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An Overview of Shipping Bill and Other Important Export Documents

IndianMoney.com Research Team | Posted On Friday, October 12,2018, 05:15 PM

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An Overview of Shipping Bill and Other Important Export Documents

 

 

Export from India requires special documents, depending on the type of product and destination. Export Documents not only give details on the product and its destination port, but are also used for the purpose of taxation and quality control inspection certification. Any goods moving out of the country need to be approved by the Customs Authorities, through a mandatory filing of a legal document called Shipping Bill. It is the main document based on which the customs office gives permission for exports. If the export is by sea, it is a shipping bill, and if the goods are sent by air, it’s called an Airway Bill.

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What is Shipping Bill?

A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, including ship's owner, seller, buyer and all other parties involved. It contains all the details on the goods being exported, the name and information of the vessel of export, consignee details, port of loading, the port at which the goods must be offloaded, country of final destination, exporter’s name, address, terms of delivery, terms of payment and other details. The exporter prepares the Shipping Bill for obtaining customs clearance. Once the customs authorities receive the shipping bill, they conduct an assessment and examination procedure, after which, a “Let Export Order” is issued on the shipping bill duly signed and sealed by the customs officials.

Types of Shipping Bill

Most exports in India are eligible for incentives, and other benefits. In cases where the exporter is required to pay duty to the exporting country’s government, he can claim exemption from duty. Categorising the different types of exports makes it easy for customs officials to identify which category they fall under. This is done by filing different types of shipping bills, which are colour coded. The types of shipping bills are explained below:

1. Duty Free Shipping Bill

Exports which are not required to pay any customs duty and not eligible for duty drawback are filed on a duty free shipping bill. It is printed on a simple white paper.

2. Dutiable Shipping Bill

Certain goods attract export duty, which must be paid to the customs department. They may or may not be eligible for duty drawback. It is printed on yellow paper.

3. Drawback Shipping Bill

It is used for goods which are eligible for refund of duty. It is printed on green paper, but, once the drawback claim has been paid to the bank, it is printed on yellow paper.

4. Ex-Bond Shipping Bill

Some goods are imported and awaiting re-export. These goods are stored in bonded warehouses. Such goods are reported on an Ex-Bond Shipping Bill which is printed on Pink Paper.

5. Coastal Shipping Bill

It isn’t exactly an export document. It is filed in the case of shipment that is moved from one port to another, within India.

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Exporters have to file several important documents prior to shipping goods or commodities from one country to another. A shipping bill is one such document. It must be prepared and filed by the exporter to get the customs clearance.

After verification of the shipping bill also called the bill of export, the customs authority permits the export of commodities. It is worth noticing that the bill of export needs to be filed in all formats of the shipment. The bill can be submitted manually or electronically and should be filed according to the norms of the customs department of every country.

An Overview of Shipping Bill and Other Important Export Documents  

Types of shipping bills

1. Duty-free shipping bill

Duty-free shipping bill shall be printed on a simple white paper. The exports that do not qualify for duty drawback and required for customs duty remittance, shall be filed on a duty-free shipping bill.

2. Dutiable shipping bill

Certain commodities attract export duty that must be remitted to the customs department. Dutiable shipping bill might or might not be entitled to duty drawback. It shall be printed on a yellow paper.

3. Drawback shipping bill

Drawback shipping bill must be filed when the commodities to be shipped are eligible for the repayment. It is printed on a green paper.

4. Coastal shipping bill

Coastal shipping bill is not an export document. When the shipment is moved from one port to another within India, the bill must be filed.

5. Shipping bill for shipment Ex-bond

When the goods to be imported are stored at bonded storehouses awaiting re-export, ex-bond shipping bill must be filed. The bill shall be printed on a pink paper.

Steps to be followed to generate the shipping bill

  1. The exporter must register with customs with his or her IES Code Number or Authorized Dealer Code Number or Customs House Agents License Number.
  2. At the service centre, the exporter has to submit the packing list and a copy of the invoice.
  3. After submitting the required details, a checklist is generated and the same shall be handed over to the exporter.
  4. The exporter must verify the data. The same should be intimated to the service centre.
  5. Once the given details are verified, they get processed automatically.
  6. If the total value of the commodities to be exported exceeds Rs 10 Lakhs, the Assistant Commissioner Export will assess the details.
  7. The exporter may check the bill status with the service centre once the processing is done.
  8. The exporter has to carry the required original documents like packing bill and a copy of the invoice at the port.  
  9. ‘Let Export Order’ is issued by the Proper Officer if everything is in place.
  10. After the issuance of Let Export Order, the printout of the shipping bills gets automatically generated.

Documents to be attached with the shipping bill

The documents to be attached with the shipping bill include the packing list, the invoice copy, the letter of credit, the contract acceptance, the QC certificate, the port trust document, the indent and other important documents.

Recent format of shipping bill

Particulars

Forms

Copy Type

Bill for Export of Goods

Form SB III (regulation three)

Original

Bill for Export of Goods

Form SB III (regulation three)

Quadruplicate (export promotion copy)

Shopping Bill for Export of Goods

Form SB (regulation two)

Quadruplicate (export promotion copy)

Shopping Bill for Export of Goods

Form SB (regulation two)

Original

Common components of shipping bill

  1. Shipping bill number is a unique number given by the Indian Customs Electronic Data Interchange System.
  2. GSTIT has been mandatory.
  3. The port of loading and discharge and the place of the receipt of the cargo must be noted.
  4. The final destination of the cargo and the number of lorries or goods trains must be submitted.
  5. The commercial invoice number, the invoice value in rupees, the currency in which the invoice was granted, the overall value of the invoice, the nature of payment must be submitted.
  6. Details related to the cargo, including the gross, net weight and nature of the cargo are important.
  7. The total tax amount and others must be noted.

Other important export documents

Bill of lading

A bill of lading, which also serves as a shipment receipt, is primarily a legal document granted by a carrier to a shipper. This document describes the quantity, type and destination of the commodities to be exported. An authorized representative from the receiver, carrier and shipper has to sign the document, which should go with the shipped commodities. It has two types: 1) negotiable bill of lading and 2) non-negotiable bill of lading. In case of a negotiable bill of lading, clear instructions are provided to deliver the commodities to anybody who has the original copy of the bill. In case of a non-negotiable bill, the consignee to whom the freights shall be delivered is specified.

Certificate of manufacturer

A certificate of manufacture is an authorized document, which certifies that the manufacturer has produced the ordered commodities and such goods are being held for the buyer’s account and at his risk. This document is used by the suppliers of the finished goods to show the changes made to the process or formula. The revision date has to match the date mentioned on the master file. The certificate of manufacturer should contain the following details:

  1. The name of the consignee to whom the drawback products or articles are delivered to
  2. The quality, quantity and kind of the duty-paid commodities
  3. The value it had at the factory gate
  4. The market price of the waste if applicable
  5. The date on which the factory received the products
  6. The manufacturing date of the commodities or articles.

Documents for Export under GST

According to Section 16 of the Goods and Services Act, 2017,“Zero Rated Supply” means any of the following:

  • Export of goods or services
  • Supply of goods or services to Special Economic Zone developer or Special Economic Zone unit.

Exports of goods or services from India attracts nil GST. However, if GST is paid at any point of time against exports, a refund can be claimed. A registered person making Zero Rated Supply can claim refund of unutilized input tax credit without paying integrated tax, or make payment of integrated tax and claim refund of the tax paid. Persons who export without paying integrated Tax can do so upon producing a Letter of Undertaking (LUT) or Bond.

Bonds are financial instruments that signify a debt owed by the issuer. If payment of GST is mandatory at any stage of export, the exporter can either pay the tax and claim a refund at a later time, or take a bond against the amount of tax payable, then cancel that document by providing documents as proof of export.

See Also: What is E-way bill?

A Letter of Undertaking (LUT) is a guarantee furnished by the exporter that he is engaged in export of goods and services and that he has satisfied all the conditions for export, to be eligible for non-payment of GST. It is like permission taken from the government of India, to avoid paying GST.

Some of the other documents required for Export are:

  • Customs Entry Document prepared by exporter or his broker
  • Customs Bond for claiming exemption from export tax
  • Letter of Undertaking as a guarantee for claiming export benefits
  • Customs Declaration by the exporter detailing the goods to be exported
  • Export License obtained from the country of export
  • Purchase Order / Letter of Credit between exporter and buyer of goods
  • Commercial Invoice cum Packing List issued by seller of goods to buyers
  • Certificate of Origin issued by competent authority in the country of origin of goods
  • Insurance Certificate obtained from a government authorized insurer
  • Certificates of Inspection by an internationally recognized inspection agency
  • Certificate of Free Sale for goods that are not commercially sold.
  • Weight Certificate attached by the exporter is used at various stages like flight or vessel satiability and international road safety rules.
  • Consular Invoice, if the importing country requires an embassy attested documents.

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