air cargo EXPORTS: PROCEDURES & REGULATORY FRAMEWORK

1. air cargo EXPORTS:PROCEDURES & REGULATORY FRAMEWORK

2. Regulatory Requirements Exporter or his agent has to obtain an IEC number from DGFT which is received online Also require to register authorised foreign exchange dealer code(through which export proceeds are expected to be realised) and open a current account in the designated bank (for credit of any drawback incentive.

3. Custodians Customs Brokers Forwarders Air lines Insurance companies Quality assurance companies Transporters ADC:- Assistant Drug Controller ensure that medicines meeting the prescribed standard are allowed export. Plant Quarantine & Animal Quarantine: No infected plant or animal material is allowed export. Wildlife Authorities: Enforce provisions of CITES so that no export allow in respect of prohibited category. Fumigation agencies Export promotion agencies/councils Assistant Drug Controller Plant Quarantine & Animal Quarantine Wildlife Authorities Stakeholders for exports...

4. Custodians • Appointed by Commissioner of Customs. • Other custodians under various other laws also recognized viz. Mumbai Port Trust under Major Port Trust Act ,1963 • Are the caretakers responsible for safety and storage of various types of cargo till it is cleared by Customs. • Facilitate Smooth movement cargo . • Address security issues. • Allow goods to be loaded only after fulfillment of Customs formalities and on payment of various charges and fees

5. X-Ray of Cargo X-Ray machines have been installed by CELEBI. DIAL (Delhi International Airport Ltd.) under GMR is manning the X-Ray operation and DIAL X-Ray the goods before loading in the aircraft. Some other airlines like Aeroflot, Air India, Jet Airways and FedEx also X-Ray the goods before loading in the aircraft.

6. Customs Brokers Statutory Requirement: Section 146 of Customs Act 1962. Earlier known as "Customs House Agent“ now Customs Brokers Licensing Regulations,2013 is in operation as defined under Customs House Agents Licensing Regulations, 2004 means: A person licensed under these regulations to act as agent for the transaction of any business relating to the entry or departure of conveyances or the import or export of goods at any Customs Station.

7. Forwarder • A freight forwarder, forwarder, or forwarding agent, is a person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. • Forwarders contract with a carrierto move the goods. A forwarder does not himself move the goods but acts as an expert in supply chain management. • Freight can be booked on a variety of shipping providers, including ships, airplanes ,trucks , and railroads.

8. Airlines • Are the carriers for international trade shipments. • Airlines needs to be licensed by DGCA. • Can call or land/ fly only from customs approved ports. • Required to strictly follow entry or exit requirements as per Indian Customs Act, 1962 • Mandated to furnish the Export General Manifest

9. Insurance Cos.. • Insurance is mandatory in case of international trade shipments. • Covers the risk/damage to goods due to natural or unforeseen events. • Custodian generally has parent cover whereas exporters or importers has individual policies covering their goods. • Insurance providers are regulated as per IRDA regulation in India.

10. Quality assurance certification Agencies • Provide certifications based on internationally acceptable quality standards such as ISO and CEN (European Committee for Standardization ) and others. • The quality standards ensure meeting of the needs of customers and other stakeholders alongwith statutory and regulatory requirements. • Helps cut down costs • Maximize efficiency. • Minimize losses and accidents

11. Transporters • Transporters are an integral part of the logistics chain. • Ensure smooth flow of imported and export cargo from various destinations. • In order to ensure safely and security of cargo only authorized transporters should be allowed to work at ports. • Port authorities in liasion with transport operators should ensure smooth flow of cargo movement.

12. Packaging Industry • Packaging is an important dimension in international trade shipments. • Proper packaging ensure safety and storage of goods till specified time without deterioration in quality or affect on other nearby goods. • FSSAI provides guidelines for packaging and labeling of food and related articles in India. • Indian Institute of packaging is empowered to provide packaging certifications as per UN classification of dangerous goods.

13. Fumigation agencies • Fumigation agencies are licensed by Dept. of Plant Quarantine, Ministry of Agriculture of India. • They fumigate the export or import cargo (if not accompanying fumigation certification) and ensure pest free delivery of goods into or out of India. • Compliance of International Standards for Phytosanitary Measures is required in respect of wood packaging material by exporters.

14. Export Promotion Councils • EPCs operate under the aegis of Ministry of Commerce. • More than 24 EPCs are operational sector wise. • Maintain statistical data of imports and exports and use it for promotion of national exports • Facilitate in getting foreign orders. • Authenticate export performance. • Provide necessary certifications such as country of origin certification etc.

15. MOVEMENT OF SHIPPING BILL Contd…… Shipping Bill filed by the CHA/Exporter from their own system or through CMC. ICEGATE will generate the Shipping Bill number. Processed by the Deputy Commissioner (Exports) in the case of fob value > 10 lakhs, drawback > Rs.1 lakh and Rs. 25 thousand in case of NFEI Shipping Bills. Appraiser processes the Shipping Bill if it pertains to Advance Licence / EPCG and if FOB value is more than Rs.10 lakh, the Shipping Bills is processed by Deputy Commissioner (Exports) also. Other Shipping Bills automatically processed by the EDI system. The vehicle carrying the goods will arrive in the Customs area after the payment of Terminal Charges to the custodian. The goods will be offloaded from the vehicle for weighment at the warehouse and the truck docket (TD) is issued.

16. The Shipping Bills will pass on to the Inspector’s screen for registration of goods for export. The Inspector will scrutinize the paper and put up the paper for Deputy Commissioner (Export)’s orders. goods are examined /inspected As per instruction issued and then the Shipping bill will be forwarded to Superintendent’s screen for Let Export Order (LEO). After LEO the Shipping Bill will be printed. The consignment of the said Shipping Bill will be lifted by the Airlines. Airlines will file EGM. The Shipping Bill will go in the Drawback queue.

17. MOVEMENT OF SHIPPING BILL FILING OF SHIPPING BILL THROUGH ICEGATE SYSTEM OR THROUGH CMC SERVICE CENTER ICEGATE GENERATES SHIPPING BILL NO. DUTY FREE SHIPPING BILL INCLUDING REWARD SCHEME OF CHAPTER -3 NFEI SHIPPING BILL DRAWBACK SHIPPING BILL SHIPPING BILL UNDER ADVANCE LICENCE / EPCG FOB VALUE ABOVE Rs.25000/- Superintendent for Assessment FOB VALUE LESS THAN Rs.25000/- DRAWBACK MORE THAN Rs.1 LAKH FOB VALUE ABOVE Rs.10 LAKH DRAWBACK LESS THAN Rs. 1 LAKH FOB VALUE LESS THAN 10 LAKH FOB VALUE MORE THAN Rs.10 LAKH FOB VALUE LESS THAN Rs.10 LAKH ASSESSED IN SYSTEM AC / DC EXPORT FOR ASSESSMENT ASSESSED IN SYSTEM ASSESSED IN SYSTEM AC / DC EXPORT FOR ASSESSMENT AC / DC EXPORT FOR ASSESSMENT AC / DC EXPORT FOR ASSESSMENT EXPORT SHED EXPORT SHED EXPORT SHED EXPORT SHED EXPORT SHED

18. PROCEDURE IN EXPORT SHED WITHDRAWAL OF SHIPMENT CHA/ EXPORTER TAKES ONLINE CARTING PERMISSION FROM AIRLINE AND PAY TERMINAL CHARGES TO Custodian SINCE THE GOODS HAVE NOT ENTERED IN CUSTOMS AREA TC to be cancelled by Custodian Withdrawal TO BE ALLOWED BY Custodian GOODS BROUGHT TO TD (TERMINAL DOCK) GATE Letter to DC (Shed) for withdrawal EFO Process the request and put to DC (Shed) After APPROVAL OF DC (SHED) and completion of formalities by Custodian, withdrawal allowed (A) CONSIGNMENT WEIGHED AT TD IF WEIGHT EXCESS IN COMPARISON TO TC, DIFFERENTIAL TC WILL BE PAID SUBMISSION OF DOCUMENTS (CHECK LIST OF SHIPPING BILL, COMMERCIAL INVOICE, PACKING LIST, ARE-I ETC.) ALONGWITH ANNEXURE ‘C’ TO INSPECTOR FOR REGISTRATION After registration for withdrawal same procedure as mentioned in Box A. DRAWBACK INVOLVED MORE THAN Rs.1 LAKH DRAWBACK INVOLVED MORE THAN Rs.50,000/- BUT BEING EXPORTED TO SENSITIVE COUNTRY Cases of Drawback less than Rs.1,00,000/- or Rs.50,000/- (sensitive country) OTHER SHIPPING BILLS SHIPPING BILLS PUT UPTO DC(SHED) FOR INSTRUCTIONS EXAMINATION / INSPECTION OF GOODS BY THE INSPECTOR / SUPERINTENDENT REPORTING BY THE INSPECTOR withdrawal request after leo after processing of request by efo AND CANCELLATION OF LEO BY DC (SHED), APPROVAL IS GIVEN BY DC (SHED) withdrawal allowed after completion of formalities by Custodian LEO BY SUPERINTENDENT PRINTOUT OF SHIPPING BILL LEFTING OF CARGO BY THE AIRLINES FILING OF EGM BY AIRLINES

19. REQUIREMENT OF DOCUMENTS AT VARIOUS STAGES 1) Payment of Terminal Charges (TC) Online request filed by cha/exporter with custodian indicating \ Shipping Bill No, date, Shipper’s Name, Packages, Gross weight , chargeable weight, Package Dimension, etc. 2) A T Terminal Dockgate (TD) Weighment of consignment done, Print Generated, in case of variation in weight with RESPECTIVE TC. Handing over of print AT TC counter for payment of differential TCalong with copy of AWB by cha / exporter. (a) Annexure ‘C’ signed by CHA with Stamp, bearing details such as Shipping Bill No, AWB No., Packages, Gross weight, Net weight, Name of Commissionerate, Division and Range, (in case shipment is agaisnt are-1). 3) Registration of Goods (b) Check list of Shipping Bill (c) Invoice (d) Packing List (e) Annexure-1 - Cenvat declaration (f) annexure-a – Value declaration (h) self declaration form (sdf) (I) ARE-1 (J) any other required document

20. Examination norms: The Board has fixed norms for examination of export consignments keeping in view the quantum of incentive, value of export goods, the country of destination etc. The scale of physical examination of various categories of exports at the port of export is as follows:

21. A. Factory stuffed export cargo: Scale of Examination No examination except: (a) where the seals are found tampered with; or (b) there is specific intelligence in which case, permission of Deputy/Assistant Commissioner would be required before checking. Category of Exports • Export goods stuffed and sealed in the presence of the Customs/Central Excise officers at the factories of manufacture, ICD/CFS, notified warehouses and other places where the Commissioner has, by a special order, permitted examination of goods for export.

22. B. Export under Free Shipping Bills: Scale of Examination No examination except where there is a specific intelligence. Category of Exports • Exports under Free Shipping Bills i.e. where there is no export incentive.

23. C. Export under Drawback Scheme:

24. D. Export under EPCG/DEEC schemes:

25. E. Export under Shipping Bills claiming benefits under Reward Schemes:

26. Implementation of Risk Management Systems (RMS) in Exports • It is proposed to implement the Export module of RMS in two phases. In the first phase, which has been rolled out on 24.01.2014, RMS will process the Shipping Bills for the purpose of selecting the bills for verification of Assessment and Examination. In the second phase, which will be introduced subsequently, RMS will process the Shipping Bills after filing of EGM to select the Bills for PCA (Post Clearance Audit) and sanction of Drawback by the officers. • The objective of the RMS is to strike an optimal balance between facilitation and enforcement and to promote a culture of compliance. Contd…..

27. This output from RMS will determine the flow of the Shipping Bill in ICES i.e. whether the Shipping Bill will be taken up for Customs control (verification of self-assessment or examination or both) or to be given “Let Export Order” directly after payment of Export Duty (if any) without any verification of self-assessment or examination. The RMS will also provide instruction for Appraising Officer / Superintendent, Examining Officer / Inspector or the Let Export Order (LEO) Officer, wherever necessary. • The RMS may facilitate Shipping Bills which are perceived to be compliant with the Customs Laws and Regulations. Such self-assessed Shipping Bills will be ready for goods registration and “Let Export Order” after payment of export duty (if any) on presentation of required documents, on the basis of the self –assessment without any assessment/ examination by the officers. Facilitated Bills will be subjected for inspection before giving LEO. • Contd…..

28. High risk consignments will be interdicted by the RMS and sent for verification of self-assessment and / or examination by the officers based on risk parameters and also on a random basis. Further, if any non-compliance is noticed , the system may also select such Shipping Bills for Assessment and / or Examination. All such Bills which are selected for action by Customs will be processed in the ICES as per the treatment and instructions communicated by the RMS. It needs to be noted that the decisions communicated by the RMS on the need for verification of self-assessment and / or examination and the appraising and examination instructions communicated by the RMS have to be followed by the Officers involved in assessing and / or examining the export consignments. • Compulsory Compliance requirements (CCRs): The RMS has a consolidated database of the compliance the requirements arising out of various Allied Acts which are administered by other government departments (OGD) and implemented by Customs at the borders. • Contd…..

29. Amendments in Shipping Bill: the existing procedure for amendments in the ICES will continue. • Assessment of Shipping Bill: The shipping Bills selected by the RMS for assessment will be sent to Export Appraising Section. Present assessment process in ICES will continue. • Examination and Let Export Order (LEO): Based on the RMS output a Shipping Bill may be sent for assessment and examination or examination alone without any assessment. Such Shipping Bills will be examined by the officers based on the RMS instructions/examination order given in the system by Export Appraising section and suggested CCRs. The existing system of selection of package numbers and SSO ID of officer for examination by the system after the goods registration will continue. In the case of Shipping Bills which are not selected for examination, the officers will inspect only the marks and numbers, or seal number of the consignment and integrity of the seal as the case may be, and proceed to give Let Export Order after the Exporter / CHA complies with the CCRs and produces the required documents. • Contd…..

30. Document Submission : It is essential that all the documents are submitted by the Exporters / CHAs to the proper officer (Appraiser / Superintendent) before getting the Let Export Order for the goods. Thereafter Shipping Bill print shall be generated by the system. At the time of getting signature of LEO officer, the dockets containing following documents wherever applicable shall be submitted by the Exporter / CHAs after affixing their signature on each of them. • a) Copy of Shipping Bill • b) AR-4 /ARE -1 (Wherever applicable) • c) Invoice / packing list • d) ADC clearance, wherever required • e) Other documents specified in the CCR instructions. • f) SDF (Statutory Declaration Form), wherever required • g) CENVAT declaration, wherever required • h) Any other documents submitted by the Exporter/ CHA. • Contd…..

31. Post Clearance Audit (PCA) : The RMS will select the Shipping Bills for audit, after issue of LEO, and these selected Shipping Bills will be directed to the audit officers for scrutiny by the ICES. In case any possible short levies or undue claim of export incentives are noticed, the officers will issue a Consultative letter setting out the grounds for their views to the Exporters / CHAs.

32. TRADE FACILITATION MEASURES AT AIR CARGO EXPORT (SHED) • Introduction of 24x7 Customs clearance operations for Duty Free Shipping Bill w.e.f.01.09.2012: As a measure of trade facilitation, 24x7 Customs clearance operations facility for export consignments covered by Duty Free Shipping Bills was introduced w.e.f. 1st September, 2012 at Air Cargo Export Commissionerate, New Delhi and for implementation of the same a Public Notice No.35/2012 dated 30.08.2012 was issued accordingly. Contd…..

33. Introduction of 24x7 Customs clearance operations for all goods w.e.f.01.07.2013: Encouraged with popularity of the above facility and on demand from various stake holders, the facility of 24x7 customs clearance operations has been extended to all goods instead of limiting it to the Duty Free Shipping Bills only w.e.f. 01.07.2013 and a Public Notice No. 11/2013 dated 26.06.2013 has been issued in this regard. The popularity of this facility is increasing day by day and more and more exporters are now bringing their export consignments during extended working hours. In the very first month of introduction of the facility of Customs clearance operation for all goods as many as export consignments against 1671 Shipping Bills relating to drawback and other scheme were cleared. Contd…..

34. The following details are indicative of the popularity and acceptation of the facilitation by the trade.

35. Restrictions : Export Policy Goods other than entries in export licensing schedule + appendices are freely exportable Subject to other laws in force : eg Wild Life (Protection)Act 1972,Atomic energy Act 1962 Free goods may also be controlled by Public Notice issued under FT(D&R)Act 1992 Free goods do not require Export License : but subject to conditions laid out in the Export Licensing Schedule

36. Classes of Export Trade Control A. PROHIBITED GOODS: not permitted B. RESTRICTED GOODS: require license along with compliance of procedures /conditions specified in Export Policy C. STATE TRADING ENTERPRISES: certain items can be exported through designated STEs without a license RESTRICTIONS ON COUNTRY OF EXPORT: eg Arms to Iraq prohibited

37. EXPORT POLICY • Has six columns : • Entry No: Serial Order • Tariff Item (HS) Code :Eight digit code : the first six correspond exactly with the six digit WCO classification. Last two digits are developed in India for tariff item: eg 3301 29 37 is Sandalwood oil • Unit: of measurement and weight • Item Description • Export Policy: general policy regime Prohibited, restricted etc • Nature of Restriction: specifies the special conditions which must be met ,details the restrictions

38. Claiming Drawback • Duty Drawback is the rebate of Customs & Excise duties and Service Tax on the materials/services used in the manufacture of export goods . • Under EDI drawback claims are paid electronically through credit/disbursal directly to the exporter’s bank, after filing of EGM. • The status of the shipping bills and sanction of drawbacks claim can be ascertained at ICEGATE website or CMC query counter”. In case of query a print out of the ‘Query” is to be obtained and reply to be submitted • Claim comes in queue of the Superintendent (DBK) for processing . • All the claims sanctioned will be enumerated in a scroll and transferred to the Bank, through EDI system..

39. THANK YOU