Every exporter requires a shipping bill to conduct their exports seamlessly. The customs service centre issues this bill. Exporters apply for such a bill to obtain customs clearance and upload their products. They can also claim a refund on customs duties based on this bill. All goods meant for export or all supplies made to the Special Economic Zone (SEZ) are liable for GST taxation. Such products or supplies require the prior approval of the customs department. The application made for a shipping bill by exporters depends on the category of export items.
There are 5 types of shipping bills: Free shipping bills, Dutiable, Drawback, Ex-Bond, and Coastal. The Free shipping Bill applies to products that are liable to duty, and you cannot claim any duty drawback on such products. It is available in a white paper format. The Dutiable bill applies to export duty imposed products, and it prints on yellow-coloured paper. The Drawback bill, also published on yellow paper, applies to products that attract a refund on the customs duties. The Ex-Bond bill, printed on yellow paper, applies to imported products that need to be re-exported. The coastal shipping bill applies to goods transported by sea from one port to another within the geographical boundaries of India.
Did you know?
You can file a shipping bill even after a specific vessel moves out of the country.
What Is a Shipping Bill?
A shipping agent issues a shipping bill on behalf of the individuals in question. They could be sellers, buyers, C&F agents, or even Customs brokers. Products to be exported by sea require clearance from the authorities in the Customs department. You can apply for a shipping bill online as well as offline; the procedures vary for each.
How Does the Shipping Bill Process Function?
A shipping bill can be filed after the vessel/ship/etc., has been granted entry outwards, allowing it to leave the country. The bill is physically examined when it is submitted, and the value of the commodities intended for export is assessed by customs authorities. Customs officials check these bills and stamp the copy with the words 'LET EXPORT ORDER' and 'LET SHIP ORDER.'
Also Read: GST Billing Software Return Filing & Accounting Software
Online Application for a Shipping Bill
To file an online application for a shipping bill for export, you have to visit the online platform of the Indian Customs EDI Gateway (ICEGATE). Some individuals complete the formalities themselves, while others hire the services of a customs house agent (CHA) to help them with the process. If you are applying for the first time, you must complete the online registration process. This process involves you registering on the Import-Export Code (IEC) as well as the Authorised Dealer Code (ADC). You have to understand the requirements of documents that have to be submitted online. Once you complete the online registration form, you must also present scanned copies of all the requisite documents. Once the details are validated, you can take a printout of the said documents and the shipping bill.
Offline Application for a Shipping Bill
Digitisation has made offline applications for a shipping bill in export almost redundant though it is an option. The application process and the documentation are similar to that of an online application. In this case, though, you have to present your document in person at the customs office.
Exporters have to bear in mind the following:
Products meant for export can come under the schemes of Duty Exemption Scheme or even under the duty entitlement passbook. Duty Exemption Scheme facilitates exporters to import duty-free inputs required to produce goods for export purposes. It includes advance authorisation and Duty-Free Import Authorisation ( DFIA Scheme ).
The customs officers are entitled to inquire and evaluate the total worth of the export products. They can request the exporters for some samples, which they forward to specific departments to be analysed. If they are satisfied with the results, then the customs division issues a 'Let Export Order'. A shipping bill serves as a valuable document for all exporters. Without it, they will not be able to obtain a clearance from the customs division. You can also hire customs house agents to fulfil all the formalities.
Procedure for Generation of Shipping Bills
- At the onset, you have to register with the electronic data interchange (EID) system. This involves an exchange of all the commercial transaction documents between the two organisations or individuals. You can register with this system by using import-export and authorised dealer codes. You can also register with the license number of the customs house agent.
- As per the electronic data interchange system, you will have to present the shipping bill in the required format at the said customs centre. You will also have to submit a few copies of the invoice that is prepared as well as a copy of the packing list.
- Once you submit all the necessary documents, the details are checked by the customs house agent.
- These authenticated details are forwarded to the electronic data interchange system by an operator at the service centre. On the basis of the verified documents, this EDI system generates a shipping bill number on the printed copy of the checklist which you have submitted.
- In a majority of cases, the entire process is automated. The Assessment Commissioner of Exports assesses the goods if the total free on board (FOB) value on a shipping bill exceeds ₹ 10 lakhs, or it includes free samples whose value exceeds ₹ 20,000. An assessment is also made if the amount to claim a refund on unsold goods extends beyond ₹ 1,00,000.
- Exporters can now visit the service centre to understand the bill's status.
- There can be instances where exporters may be questioned on some matters. In such cases, they have to provide the service centres with the correct answers.
- Once the above formalities are completed, the goods are brought to the docks. The customs house agents or the exporters have to submit all the original copies of the documents. These include the packing lists, and the invoices, among others. A checklist is presented to facilitate the process.
- If all documentation is correct, the customs officer issues a 'let export order'.
- The completion of the above procedures leads to the generation of the shipping bill. The exporter or the CHA gets a printout of it.
Understanding the Format of the Shipping Bill
The format of a shipping bill includes the following details:
- A shipping bill number that is unique to every assignment
- A GSTIN number if the GST has been levied on the consignment
- Place of origin of the consignment of goods
- Details of the port where the consignment is uploaded
- Details of the port where the consignment will be discharged
- Details of the final destination of the consignment - this could include details about the train or trucks, or any other vehicle of transportation.
- The invoice number (commercial)
- Value of the invoice in Indian rupees
- Details of the currency in which the invoice was made
- Details of the exchange rate
- The total value of the invoice in Indian rupees
- The mode of payment
- Details regarding the entire consignment - the type of packages, the weight (gross and net), etc.
- Details on the tax amount (in the invoice)
- Details on the total amount taxed on every single product for which to claim a refund.
Exporters have to bear in mind that despite being taxpayers, they will not be able to file for a refund on the amount paid as IGST. They will also not be able to make a refund claim on input tax credit (ITC) enjoyed on inputs during the said period. If they do choose to claim a refund, then they will have to provide all the details of their GST as well as their GSTIN.
Also Read: Bill of Lading – Meaning, Types, and Usage for Importers and Exporters
Shipping Bill
|
Shipping Bill No. |
234567 |
|
Date of issue |
1 Jan 2000 |
|
Port Code |
AUSAA1 |
|
GSTIN |
11GSPTN0479G1AB |
|
Total Amount paid = ₹ 6,700 |
|
|
Paid Through |
Cash |
|
Details of goods |
Assessable worth of goods in rupees |
Custom Duty Additional charges |
Taxable amount |
Tax |
|
Vivo A7 |
₹ 45,000 |
₹ 2,000 |
₹ 47,000 |
₹ 4,700 |
Assessable value = (Quantity*Rate) Additional charges, if any, are applicable
Conclusion
The details of this article help you understand the relevance of a shipping bill to exporters. It also explains the procedure of applying for a shipping bill both online as well as offline. Exporters can make claims for refunds on items sold, provided the details are furnished in accordance with the customs services department.
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