A successful international trade business runs on the pillar of loyal partnerships between the importers and exporters apart from the bucket full of underlying responsibilities. An exporter can only succeed in the league if he performs his part of tasks diligently. One such vital duty of an exporter is to acquire the shipping bill from the customs clearance department of his country. Before a shipping consignment is given the green signal from the port authorities and the legal authorities, an exporter is incapable of transporting his cargo.
In India, several important formalities need clearance and approval from the government including the submission of a plethora of documents, paying customs duty, acquiring licenses, etc. Acquiring a duly signed shipping bill from the customs department is also one of the crucial responsibilities of an exporter.
Shipping bills serve as an important piece of documentation in the trading business.
Types of Shipping Bills
The legal document that is filled with the customs to complete the export formalities is termed as the “Shipping Bill”. The colour of the bill plays a very significant part in defining the types of goods in the shipment.
- Green – It is for the goods that have drawback claims.
- White – For duty-free goods.
- Yellow – Goods that are subject to customs duty also called “dutiable goods”.
- Blue – The goods that are exported under the DEPB (Duty Entitlement Pass Book) scheme.
- Pink – The goods transported as duty-free ex-bond.
Further, a shipping bill is categorized into five broad categories-
Free Shipping Bill
This shipping bill is used for good which neither falls under any category of shipping duty nor attracts any duty in return. The shipper is also not entitled to claim any export benefits in this case.
Drawback Shipping Bill
When a refund of paid duties is allowed on the exported goods, a drawback shipping bill is issued. Although the general colour of these bills is green, it may be changed to yellow when the drawback claim is transferred to the exporter’s bank. One noticeable fact is that it is mandatory for an exporter to have a valid and active bank account in the SBI (State Bank of India) and Air Cargo Complex in order to be eligible for the drawback duty.
Dutiable Shipping Bill
As the name suggests, this shipping bill is issued when the exported items are liable to attract export duty. However, just because an exporter is paying duty for any of these goods, it does not mean all of them will attract a drawback claim.
Ex-Bond Shipment Shipping Bill
When the imported goods are re-exported by a trader, he has to acquire a shipping bill for an ex-bond shipment.
Coastal Shipping Bill
Although this bill is practically not an export document, it is considered as an important shipping bill. When goods are sent from one city to another (within the same country) using seaborne transportation, this bill is used by the trader.
Uses Of Shipping Bill
The primary purpose of a shipping bill is to get customs clearance from the legal authorities of the country. It contains a detailed description of the nature and quantity of goods, its origin, details of the exporter, shipper as well as importer, the volume of the cargo, etc. Because of its relevance in the shipping process, it can also be used for various other purposes.
Claim Excise Refunds
Under Section 11B of Central Excise Duty, 1944, an exporter who deems that he is eligible to claim a refund on any excise duty paid for export, can do so with proper documentation. However, the refund is subject to payment to the individual who paid the duty. So if an exporter forwards the burden to any other party during the freight shipment, he will not receive any refund. The most important document to apply for excise refund is the shipping bill of the cargo. Without it, no requests of refund will be entertained by the excise department.
Redeem Export Incentives
There are times when the Indian government announces a percentage of incentive on the export of certain goods to induce the traders for doing so. This step is usually taken only when the demand for a good is high in the international market but the Indian exporters are not betting on the shipment of the same. So, if an exporter abides by this announcement and exports the required goods, he can receive the incentive amount only by submitting the shipping bill along with other documents. Since the bill holds a detailed description of the goods, it becomes a crucial item for the purpose.
Claim Duty Drawback
For claiming a duty drawback, there is a specified shipping bill that an exporter needs to avail before sending the package. Any failure in producing that bill can make him lose his chance of a claim.
There is no denying that shipping bills serve as an essential document for the exporters. What is more important is to know the value of it even after the shipment is successfully delivered. Traders should not show any negligence or be ill-informed about the same.