Professional Documents
Culture Documents
Mumbai
(2008-2010)
AT
Submitted By
Divya Dharga
SPIT200810
Institute Of Management Development & Research
CONTENTS
1) ACKNOWLEDGEMENT- 3
2) CERTIFICATE - 4
3) INTERNSHIP OBJECTIVE - 5
4) EXECUTIVE SUMMARY - 6
8) GLOSSARY 41
9) PORT VISIT 46
13) CONCLUSION - 52
14) BIBLIOGRAPHY - 53
ACKNOWLEDGEMENT
I sincerely thank to all the people who helped and encouraged me during my internship. At the outset we
express our deep sense of gratitude to Mr. Sunder. Lalwani, the Chairman, Mr. Haresh Lalwani, the Joint
Managing Director, & Mr. Bharat. Lalwani, the Joint Managing Director, Sun Logistics Pvt. Ltd, Mumbai and
the project guide Mr.Kishore Bhatia and Mr. Mane, Mr. Ratnakar, Mr. Vijay, Mr. Dinkar and Mr. Kutty for
their guidance and training in various activities of the business.
I express my gratitude to all the working members of Dalal Bros Freight Forwarders Pvt. Ltd and Sundersons
Logistics Pvt. Ltd, Mumbai, who extended their ungrudging co-operation in giving valuable suggestions for the
enrichment of this project. Without their co-operation, this project and my learning would have not been
possible.
The internship would not have come my way if the Institute had not groomed us in a specific way. I thank our
Director, Mr Ajay Nagre & Mrs Vipra Tiwari for engraving on our minds the 'Ground Realities' and providing
me with an opening to the practical experience in the industry.
Last but not the least; I thank my parents and God for being with me, throughout.
Certificate
Internship Objective
My Objectives behind the summer internship programme was to learn the auxiliary operations supporting to
international trade by working in service organizations such as Shipping Companies, Custom House Agent and
Freight Forwarder etc. The thinking behind the summer internship is that after working in this organization I
would be well aware and be able to understand and analyze the role played by these supporting organizations in
the International trade transactions and growth of international trade.
To get acquainted with the routine and day-to-day work procedures involved in an Import and Export of the
organization. (Sun Logistics Pvt. Ltd. Mumbai).To find out problems that arises in the operations and to arrive
at independent Conclusions.To experience the organizational realities at the work.
To experience the work culture at the grass root level realities of an organization.To learn the intricacies
involved in Import Export and its processes.To elaborate on the scope of the subjects thought theoretically and
finding its application in the article sense of business.
In any import export transaction; Clearing and forwarding agents play a very crucial role. They make the
complex procedural activities look very simple.
Even though scope of the project was limited to the role of the clearing and forwarding agents, some coverage is
given to the shipping activities of the organization.
EXECUTIVE SUMMARY
The summer internship was the first experience about the understanding of international trade .The PGDIT
course in our Institute is designed in such a way that students would get the necessary theoretical knowledge
regarding the International Trade and also get a practical exposure towards the functioning of a company, which
is involved in International Trade.
To attain the above course objective, we are supposed to undergo a training sessions in the Industry which is
twice during our course. Summer Internships is supposed to be done in the Service sector of the International
Trade industry and Winter Internships with a trader / manufacturing company.
I got an opportunity to work with Sundersons Logistics Pvt. Ltd that is in a Logistics business for more than
28 years now. My objective of the Summer Internship was to know the ground realities of Import & Export
procedures. Learning involved the basic principles of documentation, its implementation, work culture, the
dynamic business operations and the internal processes in this field.
Thus, during internship, while working in different departments I was exposed to day-to-day activities of a
business, which includes appropriate communication & follow up with customers, shipping lines CHAs and
CFS.
In this Company I underwent many departments to learn the complete procedure, and documentation involved
in the process of import and export. As this Company practices and undertakes new disciplines and challenges
in their business, they have obtained a respectable position in the Domestic as well as the International market.
Now after completing my Internship, I have got a considerable knowledge about the industry and its Standards.
COMPANY PROFILE
Now I take the responsibility and privilege to introduce Sun Logistics as a young and growing group, focused
into providing complete solutions and setting the highest standards in service related to international trade. They
have their branches at Mumbai, Delhi, Chennai, Kolkata, Ahmadabad, Kandla and Mundra. Their offices at
these centers help them achieve the objective of providing end-to-end solutions and compete in the International
Industry.
INTRODUCTION:
Sun Logistics is the Brand created by Sundersons Group Of Companies (as a corporate entity) to deal with
Foreign Principals Agency Responsibilities, Joint Ventures and Foreign Entity Partnership Functions.
In due course of time and as a steady run up into its career graph, it diversified into related fields such as Freight
Consulting, Fleet Owning, and Customs Clearing & Forwarding. In each of its field, the Company is headed by
stalwarts who have had years of enriched experience and have specialized in delivering a product optimal in its
totality and qualitative in its approach, and who make continuous and concentrated efforts to continue doing so
with unfailing frequency. This has made the company more responsive and synergies with the group companies.
The strength was to deliver the product, which was flexible, price attractive and exhaustive at the same time.
Lalwani Plantations
Freight Management
Transportation
Customs Clearance
Flexi-Tank Supply
Logistics
Contractual Business
Warehousing
COMPANYS VISION:
THEIR STRENGHTS
1. FLEXI-TANKS
At this point of time, I need to mention their current strength in the industry. They believe in making that extra
effort to carry your liquid cargo, at a very competitive price. As the demand of exports in our industry is
growing, this is the correct approach, which Sundersons Logistics has undertaken for becoming a world-class
player in the Flexi-Tank market. They assure you of their commitment in providing you competitive rates and a
service par excellence. One-piece construction of these bags ensures internal hygiene of highest order. Clean
tanks are manufactured under controlled conditions in advance of ISO 9001 standards. They are also deemed
pioneers in introducing Multi use tanks in India, which can be used to carry the same cargo multiple times.
Sun Logistics represent M&S Tank Container Shipping U.K and Per Plus Logistics B.V. in India. Their tank
containers give customers more than safety and efficiency. They are designed to minimise the possibility of
damage or leakage, giving added security. All tanks are manufactured and maintained to the most stringent
international standards. These standards are constantly monitored and amended to ensure the protection of
people, your product and the environment. With capacities ranging from 23,000 liters to 26,000 liters, they have
the right tanks for your product, whether corrosive, flammable, toxic or an oxidizing substance.
IMO 1 tanks - For the carriage of highly flammable, toxic and corrosive liquids.
IMO 2 tanks - For medium hazard products such as flammable liquids, herbicides, resins and insecticides.
At Sun Logistics, they have world-class techniques to deliver to the customer end-to-end solutions at the right
time and at the right place. They also monitor their progress in terms of their service standards set for
themselves and hence have reached the peak through constant in-house monitoring and checks. This has led to
their growth, thereby earning the support of their esteemed clients and even large freight forwarders. They also
insist that their principals/counterparts worldwide follow the same pattern and a constant follow up on the
services has ensured smooth sailing from the origin to destination.
Sun Logistics not only track their growth but also has a pathway to the future and adapt the technologies
accordingly. Hence I can say that the company is focused in providing services with quality according to the
situations and conditions demanded by the industry at a certain point of time.
Freight Forwarder
A freight forwarder is an agent for the exporter who moves cargo to overseas destination on certain fees. Today
freight forwarder plays a very important role in international trade. They take a great deal of load off from the
shoulders of an importer or an exporter. They are one point of contact for an exporter or an importer to get all
their formalities regarding export and import done. On behalf of an exporter freight forwarder deals with CHA,
shipping lines and transporters etc and henceforth letting exporter concentrate on his core activities. Few of the
activities, which a freight forwarder undertakes, are as follows.
An understanding of the working of a freight forwarder can be understood with the following flowhcart.
E1 I1
First the forwarder receives the cargoes from the exporter. For this he may arrange for transportation between
exporter and himself. If it is a full container load then the forwarder can book a container for him with a
shipping line but in case if it is less than container load (LCL) cargo then the forwarder would club the cargoes
of different exporters for the same destination. This is called Consolidation. It helps in better rate negotiation
with the shipping lines and hence saves cost for exporters. Once the cargos are ready after customs clearing,
they sent to their destination. At the other end the forwarder takes the goods once they are custom cleared. They
segregate the cargoes as per consignee and offer various services like warehousing and transportation before the
cargoes can be safely handed over to the consignees.
Agency Fee- Agency fee includes Processing and passing shipping bill, Obtaining carting order from the
shipping company, Arrangement of customs examination, Preparing bill of lading Warehousing charges
Transportation- Transportation charges for movement of consignment from factory to CFS. THC- Terminal
Handling Charges which are payable to shipping company. Security- if the cargo is hazardous, forwarder needs
to post security till the cargo is stuffed in the container. Processing of shipping bill under DEEC / DEPB.Labour
/Forklift/ Crane for loading and unloading. Insurance Service Charge as per the regulations.
CHA is a person or company who is licensed to act as agent for transaction of any business relating to the entry
or departure of conveyance or the import or export of goods at any customs station.
Preparing the customs entry form and assuring that all the necessary documents are in order for proper
processing through customs channels.
Arranging for the goods to be transferred under bond from the port of entry to an interior destination for
customs clearance.
Necessary requesting extension of the general order time from the collector of customs.
Providing the surety bond required by the customs Authority, which guarantees full payment of all
duties.
Preparing the warehousing entry bond and arranging for goods to be transferred to the bonded
warehouse.
Arranging for the withdrawal of goods from the bonded warehouse in part or completely. Payment of
duties will be made accordingly to the quantity of goods withdrawn.
The imports into India and Export out of India take place only through ports and airports declared under Section
7 of the Custom Act. The international trade has therefore necessarily developed and concentrated at such ports
and airports like Mumbai, Chennai, Calcutta, Delhi, Cochin, Kandla, Vishakhapattanam, and Tuticorin. Trade,
no doubt is also through minor ports all among the coast. The importers who consume the goods imported and
exporters who produce the goods for export however are spread all over the country. The distance between the
point of import/export and the exporters/importers quite happens to be long and the time-involved clearance
deters the trade for handling the clearance themselves. They have necessarily to depend on agents positioning
themselves at such ports and have specialized such jobs. In fact such institutions have been in existence almost
from the beginning of the trade.
Unlike the work related to Central Excise and Income Tax, the customs facilities can not be attended to
leisurely, as clearance is allowed only on completion of formalities and payment of duty, where due. To meet
this situation alone this provision for licensing Custom House Agents to represent importer/exporter for
clearance work has been made in the Custom Act (under sec. 146)
A Custom House Agent has to be not only knowledgeable in Customs Laws, procedure and documentation, but
also alert all the time closely following the instructions or changes brought about by issue of Public Notices
from time to time. He is in a peculiar position in that though he is employed by importers /exporters, he is
licensed by the Customs dept. The Customs House Agent is answerable both to the Customs dept. for doing the
clearance correctly and expeditiously. In case he defaults, the clearance may be delayed and demurrage etc.
incurred. His knowledge and experience particularly in the areas of classification and valuation of goods and
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Summer Internship Report Sun Logistic Pvt. Ltd. Mumbai
more so in procedural formalities to be compiled with, in Custom big role to play in the clearance of goods
through customs.
Consolidation
Custom Clearance
International Transport
Commercial invoice
Packing list
Shipping bill
GR form
ARE form
N Form
Certificate of origin.
COMMERCIAL INVOICE: The commercial invoice is a record or evidence of transaction between the
exporter and the importer. It is similar to an ordinary sales invoice, except some entries specific to the export-
import trade are added. An invoice is a document which contains the detailed description of the goods
consigned, order of acceptance or contract no., name of the shipping company, Shipping Bill No., country of
origin, marks and number, number of packages, special marks (if any), quantity shipped, selling price, terms of
payment, terms of delivery amount of freight and insurance (if applicable) etc. It is a good evidence of the
contract of sale and purchase. The invoice should be strictly according to the contract of sale and should be on
the paper of seller and must be signed by him or by the person acting on his behalf.
PACKING LIST: Packing list is a document which gives understanding about the consignment, means what
are the goods which are coming. This is a detailed list of your goods. Packing List gives the information like the
invoice number, number of pieces, number of pieces per package, number of packages, dimensions of packages,
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Summer Internship Report Sun Logistic Pvt. Ltd. Mumbai
general description of cargo, net weight, gross weight, etc. It provides the specific details of the goods in the
consignment.
SHIPPING BILL: Shipping Bill is an important document required by the customs authorities for allowing
shipment. It is prepared by the exporter / CHA and contains several details.
Green - shipping bill for export of goods under claim of duty drawback
Pink -shipping bill for export of duty free ex-bond goods/for RE-Export(if goods in the bond)
GR FORM : GR form is the document to mainly monitor the inflow of the foreign exchange into the country
by RBI. Immense care is required to be taken by the exporter while filling the form because the contents are
binding on him. The GR form should be prepared in duplicate.
ARE FORM: It is an application for removal of excisable goods for exports from India by any mode i.e. sea,
air, post and land. It is required in cases where sealing of goods and their examination takes place at the place of
dispatch and also for dispatch of goods without examination. These forms are required to be printed in different
colours to facilitate disposal of goods for export in bond or under rebate of duty.
N FORM: An export consignment can be exempted from Octroi duty provided that N-Form (in duplicate) is
submitted along with photocopy of E.P copy of the shipping bill with the concerned Octroi check post. This
procedure pre-supposes that shipping bill is got processed well in advance of shipment data or before moving
the goods to the Mumbai.
BILL OF LADING: Bill of Lading is a document issued by the shipping company/ its agent acknowledging
the receipt of goods mentioned in the bill for the shipment on board the vessel and undertaking to deliver the
goods in the like order and condition as received to the consignee or his order provided the freight and other
charges specified in the bill of Lading have been duly paid.
Letter Of Credit: After a contract is concluded between buyer and seller, buyer's bank supplies a letter of credit
to seller. Seller consigns the goods to a carrier in exchange for a bill of lading. Seller provides bill of lading to
bank in exchange for payment. Seller's bank exchanges bill of lading for payment from buyer's bank. Buyer's
bank exchanges bill of lading for payment from buyer. Buyer provides bill of lading to carrier and takes
delivery of goods.
A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in
trade finance, which usually provides an irrevocable payment undertaking.
The LC can also be the source of payment for a transaction, meaning that redeeming the letter of credit will pay
an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals
between a supplier in one country and a customer in another. They are also used in the land development
process to ensure that approved public facilities (streets, sidewalks, stormwater ponds, etc.) will be built. The
parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the
applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are
irrevocable, i.e., cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank
and the confirming bank, if any. Typically, the documents a beneficiary has to present in order to receive
payment include a commercial invoice, bill of lading, and documents proving the shipment was insured against loss
or damage in transit. However, the list and form of documents is open to imagination and negotiation and might
contain requirements to present documents issued by a neutral third party evidencing the quality of the goods
shipped, or their place of origin.
Certificate Of Origin: The certificate of origin is a document certifying the country in which the product was
manufactured, and in certain cases may include such information as the local material and labor contents of the
product.
Some importing countries require a certificate of origin to establish whether or not a preferential duty rate is
applicable. A popular example of the certificate of origin is the Form A, which is often called the GSP Form A.
The certificate of origin (C/O)is an alternative to the declaration or the certification and/or legalization of the
commercial invoice. The C/O is based on the rules of the country of origin.
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The country of origin is the country where the goods are grown, produced or manufactured. The manufactured
goods must have been substantially transformed in the exporting country as the country of origin, to their
present form ready for export. Certain operations such as packaging, splitting and sorting may not be considered
as sufficient operations to confer origin.
The certificate of origin includes the Form A, Chamber of Commerce Certificate of Origin, Exporter's
Certificate of Origin, and Free Trade Market Certificate of Origin. The trade agreement, import practice, and
letter of credit (L/C) stipulation determine the type of C/O needed.
The importer or the importing country may require a specific certificate of origin (C/O) form issued by a
Chamber of Commerce in the exporting country. Some countries may further require the consular legalization
of the C/O after the Chamber of Commerce certification. The certification and legalization normally require
payment of a fee.
Unless the letter of credit (L/C) stipulates a specific certificate of origin (C/O) form and/or the issuer and/or the
wording (data content), the exporter may issue his/her own C/O using the company letterhead. The C/O
contents may include the same data as in the commercial invoice and packing list, adding a declaration that the
goods in question are manufactured in the exporting country, and that the amount shown on invoice is the true
and correct value.
Depending on the L/C stipulation, the certificate of origin issued by the exporter may be self-certified and/or
require certification by a Chamber of Commerce or the government foreign trade office. The certification
normally requires payment of a fee, unless self-certified.
Free Trade Market Certificates of Origin
EC Certificate of Origin
The European Community (EC) Certificate of Origin, as its name implies, is used in the European Community.
It is issued by the Chamber of Commerce of the exporting country, usually with payment of a fee.
EC countries consist of Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain, and United Kingdom.
Movement Certificates
Different Movement Certificates are being used in the European Union (EU) ---EC (European Community) and
EFTA (European Free Trade Association) countries. The certificates require endorsement by the customs of the
exporting country.EFTA countries consist of Austria, Finland, Iceland, Norway, Sweden, Switzerland, and
Liechtenstein.
Mate Receipt
Mate Receipt is a document that is issued by the Chief of the vessel after the cargo is loaded onto the ship. This
is later presented in the office of Shipping agent to be exchanged with the Bill of Lading. This document is
transferable in nature and is formed in Standardized Aligned Format.
Invoice, Packing list, Checklist for Shipping Bill, Shippers Letter of Instruction, SDF
form, ARE1 form if applicable, Annexure C,C1,C2 Annexure A.
Group is decided
Checklist is released
Thegives
Preventive Officer reportregistration Superintendents
appears onafter menu cartoon no.
checking the documents,
etc.
Preventive Officer cross check the details and Superintendent comments on that.
EXAMINATION
LEO is generated
Report is submitted by Examiner after Examination of the goods
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Final print of Shipping Bill is released at CMC
Summer Internship Report Sun Logistic Pvt. Ltd. Mumbai
Exporters copy of S/B and Invoice are handed over to Shipping Agent for
Stuffing
After stuffing CWC generate CLP and endorce and issue customs seal for the container
Gate Pass Order is obtained to take the cargo in and endorced with Gate PO
Export Promotion copy of S/B is generated and ARE1, EP Copy and Mate Receipt are
endorsed by Customs.
Bill Of Lading is released from the Shipping Company by producing the Mates Receipt
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The restrictions / controls / prohibitions or the permissibilitys conditional or unconditional with reference to
goods to be exported out of India is usually governed by the current Foreign Trade Policy.
Now if a trader wants to export his goods to some destination then the procedures followed
are broadly of two types, these are 1. Dock Stuff and 2. Factory Stuff.
Prior to the approval and the removal or dispatch of the goods to the shipment port, the Custom House Agent
prepares the complete documents and submit it by manually or through the Electronic Data Interface system.
The documents submitted in above mentioned two processes are different, like in EDI filling process Checklist
of Shipping bill is generated immediately after filling the shipping bill and it is submitted along with the other
documents but in case of manual process no check list of shipping bill is generated. The other documents which
are submitted to the customs are Invoice, Packing list, GR/SDF form, ARE1 form, Annexure as required or
specified. Then documents are crossed checked by customs and Noting number is generated by the customs
which ensures that the documents submitted are OK and plea for customs clearance is accepted. Then CHA
obtains permission for carting the cargo physically into the customs area after paying the CFS charges this is
called Carting Order. After this, cargo is physically moved into the specified shade in the CFS for farther
process by CHA depending on ships availability using the Dock Challan and Allow Shipment Order, which is
issued by the customs. At the time of generation of noting no. after filling the shipping bill Group is decided
which specifies which group of examiner and other responsible person will conduct the examination and other
procedures. Details which are fed by the respective authority on behalf of the customs (in CWC this is done by
CMC) appears on the menu of Customs Assistant Commissioners computer account and Assistant
Commissioner cross checks the details and final check list is released. Registration in the Shed Customs is the
next procedure for which the CHA approaches to the shed customs. The Preventive Officer gives registration
after checking documents, cartoon number etc. Then the physical Examination is done by Shed superintendent
and Examiner. After that examiner feeds his report in the electronic system of the customs and the report
appears on the menu of the Superintendent and Preventive officer. Preventive Officer then checks the report and
customs Superintendent comments on that, based on which Let Export Order (LEO) is generated. LEO ensures
that the cargo is now cleared by the customs for export. Final print of Shipping bill is now released at the
customs office (CMC). Exporters copy of S/B and Invoice are handed over to Shipping Agent for Stuffing the
cargo into containers. Shipping Agent receives Requisition letter from customs and that is endorsed by
Superintendent. Then the Stuffing is done in the presence of cutoms authorities. After stuffing the shed customs
prepare the Container Load Plan and endorse the documents and issues the customs seal for the container. Then
Customs authority and Shipping agent puts their seals in the container. The container is now moved to the port.
The gate pass order is obtained by the CHA and the container is taken into the port area and the documents are
endorsed with the gate PO. The container is then loaded in the ship and Mates receipt is obtained from the
Captain of the vassel. Export Genera Manifest (EGM) is filled by the shipping company within 24 hours after
the sailing of the ship. Export Promotion copy of the shipping bill is then generated and endorced by the
customs. ARE1,EP copy and Mates receipt are endorsed by customs. The mates receipt is then produced to the
shipping company office to obtain the Bill of Lading.
In this process Examination, Stuffing and Container Sealing is done in the factory premises of the exporter
under the supervision of the Central Excise Department authorities with the due permission of Customs
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Summer Internship Report Sun Logistic Pvt. Ltd. Mumbai
department. For factory stuffing the exporter approaches customs to give the permission. Customs then
approaches Central Excise department to conduct the factory stuffing process. Container is called at the factory
from the shipping company. The Examination, Stuffing and Sealing is governed by Central Excise at the factory
and ARE1, Examination report, Container and Seal details are printed on the back side of the Invoice and
endorsed by the Assistant Commissioner and Examiner of Central Excise. The other documents are cleared in
the customs after that. The Container is directly moved to the port and taken into the port after following the
procedure for that as mentioned above. After loading and sailing of the vassal all the remaining procedure are
conducted in the above mentioned manner.
IGM is filled
CAN is issued
D.O. and BOE has to be submitted to warehouse manager to get the Forwarding Slip-which
shows the container can be opened for customs
Appraiser passes the documents ( A.C. finalize the documents if old ,used and second
hand machine has imported)
CHA receives documents from Importers. Then CHA scrutinizes the documents and classifies items as per
Customs tariff, Central Excise Tariff & checks ITC(HS)code (BTN). Contact Shipping Lines for ETA of the
vessel and IGM; Item Number, destuffing point, & their charges. After receipt of Vessel details, IGM, Item
number from Shipping Agent, relevant Annexure is prepared. Annexure is submitted along with shipment
documents such as the Bill of Lading, Invoice, Packing List, Certificate of Origin, L.C. copy if any / Order,
Order confirmation Catalogue/Literature and other relevant papers, to CMC (Computer Maintenance Centre), at
port/dock on payment of their usual charges. CMC feeds particulars of Annexure in their System and issue
checklist to CHA who verifies the particulars of checklist with shipping documents, and if all the particulars are
in order, countersigns the checklist. In case of any correction resubmit the same to CMC and obtain corrected
checklist.
CHA resubmits the Annexure to CMC and obtains Bill of Entry Number and approaches concerned Customs
Group Appraising Officer for Assessment of Bill of Entry. If all the documents are in order, A/O passes the Bill
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of Entry after verification of classification, declared value, and ITC angles etc. Then the Group Auditor is
approached, who audits Bill of Entry after verification of Classification, declared value etc.Submits Bill of
Entry to Deputy Commissioner of Appraising Group for release. After verification of all the particulars, D/C
releases B/E.
The next step followed by CHA is to approach CMC for print out of B/Entry and Customs duty payment
Challan i.e. TR-6.CHA calls Demand Draft from Importers towards Customs duty. After receiving DD, CHA
makes Duty payments to Customs nominated Bank.
CHA obtains Final Delivery order from Shipping Agents on payment of their charges as well as Stamp duty and
Administration charges of Government of Maharashtra. (Final D/O is issued by the Shipping Line only after
payment of Customs duty)
After that CHA obtains forwarding permission from Custodians (CFS authorities) (i.e. allow for opening cargo
for customs inspection), and submits Bill of Entry to Examining officer of Customs for registration who issues
package numbers to be opened for inspection.
Goods are then inspected by the Examining officer by verifying/tallying goods with packing list, and feed his
examination report in their computer system and issues Customs out of charge/LEO to CHA. CHA obtains Final
print of Bill of Entry and obtain final signature of Customs Examining officer. Then CHA makes assessment
and payment of port/CFS ground rent, handling charges to Custodians. Obtains surveyors tally report from
Custodians/Shipping Lines Surveyor and then issue Gate pass and CHA arranges Vehicles and load the
Cargo/Container.
Gate formalities, such as verification of Cargo by Preventive officer of Customs and CFS Gate Inspector, are
completed and cargo is taken out of CFS for onward dispatch to Client.
Duty Calculation : Calculation of import duty is a crucial and important aspect of import procedure. The Duty
calculation Procedure (General) in INR is as under
Suppose,
Assessable Value = CIF Value + 1% Landing Charge, i.e. = 100.00 + 1.00 = 101.00 (A)
Basic Custom Duty (BCD) = 10% on Assessable Value, i.e. = 10.10 (B)
Customs Secondary and Higher Education Cess = 1% on [BCD + CVD + ES +SHE], i.e. = 0.19 (G)
CUSTOMS EXAMINATION
FLIGHT DETAILS
COLLECTION OF DUES
TRANSFER OF CARGO
First of all the most important step is the conformation from the customer regarding all terms and conditions.
All the shipments would only be accepted if they were in compliance with applicable rules and regulations and
notifications. Ones all the documents are received and also the cargo is handed over by the customer to the
docket is opened and also necessary reference numbers are given for future reference. The documents there
should be complete set of documents and if there is any discrepancy it should be informed to the client at the
earliest.
The weight and dimension of the cargo is measured and entered in the cargo register. The executive chooses
which airline to send the cargo in, depending upon the urgency and the rate as per shippers requirement. He
then confirms with the shipper if shipper agrees to the details or not and completes the cargo booking procedure
accordingly. The Airway Bill is prepared and faxed to the shipper. The docket is then opened to enter the
following details in the docket register:
Destination/Airport
Value of goods
The Airway Bill is validated and signed from the authorized official. The Airway Bill number is then given to
the warehouse staff for labeling the cargo. One set of copies of AWB with all the relevant information required
is sent to the shipper. And one set of AWB (the destination set) goes with the attaching set of documents and
passed shipping bill sent with the cargo. The docket is given for billing, AWB faxed to shipper.
After the airway bill cutting and the labeling of the cargo in the warehouse the cargo is forwarded to the cargo
complex for clearance. After doing all the formalities relating to the customs and the examination of the cargo in
the customs the cargo is handled to the airlines for dispatch and the Prevalent is sent to the agent of the place
where the Cargo is sent. The documents are delivered to the shipper along with the billing.
DOCUMENTS IN IMPORT
Invoice
Packing List
Certificate Of Origin
Catalogue
Bill Of Lading
Insurance Certificate
Bill Of Entry
Delivery Order
Surveyors Report
Bill Of Entry: The Bill of Entry is the document on the strength of which clearance of imported goods can be
done. The form of the Bill of Entry has been standardized by the Central Board of Excise and Customs. As soon
as the importer receives the advice of arrival of the vessel the importers are required to present a document
known as Bill of Entry, either for Home Consumption or for warehousing the goods. The Bill of Entry is noted
in the Import Department.
Goods Entered for Home Consumption are cleared on White Bill of Entry. (Form No. 22)
Goods entered for warehousing are removed 'into bond on Yellow colour In-Bond Bill of Entry. (Form
No. 23)
Goods cleared ex-bond for Home Consumption on payment of duty on Green colour EX-Bond Bill of
Entry.( Form No. 24)
A. Bill of Entry for home consumption: It 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.
B. Bill of Entry for Warehouses: It is to be submitted when the imported goods are not required immediately
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. This enables the importer to defer payment of Customs Duty until the
goods are actually required by him. It is yellow coloured. It is also known as "Bond Bill of Entry" since bond is
executed for transfer of goods in a warehouse without payment of duty.
C. Bill of Entry for Ex-Bond Clearance: It 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. It is green coloured. The rate of duty payable is that rate which is
applicable on the date of removal of goods from the warehouse. If the rate of duty has changed after goods are
cleared from custom port, duty assessed in the yellow Bill of Entry and paid on green Bill of Entry will not be
the same.
Once the Bill of Entry is noted in the customs department, the same should be presented to appraising counters
along with the following necessary documents:
Exporters invoice
Packing list
Office copy
This number is allotted to each and every shipment coming into India. This will help in identification of
shipment. This number is derived from Airlines. Without IGM no. the bill of entry cannot be formed. It is given
by the Custom Authorities.
The CHA takes it from the Shipping Company at the time of clearing the cargo from the custom warehouse. The
D/O carries the name of the consignee, import Rotation number, IGM number, flight number, MAWB number,
HAWB number, description of packages & nature of goods. Its a tool through which the payments are
recovered because D/O allows the consignee to file for the Bill of Entry.
The Examination Delivery order is taken from the shipping company in case the custom Authorities ask for the
examination of goods on the destination port. It is given by the shipping company on temporary basis for the
smooth examination process in the Custom Clearance.
The Final Delivery order is the order given by the shipping company to clear the goods from the Custom
Authorities. At the time of taking a Delivery order the Bill of Entry has to be submitted to the shipping
company.
goods
AWB (Master/House)
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Invoice
Packing List
assessment
Physical examination of
cargo
MAWB
HAWB
Forward Letter
Removal of Cargo
Once the Document has received by the CHA from the Importer, Cha make a check list based on that.
All the documents are properly checked so as to insure that all documents required are complete and if any
discrepancy, should be informed to the client at the earliest. The client should be informed about his current
status of the shipment. With the arrival of the flight, Master Air Way Bills (MAWB) is put in customs. After that
issuing of Cargo Arrival Notice (CAN) takes place against each House Air Way Bill (HAWB) to the parties.
On the basis of the documents submitted by the consignee, the invoice is converted in Indian Rupees at customs
declared rates.
After this, Bill of Entry is prepared showing details of shipment to the customs for registration (noting) the Bill
of Entry number which is also called the Token number, after verifying the IGM number (Import General
Manifest No.) with the Master Air Way Bill Number and console manifest.
After verification, the Bill of Entry is submitted to the Terminal of Groups (TOG) for computer entry. Then the
Bill of Entry is submitted to Custom Appraiser as per classification.
Custom appraiser forwards Bill of Entry to Audit Officer duly verified, the Audit Officer forwards the same to
the Assistant Commissioner of Audit after his endorsement. Assistant Commissioner of Audit in turn forwards it
to the Terminal of Audit where the final audit takes place.
In the meanwhile the concerned agent obtains Rotation Number from the console agent within 48 hours of
arrival of goods). Then payment of duty is made by way of draft in favors of SBI Account Asst. Commissioner
of Customs, Mumbai.
After this the authorized Ground Handling Authority are approached for examination and the cargo is located
and is given to the Ground Handling authority for physical examination in the appropriate shed.
After physical examination in relation to the documents submitted, the shed appraiser gives the consignment out
of custom charge. Then payment of warehouse and handling charges to AAI is done and the consignment is
handed over to the agent.The Octroi formality is completed or the N form whichever is applicable as per the
consignment. The cargo is cleared and out of charge is taken from the customs and the consignment is delivered
to the customer.The document that is the Bill of Entry is given to the customer and the required Bill is presented
to the customer.
Re Export is one of the new concept which has given the international business a new dimension and has
explored the most potential aspect of lowest risk with high gain business process. This is a process adopted by
the merchant exporter which involves both import and export simultaneously. Imported goods are exported
without any value addition in this process.
There are two process of re export, these are Normal re export and change of ownership re export.
In normal re export goods are imported by a company in one country from another and exported to the same
company situated in a third country without any value addition. In this process the imported cargo is cleared in
CFS following the normal import clearance process. The only difference in the process is that importer has to
appeal the customs that these goods are for re export and not for selling in the domestic market so that the
import duty payable for clearance can be exempted. One Double Duty Bond is to be filled accompanied by a
Bank Guarantee which ensures that the good imported once will be exported, and if not, then the importing
company will be liable to pay a duty of double amount by the clause declared in the bond for which importers
bank is taking the guarantee. Those goods are not taken out of the CFS and are stuffed in another container and
get custom cleared for export and physically exported to the desired country. The proof of export is then
submitted to the customs for the return of import duty paid for the same goods when those are imported and
Double Duty Bond is cancelled by the customs.
Another kind of re export process is that in which importer exports the goods to a different company which is
called Change of Ownership Re export. The process here is same as the previous one except the ownership of
the goods is changed and given to the company which is finally importing that before re export. Here in this
process a bond for change of ownership is prepared which transfer the ownership and right of the goods to the
final importer. In this process the imported goods are kept in the customs bonded area during which the change
of ownership is done. The importer has to file another bond for keeping the goods in the bonded area declaring
the purpose and has to pay the rent of the bonded area.
The export documents clearance for re export is done manually not by EDI. Shipping bill made for this is Pink
in colour. The Shipping bill is issued in six copies four of them are kept by officer in charge of the shed, Cashier
of the CFS, Shed Surveyor and Bond Surveyor.
GLOSSARY
1. CIF
Invoice value 100
Freight 20
Insurance 10
-----------
Total 70
*exchange rate
--------------------------
FOB value
+ 10% fob value
-----------------------
PMV Value
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Consigner name
Consignee
Transport detail
Item detail
Quantity
Container detail
3. In import
Bank
TR6 - Importer
Customer
Examine order
Original custom copy
In first check no need to fill TR6.Because in first check you have to fill duties after examination.
4. After out of charge 6 copy of Bill of Entry
Direct payment
Advance Payment
6. Nature of Cargo
C = Containerized
B= DEPB (blue)
C= EPCG (White)
D= DEEC (White)
R= RE-Export (If it is in bond than Pink otherwise it will same as free shipping bill that is white)
I=EPCG Drawback
X= Ex-bond (pink)
A= DFRC (White)
Y= Dutiable(yellow)
Covering Letter.
CVD = 8% (AC+BCD)
SHE = 1%(CVD)
ACVD = 4% (AC + BCD + CVD + EDU CESS + SHE + Custom Edu Cess + Custom SHE +
Accessible Value)
We have to take permission from custom for factory stuffing under the supervision of central
excise. For this following documents are required-
Copy of RCM
PORT VISIT
I visited port during 8th week of my summer internship. I visited Dronagiri, GDL, Continental warehousing
Corporation, Punjab CFS and observed all the processes going on there. I visited port 4times and found that life
is quite hectic and stressful over there. Processes are very monotonous and time consuming but very important.
Overall experience was good and excellent learning process. It helped me understanding how actually the
processes takes place and what are the complexities and problems that one can face while performing the role of
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CHA and freight forwarder. All the necessary documents should be properly prepared for working efficiently
and get your work done on time. And there must be effective communication between the office staff and
persons who are working actually at the port. I saw the procedure of stuffing, examination, carting, loading,
unloading, how shipping company put seal on container and submission of document to custom department.
AIM: This phase of the project was aimed to find out the reasons of the delay in the cargo clearance. It was
done by studying all the consignments in which there was a delay and then to find out the reasons and then give
suggestions as to how the delay of cargo clearance can be prevented.
The clearance of cargo is one of the major aim and objective of the Custom Clearance Department. For a
Service Organization like Allied Aviation or FedEx it is a must that the consignment should be delivered to the
customer on time without delay.
Unavailability Of Manpower.
No IT Training To Staff
Flow of information in one direction can be helpful to hold one person responsible for one job so as to the fact
that he can keep the record of the complete status of the consignment and can revert back to the client. It should
be in practice that he should be in touch with the client and the entire shortfall should be notified by him to the
clients at the earliest. The person should be from the back office only.
In this case there is no responsibility of the agent for the delay as it is the fault of the client.
AVALIBILITY OF MANPOWER:
Manpower is the essence of any organization. Thus for any organization appropriate manpower is a must. Thus
there should be proper job profiles and according to the profiles the manpower should be employed. In the
custom clearance department the need of the hour was a person who could do the back office works that is the
complete documentation work and should also be aware of the computer fundamentals.
If the person working in the organization knows the work he has to do then he will do his work properly and
promptly. He is not in a mess to know what he has to do and to go to the higher authority every day. Thus the
job profiles are made as a part of the project and it has to be implemented at the earliest.
The staff doesnt know that up to what level they are authorized to take the decisions. So for each decision they
have to go to the manager to take permission. So it would be helpful if the staff knows what are the limits up to
which they can take the decisions.
Feedback is a must to the organizations that are operating in the service sector. Thus they should be given
prompt information about what is the status of the consignment. Also it should be given by the back office and
thus the customer gets satisfied.
In todays world computers are a must. And for a service sector they are a boon. The staff of custom clearance
needs to be given the training of fundamentals of computers as for the fact that they will make the work much
faster and this would help to revert back to the clients faster.
I was working under documentation department, which was taking care of the imports and exports clearing
documents, I have learned the way work is carried by a freight forwarder and how the different documents are
prepared.
In the first week of internship I learned the basics of the trade .I went through all the inco- terms, read about
containerization and the dimensions of various containers.
I began my work with documentation. I therefore made a start by going through the various files, thereby
understanding all the documents needed for exports. I used to go through the EXIM papers, which helped me to
know about the various shipping lines.
I learnt how to prepare bill of lading, how to prepare and arrange the various files. In the process, I also learned
how to quote a rate and what all charges are included in the quotation.
I went through various documents like bill of lading, shipping bill, invoice declaration form, packing list, and
certificate of origin L/C etc. I realized that, accuracy and speed in the preparation of the documents is of vital
importance. Hence it is the responsibility of the person who is handling documentation, to keep a record of all
the documents handed over by the clients, maintain the files for each transaction and correspondences, and
forward all the necessary documents in time to the person who is looking after operations.
Then I came to know the basic procedure and how in which sequence freight forwarder performs each and
every work. To work in the service organization you have to be very well aware of the changing rules and
regulations of the industry. The Freight Forwarders have to not only satisfy the exporter and importer but also
have to keep good relation with the custom authorities. It is due to a good reputation with the customs that
Clearing and Forwarding Agent can perform successfully and satisfactorily in their field.
There were a few linkages between the courses completed at IMDR in my first year & the work done at
Sunderson Logistics Pvt. Ltd. They were with the following subjects: -
Before my summer internship it was rather difficult to comprehend the linkage between various subjects of
PGDIT-1. Since I did my internship with C.H.A and a Freight Forwarder, I found some subjects to be more
useful.
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Shipping: While studying shipping, we were taught about what are different types of containers (20 & 40),
marks and nos. On them, what are LCL and FCL, we were also told about different types of Bill of Lading -
clean, claused etc., what is mates receipt, custom seals and their importance and so on. Knowledge about these
things did help me in understanding related matter more quickly. Though we were told regarding the Bill of
Entry and Shipping Bills, it was not enough. Only during the internship did I come to know about different
types of each documents and what they are used for.
Exim Policy: For me exim policy was very useful since I had an idea what is a custom area, what are various
types of licenses, what is AR-E form, different custom rates and what they mean and so on, it was useful while
learning to prepare the documents. The legal bindings and the working of an industry according to the Customs
department was quite known to me before the internship. It helped me in gaining an extra knowledge on the
export and import procedures.
Export finance: Since we had some knowledge of L/C, its importance and features, I had a fair idea of the
financial aspects of the consignment and its legal implications. It also helped in calculating the exchange rates
for particular transactions.
Insurance: Though the only thing of insurance that I came across during my internship was the the Insurance
Certificate , but on reading what type it was (say A, B, C) I could recall some contents about it as to whether
the cargo was insured against. In future this subject would be very useful.
Legal Aspects Of Business: During the internship I could realise its usefulness in future. While preparing the
documents such as warehouse bonds etc, the importance of the subject was been sensed. This subject has not
only helped me to know about the legal implications of a transaction but also its various effects on the business.
Commercial Geography: This was another subject whose usefulness was felt. Knowledge about the
geographical location of the country, its ports, and its natural resources and so on, was very helpful.
International Economics: As we had to give number of presentations related to Indian economy, these were
very useful. In this subject we had worked on various topics which were interrelated to the business of
economics. It also helped me in knowing the various roles which a government plays in fixing any duty
structures and tariff or quotas.
Communication Skills: After working in a Logistics company, the need of having good communication skills
was prominent. Infact in my company there was only the General Manager and the above hierarchy who were
good in their communication which plays is the significant role in the Import / Export transactions.
I would like to conclude that what I had done in theory and presentation in the 1st year goes hand in hand much
to an extent with my experiences during the Summer Internship. Infact I got to the ground realities of any
business activity.
CONCLUSION
The summer training is one learning experience as it brings you closer to the reality. We actually used our
theoretical knowledge to know more about the practical one and vice-versa.
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The service organizations in international trade play a very important role in boosting exports by forwarding the
goods in a short duration, and releasing the exporter from all worries of the complex procedural formalities.
Services like consolidation provided by the C&F agent is beneficial not only for the importer and exporter but
also helps the Airline and Shipping line by giving them huge quantities of goods at one go.
To work in the service organization you have to be very well aware of the changing rules and regulations of the
industry. The freight forwarders have to not only satisfy the exporter and importer but also have to keep good
relation with the custom authorities. It is due to a good reputation with the customs that Clearing and
Forwarding Agent can perform successfully and satisfactorily in their field.
To sum up I can say that this summer training was a unique experience where I got an insight into the
supporting activities performed by service organizations and the part it plays in the operations of international
trade.
BIBLIOGRAPHY
Custom Manual