Role of Clearing and Forwarding (C&F) Agents in Exports

Shipping is the most commonly used method of dispatching goods to a foreign country. Under shipment, one shall cover all the procedural aspects from the time the product meant for export leaves the factory site till it is loaded on board the ship and the relevant documents are collected from the shipping company. Since the type of work involved is somewhat specialized  it is usually entrusted to the clearing and forwarding agents. This section focus on role of clearing and  forwarding agents in export assignment.

1. Customs Formalities

Goods can be shipped out of India only after obtaining the customs clearance. To obtain the customs clearance, the clearing and forwarding agent should submit a shipping bill in the prescribed form. The shipping bill is to be prepared in quadruplicate. The shipping bills should be accompanied by the following documents.

  1. Contract with the overseas buyer in original.
  2. Invoice for the goods.
  3. Packing list.
  4. GR-1 form or EP forms prescribed by the Exchange Control under the Foreign Exchange Regulation Rules.
  5. AR 4 or AR 4A forms in original and duplicate.
  6. A proforma showing details of drawback of duty if any claimed.
  7. In case deferred payment, a copy of the approval of the RBI.
  8. Copy of the L/C if any.

The customs authorities scrutinize the shipping bill and other requisite documents and if prima facie satisfied, they put it for export subject to the physical examination of the cargo by the customs staff. The export cargo can enter the port and can be kept in the Harbour Transit Shed even before the shipping bill is passed by the customs. However, only after obtaining the shipping bill the authorities allows the cargo to ship into the vessel.

2. Obtaining of the Carting Order

The export cargo lying in the Harbour Transit Shed should then be moved inside the port area and subsequently loaded on board the assigned ship. Permission should be obtained from the Superintendent of the Port Trust, in charge of the shed for moving the goods into the concerned shed of the port. The order issued by him is known as carting order.

3. Customs Examination of Cargo at Docks

The main purpose of the customs examination at the dock is to verify whether the goods packed and kept ready for shipment are the same as those mentioned in the shipping bill. The customs‘ appraiser, if necessary, may physically examine the goods packed inside. He shall make an endorsement on the shipping bill thus certifying that the goods have been examined. Once the endorsement is made, the goods are deemed to be “Out of Charge” of the customs.

4. Let Ship Order

The preventive officer of the customs department shall supervise the loading of the cargo on board the vessel nominated for export. Before the goods are actually loaded, permission from the preventive officer should be obtained. The permission is known as “Let Ship Order”. The let ship order is given as an endorsement on the duplicate copy of the shipping bill. It is in fact an authorization given by the customs department to the shipping company to accept the cargo on board of the vessel.

5. Mate Receipt

As soon as the goods are loaded on board the vessel, the captain or master of the ship shall issue a document known as Mate Receipt direct to the port trust superintendent, in charge of the shed.

Credit: International Finance-MGU