QA Series 2025 - 6 - Exports Part 3
The Banking Tutor
Question Answer Series 2025
S No 06
11-06-2025
Exports – Part 03
51. To whom the Shipping Bill to
be submitted in case of Export of goods/ software done through EDI ports?
The shipping bill shall be
submitted in duplicate to the Commissioner of Customs or the SEZ.
52. What is Exchange Control (EC)
Copy of the Shipping Bill and how it will be disposed off?
After verifying and
authenticating, the authority concerned shall hand over to the exporter, one
copy of the shipping bill marked ‘Exchange Control (EC) Copy’ for being
submitted to the AD bank within 21 days from the date of export for
collection/negotiation of shipping documents.
53. In what cases submission of EC
copy of Shipping Bill need not be submitted to AD Bank ?
In cases where EC copy of
shipping bill is not printed and data of shipping bill is integrated with
EDPMS, there is no need to submit EC copy to AD bank.
54. How the AD Bank dispose off EC
copy of Shipping Bill ?
The duplicate copy of the form
together with a copy of invoice etc. shall be retained by ADs and may not be submitted
to the Reserve Bank. The question of disposal of EC copy of shipping bill will,
however, not arise where EC copy of shipping bill is not printed and data of
shipping bill is integrated with EDPMS.
55. What are important points
related to export of good by Post ?
Postal Authorities shall allow
export of goods by post only if the original copy of the EDF has been
countersigned by an AD. Therefore, EDF which involve sending goods by post
should be first presented by the exporter to an AD for countersignature. The
procedure is as under:
AD shall countersign EDF after
ensuring that the parcel has been addressed to their branch or correspondent
bank in the country of import and return the original copy to the exporter, who
shall then submit the EDF to the post office with the parcel.
The duplicate copy of EDF shall
be retained by the AD to whom the exporter shall submit relevant documents
together with an extra copy of invoice for negotiation/collection, within the prescribed
period of 21 days.
56. What are important points
related to Mid-sea trans-shipment of catch by deep sea fishing vessels ?
Since deep sea fishing involves
continuous sailing outside the territorial limit, transshipment of catches
takes place in the high sea leading to procedural constraints in regulatory reporting
requirement.
a) The exporters may submit the
EDF, duly signed by the Master of the vessel in lieu of Custom certification,
duly supported by a certificate from an international cargo surveyor.
b) Bill of Lading / receipt of
trans-shipment issued by the carrier vessel should include the EDF Number.
c) The prescribed period of
realization and repatriation should be reckoned with reference to the date of
transfer of catch as certified by the Master of the vessel or the date of the
invoice, whichever is earlier.
d) The EDF, both original and
duplicate, should indicate the number and date of Letter of Permit issued by
Ministry of Agriculture for operation of the vessel.
e) The exporter will complete
the EDF in duplicate and both the copies may be submitted to the Customs at the
registered port of the vessel .
f) EDF (Original) will be
retained by the Customs for capturing of data in Customs’ Electronic Data
Interchange.
g) Customs will give their running
serial number on both the copies of EDF and will return the duplicate copy to
the exporter as the value certification of the export has already been done as
mentioned above.
57. What are important points
related to SOFTEX Forms?
All software exporters can file
single as well as bulk SOFTEX form in the form of a statement in excel format
to the competent authority for certification. Since the SOFTEX data from
STPI/SEZ are being transmitted in electronic format to RBI, the exporters have
to submit the SOFTEX form in duplicate as per the revised procedure. STPI/SEZ
will retain one copy and handover duplicate copy to exporters after due
certification. The exporters have to provide information about all the invoices
including the ones lesser than US$25000, in the bulk statement in excel format.
RBI has extended the facility
for online generation of the EDF Form Number and the SOFTEX Form Number. The facility of manual allotment of single as
well bulk SOFTEX form number by Regional Offices of RBI has been dispensed
with.
58. How Invoicing of software
exports will be done ?
a) For long duration contracts
involving series of transmissions, the exporters should bill their overseas
clients periodically, i.e., at least once a month or on reaching the
‘milestone’ as provided in the contract
entered into with the overseas client and the last invoice / bill should be
raised not later than 15 days from the date of completion of the contract.
b) It would be in order for the
exporters to submit a combined SOFTEX form for all the invoices raised on a particular
overseas client, including advance remittances received in a month.
c) Contracts involving only
‘one-shot operation’, the invoice/bill should be raised within 15 days from the
date of transmission.
d) The exporter should submit
declaration in Form SOFTEX in quadruplicate in respect of export of computer
software and audio / video / television software to the designated official concerned
of the Government of India at STPI / EPZ /FTZ /SEZ for valuation /
certification not later than 30 days from the date of invoice / the date of
last invoice raised in a month, as indicated above. The designated officials
may also certify the SOFTEX Forms of EOUs, which are registered with them.
59. What is Short Shipment ?
A "short shipment"
occurs when the quantity or value of goods shipped is less than what was
declared in the shipping documents. This means that part of the cargo listed on
a bill of lading or other shipping documents is not actually loaded or shipped.
60. What is the duty of exporter
in case of Short Shipment ?
When part of a shipment covered
by an EDF already filed with Customs is short-shipped, the exporter must give
notice of short-shipment to the Customs in the form and manner prescribed. In
case of delay in obtaining certified short-shipment notice from the Customs,
the exporter should give an undertaking to the AD banks to the effect that he
has filed the short shipment notice with the Customs and that he will furnish
it as soon as it is obtained.
61. What is Shut out Shipment ?
A shut-out shipment happens
when a shipment, despite being cleared for export, is not loaded onto the
vessel due to various reasons such as overbooking, capacity constraints, or
operational issues. Shut out in Exports means, bringing back the goods to
shipper’s premises after completion of customs export clearance
procedures. If the export quantity of
goods are lesser than the quantity mentioned in the export shipping documents
filed with customs it is called short shipment.
62. What is the duty of exporter
in case of Shut-out Shipment ?
Where a shipment has been
entirely shut out and there is delay in making arrangements to re-ship, the
exporter will give notice in duplicate to the Customs in the form and manner prescribed,
attaching thereto the unused duplicate copy of EDF and the shipping bill. The Customs
will verify that the shipment was actually shut out, certify the copy of the
notice as correct and forward it to the Reserve Bank together with unused
duplicate copy of the EDF. In this case, the original EDF received earlier from
Customs will be cancelled. If the shipment is made subsequently, a fresh set of
EDF should be completed.
63. What is Consolidation of air
cargo/sea cargo ?
Cargo consolidation involves
combining smaller shipments from various shippers into a larger, single
shipment for transport via air or sea. This process, often managed by
consolidators, aims to reduce costs and optimize space utilization.
64. What is House Airway Bill
(HAWB) ?
Where air cargo is shipped
under consolidation, the airline company’s Master Airway Bill will be issued to
the Consolidating Cargo Agent. The Cargo agent in turn will issue his own House Airway Bills (HAWBs) to individual
shippers.
65. Can AD Bank negotiate HAWBs?
AD Category – I banks may
negotiate HAWBs only if the relative letter of credit (LC) specifically provides
for negotiation of these documents in lieu of Airway Bills issued by the
airline company.
66, What is Forwarder Cargo Receipt (FCR) ?
Forwarder’s Cargo Receipts
(FCR) issued by IATA approved agents, in lieu of bills of lading, for
negotiation / collection of shipping documents, in respect of export
transactions backed by letters of credit, if the relative letter of credit
specifically provides for negotiation of this document, in lieu of bill of
lading even if the relative sale contract with the overseas buyer does not
provide for acceptance of FCR as a shipping document, in lieu of bill of lading.
67. Can AD Bank negotiate FCR ?
68. Can AD Bank purchase/discount/collection
FCR which is not backed by LC ?
AD, at their discretion, accept FCR issued by Shipping companies of
repute/IATA approved agents (in lieu of bill of lading), for purchase/discount/collection
of shipping documents even in cases, where export transactions are not backed
by letters of credit, provided their 'relative sale contract' with overseas
buyer provides for acceptance of FCR as a shipping document in lieu of bill of
lading.
69. Are FCRs negotiable ? What are
the precautions to be taken by AD while dealing with FCRs ?
The acceptance of FCR for
purchase/discount would purely be the credit decision of the bank concerned
who, among others, should satisfy itself about the bona fides of the transaction
and the track record of the overseas buyer and the Indian supplier since FCRs
are not negotiable documents. It would be advisable for the exporters to ensure
due diligence on the overseas buyer, in such cases.
70. What are the Exemption from
Declaration of Exports?
The requirement of declaration
of export of goods and software will not apply to the following cases.
a) trade samples of goods and
publicity material supplied free of payment;
b) personal effects of
travellers, whether accompanied or unaccompanied;
c) ship's stores,
trans-shipment cargo and goods supplied under the orders of Central Government
or of such officers.
d) by way of gift of goods
accompanied by a declaration by the exporter that they are not more than five
lakh rupees in value.
e) aircrafts or aircraft
engines and spare parts for overhauling and/or repairs abroad subject to their
reimport into India within a period of six months from the date of their
export;
f) goods imported free of cost
on re-export basis;
g) the goods which are
permitted by the Development Commissioner of the SEZ, STP or FTZ to be
re-exported.
(h) replacement goods exported
free of charge.
(i) goods sent outside India
for testing subject to re-import into India;
(j) defective goods sent
outside India for repair and re-import provided
(k) exports permitted by the
Reserve Bank on application.
71. What is IE Code ?
An Importer-Exporter Code (IEC)
is a 10-digit alphanumeric code required for any entity, whether individual or
business, to engage in import or export activities in India. Issued by the
Directorate General of Foreign Trade (DGFT), an IEC serves as a unique
identification number for the business and is mandatory for customs clearance,
documentation, and other trade-related processes.
72. What are the guidelines about
indication of IE Code?
The importer-exporter code
number shall be indicated on all copies of the declaration forms submitted by
the exporter to the specified authority and in all correspondence of the exporter
with the authorised dealer or the Reserve Bank.
73. Can AD grant EDF Waiver
(without RBI’s Approval) ?
AD banks may consider requests
for grant of EDF waiver from exporters as under:
Status holders shall be
entitled to export freely exportable items (excluding Gems and Jewellery,
Articles of Gold and precious metals) on free of cost basis for export promotion subject
to an annual limit as below:
a) Annual limit of 2% of
average annual export realization during preceding three licensing years.
b) For exporters of Gems and
Jewellery Sector and Articles of Gold and precious metals sector, Annual limit
of Rupees One Crore or 2% of average annual export realization during preceding
three licensing years, whichever is lower.
c) In case of supplies of
pharmaceutical products, vaccines and lifesaving drugs to health programmes of
international agencies such as UN, WHO-PAHO and Government health programmes,
the annual limit shall be up to 8% of the average annual export realisation during
preceding three licensing years.
74. Whether Free of cost supplies
(exports) are eligible for any concessions ?
Free of cost supplies shall not be entitled to Duty Drawback
or any other export incentive under any export promotion scheme.
75. Whether AD Bank can grant EDF
Waiver for exports not involving foreign exchange transactions?
Exports of goods not involving
any foreign exchange transaction directly or indirectly requires the waiver of
EDF procedure from the Reserve Bank.
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(Source : RBI MD updated 23rd
April, 2025)
Next Issue will be shared on 13th June 2025.
Sekhar Pariti
+91 9440641014
posted by The Banking Tutor @ June 11, 2025
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