International Trade — OCM STD 11 Commerce — Question
Gujarat BoardEnglish MediumSTD 11 CommerceOCMInternational Trade5 Marks
Question
Describe import procedure.
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Answer
Introduction :
There has always been difference in climate of each country.
Due to geographical specialty certain product grow in specific country.
That product is required by people all over the world.
So these products are brought from the country where they are grown or produced.
In short, every country has to import some products in bulk or less quality.
What is Import ? :
When products are brought from foreign countries in India it is called Import.
The procedure of import is not the Same in every country.
When any product is to be imported from any country, the rules and regulations formed by the concerned country are to be followed.
Import Procedure :
Policy formed by the concerned country is to be followed when product is imported from other country.
Normally following steps are taken.
To obtain import license :
Open General License $(OGL)$ is to be obtained for the goods listed under list prescribed by government, if a person or a firm who wants to buy goods from Foreign Country.
It is quite easy to obtain $OGL.$
The import of the products not listed in the government list is controlled.
The import of such goods requires application to government for license.
It carries the details like the name of the importer, his address, his economic condition, details of the goods to be imported, etc. If the officer is satisfied he approves the application and gives license.
If quota system is in force then the certificate indicating quota is given to the importer.
Arrangement of Foreign Exchange :
In Foreign Trade payment is to be made in foreign currency.
For this, foreign exchange is required.
One has to make arrangement for foreign currency.
Reserve Bank of India regulates foreign exchange.
Application in prescribed form endorsed by the bank carrying foreign exchange, business is sent to the Reserve Bank of India.
In the application form the requirement of exchange of the concerned country is to be indicated in $U.S.$ dollar.
Placing of Order :
After obtaining imported license, the importer asks exporters for the quotation of goods he requires.
Importer places an order with the exporter who quotes the lowest rates.
The letter in which the importer gives the order is called indent.
In the indent he mentions complete details of goods, price, packing, insurance, transport company etc.
In our country, indent is sent through indent firms.
To send Letter of Credit $(L/C)$ :
When the importer places an order to the exporter, the exporter demands letter of credit from the importer to knows his financial status and credit.
The Reserve Bank issues the letter of credit after getting the desired amount of deposit from the importer. On getting the letter of credit, the exporter feels surety of getting money.
To receive documents from exporter :
Exporter normally sends the documents of export through bank under the agreement of Documents against Payment.
$D/A$ means to furnish Documents against Acceptance of Bill of Exchange.
$D/P$ means Documents against Payment.
Sometimes exporter sends documents direct to the importer not to the bank. The importer obtains documents by making payment or accepting bill of exchange.
To receive an order of goods receivable :
The exporter sends many documents to the importer regarding import of goods.
Out of which. Bill of Lading is the most important document indicating the ownership of goods.
Exporter shows the bill of lading to the shipping company and endorses the bill of lading, which allows ownership of goods to the importer.
The importer gives this document to the office of shipping company in his area.
If the freight is paid by importer after it is paid, the captain of shipping company endorse the bill and releases goods in favor of importer
Payment of import duty :
Custom duty is to be paid on imported good.
The rate of duty is less if the importer shows consular invoice and certificate of origin issued either by the exporter's central government or chambers of commerce.
This is a certificate that the product is manufactured in the concerned country.
The importer fills up the form in which he shows complete details of goods such as the name of the exporter, name the exporter's country, name of vehicle if the goods are re-exported that too is to be showed.
This is called 'bill of entry' on its basis, custom office decides the amount of custom to the paid. He recovers it and then endorsees the bill 'custom paid' and gives it to the importer.
Payment of Dock charges :
The importer brings goods through aviation, road or marine, route.
When the vehicle arrives at the presided place, he has to pay for the facilities used.
It is called 'Dock Charges'.
This charges include the usage of port facilities, and all expenses from unloading till the importer receives its possession.
The importer receives receipt, after paying dock charges is called 'Dock Receipt'.
To receive possession of goods :
After completion of entire procedure, the importer has to shift the goods within fixed period.
If it is not done then he has to pay extra money for the days the goods are kept in bonded go down.
This extra money paid is called demurrage.
Conclusion:
Import procedure is to be followed as per government rules and regulation.
Obtain import license, foreign exchange arrangement, release of documents to pay import duty and port expenses are its major aspects. Services of clearing agents are hired.
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