Detail Report on export business of leather Coordinator Sahiwal and required documentation for export. Project acquired for the International Business course by Mr.Moazzam Ali Lecturer in COMSATS INSTITUTE OF INFORMATION TECHNOLOGY SAHIWAL
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Project on export process and documenatin of leather by leather coordinator shiwal (2)
1. COMSATS Road, Off GT Road, Sahiwal
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY
SAHIWAL
Leather Coordinators
Tufail Shaheed Road, Mohalla Rajpura, Sahiwal
SUBMITTED TO:
MR. MOAZZAM ALI
LECTURER
DEPARTMENT OF MANAGEMENT SCIENCES
SUBMITTED BY:
ABU SUFIAN RASHEED
CIIT/SP14-BBS-011/SWL
RASHID WAQAS
CIIT/SP14-BBS-012/SWL
SALMAN YAMIN
CIIT/SP14-BBS-006/SWL
DECEMBER 11, 2015
2. Table of Contents
1. General Perspective of Export Documentation..........................................1
1.1. NTN........................................................................................................1
1.2. Sales Tax Registration...........................................................................1
1.3. Bank Account Current............................................................................1
1.4. Chamber Membership............................................................................1
1.5. Documents for Clearing Agent ...............................................................1
1.6. Form “E”.................................................................................................2
1.7. Submission of Export Documents to the bank. ......................................2
2. Export procedure of Leather Coordinator (Mr.Iqbal, 2015)........................2
2.1. Order Sheet ...........................................................................................2
2.2. Performa Invoice....................................................................................3
2.3. Cargo and Custom clearing documentation ...........................................6
2.3.1. The Shippers Letter of Instruction for Issuing AIRWAY bill..............6
2.3.2. Packing List/Weight Note ................................................................6
2.3.3. Invoice .............................................................................................7
2.3.4. Letter of credit..................................................................................7
2.3.5. Cargo Agent ....................................................................................8
2.3.6. Form E.............................................................................................8
2.3.7. Clearing Agent.................................................................................8
2.3.8. Covering letter .................................................................................9
2.3.9. Covering schedule...........................................................................9
Charges for Exports.......................................................................................10
Bibliography ...................................................................................................11
Appendices....................................................................................................12
Appendix-A Performa Invoice....................................................................12
Appendix-B The Shippers Letter of Instruction for Issuing AIRWAY bill ....12
Appendix-C Packing List/Weight Note.......................................................12
Appendix-D Invoice ...................................................................................12
Appendix-E Form-E...................................................................................12
Appendix-F AZO Certificate ......................................................................12
Appendix-G GSP Form-A ..........................................................................12
Appendix-H AIRWAY Bill...........................................................................12
4. 1
1. General Perspective of Export Documentation
Now a days export license is no more required to export. Only the following
initial documents are required to export:
1.1. NTN
National Tax Number Certificate, which is issued by the Income Tax
Department on filing of application form accompanied with one attested copy
of NIC.
1.2. Sales Tax Registration
Commercial exporter is not required to register with Sales Tax Department.
But if you pay the sale tax on the goods from local market it will be better for
you to get yourself registered with sales tax department so that you may claim
your input tax deducting on your purchases. Once you are registered in sales
tax department you will be obliged to the monthly sales tax return irrespective
of the fact that you have been involved in any sales tax activity or not.
1.3. Bank Account Current
Bank Account is required for export proceedings and documents.
1.4. Chamber Membership
Membership certificate of Chamber of Commerce and Industries or any
relevant trade association is required.
1.5. Documents for Clearing Agent
Once the consignment, to be exported arrives at the port, usually a clearing
agent services are sought. The following documents are required to provide to
clearing agent to clear the consignment.
Packing List.
Commercial Invoice.
Letter of Credit (L/C).
Certificate of Origin which is issued by Chamber of Commerce.
National Tax Number Certificate.
5. 2
1.6. Form “E”
Form “E” (State bank form): All exports from Pakistan which are subject to
Foreign Exchange Regulations are required to be declared on form „E‟ which
is in sets of four copies each. The exporter should submit the full set of Form
„E‟ to the bank after it has been completed and signed by the exporter himself
or his authorized agent. While certifying Form „E‟, bank should ensure that
exporters give only one address in Form „E‟. After the form is certified by the
bank, it should be submitted to the Customs/Postal authorities at the time of
shipment along with the shipping bill. The Customs authorities will detach the
original copy and after filling in the portion relating to them and affixing their
seal and signature thereon forward it to the State Bank. The Customs
authorities will return the duplicate, triplicate and quadruplicate copies to the
exporter or his authorized agent who will retain the quadruplicate for his own
record and submit the duplicate and triplicate copies to the Authorized Dealer
along with the shipping documents within 14 days from the date of shipment.
1.7. Submission of Export Documents to the bank.
All shipping documents covering goods exported from Pakistan and declared
on form „E‟ must be passed through the medium of bank within 14 days from
the date of shipment. The exporter must submit the duplicate (bearing
Customs seal and signature of Customs Officials with Code number) and
triplicate copies of form „E‟ along with the shipping documents, invoices etc.,
to the bank who had certified the form „E‟. An extra copy of the shipper‟s
invoice must be attached to the triplicate copy of the form „E‟.
2. Export procedure of Leather Coordinator (Mr.Iqbal, 2015)
2.1. Order Sheet
Process start with placement of online order by importer or an order sheet that
importer send to exporter in which all order related detail are disclosed like,
Quality
Quantity
Size
Rate
Sample design (in paper or soft form)
6. 3
Other necessary document vary order to order
2.2. Performa Invoice
Performa Invoice prepared by Exporter is basically an agreement of order in
which all details are discussed as:
Buyers
Buyers name like XYZ Company of France
Description of Goods
Style and quality, quantity, price per unit, total value of goods
Total Quantity
780 units of Garments
Value
49980.00€
Currency
Currency should be defined like EURO, DOLLAR
Shipment Type
BY AIR or SEA and INLAND WATERWAY
Delivery Date
INCOTERMS
The Incoterms® rules have become an essential part of the daily
language of trade. They have been incorporated in contracts for the
sale of goods worldwide and provide rules and guidance to importers,
exporters, lawyers, transporters, insurers and students of international
trade (ICC, 2015).
• EXW Ex Works
“Ex Works” means that the seller delivers when it places the goods at
the disposal of the buyer at the seller‟s premises or at another named
place (i.e.,works, factory, warehouse, etc.). The seller does not need to
load the goods on any collecting vehicle, nor does it need to clear the
goods for export, where such clearance is applicable.
• FCA Free Carrier
“Free Carrier” means that the seller delivers the goods to the carrier or
another person nominated by the buyer at the seller‟s premises or
another named place. The parties are well advised to specify as clearly
7. 4
as possible the point within the named place of delivery, as the risk
passes to the buyer at that point.
• CPT Carriage Paid To
“Carriage Paid To” means that the seller delivers the goods to the
carrier or another person nominated by the seller at an agreed place (if
any such place is agreed between parties) and that the seller must
contract for and pay the costs of carriage necessary to bring the goods
to the named place of destination.
• CIP Carriage And Insurance Paid To
“Carriage and Insurance Paid to” means that the seller delivers the
goods to the carrier or another person nominated by the seller at an
agreed place (if any such place is agreed between parties) and that the
seller must contract for and pay the costs of carriage necessary to
bring the goods to the named place of destination.
„The seller also contracts for insurance cover against the buyer‟s risk of
loss of or damage to the goods during the carriage. The buyer should
note that under CIP the seller is required to obtain insurance only on
minimum cover. Should the buyer wish to have more insurance
protection, it will need either to agree as much expressly with the seller
or to make its own extra insurance arrangements.”
• DAT Delivered At Terminal
“Delivered at Terminal” means that the seller delivers when the goods,
once unloaded from the arriving means of transport, are placed at the
disposal of the buyer at a named terminal at the named port or place of
destination. “Terminal” includes a place, whether covered or not, such
as a quay, warehouse, container yard or road, rail or air cargo terminal.
The seller bears all risks involved in bringing the goods to and
unloading them at the terminal at the named port or place of
destination.
• DAP Delivered At Place
“Delivered at Place” means that the seller delivers when the goods are
placed at the disposal of the buyer on the arriving means of transport
ready for unloading at the named place of destination. The seller bears
all risks involved in bringing the goods to the named place.
8. 5
• DDP Delivered Duty Paid
“Delivered Duty Paid” means that the seller delivers the goods when
the goods are placed at the disposal of the buyer, cleared for import on
the arriving means of transport ready for unloading at the named place
of destination. The seller bears all the costs and risks involved in
bringing the goods to the place of destination and has an obligation to
clear the goods not only for export but also for import, to pay any duty
for both export and import and to carry out all customs formalities.
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
• FAS Free Alongside Ship
“Free Alongside Ship” means that the seller delivers when the goods
are placed alongside the vessel (e.g., on a quay or a barge) nominated
by the buyer at the named port of shipment. The risk of loss of or
damage to the goods passes when the goods are alongside the ship,
and the buyer bears all costs from that moment onwards.
• FOB Free On Board
“Free On Board” means that the seller delivers the goods on board the
vessel nominated by the buyer at the named port of shipment or
procures the goods already so delivered. The risk of loss of or damage
to the goods passes when the goods are on board the vessel, and the
buyer bears all costs from that moment onwards.
• CFR Cost and Freight
“Cost and Freight” means that the seller delivers the goods on board
the vessel or procures the goods already so delivered. The risk of loss
of or damage to the goods passes when the goods are on board the
vessel. the seller must contract for and pay the costs and freight
necessary to bring the goods to the named port of destination.
• CIF Cost, Insurance and Freight
“Cost, Insurance and Freight” means that the seller delivers the goods
on board the vessel or procures the goods already so delivered. The
risk of loss of or damage to the goods passes when the goods are on
board the vessel. The seller must contract for and pay the costs and
freight necessary to bring the goods to the named port of destination.
9. 6
“The seller also contracts for insurance cover against the buyer‟s risk of
loss of or damage to the goods during the carriage. The buyer should
note that under CIF the seller is required to obtain insurance only on
minimum cover. Should the buyer wish to have more insurance
protection, it will need either to agree as much expressly with the seller
or to make its own extra insurance arrangements.”
Payment Mode
Letter of credit
Advance Payment
CAD1
D/A2
Port of shipment
Any Pakistani port can be used for shipment as per convenience and
availability of resources
Bank Details
Exporter Bank detail through which payment should proceeded. Like
Meezan Bank Ltd
Packing
Usually Export packing is used for Exporting.
2.3. Cargo and Custom clearing documentation
After preparation of Performa invoice it will be sent to importer via reliable
source of communication and importer respond back in form of acceptance.
When the agreement done between parties in form of acceptance of Performa
invoice by importer then further process started that is cargo and custom
clearing agent documentation
2.3.1. The Shippers Letter of Instruction for Issuing AIRWAY bill
2.3.2. Packing List/Weight Note
Production Provide packing list or weight note, Normally Hard board Box are
used for packing. Packing list contain detail of boxes as,
1
Cash Against Document
2
Document Delivered against Acceptance
10. 7
BOX NO.
PO No.
Style
Quality
Color
Size
Total PCS per Box-normally one Box contain 10 PCS
2.3.3. Invoice
Based on packing list (quantity taken) and Performa invoice (Price Taken in
account), invoice of partial or full order are prepared. If Letter of credit
involved then mentioned clearly
2.3.4. Letter of credit
A guarantee from the importer‟s bank that it will act on behalf of the importer
and pay the exporter for the merchandise if all relevant documents specified
in the letter of credit are presented according to the terms of the letter of
credit.
Document Required
Draft
Invoice
Packing List
AWB3
Consignment No.
B/L4
Consignment to: Buyer information
GSP5
Form A: Issued by TDAP6
which benefits to importer in tax
rebate against import from devolping countries.
Certificate of origin
Inspection certificate: Issued by Agent of importer
Declaration
AZO Free certificate
3
AIRWAY BIL
4
Bill of lading
5
Generalized system of procedure
6
Trade development Authority of Pakistan
11. 8
AZO is a chemical that and German law require all the used dyes are
must be free from AZO chemical and Now a days it will become
requirement for international Trade.
Weight Note
Summary Note
5% commission Certificate_ in case of agent as middleman
Insurance Certificate _Covered by applicants
2.3.5. Cargo Agent
Cargo agent is member of IATA7
. After all above Cargo agent issue Airway bill
that is named as MASTER Bill of any Airline
2.3.6. Form E
Online Form issued by Exporter bank main branch. All exports from Pakistan
which are subject to Foreign Exchange Regulations are required to be
declared on form „E‟ which is in sets of four copies each. The exporter should
submit the full set of Form „E‟ to the bank after it has been completed and
signed by the exporter himself or his authorized agent. While certifying Form
„E‟, bank should ensure that exporters give only one address in Form „E‟.
After the form is certified by the bank, it should be submitted to the
Customs/Postal authorities at the time of shipment along with the shipping bill.
The Customs authorities will detach the original copy and after filling in the
portion relating to them and affixing their seal and signature thereon forward it
to the State Bank. The Customs authorities will return the duplicate, triplicate
and quadruplicate copies to the exporter or his authorized agent who will
retain the quadruplicate for his own record and submit the duplicate and
triplicate copies to the Authorized Dealer along with the shipping documents
within 14 days from the date of shipment.
2.3.7. Clearing Agent
Clearing agent issue GD-I8
Form and present to customs authorities likewise
Invoice
7
International Air Traffic Authority
8
Goods declaration Form
12. 9
Packing list
AIRWAY Bill
GD-I
For AIRWAY bill bank issue 3 certificate with attachments of form E for
issuance of AIRWAY Bill by Custom authority. After all this clearance of
shipment clearing Agent sent back following Document to Exporter for
further procedure.
Invoice
Packing list
Airway bill
Form-E
GD-I Form
2.3.8. Covering letter
After receiving documents from clearing agent exporter make covering letter
which include all necessary documents that will further proceeded to exporter
bank for preparing of Covering schedule.
2.3.9. Covering schedule
After receiving covering letter exporter bank prepare covering schedule and
send to Importers bank.
Covering schedule basically contain all documents necessary provided by
exporter like Invoice Packing list, Airway bill, Form-E, GD-I Form e.t.c.
After Acceptance of covering schedule, Bankers Acceptance received and
exporter bank notify to exporter about it.
At maturity payment will disburse to exporter on his demand
Before Maturity Exporter can Discount Bankers Acceptance
After Maturity Exporter sold foreign currency to bank on above market
rate after negotiating with treasury department of his Bank.
Bank issue Proceed realization certificate which cover all transaction
detail.
Leather coordinator submit this certificate and all relevant documents
for rebate on tax paid against Imports of chemicals
13. 10
Basically Government of Pakistan provide 4% subsidy on Garments
and 1.7% on leather
Charges for Exports
Service Charges=0.15% minimum
With holding Tax= 1% @Leather
Export development charges= FOB value 0.25% (MEHKARI, 2003)
Courier charges=1500 min.
Container charges= 1200$-2500$ per Container
14. 11
Bibliography
ICC. (2015, December 09). Home: Products and Services: Tools for Trade:
Incoterms® 2010 . Retrieved from International Chamber of Commerce (ICC)
Website: http://www.iccwbo.org/products-and-services/trade-
facilitation/incoterms-2010/the-incoterms-rules/
MEHKARI, M. R. (2003, January 3). Circulars/Notifications: . Retrieved
December 11, 2015, from State Bank of Pakistan :
http://www.sbp.org.pk/epd/2003/FECL2.htm
Mr.Iqbal. (2015, December 10). Leather Coordinator Export. (A. S. Rasheed,
Interviewer)
15. 12
Appendices
Appendix-A Performa Invoice
Appendix-B The Shippers Letter of Instruction for Issuing AIRWAY bill
Appendix-C Packing List/Weight Note
Appendix-D Invoice
Appendix-E Form-E
Appendix-F AZO Certificate
Appendix-G GSP Form-A
Appendix-H AIRWAY Bill
Appendix-I GD-I Form