IGNOU SOLVED ASSIGNMENT 2018-19, AED - 01: Export Procedures & Documentation For July 2018 and January 2019 admission cycle

                                            AED - 01

Also For:

B.Com (A & F)

B.Com (CA & A)

B.Com (F & CA)

                             Elective Course in Commerce

             AED – 01: Export Procedures & Documentation

                                 ASSIGNMENT- 2018-19

Dear Students,

As explained in the Programme Guide, you have to do one Tutor Marked Assignment in this Course. Assignment is given 30% weightage in the final assessment. To be eligible to appear in the Term-end examination, it is compulsory for you to submit the assignment as per the schedule. Before attempting the assignments, you should carefully read the instructions given in the Programme Guide. This assignment is valid for two admission cycles (July 2018 and January 2019). The validity is given below:

1. Those who are enrolled in July 2018, it is valid up to June 2019.

2. Those who are enrolled in January 2019, it is valid up to December 2019.

You have to submit the assignment of all the courses to The Coordinator of your Study Centre. For appearing in June Term-End Examination, you must submit assignment to the Coordinator of your study centre latest by 15th March. Similarly for appearing in December Term-End Examination, you must submit assignments to the Coordinator of your study centre latest by 15th September.

TUTOR MARKED ASSIGNMENT

Course Code: AED-01

Course Title: Export Procedures & Documentation

Assignment Code: AED-01/TMA/2018-19

Coverage: All Blocks

Maximum Marks: 100

Attempt all the questions.

1. State the steps involved in the processing of an export order. Explain them briefly.                   

                                                                                                                                                (5+15)

2. Distinguish between pre-shipment and post-shipment finance. Explain various post shipment finance available to Indian Exporters.                                                                                     

                                                                                                                                               (6+14)

3. Explain various technical and specialized services assistance related to institutional set-up for export promotion in India. Do you think that these Institutions help in promoting export from India?                                                                                                                                     

                                                                                                                                              (16+4)

4. Comment on the following statements.

(i) International trade may not help in better use of country’s resources.

(ii) Forfaiting does not convert credit sale into cash for exporter.

(iii) Clearing and Forwarding agents are not a link between the owners of goods and owners of means of transport.

(iv) Exporters are not allowed to remove the goods without the examination of Central

Excise Authority.

                                                                                                                                              (5X4)

5. Write notes on the following?

(i) Deemed exports

(ii) Letter of Credit

(iii) Open Cover

(iv) Strengthening export marketing effort.

                                                                                                                                             (5X4)    

Q -1:- State the steps involved in the processing of an export order. Explain them briefly.                   

                                                                                                                                                (5+15)

Ans.

In all actuality, a fare practice is finished up effectively simply after the exporter has possessed the capacity to convey the committal as per the fare contract and get installment for the products. This includes routine with regards to endorsed technique to be performed. The truth of the matter is that one needn’t bother with just to be exceptionally very much educated about his/her fare organization, his/her items, his/her providers, his/her fare chain, his/her market, the world market, yet one likewise has to know the fare guidelines and terms, the diverse societies that one targets and the last client’s needs. At that point comes satisfying these requirements by the most aggressive route and by increasing the value of one’s administrations. This is so since all offer similar items with minor changes, yet what has the effect is the strategy and the esteem added administrations one gives to a definitive buyers. Essentially, that influencing a fare to organization is a simple procedure, yet making the fruitful and durable fare organization is an exceptionally troublesome errand promotions:

          Thusly, it appears to be applicable now to influence us to take in the different advances’ engaged with the handling of a fare arrange. These are recorded as takes after:

1) Having an Export Order:  

            Preparing of a fare arrange begins with the receipt of a fare arrange. A fare arranges, essentially expressed, and implies that there ought to be an assertion as a record, between the exporter and the shipper before the exporter really begins delivering or obtaining merchandise for shipment. For the most part a fare request may appear as proforma receipt or buy request or letter of credit.

2) Examination and Conformation of Order:

            Having gotten a fare arranges, the exporter ought to analyse it with reference to the terms and states of the agreement. Truth be told, this is the most vital stage as every single resulting activity and responses rely upon the terms and states of the fare arrange. The examinations of a fare arrange, in this manner, incorporates things like item portrayal, terms of installment, terms of shipment, investigation and protection perquisite, archives acknowledging installment and the last date of transaction of records with the bank. Having being happy with these, the fare arrange is affirmed by the exporter.

3) Assembling or Procuring Goods:

            The Reserve Bank of India (RBI), under the fare credit (premium sponsorship) plot, stretches out pre-shipment credit to exporter to fund working capital requirements for buy of crude materials, handling them and changing over them into completed merchandise with the end goal of fares. The exporter approaches the depend on the premise of set down methods for the pre-shipment credit. Having gotten credit, the exporter begins to fabricate/get and pack the products for shipment abroad.

4) Freedom from Central Excise: 

              When merchandise have been made/secured, the procedure for getting freedom from focal extract obligation begins. The Central Excise and Sale Act of India and the related standards give the discount of extract obligation paid. There are two option plans whereby 100 for every penny discount on obligation is given to trade items on the accommodation of the verification of shipment. The principal conspire is to make installment of the extract obligation at the season of expelling the fare transfer from the processing plant and record a claim for refund of obligation after exportation of merchandise. The second plan is to expel merchandise from production line/distribution centre without installment yet under a suitable bond with the extract specialists. The exporter needs to apply on a frame known as AR4 or AR4A to the Central Excise Range Superintendent for acquiring extract freedom. Shape An is documented when merchandise are to be cleared after examination by the extract auditor. In every other case, shape AR4A is documented.

5) Pre-Shipment Inspection:

             There are number of merchandise whose fare requires quality affirmation according to the Government of India’s notice. Thusly, the Indian custom experts will require the accommodation of an examination testament issued by the able and assigned specialist before allowing the shipment of merchandise happens.

Assessment of fare merchandise might be directed under:

(I) Consignment – wise Inspection

(II) In – Process Quality Control, and

(III) Self – Certification

The Inspection Certificate is issued in triplicate. The first duplicate is for the traditions confirmation. The second duplicate of the declaration is sent to the shipper and the third duplicate stays with the exporter for his reference reason.

6) Arrangement of Clearing and Forwarding Agents:

                On fruition of the way toward getting the Inspection Certificate from the custom offices, the exporter names clearing and sending operators who play out various capacities in the interest of the exporter. The fundamental capacities performed by these operators incorporate pressing, stamping and marking of committal, plan for transport to the port course of action for shipment abroad, traditions freedom of load, acquisition of transport and different archives. Keeping in mind the end goal to encourage the exporter in releasing his obligations, the accompanying reports are submitted to the specialist:

(I) Commercial receipt in 8-10 duplicates

(II) Customs Declaration Form in triplicate

(III) Packing list

(IV) Letter of Credit (unique)

(V) Inspection Certificate (unique)

(VI) G.R. Shape (in unique and copy)

(VII) AR4/AR4A (in unique and copy)

(VIII) GP-1/GP-2 (unique)

(IX) Railway Receipt/Lorry Way Bill, by and large

7) Products to Port of Shipment:  

                After the extract leeway and pre-shipment examination customs are finished, the products to be sent out are pressed, stamped and marked. Appropriate stamping, naming and pressing help fast and safe transportation of merchandise. The fare division finds a way to save space on the ship through which products are to be sent to the merchant. The transportation space can be saved either through the clearing and sending operator or cargo intermediary who takes a shot at benefit of the delivery organization or specifically from the transportation organization. Once the space is held, the transport organization issues a report known as Shipping Order. This request fills in as a proof of room reservation. On the off chance that products are sent through a street transporter to the port, no particular convention is included. On the off chance that, the products are sent by rail to the port of shipment, designation of wagon should be gotten from the Railway Board. The accompanying archives are submitted to the booking rail road yard/station:

(I) Forwarding Note (A Railway Document)

(II) Shipping Order

(III) Wagon Registration Fee Receipt

When wagons have been assigned, merchandise are stacked, for which rail roads will issue Railway Receipt (RR). At that point, this receipt and different reports are sent to the clearing and sending operator at the port town. In the mean time, the generation/trade division takes protection arrangement in copy for hazard scope (inner and additionally abroad) for the merchandise to be sent out.

8) Port Formalities and Customs Clearance:

                  Having gotten the records from the fare division, the clearing and sending specialist takes conveyance of the payload from the rail road station or the street transport organization and stores it in the distribution center. He likewise acquires traditions leeway and consent from the port specialists to bring the freight into the shipment shed. The custom office stipends consent for trade at the workplace of the traditions and physical confirmation of merchandise in the shipment shed. The leeway for trade is given on the Shipping Bill. The clearing and sending specialist is required to present the accompanying reports with the Customs House for acquiring traditions freedom and consent:

(I) Shipping Bill

(II) Contract Form

(III) Letter of Credit, if appropriate

(IV) Commercial Invoice

(V) GR Form

(VI) Inspection Certificate

(VII) AR4/AR4A Form

(VIII) Packing List, if necessary

In the wake of getting reports from the fare office, the clearing and sending specialist exhibits the Port Trust Document to the Shed Superintendent of the port. He gets trucking request conveying the load to the travel shed for physical examination by the Dock Appraiser. The Dock Appraiser is exhibited the accompanying reports to encourage him in physical examination of fare products:

(I) Shipping Bill

(II) Commercial Invoice

(III) Packing List

(IV) AR4/AR4A Form and Gate Pass

(V) GR Form (copy)

(VI) Inspection Certificate (unique)

The Dock Appraiser, in the wake of making examination, makes ‘Let Export’ underwriting on the copy duplicate of the shipping Bill and hands over it to the Forwarding Agent. Every one of these reports are introduced to the Preventive Officer who puts a support ‘Let Ship’ on the copy duplicate of the Shipping Bill. The preventive officer oversees the stacking of load on board the vessel. After the merchandise are stacked on board the vessel, the skipper of the ship issues a receipt known as ‘Mate’s Receipt’ to the Shed Superintendent of the port concern. The sending, specialist in the wake of paying port charges, takes the conveyance of the ‘Mate Receipt’. He submits to Shipping Company and demands it to issue the Bill of Lading.

9) Dispatch of Documents by Forwarding Agent to the Exporter:

                  Subsequent to getting the Bill of Lading from the Shipping Company, the clearing and sending specialist dispatches every one of the archives to his/her exporter. These reports include:

(I) Commercial Invoice

(II) Export Promotion Copy

(III) Drawback Copy

(IV) Clean on Board Bill of Lading

(V) Letter of Credit

(VI) AR4/AR4A and Gate Pass

(VII) GR Form (in copy)

10) Declaration of Origin:

                    On receipt of above records from the sending operator, the exporter now applies to the Chamber of Commerce for a Certificate of Origin and gets it. In the event that the merchandise are traded to nations offering GSP concessions, the exporter needs to obtain the GSP Certificate of Origin from the concerned specialist like Export Inspection Agency

11) Dispatch of Shipment Advice to the Importer:

                    Finally, the exporter sends ‘Shipment Advice’ to the shipper implying the date of shipment of the dispatch by a named vessel and its normal time of landing in the goal port of the merchant.

The accompanying reports are likewise sent to the merchant to encourage him for taking conveyance of the committal:

(I) Bill of Lading

(II) Commercial Invoice

(III) Packing List

(IV) Customs Invoice

12) Accommodation of Documents to Bank:

                     Toward the finish of the procedure, the exporter shows the accompanying archives to his bank for acknowledgement of his sum because of the merchant:

(I) Commercial Invoice

(II) Certificate of Origin

(III) Packing List

(IV) Letter of Credit

(V) Marine Insurance Policy

(VI) GR Form

(VII) Bill of Lading

(VIII) Bill of Exchange

(IX) Bank Certification

(X) Commercial Invoice

13) Asserting Export Incentives:

                       On culmination of the handling of a fare arrange at the three levels of shipment i.e. pre-shipment, shipment and post-shipment, the exporter claims for send out impetuses permissible to him/her.

Q – 2:- Distinguish between pre-shipment and post-shipment finance. Explain various post shipment finance available to Indian Exporters.                                                                                     

                                                                                                                                               (6+14)

Ans.  Difference between Pre – shipment finance and Post – shipment finance:-

Pre – shipment finance	Post – shipment finance
1- Pre-Shipment finance refers to the credit extended to the exporters prior to the shipment of goods for the execution of the export order.	1 - Post-Shipment Finance Post-shipment finance refers to the credit extended to the exporters after the shipment of goods for meeting working capital requirement.
2 -It is granted for s as purchase, processing, manufacturing or packing of goods as defined by the Reserve Bank of India.	2 -Short-term finance is extended for meeting working capital requirement and medium and long-term for exports on deferred payment
3 - Generally, the amount of packing credit does not exceed the FOB value of the goods to be exported or their domestic value whichever is less.	3 - Post-shipment finance can be given to the extent of 100% of the invoice value of the goods exported
4 - It is extended to the Indian exporters or deemed exporters from India.	4 - It is extended to the Indian exporters as well as the overseas importers.
5 - It is extended in the following forms: Extended Packing Credit Loan; Packing Credit Loan (Hypothecation and Pledge); Secured Shipping Loan.	5 - It is extended in the following forms: Discounting of export bills, Against undrawn balances, Against retention money; Against goods on consignment.

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IGNOU SOLVED ASSIGNMENT 2018-19, AED - 01: Export Procedures & Documentation For July 2018 and January 2019 admission cycle