What are the documents needed in an Export Trade?

Some of the documents needed in an export trade are as follows:

(a) Export invoice:

Export invoice is a seller’s bill for merchandise. It is a basic document in export
transaction. The invoice contains information about the description of goods,
value of goods, terms of shipment, marks and numbers of packages, etc. It also
contains date, name and address of both buyer and seller, name of shipping
vessel, port of destination, terms of delivery and payments, etc. The exporter
may design his own form. Some countries ask for a particular type of form.

(b) Packing List:

A packing list is a consolidated statement of the contents of a number of cases
or packs. It gives a detail of the nature of goods which are being exported and
the form in which these are sent. The description is given in such a manner as to
permit checks of the contents by the customs on arrival at the port of destination
as well as by the recipient.

Packing list should contain information such as invoice number and date, names
of exporter and importer, country of origin and country of final destination,
marks and number of containers, description of goods, quantity, etc. It is a
relatively simpler document and required information can be reproduced from
master document.

(c) Certificate of Origin:

A certificate of origin, as the name indicates, is a certificate which specifies the
country of the production of goods. The customs law of a country may require
this certificate before clearance of goods and assessment of duty. This
certificate may also be required when goods of a particular type are banned
from certain countries.
The Federation of Indian Chambers of Commerce and Industry, Export
Promotion Councils and various other trade organisations have been authorized
by the Government of India to issue a certificate of origin. The Chambers of
Associations issue these certificates on their printed forms.

(d) Mate’s Receipt:

When the cargo is loaded on the ship, the Commanding Officer of the ship
issues a receipt known as mate’s receipt. The mate’s receipt indicates name of
the vessel, berth, date of shipment, description of packages, marks and numbers,
condition of the cargo at the time of its receipt etc. The port of loading and
discharge is also given in this receipt.

The mate’s receipt is first handed over to port trust authorities for payment of
dues by the exporter. After paying the dues the exporter or his agent will collect
this receipt from port authorities. The shipping agent prepares bill of lading on
the basis of mate’s receipt.

(e) Bill of Lading:

A bill of lading is a document issued by the shipping company acknowledging
the receipt of goods mentioned therein and undertaking to deliver them in the
like order and condition, as received, to the consignee or his order.

A bill of lading serves the following purposes:

(a) It is a document of title to the goods

(b) It is a receipt from the shipping company, receiving the goods.

(c) It is a contract for the transportation of goods.

A bill of lading contains information about date and place of shipment, port of
loading and port of destination, marks and numbers, kind of packages,
description of goods, gross weight and measurement, freight etc.
The bill of lading is issued in exchange for mate’s receipt.

(f) Shipping Bill:

It is a document on the basis of which customs permission for exports is given.
The shipping bill contains contents such as name and address of the exporter
and consignee, invoice number and date, import, export code number, RBI code
number, particulars of goods exported, name of the vessel, port at which goods
are to be discharged, number and kind of packets, quantity and value of goods.

The shipping bill is prepared by the clearing and forwarding agent and
presented to the shed superintendent for getting carting order. The preventive
officer of the customs, after being satisfied, endorses the shipping bill with ‘Let
Ship’ order.

The Customs Public Notice No. 39 suggests a uniform shipping bill for all
categories of exports i.e. dutiable, free and drawback claims. Since all the
columns are not printable on one side of A4 size paper, some contents have
been printed on the backside of the form. Some declarations which are material
to the transaction have also been given in the standard form.

(g) Cart Ticket:

Cart ticket is prepared by the exporter giving details of the cargo to be exported.
It has the name of the ship, number of packages, shipping bill number, port of
destination and the number of vehicle carrying the cargo. The cart ticket is
handed over by the driver of the vehicle at the entry of the port. The gate keeper
will check the cargo as shown in the ticket. If satisfied, the gate keeper will
allow the vehicle to enter.

(h) Airway Bill:

It is a receipt issued by an airline for the carriage of goods. Every airline issues
its own bill for receiving the goods. Airway bill is non-transferrable so it does
not carry the same validity as a bill of lading in sea transport.

(i) Letter of Credit:

In an export trade, the exporter would like to ensure that there is no risk of non-
payment. Usually, the exporter asks the importer to send a letter of credit to
him. A letter of credit popularly known as L/C is an undertaking by its issuer
(usually importer’s bank) that the bills of exchange drawn by the foreign dealer
on the importer will be honoured on presentation for specified amount. L/ C is
simply a guarantee by the bank to the foreign dealer (exporter) that their bills
upto a specified amount would be honoured.

(j) Bill of Exchange:

A bill of exchange, popularly known as bill, as defined under Section 5 of the
Indian Negotiable Instruments Act, means “an instrument in writing containing
an unconditional order, signed by the maker, directing a certain person to pay a
certain sum of money only to, or to order of a certain person, or to the bearer of
the instrument.”

Payment through a bill of exchange is a common method of payment in

international trade. An exporter draws a bill on an importer calling upon him to
pay a specified sum of money on an appointed date. The bill will be sent to the
importer who will sign it by giving his consent. A banker of the importer may
also accept the bill on behalf of his client.

There are three parties to the bill of exchange:

(a) The drawer (exporter):
The person who executes the bill and the payment is due to him.

(b) The drawee (importer):

The person on whom the bill is drawn and is expected to make the payment as
per the terms of the document.

(c) The payee (exporter or his bank):

The party which receives the payment of the bill.

An exporter may dispose of the bill by discounting it with bank, placing it for
collection. If it is not discounted then it is sent to the bank along-with the
documents attached, with the instructions to send them abroad for collection.

It is a common practice to deliver it to the banker along-with the bill the

documents of title to the goods such as bill of lading, invoice, certificate of
origin, insurance policy etc. The banker is instructed to deliver the documents to
the importer against acceptance or payment of bill.

In case the documents are to be released against acceptance of the bill, bill is
called documents against acceptance bill. But where the documents are to be
released only against payment, it is called documents against payment bill.
Where no documents of title to the goods are enclosed to the bill, it is called a
clean bill.

(k) Certificate of Inspection:

To ensure proper quality of goods, exportable goods are inspected before being
despatched for export. Export Inspection Council of India (EIC) issues such
certificate in India. Some countries have made this certificate compulsory for
goods being imported.

When goods are ready for despatch, the exporter will request EIC to send
persons for inspection of goods. The inspectors check the goods against
prescribed quality standards. If they are satisfied with the quality then goods are
packed in the presence of inspection staff and a certificate to this effect is
issued. This certificate is a part of documents being sent to the importer.