The customs clearance for commercial cargo refers to the process that involves the clearing’ of goods through the customs barriers for importers and the exporters (usually businesses). This process however involves the preparation of documents and or the electronic submissions, for the purpose of calculation and also for the payment of taxes, duties and goods and also service tax.
In order to complete the clearance process , shipping documents are thus required and the type of documents which are needed for importing or exporting of transactions usually depend on the type of goods which the businessman have. In many cases, the process of documentation may also vary depending on the country of origin or its destination. Thus, the documents may have to be prepared in a particular way in order to comply with the requirements of the import or the export country.
As a rule of thumb, a standard procedure for importing or exporting of transaction usually requires a commercial invoice, a quarantine packing declaration ,a packing list, bill of Lading and also an insurance certificate , and this depends on your Inco terms.
Customs Clearance is however mandatory for any kind of import export business. In order to get Custom Clearance, shipping documents are necessary and this depends on the type of cargo.
The documents required are as follows:
- Commercial Invoice: the very first document which gives details about the contents of the goods. Exporter needs this document in order to obtain an inspection certificate.
- Bill of lading: this document is an acknowledgement of the fact that the mentioned goods are either in the process of shipping or that the shipment is complete. In other words, it is an evidence of the contract of transport.
- Bill of Exchange: it is addressed to the importer in order to make payment either on demand or at a fixed or determinable future.
- Letter of Credit: this letter gives the exporter more security than a bill of exchange.
- Shipping Bill: After preparing of the invoice which is based on a purchase order or Letter of Credit, an exporter needs to prepare the documents well in time. He can hire a custom house agent or can do himself. Normally, to make the work easier, customs agents are hired who submit this shipping bill through custom online software system (ICEGATE). The generation of shipping bill number is according to the serial order all over the country. ICEGATE works for 24*7 in order to accomplish smooth working of Customs Clearance.
Following documents are necessary for obtaining the shipping bill:
- GR Forms (in duplicate) for shipment to all the countries.
- Four copies of packing list depicting contents, quantity, the gross and net weight of each package.
- Four copies of invoices that contain all relevant details like a number of packages, quantity, price, correct specification of goods etc.
- Purchase Order, Letter of Credit
- AR4 (both in original and duplicate) and invoice
- Examination Certificate
After this, the generation of prints of shipping bill takes place. There you get three copies:
- One for the Exporter
- Second is exchange control copy for the Reserve Bank of India. It is submitted with RBI through exporter’s authorised bank. RBI needs this copy to keep a check on foreign exchange.
- Third is for shipping carriers to take the cargo to final destination.
On these printed copies, the concerned custom officials then put their signatures and return it to the exporter or customs agents. After movement of goods, shipping carrier files Export General Manifest (EGM) with the Customs Department and on the basis of this, the department issues a proof namely, Export Promotion Copy.
Let Export Order– after verifying all the information and conducting an examination procedure, Custom Department issues ‘Let Export Order’ as a proof of completion of the Customs Clearance procedure.
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