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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
ACKNOWLEDGEMENT
We would like to thank Shailashree mam
for giving us an opportunity which gave us more
knowledge about the lengthy and the complicated
procedures of import and export. With the help of
this project we could understand the role of
clearing and forwarding agents in export and
import procedures.
TABLE OF CONTENTS
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Sr.no
Title Page
no 1) INTRODUCTION.
(i) DEFINITION.4
2) RESPONSIBILITIES OF CLEARING AND FORWARDING AGENTS.
(i) THREE FACETS OF CLEARING AND
FORWARDING AGENTS.
7
3) ESSENTIAL SERVICES PROVIDED BY C&F AGENTS.
(i) OPTIONAL SERVICES PROVIDED BY C&F AGENTS.
13
4) ROLE OF C&F IN EXPORT & IMPORT PROCEDURE.
(i) EXPORT PROCEDURE.(ii) IMPORT PROCEDURE.
17
5) MODE OF PAYMENT. 25
6) DOCUMENTATION.(i) PERFORMA INVOICE.(ii) PACKING LIST.(iii) BILL OF LADING.(iv) CERTIFICATE OF
ORIGIN.(v) SHIPPING BILL.
26
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
INTRODUCTION
Before the clearing and forwarding agents
came into the picture the export-import rules
and procedures were very complex, time-
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
consuming in short difficult to understand so
as to make it easy the commission rate of
customs have issued clearing and forwarding
license to the people who have proved
themselves convergent with customs rules
and regulations. The clearing and
forwarding agents are also known by
different names such as custom house agent
or freight forwarders or shipping agents.
The clearing & forwarding agents are the
Companies, which have been authorised and
issued License by Customs and Airport
authority of India to get the goods inspected
at the customs warehouse.
Where entry of common man or even the
exporter is prohibited (exporter can always
go to get his goods inspected, but cannot
communicate directly with a custom
inspector)
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
These shipping and clearing agents only
prepare the export documents for the
client’s shipments.
As this area is highly sensitive in nature,
due to all the stuff meant for export is
stocked here and because of risk of goods
being stolen, only authorised people like
employees of these licensed agencies are
allowed to interact with custom officials to
get the goods inspected, after which they
handover the goods to air/shipping lines for
them to airlift the cargo and send it to its
destination.
(i) DEFINITION
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Clearing and forwarding agents are
authorised by the Government of India to not
only help the importers and the exporters
but also to bring it to the notice of the
custom officials any irregularities in the
customs rules and regulations optated by the
customs, importer and exporter. The
clearing agent should be converse with
customs act rules and regulations.
RESPONSIBILITIES OF CLEARING AND
FORWARDING AGENTS
(i) Furnish, whenever required by the
Licensing Authority, an authorization
from each of the firms or persons by
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
whom he is employed to act as their
Customs Agent;
(ii) Not represent a client before an
Officer of Customs in any matter
which the licensee dealt as an officer
or employee of the Department or of
the facts of which he gained
knowledge while in Government
service;
(iii) Not appear, plead or act in any
proceedings under Sections 179,
193, 194 or 196 of the Customs
Act’1969, for and on behalf of any
person other than the person for
whom he acted as licensee in
relation to matters out of which the
proceedings have arisen;
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(iv) Where he knows that a client has not
complied with the law or has made
any error in or omission from any
documents which the law requires
such client to execute, advise his
client promptly of the fact of such
non-compliance, error or omission
and immediately bring the matter to
the notice of the appropriate officer
of Customs in writing.
(v) exercise due diligence to ascertain
the correctness of any information
which he imparts to a client with
reference to any Customs business;
(vi) Not withhold information relating to
any Customs business from a client
who is entitled to such information;
(vii) promptly pay over to Government
when due, all sums received for
payment of any duty, tax or other
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
debt or obligation owing to the
Government and promptly account to
his clients any money received for
them from Government, or received
from them in excess of
Governmental, or the other charges
properly payable in respect of the
clients Customs business;
(viii) not attempt to influence the conduct
of any officer of Customs in any
matter pending before the Custom
House, Station, Port or Airport by
the use of threat, false accusation,
duress or the offer of any special
inducement or promise of advantage,
or of any gift or favor or other thing
of value;
(ix) not procure or attempt to procure,
directly or indirectly, information
from Customs records or other
Government sources of any kind to
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
which access is not granted by
proper authority;
(x) not employ in any capacity, with
power of attorney, by delegation of
otherwise, for the promotion of or in
connection with the work relating
the license :-
i. any person whose application for
license or Customs permit has
been refused; or
ii. any person whose license or
permit has been revoked or
whose conduct as a partner,
manager, director, officer or
servant has been the cause of the
revocation of the license or
permit;
(xi) not lend money to any officer or
employee in the service of the
Custom House or Customs-station or
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
become surety for the repayment of
money borrowed by any such officer
or employee ; and
(xii) Intimate to the Licensing Authority
any change of address immediately
after such change is effected.
(i) Three facets of customs clearance
A customs house agent clears and forwards the goods arrived at the following places:-
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
1. Goods which come by a foreign post.
2. Goods which come through Sea-ports.
3. Goods which come through Airports
ESSENTIAL SERVICES
PROVIDED BY C&F AGENTS
The following are some of the services provided by all kinds of C&F agents:
Providing warehousing facility to the
exporters for warehousing the goods
before their transportation to the
docks/port.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Transportation of goods to the docks
and arrangements of warehousing at
the port.
Arrangement of containers required
for shipment of the goods.
Booking of shipping space or air
freighting.
Advising the exporter as regards the
relative cost of sending the goods by
different airlines/shipping lines as
well as selection of the route of the
flight/ sea route.
Making arrangements for shipment
of goods to be on board the
ship/plane.
Arranging for marine/cargo
insurance of the shipment.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Preparation and processing of
shipping documents required for
custom clearance.
Arranging for various
endorsements/issue of certificates
from various agencies.
Providing assistance in the packing
of the shipment.
Making arrangements for local
transportation of goods to the
port/docks.
Forwarding the documents to the
exporter for their negotiation with
the bank.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(i) OPTIONAL SERVICES
PROVIDED BY THE C&F
AGENTS:-
The following services are provided by
the leading c&f agents at the specific
request of the exporter:
1. Providing warehousing facilities
abroad at least in some of the major
international markets in case the
importer refuses to take the delivery of
the goods for any reason.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
2. Providing assistance to bring the
goods back to India if the situation so
demands.
3. Providing assistance to locate the
goods in case of shipment is misplaced
or the cargo is stranded at some port.
4. Making arrangements for assessment
of damage to the goods to title claim
with the insurance company.
Role of C&F in Import & Export procedure
For smooth and timely shipment of cargo,
the exporter should appoint a suitable
Clearing and Forwarding Agent.
Nevertheless, he should prepare the
shipping documents himself as there are
many intricacies and technicalities which he
alone would know properly. He should not
depend too much on the Clearing and
Forwarding Agent, who should be entrusted
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
with getting the documents processed and
shipment only.
The different stages involved in the
shipment of goods are as follows:
Customs verification of Shipping Bills.
Carting and Receipt of Cargo of/in transit
Sheds.
Cargo examination at Docks.
Loading of Cargo.
Issue of Mate Receipt.
The procedure adopted at different ports relating to different stages is different. Since all these formalities are, by and large, to be completed by the Clearing and Forwarding Agents.
(i) Export procedure:-
Documents required:-
Detail description of goods to be
exported.
Destination address with contact details.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Invoices that would be raised on
consignee.
The goods that are to be exported would be
factory stuffed or stuffed at the port of
loading. In case the goods are factory
stuffed the exporter needs to make sure that
the container is stuffed in the presence of
the regional customs/excise officials and the
same is sealed by the concerned officer and
the same should be certified by him.
The customs house agent needs to keep the
shipping bill ready with all the particulars
viz.
Exporter name and address with contact
details (consigner), destination name and
address with contact details (consignee),
number of packages, its weight, details
like freight paid mentioned in it, the name
of the vessel/flight
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
The goods are taken in the port area for
either stuffing it into the container or
directly to the vessel/flight. This procedure
is known as carting of cargo.
The customs officials will examine the
goods that have to be stuffed in the
container at the port. In case of factory
stuffed containers the custom official will
only verify marks and number of the
containers the custom official will only
verify marks and the number of the
container and seal number as shown by
the customs/excise officials remarked at
the factory stuffing.
The goods will be loaded into the
designated vessel and only then the
shipping company will issue bill of lading
showing the container is laden on board.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
The bill of lading will have columns
showing the exporter’s name and address,
name and address of the person to whom
the container is consigned to, exporting
carrier’s name, post of loading will also the
number of packages, weight and volume of
the consignment.
Bill of lading is very important
document for consigned partly as he will
be able to clear these goods only on
surrender of Bill of Lading issued by the
port of loading.
Documents enclosed
Copy of shipping bill.
Copy of bill of lading.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(ii) Import Procedure:-
The custom clearing and forwarding agents
once appointed by the consignee need to
have the following documents:
Bill of Lading.
Invoices.
Packaging list.
Certificate of Origin.
Quarantine Certificate.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Letter of authority from the Importer.
Importers IC code no. certificate.
On receipt of the above said documents
the custom house agent need to submit
duly filled Bill of Entry to the customs.
The Bill of Entry will be in quadruplicate
original copy for the customs, duplicate
being the importers copy, triplicate being
the exchange control and the fourth copy
to the port Authority.
The cargo would be either first check or
second check. In first check, the cargo is
first checked by customs officials and duty.
In second check, the duty is first paid on
the strength of consigner’s declaration and
customs official would examine the cargo
after the duty is paid.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
The custom house agent should make sure
that all sums received for payment of any
duty, taxes or other obligation owing to the
government is promptly paid on receipt of
the same from the client.
Documents enclosed:
Copy of Bill of Lading.
Packing List.
Invoices.
Certificate of Origin.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
MODE OF PAYMENT:-
The c&f agent offers various services to
its clients. While planning for distribution
logistics, the exporter should in the first
instance, appoint C&F agents to provide him
the required services. There are no
standardized rates of charges taken by these
agents. The exporter should negotiate with
these agents the amount of fees payable to
them in relation to the desired services or
even could pay him on commission basis.
DOCUMENTATION
Documents are classified as commercial
documents and regulatory documents:
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(a) Commercial Documents: Commercial
documents are required for effecting
physical transfer of goods and their title
from the exporter to the importer and the
realization of export sale proceeds. Out of
the sixteen commercial documents in the
export documentation frame work as many
as fourteen have been standardized and
aligned to one another. These are Performa
Invoice, Commercial Invoice, Packing List,
Shipping instructions, intimation for
inspection, certificate of inspection of quality
control, insurance declaration, certificate of
insurance, Mate’s Receipt, and Bill of Lading
or combined transport document, application
for certificate origin, certificate of origin,
shipment advice and letter to the bank for
collection or negotiation of documents.
(b) Regulatory Documents: Regulatory
pre-shipment export documents are
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
prescribed by the different government
departments and bodies in order to comply
with various rules and regulations under the
relevant laws governing export trade such as
export inspection, foreign exchange
regulation, export trade control, customs
etc. Out of nine regulatory documents four
have been standardized and aligned. These
are shipping bill or bill of export, exchange
control declaration, export application dock
challans or port trust copy of shipping bill
and receipt for payment of port charges.
FOLLOWING ARE THE
DOCUMENTS ATTACHED WITH
THEIR EXPLANATIONS.
(i)Proforma Invoice
The starting point of the export contract is
in the form of offer made by the exporter to
the foreign customer. The offer made by the
exporter is in the form of Proforma invoice.
It is a quotation given as a reply to an
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
enquiry. It normally forms the basis of all
trade transactions.
Contents of Proforma invoice
Name and address of the exporter.
Name and address of the importer.
Mode of transportation, such as sea or
air or multimodal transport.
Name of the port of loading.
Name of the port of discharge and final
destination.
Provisional invoice number and date.
Exporter’s reference number.
Buyer’s reference number and date.
Name of the country of origin of goods.
Name of the country of final destination.
Marks and container number.
Number and packing description.
Description of goods giving details of
quantity, rate and total amount in terms
of internationally accepted price
quotation.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Signature of the exporter with date.
(ii) PACKING LIST
The exporter prepares the packing list to
facilitate the buyer to check the shipment. It
contains the detailed description of the
goods packed in each case, their gross and
net weight, etc. The difference between a
packing note and a packing list is that the
packing note contains the particulars of the
contents of an individual pack, while the
packing list is a consolidated statement of
the contents of a number of cases or packs.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(iii) BILL OF LADING
Bill of lading is a document issued by the
shipping company or its agent
acknowledging the receipt of goods 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 as
specified in the bill have been duly paid. It is
also the document of title to the goods and
as such, is freely transferable by
endorsement and delivery.
A bill of lading serves three main purposes:-
(a) As a document of title to the goods;
(b) As a receipt from the shipping company;
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(c) As a contract for the transportation of
goods.
CONTENTS OF BILL OF LADING
Name and logo of the shipping line.
Name and address of the shipper.
Name and the number of the vessel.
Name of the port of loading.
Name of the port of discharge and place of
delivery.
Marks and container number.
Packing and container description.
Total number of containers and packages.
Description of goods in terms of quantity.
Container status and seal number.
Gross weight in kilogram and volume in
terms of cubic meters.
Amount of freight paid or payable.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Shipping bill number and date.
Signature and initials of the Chief Officer.
(iv) CERTIFICATE OF ORIGIN
The importers in several countries require
a certificate of origin without which
clearance to import is refused. The
certificate of origin states that the goods
exported are originally manufactured in the
country whose name is mentioned in the
certificate. Certificate of origin is required
when:-
(1) The goods produced in a particular
country are subject to preferential
tariff rates in the foreign market at the
time of importation.
(2) The goods produced in a particular
country are banned for import in the
foreign market.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
CONTENTS OF CERTIFICATE OF ORIGIN
Name and logo of chamber of commerce.
Name and address of the exporter.
Name and address of the consignee.
Name and number of the Vessel of
Flight.
Name of the port of loading.
Name of the port of discharge and place
of delivery.
Marks and container number.
Packing and container description.
Total number of containers and
packages.
Description of goods in terms of
quantity.
Signature and initials of the concerned
officer of the issuing authority.
Seal of the issuing authority.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(v) SHIPPING BILL
Shipping bill is the main customs
document, required by the customs
authorities for granting permission for the
shipment of goods. The cargo is moved
inside the dock area only after the
shipping bill is duly stamped, that is
certified by the customs. Shipping bill is
normally prepared in five copies:
(a) Customs copy.
(b) Drawback copy.
(c) Export promotion copy.
(d) Port trust copy.
(e) Exporters copy.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
CONTENTS OF SHIPPING BILL
Name and address of the exporter.
Name and address of the importer.
Name of the vessel, master of agents and
flag.
Name of the port at which goods are to be
discharged.
Country of final destination.
Details about packages, description of
goods, marks and numbers, quantity and
details of each case.
F O B price and real value of goods as
define in the Sea Customs Act.
Whether Indian or Foreign Merchandise to
be re-exported.
Total number of packages with total
weight and value.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
(vi) BILL OF ENTRY
Bill of entry is a document, prepared by
the importer or his clearing agent in
prescribed form under bill of entry
regulations, 1971, on the strength of which
clearance of imported goods can be made.
Bill of entry is a document, which states
that the goods of the stated values and
description in the specified quantity have
entered into the country from abroad. The
bill of entry is drawn triplicate. The
customs authorities may ask the importer
to supply other documents like invoice,
broker’s notes and insurance policy, etc in
order to verify the correctness of the
information supplied in the bill of entry
form.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
The bill of entry goods are classified into
three categories:
1)Free Goods.
2)Goods for Home Consumption.
3)Bonded Goods.
The importer has to fill up a separate bill of
entry form for different classes of goods. In
India, separate forms are not used but all
entries are made in one form
CONTENTS OF BILL OF ENTRY
Name and address of the Importer.
Name and address of the Exporter.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Import license number of the importer.
Name of the port/dock where goods are to
be cleared.
Description of goods.
Value of goods.
Rate and amount of import duty payable.
Other relevant documents.
BIBLIOGRAPHY
Primary Data:
(1) Mr.Gajendra Shetty.
- Clearing and Forwarding Agent.
- Owner of Akanksha Shipping.
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BMS@VES EXIM ROLE OF CLEARING AND FORWARDING AGENTS
Secondary Data:
(1) www.google.com (2) Export Management
- D C Kapoor
(3) Export Management
- Khurana
(4) Export Import Procedures and
Documentation
- Jain Acharya
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