Our previous blog, “3 Mandatory Documents Exporters And Importers Need for Hassle-free Shipping”, dealt with the must-have documents for exporters and importers sending and receiving goods by sea. In this follow-up blog, we will look at some of the most common supporting documents in the shipping process, which exporters and importers might need to get their goods cleared by customs.

The term “supporting” suggests these documents are secondary to the mandatory documents. It is important to understand that this does not necessarily mean they are optional. It only means the requirement for a specific supporting document depends on various factors, including but not limited to:

• The nature of the cargo
• Rules and regulations of the exporting or importing country
• Trade agreements between certain countries
• Bans imposed on certain goods by certain countries             

Take the example of a Country of Origin (COO) certificate, which we will deal with in detail later in this blog. Most countries demand a COO certificate for an export shipment to get customs clearance. This makes the document mandatory in such cases. But there are also countries that do not demand such a certificate. Hence, a COO certificate falls in the category of secondary documents.

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Supporting Documents for Export Customs Clearance

To start with, these are some but not all of the supporting documents exporters in India might be asked to submit at the time of customs clearance: 

1. Export Licence

A licence issued by the Directorate General of Foreign Trade (DGFT), it allows exporters to trade in goods that come under the restricted category of the Indian Trade Classification-Harmonised System Codes. It must be produced when the exporter is shipping his first cargo.    

2. Proforma Invoice

A proforma invoice is a preliminary invoice issued by the exporter to the importer. It differs from a regular invoice in that it is not a demand for payment. It includes a detailed description of the goods, their price, terms of sale and delivery details.        

3. Country Of Origin (COO) Certificate

A COO certificate vouches that the goods being shipped were produced, manufactured and processed in a particular country. It includes an exporter declaration and an inspection certificate (by a state employee or relevant agency). Most countries demand a COO certificate for customs clearance.

4. Letter of Credit

The exporter might need to acquire a letter of credit from the importer’s bank, stating that the importer will go through with the payment. In some cases, the goods can be dispatched only after the exporter produces this document.

5. Warehouse Receipt

The Business Dictionary defines a warehouse receipt as a “receipt for goods left for safekeeping in a warehouse” and a “document of title… guaranteeing existence and availability of a specified quantity and quality of a commodity, and used as an instrument of transfer in cash (spot) and futures transactions”. It is proof that the goods authorised for sale are available and ready to be transferred to the buyer.   

6. Health Certificates

These are mostly required for food products. They certify that the goods comply with safety standards and export regulations, and are fit for human consumption.

7. Dangerous Goods Forms

These are required for goods considered dangerous by the International Maritime Organisation, such as flammable liquids, gases, corrosives and toxic substances. 

8. Consular Invoice

Some importing countries insist on this embassy-attested document. The exporter can get this from a consular representative of the country he is shipping to.

9. Insurance Certificate

This certifies that the exporter has insurance cover for the cargo being shipped.

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Supporting Documents for Import Customs Clearance  

As it is with exports, the process of importing a particular product is completed only when the buyer receives the goods. Thus, for the imported goods to get customs clearance, the importer might have to furnish these additional documents at the port of entry:

1. Import Licence

An import licence is a permit issued by the DGFT that allows the import of goods that are subject to government regulations. It specifies the amount that can be imported, and is usually valid for 18 months to a year, depending on the goods. Most goods are freely importable in India. But in the case of regulated goods – chemicals, pharmaceuticals, precious stones, plants, animals, etc – the importer must obtain an import licence and present it at the time of customs clearance. 

2. Insurance Certificate

This document, issued by an insurance company, certifies that the goods are covered for any loss or damage during transit. It backs up the importer’s declaration on the terms of delivery and helps customs ascertain the duties due on the goods.

3. Purchase Order and Letter of Credit

A purchase order is a contract issued by the buyer (importer) to the seller (exporter) confirming the purchase of goods. It contains details of the goods, their quantity and price, payment and delivery terms. Once the purchase order is finalised, the importer contacts a bank (called the issuing bank) to obtain a letter of credit, which is a promise by the bank to pay the exporter the agreed upon sum on behalf of the importer.

4. Technical Write-up/Literature

If the cargo is machinery, for example, customs authorities might ask for a written explanation of its functions to help them determine the product’s market value.

5. Test Report

When customs authorities are unable to assess the quality and thereby value of certain goods, they might send a sample to an authorised government laboratory for testing. The lab tests the product and provides a test report, on the basis of which the cargo is cleared.  

6. Industrial Licence

An importer can avail of import benefits under government guidelines by submitting a copy of this to customs.

7. Registration cum Membership Certificate

This is a certificate of registration with the Federation of Indian Export Organisations (the country’s apex export promotion organisation) or the various Export Promotion Councils or Commodity Boards. It is required for importing (or exporting) restricted items and to avail of benefits under the Foreign Trade Policy or those offered by customs and excise authorities.       

8. Duty Exemption Documents 

For duty exemptions under government schemes such as the Duty Exemption Entitlement Certificate (DEEC) and Export Promotion Capital Goods (EPCG), the importer must present the relevant documents during clearance.

9. Central Excise Document

This is required to avail of central excise benefits, if applicable.

10. GATT/DGFT Declarations

Both the General Agreement on Tariffs and Trade (GATT), a legal document between multiple countries, and the DGFT declaration establish standards for participating in international trade. These documents may be required for import customs clearance.           

Note: These are by no means complete lists of supporting documents required in the international shipping process. Businesses and individuals exporting from India or importing into India might be required to submit even more paperwork. Therefore, exporters and importers are advised to check with their agents or shipping lines for any country-specific or product-specific documentation requirements for a hassle-free shipping experience.