Ans: Rekha Garments should follow the export procedure given below:
A. Receipt of enquiry and sending quotation
Exporters can be notified of a request for information even if the importer places an advertisement in the press.
The exporter responds to the inquiry with a quotation, often known as a proforma invoice.
The proforma invoice comprises information about the price at which the exporter is willing to sell the goods, as well as information about the quality, grade, size, weight, mode of delivery, packing type, and payment terms.
B. Receipt of order or indent
It sets an order for the items to be sent if the export price and other terms and conditions are acceptable.
Also referred to as indent, contains the details of the goods ordered, and other information in respect to price, delivery, packing, marking etc.
C. Determining the creditworthiness of the importer and obtaining a payment guarantee
The importer's creditworthiness is investigated by the exporter.
A letter of credit is asked from the importer to reduce the extent of risk.
A letter of credit is a guarantee issued by the importer's bank that it will honour payment of export invoices to the exporter's bank up to a specific amount.
D. Obtaining export licence
In India, exporting commodities is governed by customs laws, which require that an export firm obtain an export licence before proceeding with exports.
Prerequisites for getting an export licence:
Opening a bank account with any bank that has been approved by the Reserve Bank of India;
Getting an Import Export Code (IEC) from the Directorate General of Foreign Trade (DGFT) or a Regional Import Export Licensing Authority;
Creating an account with the right export promotion council.
To protect against non-payment risks, you should register with the Export Credit and Guarantee Corporation (ECGC).
A company must submit an exporter/importer profile, a bank receipt for the required fee, a certificate from the banker on the prescribed form, two copies of photographs attested by the banker, details of non-resident interest, and a declaration about the application to obtain an IEC number to the Director General for Foreign Trade (DGFT).
It is a legal requirement for all exporters to register with the proper export promotion council.
To secure international payments from political and commercial interference, you must register with the ECGC.
Creating an account with the right export promotion council.
To protect against non-payment risks, you should register with the Export Credit and Guarantee Corporation (ECGC).
A company must submit an exporter/importer profile, a bank receipt for the required fee, a certificate from the banker on the prescribed form, two copies of photographs attested by the banker, details of non-resident interest, and a declaration about the application to obtain an IEC number to the Director General for Foreign Trade (DGFT).
It is a legal requirement for all exporters to register with the proper export promotion council.
To secure international payments from political and commercial interference, you must register with the ECGC.
E. Obtaining pre-shipment finance
To begin pre-production, the exporter asks his banker for pre-shipment financing.
Pre-shipment finance is the funding required by an exporter to purchase raw materials and other components, process items, and transport goods to the port of shipment.
F. Production or procurement of goods
G. Pre-shipment Inspection
Inspection of some products by a competent agency recognised by the government is required.
For this aim, the government created the Export Quality Control and Inspection Function in 1963 and authorised specific entities to act as inspection agencies.
At the time of export, the pre-shipment inspection report is required to be submitted along with other export paperwork.
H. Excise Clearance
The materials used to make the items are subject to excise duty.
The exporter must submit an invoice to the relevant Excise Commissioner in the region.
The Excise Commissioner issues the Excise clearance if he is satisfied with the invoice.
The refund of an excise duty is known as a duty drawback.
This scheme of duty drawback is administered by the Directorate of drawback under the ministry of finance which fixes the rates of drawback for different products.
I. Obtaining certificate of origin
To avail the trade concessions and other benefits, the importer has to ask the exporter to send a certificate of origin.
The certificate of origin issued by the importer acts as a proof that the goods are manufactured in the country from where the export is taking place.
J. Reservation of shipping space
The exporting company submits a request for shipping space to the shipping company.
It must specify the types of commodities to be exported, the expected shipment date, and the final destination port.
The shipping business issues a shipping order after accepting the application for shipping.
K. Packing and forwarding
The items are then properly packed and labelled with relevant information such as the importer's name and address, gross and net weight, shipping port and destination, country of origin, and so on.
The exporter then arranges for the transportation of the goods to the port.
The railway authorities issue a "railway receipt" when commodities are loaded into a railway waggon, which serves as a title to the items.
To enable his agent to take delivery of goods at the port of shipping, the exporter endorses the railway receipt in his favour.
L. Insurance of goods
M. Custom clearance
Before the products can be loaded into the ship, they must first be cleared from customs.
The exporter prepares the shipping bill in order to gain custom clearance.
The main document on which the customs office grants export permission is the shipping bill.
Five copies of the shipping bill are subsequently presented to the Customs Appraiser at the Customs House, together with the following documents:
Export Contract or Export Order
Following the submission of these documents, the Superintendent of the relevant port trust is contacted to acquire a carting order.
The command to the workers at the port's gate to allow the goods to enter the dock is known as a carting order.
N. Obtaining mates receipt
A mate receipt is a receipt that is provided by the ship's commanding officer when the cargo is loaded on board.
The receipt contains information such as the vessel's name, berth, date of shipping, package description, marks and numbers, cargo condition at the moment of receipt on board the ship, and so on.
The port superintendent gives the C&F agent the mate's receipt after receiving the port dues.
O. Payment of freight and bill of lading
The C&F agent hands along the mate's receipt to the shipping business for freight calculation.
The shipping company issues a bill of lading after receiving the freight, which acts as proof that the goods have been accepted for transport to the specified destination.
This document is referred to as an airway bill when goods are being shipped by air.
P. Preparation of invoice
Q. Securing payment
The importer will require a variety of documentation in order to claim ownership of goods upon their arrival in his or her nation and get them customs cleared.
In this case, a certified copy of the invoice, a bill of lading, a packing list, an insurance policy, a certificate of origin, and a letter of credit is needed.
The submission of necessary documents to the bank for the purpose of receiving payment from the bank is referred to as "document negotiation."
When the bill of exchange is received, the importer either releases the money in the event of a sight draught or accepts the usance draught for payment on the bill of exchange's maturity date.
The payment is collected by the exporter's bank through the importer's bank and credited to the exporter's account.
The exporter can receive immediate payment from his/her bank upon submission of documentation by signing a letter of indemnity.