out. Customs duty is paid after assessment.
Bond Bond is executed if required if assessment is provisional or
concessional rate of customs duty is subject to certain post import
conditions.
Out of customs charge
order
Goods can be cleared outside port after ‘Out of Customs Charge’
order is issued by customs officer. After that, port dues, demurrage
and other charges are paid and goods are cleared.
Demurrage if clearance
from port delayed
Demurrage is payable if goods are not cleared from port/airport
within three days. Goods can be disposed of if not cleared from port
within 30 days.

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d) Export Process
Entry Outward Loading in conveyance can start after ‘Entry Outward’ is given by
customs officer.
Export manifest/Export
report
Person in charge of conveyance is required to submit ‘Export Manifest’
or ‘Export Report’.
Registration with DGFT
and EPC
Exporter has to be obtain IEC number from DGFT is advance. He
should be registered with Export Promotion Council if he intends to
claim export benefits.
Third party exports Export can be by manufacturer himself or third party (i.e. by exporter
on behalf of another). Merchant exporter means a person engaged in
trading activity and exporting or intending to export goods [para 9.40
of FTP]
Registration of
documents under
Export Promotion
Scheme
Advance authorisation, DEPB etc. should be registered if exports are
under Export Promotion Scheme.
Shipping Mill Export is required to submit Shipping Bill with required documents for
obtaining permission to export. There are five forms : (a) Shipping Bill
for export of goods under claim for duty drawback – these should be in
Green colour (b) Shipping Bill for export of dutiable goods – this should
be yellow colour (c) Shipping bill for export of duty free goods – it
should be white colour (d) shipping bill for export of duty free goods
ex-bond – i.e. from bonded store room – it should be pink colour (e)
Shipping Bill for export under DEPB scheme – Blue colour.
FEMA formalities GR/SDF/Softex form (under FEMA) is required to be submitted.
Noting, assessment,
examination
The shipping bill is noted, goods are assessed and examined. Export
duty is paid, if applicable.
Certification of If export is under export incentives, relevant documents are checked

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documents for export
incentives
and certified. Then proof of export is obtained on ARE-1.
Let export order Conveyance can leave only after ‘Let Export’ order is issued.

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B.IMPORTS
Import of goods helps to boost the economy by providing capital good for infrastructure or
industrial development, meeting shortages and improving quality of production. It also helps
improving living standards by making available good and products not produced in the country.
With the rise in disposable incomes in India, the marked for imported goods is growing. Starting
a business of importing goods can be a profitable venture, but requires that the rules and
regulations governing such trade and the markets in respect of both the countries, and the
trade agreements with the country of interest, are studied and understood well.
a) Preliminary Actions
Market Survey
The first step for an importer is to do a market survey to decide on the goods or commodities
that he wants to import. He needs to study the domestic market for items that are in demand,
or for which a demand is likely to arise. These could include finished goods for the consumer or
secondary market, or ancillaries for other industries. He should also study the present
competition and future prospects. The following are some sources of data/information can be
tapped for carrying out such studies:-
 Export Import Data Bank of Ministry of Commerce
 Foreign Trade Performance Analysis
 Directorate General of Commercial Intelligence and Statistics
 India Trade Journal
 Directory of Indian Importers
 Exim Bulletins
Familiarisation with Policies, Procedures and Agreements
It is very important to be familiar with all the policies, regulations and procedures governing
foreign trade, as well as foreign trade agreements between India and other countries and
international trade organisations, before embarking on a venture.

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Registration
Before commencing business, you need to register with the Directorate General of Foreign
Trade (DGFT) and obtain Importer Exporter Code Number. IEC Code is unique 10 digit code
issued by DGFT to Indian Companies. This is a mandatory requirement to carry out import from
or export to India.
Identification of Source
Having identified the possible items to import, the source has to be identified. It is imperative
to ascertain the legal implications of trading in the selected items in both the countries as well
as the credibility of the overseas suppliers. Assistance for this is provided by the Indian
Commercial Missions abroad and the International Trade Promotion Organisation (ITPO)
through various exhibitions and trade fairs organised in India and abroad. It is important to
keep abreast with Important Notifications by DGFT related to imports. Care must also be taken
to remain updated on applicability of standards laid down by Bureau of Indian Standards for
specific items to be imported.
Categories of Items
Items that can be imported fall under four categories:
 Freely importable: Majority of the goods come under this category. These do not
require import licenses.
 Licensed Items: There are number of goods, which can only be importer under an
import license. These include some consumer goods; precious and semi-precious
stones; products related to safety and security; seeds, plants and animals; some
insecticides, pharmaceuticals and chemicals; some electronically items; several items
reserved for production by the small-scale sector. Licence for import of these items is
issued by the Directorate General of Foreign Trade.
 Canalised Items: These can only be imported by specified channels or government
agencies such as the State Trading Corporation (STC).

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 Prohibited items: Tallow fat, animal rennet, wild animals and unprocessed ivory-are
prohibited to be imported.
Import of Samples
Commercial samples are specimens of goods that may be imported by the traders in India, to
know its characteristics and usage and to assess its marketability in India. The bona fide trade
samples can be imported provided the said goods have been supplied free of charge. Samples
in respect of Prohibited items mentioned above cannot be imported. Further details about
importing samples can be found here.
b) Import Duties
The government levies import duties on most of the items imported for trade purposes. These
are of different types including Basic Duty, Additional Customs Duty, True Countervailing Duty,
Anti Dumping or Safeguard Duty and Education Cess. Details about these can be viewed here.
Payment of Duty
 Provisional Deposit Account with Bank: Facilities are available to debit duty amounts
directly from the Banks nominated by Customs. This facility reduces delays in receipt of
customs duties from Importers and also payment of interest after 2 days. Importers are
required to open a deposit account with the nominated Bank and maintain a minimum
balance as per the Banks guidelines. On completion of assessment of the Entries, the
importer can authorize debit of the duty amount against authorization slips.
 Payment by Draft/Bankers Cheque: RBI has issued new guidelines to the nominated
banks for acceptance of payments against instruments from nationalized banks only.
 Interest: Interest is charged on duties not paid within 2 days.
Bill of Entry
It is a document certifying that the goods of specified description and value are entering into
the country from abroad.

29
If the goods are cleared through the Electronic Data Interchange (EDI) System no formal Bill of
Entry is filed as it is generated in the computer system, but the importer is required to file a
cargo declaration having prescribed particulars required for processing of the entry for customs
clearance.
The Bill of entry, where filed, is to be submitted in set, different copies meant for different
purposes and also given different color scheme. Bills of Entry are of three types:-
 Bill of Entry for home consumption
 Bill of Entry for Warehouses
 Bill of Entry for Ex-Bond Clearance
Details about these and the documents to be filed in case of Non-EDI system can be found here.
The Bill of entry, where filed, is to be submitted in set, different copies meant for different
purposes and also given different colour schemes. Bill of Entry are of three types:-
 Bill of Entry for home consumption: is to be submitted when the imported goods are to
be cleared on payment of full duty for consumption of the goods in India. It is white
colored.
 Bill of Entry for Warehouses : is to be submitted when the imported goods are not
required immediately by the importer but here they are to be stored in a warehouse
without payment of duty under a bond and cleared later when required on payment of
duty.
 Bill of Entry for Ex-Bond Clearance : is used for clearing goods from the warehouse on
payment of duty. The goods are classified and valued at the time of clearance from the
Customs Port. Value and classification are not determined on such Bill of Entry.
In the non-EDI system along with the bill of entry filed by the importer or his representative the
following documents are also generally required:-
 Signed invoice
 Packing list

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 Bill of Lading or Delivery Order/Airway Bill
 GATT declaration form duly filled in
 Importers declaration
 License wherever necessary
 Letter of Credit/Bank Draft/wherever necessary
 Insurance document
 Import license
 Industrial License, if required
 Test report in case of chemicals
 Adhoc exemption order
 DEEC Book/DEPB in original
 Catalogue, technical write up, literature in case of machineries, spares or chemicals as
may be applicable
 Separately split up value of spares, components machineries
 Certificate of Origin, if preferential rate of duty is claimed
 No Commission declaration
Green Channel facility
Some major importers have been given the green channel clearance facility. It means clearance
of goods is done without routine examination of the goods. They have to make a declaration in
the declaration form at the time of filing of bill of entry. The appraisement is done as per
normal procedure except that there would be no physical examination of the goods. Only
marks and number are to be checked in such cases. However, in rare cases, if there are specific
doubts regarding description or quantity of the goods, physical examination may be ordered.
This facility can be claimed by the Importers who have been approved by the Customs as
eligible for claiming the facility. Importers having a clean record can apply to the Customs (EDI)
with a request for Green Channel facility against a covering letter and enclosing copy of Balance
Sheet showing proof of Duty paid in a year.

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Dumping
Dumping is said to have taken place when an exporter sells a product to India at a price less
than the price prevailing in its domestic market. However, the phenomenon of dumping is per
se not condemnable as it is recognized that producers sell their goods at different prices to
different market. However, where dumping causes or threatens to cause material injury to the
domestic industry of India, the Designated Authority initiates necessary action for investigations
and subsequent imposition of anti-dumping duties.
Anti Dumping Guidelines issued by the Government of India must be understood and complied
with while carrying out import of goods.
c) Forms
DGFT
 ANF 1 Profile of importer / exporter
 ANF 2 A Importer Exporter Code Number (IEC)4
 ANF 2 B Import Licence for Restricted Items
 ANF 2 C Import Certificate under Indo-US Memorandum
 ANF 2F Refund of Application Fee
 ANF 3 A Grant of Status Certificate
 ANF 3 D Focus Market Scheme (FMS)
 ANF 3 E Focus Product Scheme (FPS)
 ANF 3 G Vishesh Krishi And Gram Udyog Yojana (VKGUY) - Para 3.8.6 application
 ANF 4 A Advance Authorisation (Including Advance authorisation for Annual
Requirement) / Advance Release Order (ARO)/ Invalidation letter
 ANF 4 B Fixation / Modification of Standard Input Output Norms (SION)
 ANF 4 C Fixation of DEPB Rates / Fuel rates
 ANF 4 D Clubbing of Advance Authorisations
 ANF 4 E Enhancement in CIF / FOB Value or Revalidation or EO extension of
Authorisation

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Customs & Excise
 ATA Carnet Form of Bill of Entry or the Shipping Bill
 Shipping Bill for export of goods under claim for duty drawback
 Bill of Entry for Home Consumption
 Bill of Entry for Warehousing
 Bill of Entry for Ex-bond Clearance for Home consumption
 EDI
 Application Form for Grant of a temporary Customs House Agent's License
 Application Form for Grant of a permanent Customs House Agents' License
 Form of application for settlement of a case under section 127B
 Application for refund of duty/interest
 Form of Appeal to the Collector (Appeals) under Section 128
 Form of Appeal to the Collector (Appeals) under Section 129D(4)
 Form of Appeal to the Appellate Tribunal under Section 129A(1)
 Form of Memorandum of Cross Objections to the Appellate Tribunal under Section
129A(4)
 Form of Application to the Appellate Tribunal under Section 129D(4)
 Form of An Application to the High Court under Section 130A
 Form of Memorandum of Cross Objections under Section 130A(3) in the matter of an
Application before the High Court under Section 130A(1)
 Form of Revision Application to the Central Government under Section 129DD
 Performa for claiming drawback on re-export of duty paid goods under Section 74
 Form of Application for permission to remove goods from one Warehouse to another in
the same Port or to another Warehousing Port to be Warehoused there
RBI Forms
 FEMA Forms
 Exchange Control Forms

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d) Other Incentives and Facilities
Online Services
 SMS Query - www.cbec.gov.in/sms/sms_query.htm
 Help Mail - www.cbec.gov.in/helpmail.htm
 E-filing - www.cbec.gov.in/e-filing.htm
 Software for Remote Filing (RES Package) – http://ices.nic.in/
 Document Tracking at ICEGATE - www.icegate.gov.in/jsp/Tracking_at_ICES.jsp
 IE CODE/BIN status - www.icegate.gov.in/moreinfo/check_IE_code_status.html
 Online filing through ICEGATE - www.icegate.gov.in/
 DGFT Helpdesk – www.dgftcom.nic.in/exim/2000/helpdesk.htm

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C.EXPORTS
a) Preliminary Actions
Market Survey
The first step for an exporter is to carry out a survey of the International market to identify
suitable markets for the goods he wants to export. Alternatively, he could study a specific
market to identify the goods suitable for export to that particular market. He should also study
the present competition and future prospects. The following are some sources of data /
information can be tapped for carrying out such studies:-
 Export Import Data Bank of Ministry of Commerce
 Foreign Trade Performance Analysis
 Directorate General of Commercial Intelligence and Statistics
 India Trade Journal
 Directory of Indian Exporters
 Exim Bulletins
Familiarization with Policies, Procedures and Agreements
It is very important to be familiar with all the policies, regulations and procedures governing
foreign trade, as well as foreign trade agreements between India and other countries and
international trade organisations, before embarking on a venture. Assistance of Indian
Commercial Missions abroad can be sought to gain desired information about the regulations,
standards and trade data of the countries of interest.
Exporters must also be aware of Non Tariff Measures (NTM), which are all measures other than
normal tariffs namely trade related procedures, regulations, standards, licensing systems and
even trade defence measures such as anti-dumping duties etc which have the effect of
restricting trade between nations. With the lowering of tariffs across the globe, NTMs have
come into prominence with Members using these measures to erect entry barriers for goods
and services. Database of country wise and product wise NTMs.

35
Registration
Before commencing business, you need to register with the Directorate General of Foreign
Trade (DGFT) and obtain Importer Exporter Code Number. IE Code is unique 10 digit code
issued by DGFT to Indian Companies. This is a mandatory requirement to carry out import from
or export to India. Exporters also have to obtain PAN based Business Identification Number
(BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance
of export goods.
Exploring Export Opportunities
The Government actively assists exporters by through Trade Promotion Programmes and
Schemes and by providing Trade Promotion Assistance. These include programmes for
enhancing bilateral trade by entering into agreements with countries or trade blocks such as
the CIS and ASEAN. While selecting the goods to export, it is important to ascertain that it
meets the quality and other specifications laid down in the chosen country / countries. It must
meet the standards laid down by Bureau of Indian Standards or Agmark as applicable, besides
other International certification bodies.
b) Export Procedures
Export License
Majority of goods are allowed to be exported without obtaining a license. Export licenses are
only required for items listed in the Schedule 2 of ITC (HS) Classifications of Export and Import
items. An application for grant of Export License for such items must be submitted to the
Director General of Foreign Trade (DGFT). The Export Licensing Committee under the
Chairmanship of Export Commissioner considers such applications on merits for issue of export
licenses.
Export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET)
items are also permitted under a license or prohibited altogether. Guidelines for Export of
SCOMET items can be viewed here..

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Export of Samples
Export of samples up to specified limits are allowed free. The exporter is required to be
registered with the appropriate Export Promotion Council to avail of this benefit. Samples with
permanent marking as "sample not for sale" are allowed freely for export without any limit.
Processing of Shipping Bill
In case of export by sea or air, the exporter must submit the 'Shipping Bill', and in case of export
by road he must submit 'Bill of Export' in the prescribed form containing the prescribed details
such as the name of the exporter, consignee, invoice number, details of packing, description of
goods, quantity, FOB value, etc. Along with the Shipping Bill, other documents such as copy of
packing list, invoices, export contract, letter of credit, etc. are also to be submitted. There are 5
types of shipping bills:-
 Shipping Bill for export of duty free goods. This shipping bill is white coloured.
 Shipping bill for export of goods under claim for duty drawback. This shipping bill is
green coloured.
 Shipping bill for export of duty free goods ex-bond i.e. from bonded warehouse. This
shipping bill is pink coloured.
 Shipping Bill for export of dutiable goods. This shipping bill is yellow coloured.
 Shipping bill for export under DEPB scheme. This shipping bill is blue in colour.
The Bills of Export are:-
 Bill of export for goods under claim for duty drawback
 Bill of export for dutiable goods
 Bill of export for duty free goods
 Bill of export for duty free goods ex-bond

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Let Export Order
After the receipt of the goods in the dock, the exporter may contact the Customs Officer
designated for the purpose and present the checklist with the endorsement of Port Authority
and other declarations along with all original documents. Customs Officer may verify the
quantity of the goods actually received and thereafter mark the Electronic Shipping Bill and also
hand over all original documents to the Dock Appraiser, who may assign a customs officer for
the examination of the goods. If the Dock Appraiser is satisfied that the particulars entered in
the system conform to the description given in the original documents, he may proceed to
allow "let export" for the shipment.
Common Issues
Important Policies, Regulations and Procedures Governing Foreign Trade
 Customs Act 1962
 Customs Tariff Act 1975
 India Foreign Trade (Development and Regulation) Act (1992)
 Foreign Trade (Regulation) Rules 1993
 Foreign Trade Policy – 2009 - 14
 Foreign Trade Procedures – 2009 - 14
 International Trade Agreements
 Foreign Exchange Management Act 1999
Getting IEC Code
 Application to be made by the Registered/Head Office of the applicant to the nearest
Regional Authority of Directorate General Foreign Trade in the 'Aayaat Niryaat Form -
ANF2A' along with Appendix-18B .
 Application Fee of Rs 250/- has to be paid by Demand Draft or through Electronic Fund
Transfer to nominated bank.
 Only one IEC is issued against a single PAN number.

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c) Forms
DGFT
 ANF 1 Profile of importer / exporter
 ANF 2 A Importer Exporter Code Number (IEC)4
 ANF 2 D Export Licence for Restricted items
 ANF 2 E Export Licence for SCOMET items
 ANF 2F Refund of Application Fee
 ANF 3 A Grant of Status Certificate
 ANF 3 C Vishesh Krishi and Gram Udyog Yojana (VKGUY)
 ANF 3 D Focus Market Scheme (FMS)
 ANF 3 E Focus Product Scheme (FPS)
 ANF 3 G Vishesh Krishi and Gram Udyog Yojana (VKGUY) - Para 3.8.6 application
 ANF 4 A Advance Authorisation (Including Advance authorisation for Annual
Requirement) / Advance Release Order (ARO)/ Invalidation letter
 ANF 4 B Fixation / Modification of Standard Input Output Norms (SION)
 ANF 4 C Fixation of DEPB Rates / Fuel rates
 ANF 4 D Clubbing of Advance Authorisations
 ANF 4 E Enhancement in CIF / FOB Value or Revalidation or EO extension of
Authorisation
 ANF 4 F Redemption / No Bond Certificate against Advance Authorisation
 ANF 4 G Duty Entitlement Pass Book (DEPB) Application
 ANF 4 I GEM REP Authorisation
 ANF 5A Export Promotion Capital Goods (EPCG) Authorisation
 ANF 5 B Statement of Export for Redemption of EPCG Authorisation
 ANF 5 C EO Refixation under EPCG Scheme
 ANF 5 D Clubbing of EPCG Authorisations
 ANF 8 for Claiming Duty Drawback on All Industry Rates/Fixation of Drawback
Rates/Refund of Terminal Excise Duty.

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Customs & Excise
 Application for refund of duty/interest
 Form of Appeal to the Collector (Appeals) under Section 128
 Form of An Application to the High Court under Section 130A
 Form of Memorandum of Cross Objections under Section 130A(3) in the matter of an
Application before the High Court under Section 130A(1)
 Form of Revision Application to the Central Government under Section 129DD
 Form for claim of drawback under Section 74 on goods exported by post
 Performa for claiming drawback on re-export of duty paid goods under Section 74
 Form for claim of drawback under Rule 11
 Application for supplementary claim for drawback under Rule 15 of Customs and Central
Excise Duties Drawback Rules, 1995
 Statement - DBK-I
 Statement - DBK-II
 Statement - DBK-III
 Shipping Bill for export of duty free goods
 Shipping Bill for export of duty free goods ex-bond
 Bill of export for goods under claim for duty drawback
 Bill of export for dutiable goods
 Bill of export for duty free goods
 Bill of export for duty free goods ex-bond
 Bond for CHA Licence
 Surety Bond for a CHA Licence
 Indemnity Bond for Simplified Brand Rate Fixation Scheme
 Form of application for settlement of a case under section 127B
RBI Forms
 FEMA Forms
 Exchange Control Forms

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D.TAXATION
India has a well developed tax structure. The power to levy taxes and duties is distributed
among the three tiers of Government, in accordance with the provisions of the Indian
Constitution. The main taxes/duties that the Union Government is empowered to levy are:-
Income Tax (except tax on agricultural income, which the State Governments can levy),
Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the
State Governments are:- Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on
transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land
used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions
& Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi
(tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets
and Tax/User Charges for utilities like water supply, drainage, etc.
In the wake of economic reforms, the tax system in India has under gone a radical change, in
line with the liberal policy. Some of the changes include:- rationalization of tax structure;
progressive reduction in peak rates of customs duty ; reduction in corporate tax rate; customs
duties to be aligned with ASEAN levels; introduction of value added tax ; widening of the tax
base; tax laws have been simplified to ensure better compliance. Tax policy in India provides tax
holidays in the form of concessions for various types of investments. These include incentives
to priority sectors and to industries located in special area/ regions. Tax incentives are available
also for those engaged in development of infrastructure.
Taxation of Individuals
Individuals are subject to income tax. Income tax is a direct tax levied on the income earned by
individuals, corporations or on other forms of business entities. The Indian constitution has
empowered only the Central Government to levy and collect income tax. The Income Tax
department set up by the Government, is governed by the Central Board for Direct Taxes
(CBDT). The CBDT is a part of Department of Revenue in the Ministry of Finance.

41
It has been charged with all the matters relating to various direct taxes in India. It provides
essential inputs for policy and planning of direct taxes in India and is also responsible for
administration of direct tax laws through the Income Tax Department. For all the matters
relating to Income tax, the Income Tax Act, 1961 is the umbrella Act which empowers the
Central Board of Direct Taxes to formulate rules (The Income Tax Rules, 1962) for implementing
the provisions of the Act.
The Income Tax Act provides that in respect of the total income of the previous year of every
person, income tax shall be charged for the corresponding assessment year at the rates laid
down by the Finance Act for that assessment year. In other words, the income earned in a year
is taxable in the next year and the income-tax rates prescribed for an assessment Year are
applicable in respect of income earned during the previous Year.
Note that: - The financial year in which the income is earned is known as the previous year. The
financial year following a previous year is known as the assessment year. The assessment year
is the year in which the salary earned in the previous year is taxable. Any financial year begins
from 1st of April of every year and ends on 31st of March of the subsequent year.
In case of a business or profession which is newly started, the previous year commences from
the date of commencement of the new business or profession up to the next 31st March,
unless the person is an existing assessee.
The Income Tax Act is subjected to annual amendments by the Union Budget every year. The
Finance Bill in the budget contains various amendments which are sought to be made in direct
and indirect taxes levied by the Central Government. The bill also mentions the rates of income
tax and other taxes. The bill once approved becomes a Finance Act and provisions in it are
incorporated in the Income Tax Act.
Taxation of Partnerships
Partnership is the most common form of business organization in India. Partnership firms are
governed by the provisions of the Indian Partnership Act, 1932. The Act lays down the rules
relating to formation of partnership, the rights and duties of partners and dissolution of

42
partnership. It defines partnership as a "relationship between persons who have agreed to
share the profits of business carried on by all or any of them acting for all".
This definition gives three minimum requirements to constitute a partnership:-
 There must be an agreement entered into orally or in writing by the persons who desire
to form a partnership.
 The object of the agreement must be to share the profits of business intended to be
carried on by the partnership.
 The business must be carried on by all the partners or by any of them acting for all of
them.
Under the Act, persons who have entered into partnership with one another are individually
called as 'partners' and collectively as 'firm' and the name under which they run their business
is called the 'firm name'.
Customs Duties (Import Duty and Export Tax)
Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods
exported from India. Taxable event is import into or export from India. Import of goods means
bringing into India of goods from a place outside India. India includes the territorial waters of
India which extend upto 12 nautical miles into the sea to the coast of India. Export of goods
means taking goods out of India to a place outside India.
In India, the basic law for levy and collection of customs duty is Customs Act, 1962. It provides
for levy and collection of duty on imports and exports, import/export procedures, prohibitions
on importation and exportation of goods, penalties, offences, etc.
The Constitutional provisions have given to Union the right to legislate and collect duties on
imports and exports. The Central Board of Excise & Customs (CBEC) is the apex body for
customs matters. Central Board of Excise and Customs (CBEC) is a part of the Department of
Revenue under the Ministry of Finance, Government of India. It deals with the task of
formulation of policy concerning levy and collection of customs duties, prevention of smuggling

43
and evasion of duties and all administrative matters relating to customs formations. The Board
discharges the various tasks assigned to it, with the help of its field organizations namely the
Customs, Customs (preventive) and Central Excise zones, Commissionerate of Customs,
Customs (preventive), Central Revenues Control Laboratory and Directorates. It also ensures
that taxes on foreign and inland travel are administered as per law and the collection agencies
deposit the taxes collected to the public exchequer promptly.
Classification of Goods and the Rates of Customs Duty
All goods must be classified into groups and sub-groups in order to levy the customs duty. The
Customs Tariff Act 1975, gives the classification of goods and accordingly specifies the rate of
duty. The act contains two schedules:-
 Schedule 1 classifies the goods for import and prescribes the rate of import duties. It
specifies the various categories of import items in a systematic and in accordance with
an international scheme of classification of internationally traded goods – termed as
‘harmonized system of commodity classification'.
 Schedule 2 classifies the goods for export and prescribes the rate of export duties.
In addition, the Customs Tariff Act makes provisions for duties like additional duty(CVD),
preferential duty, anti-dumping duty, protective duties,etc.
The duties are levied both on specific and ad-valorem basis, while there are few cases where at
times specific-cum-ad valorem duties are also collected on imported items. Where ad-valorem
duties (i.e. duties with reference to value) are collected, which are the predominant mode of
levy, the value of the goods has to be determined for customs duty purposes as per provisions
laid down under the Customs Act and the Customs Valuation (determination of prices of
imports goods) Rules, 1988 issued thereunder. These provisions are essentially adoption of
GATT based valuation system and followed internationally (now termed WTO Valuation
Agreement). The importer as well as the assessing officer has to carefully study and apply these
provisions so that the duties as due after proper valuation as per law get discharged before the
goods get out of customs control.

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Valuation
When customs duties are levied at ad-valorem rates, i.e. depending upon its value, it
becomes essential to lay down the broad guidelines for such valuation to avoid arbitrariness
and to ensure that there is uniformity in approach at different customs formations. The
Customs Act,1962 lays down the basis for valuation of import & export goods in the country.
Provisions for Customs Valuation:-
Tariff value :The Central Government has been empowered to fix values for any product which
are called Tariff Values. If tariff values are fixed for any goods, ad valorem duties are to be
calculated with reference to such tariff values. The tariff values may be fixed for any class of
imported or export goods having regard to the trend of value of such or like goods and the
same has to be notified in the official gazette.
When no tariff values are fixed:-
In case of exported goods, provisions of sub-section (1) of Section 14 provide a complete
code of valuation. For valuation of Export goods the criteria specified in the section is fully
applicable and normally "FOB" i.e. Free on Board value is considered after excluding cost of
international insurance and freight.
According to the section, the value of the good shall be deemed to be:-
 Price at which such or like goods are ordinarily sold or offered for sale.
 Price for delivery at the time of importation and exportation. The price at the time and
place of importation must be considered for determining the customs value. All
expenses upto the destination of goods including freight, transit insurance, unloading
and handling charges are to be considered.
 Price should be in the course of international trade.
 Seller and buyer should have no interest in the business of each other.
 Price should be the sole consideration for sale or offer for sale.

45
 Rate of exchange as on the date of presentation of bill of entry as fixed by the Central
Government must be considered. Foreign Exchange rate as applicable at the time of
presentation of the bill of entry as prescribed by the central government must be
considered. This rate may or may not be the market rate prevailing on that date. The
relevant date for determining foreign exchange rate is the date of presentation bill of
entry.
In case of imported goods , the valuation is done according to the Customs Valuation
(Determination of Price of Imported Goods) Rules, 1988. The Customs Valuation rules, follow
the WTO Customs Valuation Agreement. According to the rules, the value of imported goods
shall be the "transaction value" i.e. the price actually paid or payable for the goods when they
are sold for export to India, after adjustment by valuation factors and subjected to:-
 Compliance with valuation conditions
 Customs authorities being satisfied with the truth and accuracy of the declared value
Excise Duty
Central Excise duty is an indirect tax levied on those goods which are manufactured in India and
are meant for home consumption. The taxable event is 'manufacture' and the liability of central
excise duty arises as soon as the goods are manufactured. It is a tax on manufacturing, which is
paid by a manufacturer, who passes its incidence on to the customers.
The term "excisable goods" means the goods which are specified in the First Schedule and the
Second Schedule to the Central Excise Tariff Act, 1985 , as being subject to a duty of excise and
includes salt.
i. The term "manufacture" includes any process,
ii. Incidental or ancillary to the completion of a manufactured product and
iii. Which is specified in relation to any goods in the Section or Chapter Notes of the First
Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture or

46
Which, in relation to the goods specified in the Third Schedule, involves packing or repacking of
such goods in a unit container or labelling or re-labelling of containers including the declaration
or alteration of retail sale price on it or adoption of any other treatment on the goods to render
the product marketable to the consumer.
As incidence of excise duty arises on production or manufacture of goods, the law does not
require the sale of goods from place of manufacture, as a mandatory requirement. Normally,
duty is payable on 'removal' of goods. The Central Excise Rules provide that every person who
produces or manufactures any 'excisable goods', or who stores such goods in a warehouse,
shall pay the duty leviable on such goods in the manner provided in rules or under any other
law. No excisable goods, on which any duty is payable, shall be 'removed' without payment of
duty from any place, where they are produced or manufactured, or from a warehouse, unless
otherwise provided. The word 'removal' cannot be necessarily equated with sale.
The removal may be for:-
i. Sale
ii. Transfer to depot etc.
iii. Captive consumption
iv. Transfer to another unit
v. Free distribution
Thus, it can be seen that duty becomes payable irrespective of whether the removal is for sale
or for some other purpose.
Rules for Levy of Central Excise
In India, excise duty is levied in accordance with the provisions of Central Excise Act, 1944. It is
the basic Act which lays down the law relating to levy and collection of Central Excise duty. The
Act empowers the Central Government to make rules in pursuance of the Act. Accordingly, the
following set of rules has been framed:-
 The Central Excise Rules, 2002 (Section 143 of the Finance Act, 2002)

47
 The Central Excise (Settlement of Cases) Rules, 2001
 The Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of
Excisable Goods) Rules, 2001
 Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000
 Consumer Welfare Fund Rules, 1992
 The Central Excise (Advance Rulings) rules, 2002
 Central Excise (Compounding of Offences) Rules, 2005
The Central Excise law is administered by the Central Board of Excise and Customs (CBEC).
Central Board of Excise and Customs is a part of the Department of Revenue under the Ministry
of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy
and collection of Customs and Central Excise duties, prevention of smuggling and
administration of matters relating to Customs, Central Excise and Narcotics to the extent under
CBEC's purview.
Classification of Goods and Rates of Excise Duty
In order to determine the rate of excise duty on goods, classification is prerequisite. Excise duty
payable is based on the classification of goods given in the Central Excise Tariff Act, 1985
(CETA). The Act gives a list of items chargeable to Central Excise duty. It is divided into 96
Chapters grouped in twenty Sections. Each of these twenty sections relates to broader class of
goods such as Section I relates to Animal and Dairy Products, Section VI relates to Products of
Chemical and Allied Industries, while Chapter XI relates to Textiles and Textile Articles.
The Central Excise Tariff Act was amended in 2004. Earlier there was six digits classification
code for classification of the goods, which has been replaced by 8 digits classification code.
With introduction of this 8 digits classification code, a detailed classification of the goods is now
available. The classification of items is significant because it is only the proper classification,
which leads to determination of rate of duty.
In Central Excise Tariff, against each item a rate of duty has been prescribed. These are
normally termed as "tariff rates". In order to determine the rate of duty on a particular product,

48
first find out the chapter heading under which the item is classifiable. Against that classification,
the corresponding tariff rate has to be read with the exemption notification, if any. Thus,
effective rate of duty on an item is obtained.
Some commodities may be subject to ‘special duty of excise' prescribed under the Central
Excise Tariff Act, 1985. Certain goods may also be subject to duty under some other Acts such
as Additional Duty of Excise (Goods of Special Importance) Act, 1957 or certain Cess.
Different kinds of Excise Duties
 Basic Excise Duty : This is the duty leviable under First Schedule to the Central Excise
Tariff Act, 1985 at the rates mentioned in the said Schedule.
 Special Excise Duty : This is the duty leviable under Second Schedule to the Central
Excise Tariff Act, 1985 at the rates mentioned in the said Schedule. At present this is
leviable on very few items.
 Additional Duties of Excise (Textiles and textile Articles) : his duty is leviable under
section 3 of the Additional Duties of Excise (Textiles and Textile Articles ) Act, 1978. This
is leviable at the rate of fifteen percent of Basic Excise Duty payable on specified textile
articles.
 Additional Duties of Excise (Goods of Special Importance) : duty is leviable under the
Additional Duties of Excise (Goods of Special Importance) Act, 1957 on the specified
goods mentioned in its First Schedule.
 National Calamity Contingent Duty - Normally known as NCCD. This duty is levied as per
section 136 of the Finance Act, 2001, as a surcharge on specified goods.
 Excise Duties and Cesses Leviable Under Miscellaneous Act - On certain specified goods,
in addition to the aforesaid duties, prescribed rate of excise duty and cess is also
leviable.
 Education Cess on excisable goods is levied in addition to any other duties of excise
chargeable on such goods, under the Central Excise Act, 1944 or any other law for the
time being in force.

49
Wealth Tax
Wealth tax is a direct tax, which is charged on the net wealth of the assessee. It is a tax on the
benefits derived from ownership of property. The tax is to be paid year after year on the same
property on its market value, whether or not such property yields any income. Wealth tax, in
India, is levied under Wealth-tax Act, 1957. The Income tax department under the Department
of Revenue in the Ministry of Finance administers the Wealth Tax Act, 1957 as well as the
Wealth Tax Rules framed there under.
Under the Act, the tax is charged in respect of the wealth held during the assessment year by
the following persons :-
 Individual
 Hindu Undivided Family(HUF)
 Company
Chargeability to tax also depends upon the residential status of the assessee same as the
residential status for the purpose of the Income Tax Act.
Wealth tax is not levied on productive assets, hence investments in shares, debentures, UTI,
mutual funds, etc are exempt from it. The assets chargeable to wealth tax are :-
 Guest house, residential house, commercial building
 Motor car
 Jewellery, bullion, utensils of gold, silver etc
 Yachts, boats and aircrafts
 Urban land
 Cash in hand(in excess of 50,000), only for Individual & HUF
The following will not be included in Assets :-
 Any of the above if held as Stock in trade.
 A house held for business or profession.
 Any property in nature of commercial complex.

50
 A house let out for more than 300 days in a year.
 Gold deposit bond.
 A residential house allotted by a Company to an employee, or an Officer, or a Whole
Time Director ( Gross salary i.e. excluding perquisites and before Standard Deduction of
such Employee, Officer, Director should be less than Rs. 5,00,000).
The Assets exempt from Wealth tax are :-
Property held under a trust.
 Interest of the assessee in the coparcenary property of a HUF of which he is a member.
 Residential building of a former ruler.
 Assets belonging to Indian repatriates.
 One house or a part of house or a plot of land not exceeding 500sq.mts,for individual &
HUF assessee.
Wealth tax is chargeable in respect of Net wealth corresponding to Valuation date.(Net wealth
means all assets less loans taken to acquire those assets. Valuation date means 31st March of
immediately preceding the assessment year). In other words, the value of the taxable assets on
the valuation date is clubbed together and is reduced by the amount of debt owed by the
assessee. The net wealth so arrived at is charged to tax at the specified rates. Wealth tax is
charged @ 1% of the amount by which the net wealth exceeds Rs. 15 Lakhs.
Taxation of Corporates
Company whether Indian or foreign is liable to taxation, under the Income Tax Act,1961.
Corporation tax is a tax which is levied on the incomes of registered companies and
corporations.
A Company means:-
 Any Indian company, or
 Any corporate body, incorporated by or under the laws of a country outside India, or

51
 Any institution, association or a body which was assessed as a company for any
assessment year under the Income Tax Act,1922 or was assessed under this Act as a
company for any assessment year commencing on or before April 1, 1970,or
 Any institution, association, or body, whether incorporated or not and whether Indian
or Non-Indian, which is declared by a general or special order of the Central Board of
Direct Taxes to be a company.
Companies in India, whether public or private are governed by the Companies Act, 1956. The
registrar of companies and the company law board administers the provisions of the Act.
However, for the purpose of taxation, companies are broadly classified as:-
 Domestic company [Section 2(22A)]:- means an Indian company (i.e. a company formed
and registered under the Companies Act,1956) or any other company which, in respect
of its income liable to tax, under the Income Tax Act, has made the prescribed
arrangement for declaration and payments within India, of the dividends payable out of
such income. A domestic company may be a public company or a private company.
 Foreign company [Section 2(23A)] :- means a company whose control and management
are situated wholly outside India, and which has not made the prescribed arrangements
for declaration and payment of dividends within India.
Taxation of Agents
An 'agent' is a person who agrees and is authorized to act on behalf of another. This another
person is known as 'Principal' who authorizes and empowers the agent as his representative to
carry out his legal acts. When the agent and the principal mutually agree, an 'agency
relationship' starts between them. This relationship empowers the agent to carry out business
transactions on behalf of the principal. Infact while dealing with the third parties, the agent
steps into the shoes of his principal and all his legal acts are binding on the principal.
An agent can be an individual, a company or any association of individuals. The document
which empowers the agent is known as 'Power of Attorney', which is executed by the principal
in favour of the agent. When the power of attorney relates to a particular transaction and for a

52
specific purpose, it is known as 'Specific Power of Attorney'. Whereas, when power of attorney
relates to transactions in general, it is known as 'General Power of Attorney'. The power of
attorney may or may not be registered.
An agent enjoys all the powers of the principal and binds the principal for all his legal acts. He
can sue the third parties in the name of the principal and has a right to get reimbursement for
the expenses incurred by him related to the business. But at the same time, an agent should act
as per the powers vested in him and should act in the best interests of his principal. He should
maintain proper accounts of all transactions and submit them to the principal.
Provisions for Taxation of Agents
An agent is subjected to taxation under the provisions of the Income Tax Act,1961. It is the
umbrella Act for all the matters relating to income tax and empowers the Central Board of
Direct Taxes (CBDT) to formulate rules ( The Income Tax Rules,1962 ) for implementing the
provisions of the Act. The CBDT is a part of Department of Revenue in the Ministry of Finance .
It has been charged with all the matters relating to various direct taxes in India and is
responsible for administration of direct tax laws through the Income Tax Department .
An agent may be taxed depending upon the category of "persons" in which it falls under the
Income Tax Act. The term "person" under the Act includes:-
 Individuals
 Corporates
 Firms
 Association of Persons or Body of Individuals
 Hindu Undivided Families
Assessment of non-residents through Agents
A non-resident may be assessed to tax in India either directly or through agents. Under the
Income Tax act (Section 163), there is a provision to assess a non-resident through his agent

53
due to the inherent difficulties in ensuring his physical presence during the assessment
proceedings and the possibilities of effecting recovery of the due taxes.
Persons in India who may be treated as 'agent' of a non-resident are:-
 Employee or trustee of the non-resident
 Any person who has any business connection with the non-resident
 Any person from or through whom the non-resident is in receipt of any income
 Any person who has acquired a capital asset in India from the non-resident.
If a person is assessed as an agent, he may retain out of any money payable by him to the
person residing outside India on whose behalf he is liable to pay tax (the principal), a sum equal
to his estimated liability. In case of any disagreement between the principal and the agent
regarding the amount to be retained, the agent may secure from the assessing Officer a
certificate stating the amount to be retained pending final settlement of the liability, and the
certificate obtained will be his warrant for retaining that amount.
Permanent Account Number (PAN)
PAN is an all India, unique ten-digit alphanumeric number, issued in the form of a laminated
card by the Income Tax Department. It does not change with changes in address or place where
you are being assessed. For obtaining PAN related information the Income Tax department has
authorized :- (i) UTI Technology Services Ltd (UTITSL) to set up and manage IT PAN Service
Centers in all those cities or towns where there is an Income Tax office and (ii) National
Securities Depository Limited (NSDL) to dispense PAN services from Tax Information Network
(TIN) Facilitation Centers.
Transactions in which quoting of PAN is mandatory :-
 Purchase and sale of immovable property.
 Purchase and sale of motor vehicles.
 Transaction in shares exceeding Rs. 50,000.
 Opening of new bank accounts.

54
 Fixed deposits of more than Rs. 50,000.
 Application for allotment of telephone connections.
 Payment to hotels exceeding Rs. 25,000.
 Provided that till such time PAN is allotted to a person, he may quote his General Index
register Number or GIR No.
The following changes must be intimated to the assessing officer :-
 Death of the assessee.
 Discontinuation of business.
 Dissolution of a firm.
 Partition of a Hindu Undivided Family(HUF).
 Liquidation or winding up of a company.
 Merger or amalgamation or acquisition of companies.
Service Tax
Service tax is a tax levied on services rendered by a person and the responsibility of payment of
the tax is cast on the service provider. It is an indirect tax as it can be recovered from the
service receiver by the service provider in course of his business transactions. Service Tax was
introduced in India in 1994 by Chapter V of the Finance Act, 1994. It was imposed on a initial set
of three services in 1994 and the scope of the service tax has since been expanded continuously
by subsequent Finance Acts. The Finance Act, extends the levy of service tax to the whole of
India, except the State of Jammu & Kashmir.
The Central Board of Excise & Customs (CBEC) under Department of Revenue in the Ministry of
Finance, deals with the task of formulation of policy concerning levy and collection of Service
Tax. In exercise of the powers conferred, the Central Government makes service tax rules for
the purpose of the assessment and collection of service tax. The Service Tax is being
administered by various Central Excise Commissionerates, working under the Central Board of
Excise & Customs. There are six Commissionerates located at metropolitan cities of Delhi,
Mumbai, Kolkata, Chennai, Ahmedabad and Bangalore which deal exclusively with work related

55
to Service Tax. Directorate of Service Tax at Mumbai over sees the activities at the field level for
technical and policy level coordination.
In case a registered assessee starts providing any new service from the same premises, he need
not apply for a fresh registration. He can simply fill in the Form S.T.1 for necessary amendments
he desires to make in his existing information. The new form may be submitted to the
jurisdictional Superintendent for necessary endorsement of the new service category in his
Registration certificate. In case of Individuals or Proprietary Concerns and Partnership Firm,
service tax is to be paid on quarterly basis. The due date for payment of service tax is the 5th of
the month immediately following the respective quarter. (Quarters are : April to June, July to
September, October to December and January to March). However, payment for the last
quarter i.e. January to March is required to be made by 31st of March itself. In case of any
other category of service provider than specified above, service tax is to be paid on a monthly
basis, by the 5th of the following month.
The unique feature of Service Tax is reliance on collection of tax, primarily through voluntary
compliance. System of self-assessment of Service Tax Returns by service tax assesses was
introduced w.e.f. 01.04.2001. The jurisdictional Superintendent of Central Excise is authorized
to cross verify the correctness of self assessed returns. Tax returns are expected to be filed half
yearly. Central Excise officers are authorized to conduct surveys to bring the prospective service
tax assesses under the tax net.
Service tax is payable @ 12% of the ‘gross amount' charged by the service provider for
providing such taxable service. The Education Cess is payable @ 2% of the service tax payable.
Service Tax Exemptions
The Central Government can grant partial or total exemption by issuing an exemption
notification. But it cannot be granted by the Government with retrospective effect. The general
exemptions are :-
 Small service providers whose turnover is less than Rs 4 lakhs per annum are exempt
from service tax.

56
 There is no service tax on export of services.
 Services provided to UN and International Agencies and supplies to SEZ(Special
Economic Zones) are exempt from service tax.
 Service tax is not payable on value of goods and material supplied while providing
services. Such exclusion is permissible only if Cenvat credit on such goods and material
is not taken.
Direct Tax Code
The direct tax code seeks to consolidate and amend the law relating to all direct taxes, namely,
income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an
economically efficient, effective and equitable direct tax system which will facilitate voluntary
compliance and help increase the tax-GDP ratio. Another objective is to reduce the scope for
disputes and minimize litigation.
It is designed to provide stability in the tax regime as it is based on well accepted principles of
taxation and best international practices. It will eventually pave the way for a single unified
taxpayer reporting system.
The salient features of the code are:
 Single Code for direct taxes: all the direct taxes have been brought under a single Code
and compliance procedures unified. This will eventually pave the way for a single unified
taxpayer reporting system.
 Use of simple language: with the expansion of the economy, the number of taxpayers
can be expected to increase significantly. The bulk of these taxpayers will be small,
paying moderate amounts of tax. Therefore, it is necessary to keep the cost of
compliance low by facilitating voluntary compliance by them. This is sought to be
achieved, inter alia, by using simple language in drafting so as to convey, with clarity,
the intent, scope and amplitude of the provision of law. Each sub-section is a short
sentence intended to convey only one point. All directions and mandates, to the extent
possible, have been conveyed in active voice. Similarly, the provisos and explanations

57
have been eliminated since they are incomprehensible to non-experts. The various
conditions embedded in a provision have also been nested. More importantly, keeping
in view the fact that a tax law is essentially a commercial law, extensive use of formulae
and tables has been made.
 Reducing the scope for litigation: wherever possible, an attempt has been made to
avoid ambiguity in the provisions that invariably give rise to rival interpretations. The
objective is that the tax administrator and the tax payer are ad idem on the provisions
of the law and the assessment results in a finality to the tax liability of the tax payer. To
further this objective, power has also been delegated to the Central Government/Board
to avoid protracted litigation on procedural issues.
 Flexibility: the structure of the statute has been developed in a manner which is capable
of accommodating the changes in the structure of a growing economy without resorting
to frequent amendments. Therefore, to the extent possible, the essential and general
principles have been reflected in the statute and the matters of detail are contained in
the rules/schedules.
 Ensure that the law can be reflected in a Form: for most taxpayers, particularly the small
and marginal category, the tax law is what is reflected in the Form. Therefore, the
structure of the tax law has been designed so that it is capable of being logically
reproduced in a Form.
 Consolidation of provisions: in order to enable a better understanding of tax legislation,
provisions relating to definitions, incentives, procedure and rates of taxes have been
consolidated. Further, the various provisions have also been rearranged to make it
consistent with the general scheme of the Act.
 Elimination of regulatory functions: traditionally, the taxing statute has also been used
as a regulatory tool. However, with regulatory authorities being established in various
sectors of the economy, the regulatory function of the taxing statute has been
withdrawn. This has significantly contributed to the simplification exercise.

58
OVERSEAS DOCUMENTATION
Zero Amount Tax Returns
A zero amount tax return could mean there is no income to report, because:
 There is no US source income
 The US source income is reduced to zero taxable income due (either in combination or
individually) to personal exemption, allowed deductions, or treaty benefits.
When making some of its determinations with regard to the status of certain aliens, the United
States Citizenship and Immigration Service (USCIS) sometimes ask an alien to prove that he has
complied with all his U.S. tax obligations. This is easy to do in cases in which the alien has filed a
U.S. federal individual income tax return for every year he has been in the USA, since the
Internal Revenue Service (IRS) has assigned a document locator number (DLN) to each tax
return filed. It can easily retrieve the alien's original tax return if asked to do so.
More frequently, however, the IRS proves that a taxpayer has filed a return by accessing the
computerized filing record of the taxpayer, and printing out "transcripts" which list the content
of returns filed. If requested, some of these transcripts actually depict the line-by-line entries
made by the taxpayer on his federal tax returns. The IRS usually can provide transcripts very
quickly.
Those reports normally are sufficient to prove to USCIS that the alien taxpayer has filed all of his
required federal returns.
 A taxpayer may use IRS Form 4506 to request a copy of his original tax return; or
he may use Form 4506-T to request a transcript which proves the filing of a tax
return, and lists all the transactions which have transpired with respect to the
return.
 You may download these forms from the IRS website at
http://www.irs.gov/app/picklist/list/formInstruction.html.

59
W8Ben- compliance form from US
Forms W-8BEN and W-9 Compliance in Foreign and U.S. Business Transactions
Under U.S. federal tax law, businesses making certain payments must request a Form W-8BEN
or other W-8 (foreign entities or individuals), or a Form W-9 (U.S. taxpayers), bearing certain
information about the payee. Otherwise, the pay or may have to withhold tax from the
payment.
Compliance in this area became more complex when the IRS released two draft forms to
replace the former W-8BEN when FATCA rules were issued in Jan. 2013. One was a streamlined
W-8BEN for individuals, the other a more complex version for business entities with 25
separate parts and six pages (vs. one now).
With IRS audit activity aggressive in this area, tax professionals must ramp up their knowledge
of the evolving Form W-8BEN. Meanwhile, ongoing issues command attention, such as when
the forms are required from foreign and U.S. payees and when back-up withholding is or isn't
required.
Listen as our panel of experienced tax advisors analyzes the upcoming new Form W-8BEN and
provides insights for compliance with W-8BEN and W-9 for U.S. taxpayers.
Outline
I. Terms of revised Form W-8BEN draft forms
(a) Form for individuals
Four major changes: country of citizenship, no checkbox to choose entity type, no
checkbox for list of swaps, scaled-back section on treaty benefits.
(b) Form for entities
i. Six pages and 25 separate parts
ii. Many new data elements to be validated and possibly stored
iii. Separate checkboxes to indicate status

60
II. Significant ongoing compliance challenges with W-8BEN and W-9
III. Best practices for validating forms
IV. Current IRS audit imperatives
Benefits
The panel will explore these and other on-point topics:
 Implications of the new requirement for a foreign tax identifying number.
 Circumstances that require pay or companies to obtain a form from payees or to
withhold because they haven't received a valid form.
 Tactics for performing a line-by-line review to ensure a form is accurate and
complete.
 Red flags for IRS auditors right now when they look at a W-8BEN, W-9 or W-8
pulled from your company's files.
Applicable to the United States, an Employer Identification Number or EIN (also known as
Federal Employer Identification Number or FEIN) is the corporate equivalent to a Social Security
number, although it is issued to anyone, including individuals, who have to pay withholding on
employees. It is also issued to entities, such as states, government agencies, corporations,
limited liability companies, and any other organization that must have a number for a purpose
in addition to reporting withholding tax, such as for opening a bank or brokerage account.
Memorandum of Association
The memorandum of association is a statement made by each subscriber confirming their
intention to form a company and become a member of that company. If the company is to have
a share capital on formation, each member also agrees to take at least one share. The form of
memorandum is included in schedules 1 and 2 of The Companies (Registration) Regulations
2008 (SI 3014). You can download a pro-forma memorandum for a company limited by shares
or guarantee from our forms online page.

61
Articles of Association
A document that specifies the regulations for a company's operations. The articles of
association define the company's purpose and lays out how tasks are to be accomplished within
the organization, including the process for appointing directors and how financial records will
be handled.
Pre Shipment Documents :-
 Cost Sheet
 Order Acceptance
 Proforma Invoice
 Invoice
 Packing lists (5 types)
 Special customs Invoice
 Drafts bill of Lading
 Form SDF
 Certificate of Origin (7 Chambers)
 GSP Certificate
 Marine Insurance Declaration
 Shipping Instructions
 Shipment Advice
 Intimation for Inspection
 Certificate for Inspection
 Certificate of Health
 Certificate of Analysis
Post Shipment Documents :-
 Bank Invoice
 Commercial Invoice
 Commercial packing List

62
 Bank Certificate – Horizontal format (Form No. 1)
 Bank Certificate – Vertical Format (Form No. 1)
 Letter to bank for Collection/Negotiation
 Bills of Exchange
 Cost Sheet
Excise Documents :-
 AREI
 Form C
 Form CTI
 Proof of exports
EDI Shipping Bills :-
 Annexure A
 Annexure B
 Annexure C
 Annexure D DEPB Declaration
 DEPB / DEEC / DBK documents
- Appendix 10 A - DBK application
- Appendix 10 C - DEPB application
- Appendix 10D - DFRC application
Reports :-
 Export Register
 Country wise Exports
 Item wise Exports
 Pending Order details
 LC Register

63
FINDINGS
 The documentation paper works are simplified than the previous years and this has led
to the emergence of a business environment, widening both the scope and scale of
opportunities open to sellers.
 Though many documents prevail in documentation, only certain documents play a vital
part in the company
 Central Government is empowered the to make provisions for development and
regulation of foreign trade by facilitating imports into, and augmenting exports from
India and for all matters connected therewith or incidental thereto.
 The Central Government can prohibit, restrict and regulate exports and imports, in all or
specified cases as well as subject them to exemptions.
 The Director General or any other officer so authorized can suspend or cancel a license
issued for export or import of goods in accordance but he does it after giving the license
holder a reasonable opportunity of being heard.
 Government of India formulates and announces an Export and Import policy (EXIM
policy) and amends it from time to time. EXIM policy refers to the policy measures
adopted by a country with reference to its exports and imports.
 Custom duty has to paid for certain goods which have demand in India and the duty rate
various depending upon the current demand of the good.

64
CONCLUSION
Thus, the internship proved to be a very enlightening experience. Through this many practical
aspects of documentation and export procedures could be understood. The study explores the
importance of the documents used for exports and imports based on the procedures of
Government of India. The Marks Cargo Private Limited deals with the documents like Bill of
Lading, Proforma Invoice, Consular Invoice, Insurance Certificate, Inspection Certificate, Bill of
Entry etc., Marks Cargo Private Limited is a well known multimodal logistics company in India ,
it has 8 branches all over India. The company is engaged in processing clearance, forwarding for
export and exports.
The internship programme was a great learning experience since it helped me to
understand various procedures involved in the export and import of goods, various documents
required to carry out exports and import financing modes. I was able to gain knowledge about
the format to be followed in the documentation of export and import documents.
Marks Cargo Private Limited from Pondicherry office does clearance and forwarding of imports
and exports for all leading companies having global operations. it exports to countries like
china, hong kong, myanmar, singapore, vietnam, canada, sri lanka, malaysia, yangon and etc.

65
BIBLIOGRAPHY
 www.commerce.nic.in
 www.sezindia.nic.in
 www.investindia.gov.in
 www.indiainbusiness.nic.in
 Handbook of International Trade - E Kwan Choi , James Harrigan
 Import Do It Yourself - M I Mahajan

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