Unit 2: Commercial and Regulatory Documentation

Commercial Documents in Export-Import Business

Commercial documents are the papers required during export and import of goods.
They help in smooth trade, payment, customs clearance, and product verification.

Proforma Invoice

• Meaning: A proforma invoice is a preliminary bill sent by the exporter to the importer before the shipment.
• Purpose: It gives details about the goods, price, quantity, shipment time, and payment terms.
• Use: The importer uses it to apply for an import license or foreign exchange approval.
• Example: Like a quotation or price estimate given before the final bill.

Key Points:

• Sent before actual sale
• Not a demand for payment
• Helps buyer make purchase decisions

Commercial Invoice

• Meaning: The commercial invoice is the final bill issued by the exporter after the goods are shipped.
• Purpose: It is the main document for payment and customs clearance.
• Use: It shows the total value of goods and helps calculate customs duty.

Key Contents:

• Name and address of exporter & importer
• Invoice number and date
• Description of goods (quantity, price, total value)
• Terms of delivery (FOB, CIF, etc.)
• Payment terms and shipping details

Simple Example: It’s just like a final shop bill you get after buying something, but for international trade.

Packing List

• Meaning: A packing list gives details of how goods are packed in cartons, boxes, or containers.
• Purpose: Helps customs and transport staff identify goods easily without opening every package.
• Use: It shows item-wise packing details and helps in checking missing or damaged items.

Key Details:

• Description of goods
• Weight, volume, and dimensions
• Number of packages and markings
• Shipping details

Example: It’s like a checklist of what’s inside the parcel.

Certificate of Origin (COO)

Meaning: This certificate proves that the goods are made in a particular country.

Issued by:

• Directorate General of Foreign Trade (DGFT) or
• Local Chamber of Commerce.
• Purpose: Some countries give import duty discounts if the goods come from specific nations (under trade agreements).

Types:

1. Preferential COO: For countries having trade agreements (e.g., India–ASEAN FTA).
2. Non-Preferential COO: For other normal exports.

Example: It’s like a “Made in India” proof for goods.

Inspection and Quality Certificates

• Meaning: These certificates confirm that the goods meet the required quality and safety standards.
• Purpose: To ensure products are safe, hygienic, and as per buyer’s requirement.

Issued by:

• FSSAI (Food Safety and Standards Authority of India): For food items to ensure safety and hygiene.
• Export Inspection Agency (EIA): For general product inspection.
• Chamber of Commerce: Can verify certain product or business details if required.

Example: It’s like a quality check report before delivering goods abroad.

Summary Table

Document Name	Issued By	Purpose	Example
Proforma Invoice	Exporter	Gives product & price details before shipment	Quotation before purchase
Commercial Invoice	Exporter	Final bill for customs and payment	Final sales bill
Packing List	Exporter	Shows how goods are packed	Parcel content list
Certificate of Origin	DGFT / Chamber of Commerce	Proves goods are made in a specific country	“Made in India” proof
Inspection & Quality Certificate	FSSAI / EIA / Chamber	Ensures goods meet quality & safety standards	Quality test report

Agricultural and Processed Food Products Export Development Authority (APEDA)

APEDA stands for Agricultural and Processed Food Products Export Development Authority.
It was set up by the Government of India under the Ministry of Commerce and Industry in 1985.

Main Purpose

To promote, develop, and regulate the export of agricultural and processed food products from India.

Functions of APEDA

1. Promotes export of agri and food products like fruits, vegetables, meat, dairy, honey, etc.
2. Registers exporters and gives RCMC (Registration-Cum-Membership Certificate).
3. Provides financial help for packaging, infrastructure, quality improvement, and market development.
4. Organizes training programs, trade fairs, and buyer-seller meets.
5. Sets quality standards and monitors food export quality.

Products under APEDA

• Fruits, vegetables, and their products
• Meat, poultry, and dairy products
• Confectionery, biscuits, and bakery products
• Honey, jaggery, sugar products
• Alcoholic & non-alcoholic beverages

Regulatory Documents for Export

These are legal and financial documents required for customs clearance, tax compliance, and export benefits.

Shipping Bill

• Meaning: A document filed with Indian Customs before exporting goods.
• Purpose: It acts as proof of export and helps in claiming export incentives.
• Issued by: Indian Customs Department (through ICEGATE portal).
• Details included: Exporter details, goods description, value, HS code, destination country, etc.

Simple Example: It’s like a ticket or permit that allows goods to leave India legally.

Bill of Entry

• Meaning: A document filed by the importer when goods arrive in India.
• Purpose: Used for customs clearance of imported goods and to calculate duty payable.
• Issued by: Indian Customs (through ICEGATE).

Simple Example: It’s like a receipt slip showing what goods have entered India and their duty details.

Goods and Services Tax (GST) Invoice for Exports

• Meaning: A GST-compliant invoice issued by an exporter when selling goods abroad.
• Special Rule: Exports are “zero-rated” under GST, which means no GST is charged on export sales.

Contains:

• Exporter’s GSTIN
• Invoice number and date
• Description and value of goods
• Declaration that it’s a “Supply meant for export under bond or Letter of Undertaking (LUT)”

Example: It’s a bill with zero GST because exports are tax-free.

E-Invoicing Compliance

• Meaning: Under GST, large and medium businesses must issue electronic invoices (e-invoices) through the GST Invoice Registration Portal (IRP).
• Purpose: Ensures authenticity and transparency in export transactions.

Steps:

1. Exporter uploads invoice data on IRP
2. System generates a unique Invoice Reference Number (IRN) and QR code
3. This becomes a valid e-invoice for GST and customs use

Simple Example: It’s like digitally verifying your bill online before sending goods abroad.

GST Refund Mechanism for Exports

Exports are zero-rated, meaning exporters can claim back any input tax credit (ITC) paid on goods or services used for exports.

Two Ways to Claim Refund:

Export under LUT/Bond without payment of GST

• Exporter doesn’t charge GST on invoice
• Can claim refund of input tax credit (ITC) used for exports

Export with payment of GST

• Exporter pays GST on goods at the time of sale
• Can claim refund of the GST paid after export

Documents Required for Refund:

• Shipping Bill
• Export Invoice
• Bank realization certificate (proof of payment received from foreign buyer)
• GST return (GSTR-1 & GSTR-3B)

Example: It’s like getting your tax money back since export goods are not meant for domestic use.

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Summary Table

Document / Authority	Issued By	Purpose	Example
APEDA	Ministry of Commerce	Promotes and regulates export of agri & food products	Registration for food exporters
Shipping Bill	Indian Customs (ICEGATE)	Permission for goods to leave India	Export permit
Bill of Entry	Indian Customs	Customs clearance for imported goods	Import record
GST Invoice	Exporter	Legal invoice showing zero-rated supply	Export bill
E-Invoicing	GST Portal (IRP)	Digital authentication of invoice	E-bill with QR code
GST Refund Mechanism	GST Department	Refund of GST/ITC paid on exports	Tax refund claim