Shipment insurance

Export: how to prepare the necessary documents for export

When it comes to exporting, keeping the right set of documents handy can make a big difference in ensuring the process is smooth and seamless. Mastering the organization of these documents is essential to manage export orders, especially the largest or most complicated ones, and facilitate compliance with the process.

So what kind of paperwork can help ensure order and structure to the various steps involved?

First of all, it is important to check the documents carefully before submitting them as there are several types of documents involved when exporting goods, says Pushkar Mukewar, co-founder and CEO of Drip Capital.

According to the Foreign Trade Policy (FTP) 2015-2020, the essential documents required to export goods from India are: Bill of Lading/Air Waybill; truck receipt or railway receipt/postal receipt; commercial invoice; packing list and shipping invoice. There are also documents related to export compliance, licensing, and some general documents that are integral to export readiness.

When it comes to export compliance documents, an import and export code (IEC) is needed first. If you are exporting without paying the Integrated Goods and Services Tax (IGST), a bond or Letter of Commitment (LUT) is required. In addition to this, tax invoices with details such as supplier name, address and GSTIN; invoice number and date; recipient’s name and address; Goods HSN code; the quantity and total value of the goods and the supplier’s signature are required.

Mukewar says a trader should remember the key steps while collecting all the documents. He suggests hiring the services of a customs agent who can make sure all the paperwork is in place and help with customs and shipping procedures smoothly and quickly. “To avoid confusion and delays, make sure you know in advance which products need to be reviewed and by which agencies, so you can easily start compiling the required documents sooner. As for quality control certificates, check if everything is ready for inspection so that you can have these documents in time,” he adds.

To obtain an export license, Drip Capital recommends attaching the following documents to the application for faster processing:

  • Exporter and Importer Profile in Form ANF-1 and Restricted Article Export Permit Application Form in Form ANF-2N
  • Copy of foreign buyer’s purchase order/import order, or contractual agreement between the two
  • Proof of online payment of application fees
  • Copy of the PAN card
  • Copy of ID
  • Proof of address
  • Bank statement/cancelled check
  • A NOC in case of rental property

General documents

Exporters should also be aware of an indicative list of general documents needed to ship goods overseas. Proforma invoice, for example, which specifies various details including buyer and seller in the transaction; description of the goods shipped; delivery details and currency used in the quotation must be filled in correctly. Certificates of origin will be required in some countries to prove the source of the product. A bill of exchange, which is usually generated on the exporter’s letterhead, instructs the importer to pay the corresponding amount to the exporter.

Additionally, documents such as phytosanitary certificates and fumigation certificates are required to prove compliance with international quality, standards and procedures. Other necessary documents include export order / purchase order; letter of credit; inspection/quality control certificate; marine insurance policy; health certificate (applicable only when exporting food products of animal or non-animal origin); insurance certificate; warehouse receipt and entry slip.

Exporters should ensure that they fill in the product description or classification correctly to avoid customs clearance problems at a later stage. Consideration of rigorous quality checks by ensuring that all quality certifications are in good standing will also keep them in good stead.

Mukewar suggests that exporters network and establish a good equation with relevant officials to ensure smooth processing and track shipments. “In general, it is important for exporters to maintain a good relationship with the C&F agent to benefit from real-time shipment updates. Delays can prove costly,” he adds.

(The one-stop destination for MSMEs, ET RISE provides news, views and analysis on GST, exports, finance, policy and small business management.)

Download the Economic Times News app to get daily market updates and live business news.