MANAPPURAM JEWELLERS LTD

IMPORT – EXPORT
LMS MODULE
 REQUISITIES FOR EXIM ACTIVITY
ESTABLISHING & REGISTRATION OF A BUSINESS FIRM

Choosing the nature of business entity as

proprietorship, partnership, limited liability
partnership, private company, limited
company, Trust, Registered Society and HUF
and get it registered as per the respective laws
in the country.
 MODE OF OPERATION
A Firm should decide the mode of doing
exports operations either as a

MERCHANT EXPORTER ,

MANUFACTURER EXPORTER
or
MERCHANT cum MANUFACTURER EXPORTER
Applying for the grant of PAN of Income Tax

It is necessary to obtain a Permanent Account

Number (PAN) issued from Income Tax
Department after applying at 
https://www.onlineservices.nsdl.com/
PAN is a requirement to open the current A/C
in the name of the proposed business firm and
to apply for the allotment of IEC No. (IMPORT
EXPORT CODE No.)
  Opening a Bank Account and obtaining
Authorised Dealer Code (AD)

A current account with a Bank authorized to

deal in Foreign Exchange should be opened.
Authorised Dealer Code (AD code) – a 14 digit
numerical code is issued by the bank which is
to be registered with the Customs
 Registering with the Goods and Services Tax
Department
In order to obtain Goods and Services Tax
Identification Number (GSTIN No.) which is
required for claiming the refund of taxes a
firms needs to register with the Goods and
Services Tax Department by applying at 
https://www.gst.gov.in/
Obtaining Importer-Exporter Code (IEC) Number
• An Importer -Exporter Code (IEC) is a key business identification number which is
mandatory for export from India or Import to India. No export or import shall be made
by any person without obtaining an IEC unless specifically exempted. For services
exports however, IEC shall be not be necessary except when the service provider is
taking benefits under the Foreign Trade Policy.
• Consequent upon introduction of GST, IEC being issued is the same as the PAN of the
firm. However, the IEC will still be separately issued by DGFT based on an application.
The nature of the firm obtaining an IEC may be any of the follows- Proprietorship,
Partnership, LLP, Limited Company, Trust, HUF, Society.
• Pre-Requisites for Applying for IEC
IEC may be applied on behalf of a firm which may be a Proprietorship, Partnership, LLP,
Limited Company, Trust, HUF, Society. Firm must have a PAN, bank account in the name
of the firm and a valid address before applying. Address may be physically verified by
the DGFT on issuance of the IEC. Please keep your PAN, bank details and firm details
ready before applying.
• Para 2.05 of the Foreign Trade Policy (FTP) of 2015-20 lays down the procedure to be
followed for obtaining an IEC, which is PAN based.
• An application for IEC is filed online at https://dgft.gov.in/CP/ IEC Profile Management
as per ANF 2A, online payment of application fee through net Banking or credit/debit
card can be made along with requisite documents as mentioned in the application form.
 AD code - Authorized Dealer Code -
Registration with customs
After obtaining IEC , it is necessary to register an
AD Code at the port from where goods are
cleared by customs as the EDI system of the Ice
Gate portal does not allow the generation of the
shipping bill in the absence of a registered AD
Code. In case of being eligible for the
government benefits, an AD Code registration
with the customs enables a firm to get the same
directly credited into your current account.
 Registration for Business Identification
Number
• It is necessary to obtain PAN based Business
Identification Number (BIN) from the Customs
prior to filing of shipping bill for clearance of
export goods.
 Registration with Export Promotion Council
(EPC) and Commodity Boards
• For availing authorization to import/ export or any other
benefit or concession under FTP 2015-20, as also to avail
the services/ guidance , the exporters are essentially
required to obtain Registration cum membership
certificate (RCMC) granted by the concerned Export
Promotion Councils/ FIEO/Commodity Boards/
Authorities.
• For Gems and Jewellery commodities falling under
chapter 71, Gem and Jewellery Export Promotion Council
(GJEPC) is the Export Promotion Council. For applying visit
at www.gjepc.org
 E-Sanchit Registration on ICEGATE Portal

• Indian Customs Electronic Gateway (ICEGATE) is the

national portal of Indian Customs of Central Board of
Indirect Taxes and Customs (CBIC) that provides e-filing
services to the Trade, Cargo Carriers and other Trading
Partners electronically.
• IEC holders need to register their IEC on the portal for
availing e-Sanchit facility. For the registration on
Icegate portal Cass III Digital Signature is mandatory.
• https://www.icegate.gov.in/eSANCHIT.html
• https://www.icegate.gov.in/Download/v1.2_Advisory_
Registration_APPROVED.pdf
 ACTIVITY - POST SET UP OF EXPORT FIRM
COMPLYING WITH ALL THE REGISTRATIONS, A FIRM CAN START ITS OPERATIONS WHICH INCLUDES THE FOLLOWING STEPS

• Selection of the Product

All items are freely exportable except few items appearing
in prohibited/ restricted list. After studying the trends of
export of different products from India proper selection of
the product(s) to be exported may be made.
 Selection of Markets
An overseas market should be selected after research
covering market size, competition, quality requirements,
payment terms etc. Exporters can also evaluate the
markets based on the export benefits available for few
countries under the FTP.
ACTIVITY - POST SET UP OF EXPORT FIRM

• Selection of Markets & Finding Buyers

• An overseas market should be selected after
research covering market size, competition, quality
requirements, payment terms etc. Exporters can
also evaluate the markets based on the export
benefits available for few countries under the FTP.
• Participation in trade fairs, buyer seller meets,
exhibitions, B2B portals, web browsing are an
effective tool to find buyers.
ACTIVITY - POST SET UP OF EXPORT FIRM
• Procuring an Export Order
• The exporter goes for procuring orders by sending a sample
or sharing a proforma invoice including description, price
etc. of the goods and after having agreed upon the terms
and conditions of the contract related to documents, freight
charges, payment terms etc. importer sends a purchase
order.
• Providing customized samples as per the demands of Foreign
buyers help in getting export orders. As per FTP 2015-2020,
exports of bonafide trade and technical samples of freely
exportable items shall be allowed without any limit.
ACTIVITY - POST SET UP OF EXPORT FIRM

•  Commencing Manufacturing Operations

• With export orders in hand , the exporter
starts manufacturing goods or buying them
from the other manufactures in case of being
merchant exporter.
ACTIVITY - POST SET UP OF EXPORT FIRM

• Quality Control
• In order to have a check on quality control ,
the exporter makes arrangements for
inspection by the concerned Agency and
obtaining certificate of inspection which is
essentially required by the customs before
allowing shipment of goods and By a banker to
negotiate the documents
ACTIVITY - POST SET UP OF EXPORT FIRM

• Obtaining Certificate of Origin

• Certificate of Origin is a document, which is
used to avail the preferential tariff rates as per
some agreements such as GSP, GSTP. This is
obtained from the authorized agency which
issues a certificate declaring that goods being
exported are of Indian Origin.
 ACTIVITY - POST SET UP OF EXPORT FIRM
•  Insurance Policy/Certificate of Insurance
• As international trade transportation is full of risks and ocean
carriers doesn’t take any responsibility for loss/piracy/damage
etc. to the cargo if the cargo is shipped without the insurance
cover.
• Ocean carriers consider it negligence on the part of exporter.
Hence exporter is mandatory required to arrange the
cargo/marine insurance for his export shipment.
• The insurance certificate indicate the amount insured of the
shipments and also describes that awhile kind of risks are
covered under the polices under various institute cargo clauses
ACTIVITY - POST SET UP OF EXPORT FIRM

• Dispatch to Ports/Airports for Transit

• Exportable are then dispatched to
ports/airports for transit
•  Insurance Policy/Certificate of Insurance
• The exporter firm has to apply to an insurance
company for marine/air insurance cover in
accordance with the pricing terms viz. FOB,
CFR, CIF etc.
ACTIVITY - POST SET UP OF EXPORT FIRM

• Customs Procedures
• Custom procedures including issuing of
shipping bill in case of exports and Bill of Entry
in case of imports , payment of port charges,
inspection, etc. take place. For this an exporter
may hire a Clearing House Agent (CHA).
ACTIVITY - POST SET UP OF EXPORT FIRM

• Shipment
• After the customs clearance final shipment of
goods take place and in exchange bill of lading
Is issued.
 ACTIVITY - POST SET UP OF EXPORT FIRM
• Submission of documents to the Importers and Bank
• After shipment, it is obligatory to present the documents to the Bank
within 21 days for onward dispatch to the foreign Bank for arranging
payment. Documents should be drawn under
Collection/Purchase/Negotiation under L/C as the case may be, along with
the following documents -
• Bill of Exchange
• Letter of Credit (if shipment is under L/C)
• Invoice
• Packing List Airway Bill / Bill of Lading
• Declaration under Foreign Exchange
• Certificate of Origin/GSP; Inspection Certificate, wherever necessary
• Any other document as required in the L/C or by the buyer or statutorily
ACTIVITY - POST SET UP OF EXPORT FIRM

• Realization of Export Proceeds

• As per FTP 2015-2020, all export contracts and
invoices shall be denominated either in freely
convertible currency of Indian rupees, but
export proceeds should be realized in freely
convertible currency except for export to Iran.
Export proceeds should be realized in 9
months.
 Covering Credit Risks Through ECGC

International trade involves payment risks due

to buyer/ Country insolvency. These risks can
be covered by an appropriate Policy from
Export Credit Guarantee Corporation Ltd
(ECGC). Gold Jewellery is exempted under
ECGC
 Obtaining Export Credit
via
BANKING CHANNELS

The bank & other financial institutions extend

financial facility for completion of export
orders received from the foreign buyer. The
finance is generally given for procurement of
raw material or merchandise including
towards cost of processing, manufacturing &
packaging. The bank normally finance up to
75% of the value of export order.
 Pre Shipment / Packing Credit

'Pre-shipment /Packing Credit' means any loan or advance

granted or any other credit provided by a bank to an exporter
for financing the purchase, processing, manufacturing or
packing of goods prior to shipment / working capital expenses
towards rendering of services on the basis of letter of credit
opened in his favour or in favour of some other person, by an
overseas buyer or a confirmed and irrevocable order for the
export of goods / services from India or any other evidence of
an order for export from India having been placed on the
exporter or some other person, unless lodgement of export
orders or letter of credit with the bank has been waived.
 PSCFC
'Post-shipment Credit' means any loan or advance
granted or any other credit provided by a bank to an
exporter of goods / services from India from the date
of extending credit after shipment of goods /
rendering of services to the date of realisation of
export proceeds. ,and includes any loan or advance
granted to an exporter, in consideration of, or on the
security of any duty drawback allowed by the
Government from time to time. If the loan is given in
foreign currency it is termed as PSCFC.
 Interest Subvention For Export

It is financial support given by Govt. for promoting the exports.

Interest subvention is hence the subsidy offered on interest
rates. For instances, interest subvention is offered on several
lending schemes by the government to promote a particular
industry for defined tariff lines. This implies that with the
subsidy in hand, the loan borrower has not to pay total
interest on loan amount and the balance interest amount is
borne by the government. Thus, interest subvention is a form
of waiver of some percentage of interest that promotes some
particular industry and general public interest. For
manufacturing the subvention rate is 5% & for services it is 3%.
PRODUCT WISE GUIDANCE RELATED TO COMPLIANCE OR PROCEDURE FOR
EXPORT

• GOLD JEWELLERY - (HSN CODE – 7113.19)

• DUTY DRAWBACK SCHEME
• Exporter needs to have one-time certificate from the customs authorities
from the respective jurisdiction and then they become eligible to draw
duty free gold/inputs from Nominated agency. The exporter along with
GJEPC membership certificate and RCMC along with one-time certificate
will go to the Nominated agency to draw duty free gold. If these
documents are there, then exporter become eligible for doing exports.
• From the date of export gold within 90 days exporter has to do the export
and another 120 days for receiving the payments. Customs Invoice Bill
Shipping Bill, BRC, Customs are the 3 proofs of doing the exports.
• Duty Drawback Scheme – To draw duty drawback gold, if he has gold
stocks, he will complete exports, he will have to say its is duty drawback,
shipping bill would be duty drawback. He will be eligible to have drawback
from -
 Outright Purchase

• It is a facility under which you may purchase gold/silver for jewellery exports against 100%
payment
• Submit a copy of Purchase Order of the Overseas Buyer.
• Place trade margin with us as mutually agreed.
• Fix the price of Metal and USD with our Bullion Treasury over phone.
• Fund our bank account with the invoice amount Plus security amount for Customs Duty
through RTGS/NEFT/bank transfer.
• Take delivery of metal through your authorised person from our logistic agent
• Export jewellery made out of this gold, with admissible value addition, within 90 days from
the date of taking gold delivery.
• Submit E.P copy of Shipping Bill, Customs attested Invoice) to us within 7 days from the
date of export (otherwise, we have to pay customs duty by encashing security).
• Submit Bank Realisation Certificate (BRC) within credit term (Maximum 270 days from the
date of export) and get refund of security for customs duty.
• Unfix Purchase facility is also available against 110% cash margin where price is to be fixed
within 11 days.
 METAL LOAN
• It is a facility under which you may take delivery of duty free gold on loan basis for jewellery
exports against security of Bank Guarantee/Cash Margin for 110% of notional value of
gold .
• Submit a copy of Purchase Order of the Overseas Buyer.
• Submit Bank Guarantee for 110% of notional value of gold.
• Take delivery of gold through your authorised person from our logistic agent.
• Pay interest on metal loan on/ before the last day of every month.
• Export jewellery made out of this gold within 90 days from the date of delivery.
• Submit Proof of Export (i.e. Export Promotion copy of Shipping Bill and Customs attested
Invoice) within 7 days from the date of export (otherwise, we have to pay customs duty by
encashing security).
• Fix the price of gold and pay the amount with interest to close metal loan max within 180
days (Fixed term loan to be closed on pre-fixed date and Flexi loan to be closed on any day
within 180 days)
• Submit Bank Realisation Certificate (BRC) within credit term (Maximum 270 days from the
date of export) and get refund of security of customs duty.
• You should monitor gold price to maintain margin at 110% at all times and top up margin
when it falls below 110%.We may also give you the Margin Call. You should top up the
margin within 24 hours of our margin call failing which the metal shall be priced out.
 REPLENISHMENT SCHEMES
Under these schemes, you may take delivery of duty free gold after
export of jewellery. In other words, it is 'replenishment' of your own gold
used in thejewellery exported.

A. On Booking Basis
• It is a facility under which you may book gold with us for the jewellery to
be exported
• Fix gold price with us for the quantity of jewellery to be exported,plus
admissible wastage, against payment of 20% cash margin.
• Export jewellery within 120 days of booking/price fixing.
• Take delivery of gold within 150 days of booking or 30 days of export,
whichever is later, on payment of balance 80% plus interest at agreed rate.
• Submit EP copy, Customs attested Invoice & Bank Realisation Certificate
(BRC) within credit term.
 On Notional Rate Certificate (NRC) Basis

• It is a facility under which you may export jewellery on the basis of a Notional
Rate Certificate and book gold after export of jewellery Obtain NRC from us.
• Export jewellery within 7 days from date of NRC.
• Submit EP copy, Provisional Customs attested Invoice.
• Fix price with us within credit terms or 180 days whichever is earlier.
• Gold to be booked/priced for exported quantity (Metal content plus admissible
wastage) only and same gold rate will be charged to the foreign buyer.
• Obtain a Purchase Certificate/Invoice.
• Submit Final Customs Invoice as per the rate fixed with us.
• Realize proceeds as per final invoice within credit terms or 180 days,whichever
is earlier.
• Submit BRC & take delivery of gold on payment of balance 80% plus interest at
agreed rate.
 On Exhibition Sale Basis

• It is a facility under which you may take delivery of duty free

gold after sale of jewellery in exhibitions held abroad.
• Submit approval of GJEPC for exhibition.
• Submit EP copy of Shipping Bill,Customs attested Invoice for
the jewellery exported.
• Submit EP copy of Shipping Bill and Customs attested invoice
for unsold jewellery re-imported.
• Submit Appendix 4.0, duly certified by GJEPC.
• Purchase gold from us for the eligible quantity within 120 days
of the close of exhibition.
• Submit BRC to GJEPC within 180 days.
 HARMONIZED SYSTEM (HS) CODES

• The Harmonized System is a standardized numerical method of

classifying traded products. Harmonized System (HS) Codes are used by
customs authorities around the world to identify products when
assessing duties and taxes and for gathering statistics.
• The HS is administrated by the World Customs Organization (WCO) and is
updated every five years.
• The HS assigns specific six-digit codes for varying classifications and
commodities. Countries are allowed to add longer codes to the first six
digits for further classification.
• Gems & Jewellery items fall under Chapter 71 and for the productwise
HS Classification used by Indian customs please click here
• http://dgciskol.gov.in/Itchs.aspx
• http://dgciskol.gov.in/Section_XIV2017.aspx
 ASSESSMENT
1) An Export Registration can be taken by
a) MERCHANT EXPORTER ,
b) MANUFACTURER EXPORTER
c) MERCHANT cum MANUFACTURER
EXPORTER
I (a) ii (b) iii (c)

Answer : c
 ASSESSMENT
2) IEC No. Stands for
a) INDIAN EXPORT CODE No.
b) IMPORT EXPORT CODE No.
c) INDIAN EXTERNAL CODE No.
d) IMPORT EXTERNAL CODE No.

Ans. b
 ASSESSMENT
3) _____ are necessary for Export Registration

a) PAN b)Bank Account c) GST d) IEC No. e)

GJEPC f) TRS Certificate
i) a,b,c ii) a,b,c,e,d iii) a,c iv) a,b,c,d v) all of
the above
Ans: ii
 ASSESSMENT
4) IEC No. Is issued by _____

a) IT Dept b) SEBI c) DGFT d) GST

Ans : c
 ASSESSMENT
5) DGFT stands for ______

a) Director General Free Trade

b) Directorate General Foreign Trade
c) District General Free Trade
d) Direct Goods Foreign Trade

Ans : b
 ASSESSMENT
6) Export Credit insurance is issued by ___

a) LIC b) GIC c) ECGC d ) All

Ans : c
 ASSESSMENT
7) GOLD bullion and Jewellery is covered under
ECGC

a) True b) false

Ans : b
 ASSESSMENT
8) Export Credit insurance is issued by ___

a) LIC b) GIC c) ECGC d ) All

Ans : c
 ASSESSMENT
9) ______is the national portal of Indian
Customs of Central Board of Indirect Taxes and
Customs (CBIC) that provides e-filing services
to the Trade, Cargo Carriers and other Trading
Partners electronically.
a) GATE b) ICEGATE c) GST Portal d) Export

Ans : b
 ASSESSMENT
10)GJEPC Stands for _____

a)Gems and Jewellery Exemption Policy Code

b)Gems and Jewellery Export Policy code
c)Gems and Jewellery Export Promotion Centre
d)Gems and Jewellery Export Promotion
council
Ans : d