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Samacheer Kalvi 11th Commerce Solutions Chapter 26 Export and Import Procedures
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Samacheer Kalvi 11th Commerce Export and Import Procedures Textbook Exercise Questions and Answers
I. Choose the Correct Answer
Question 1.
EPC stands for ………………
(a) Export processing commission
(b) Export Promotion Council
(c) Export Carriage council
(d) Export Promotion Congress
Answer:
(b) Export Promotion Council
Question 2.
STC is an expansion for ………………
(a) State Training Centre
(c) State Trading Centre
(b) State Training Council
(d) State Trading Corporation
Answer:
(d) State Trading Corporation
Question 3.
An ……………… is a document prepared by the importer and sent to the exporter to buy the goods.
(a) Invoice
(b) Indent
(c) Enquiry
(d) Charter Party
Answer:
(b) Indent
Question 4.
The ……………… receipt is an acknowledgment of receipt of goods on the ship issued by the Captain.
(a) Shipping Bill
(b) Bill of Lading
(c) Mate’s Receipt
(d) Consular Invoice
Answer:
(b) Bill of Lading
Question 5.
The Exporters appoint the agent to fulfill the customs formalities.
(a) Clearing Agent
(b) Forwarding Agent
(c) Commission Agent
(d) Factor
Answer:
(b) Forwarding Agent
II. Very Short Answer Questions
Question 1.
What is meant by Indent?
Answer:
An indent actually points to an order received from abroad for export of goods, i.e. sale of goods. The indent contains the details in the box.
Question 2.
Write any two export promotion institutions.
Answer:
- Department of Commerce
- Export Promotion Council (EPC)
Question 3.
Mention the types of Indent.
Answer:
- Open Indent
- Closed Indent
- Confirmatory Indent
Question 4.
What is the Letter of credit?
Answer:
Letter of Credit (LC) is an undertaking by its issuer (importer’s bank) that bills of exchange drawn by the foreign dealer on the importer will be honoured upon its presentation by the exporter’s bank up to a specified amount.
III. Short Answer Questions
Question 1.
What are the contents of Indents?
Answer:
Contents of an Indent:
- Quantity of goods sent
- Design of goods
- Price
- Nature of packing shipment
- Mode of shipment
- Period of delivery
- Mode of payment
Question 2.
What is meaning of consular invoice?
Answer:
Where the customs duties are charged on the basis of value of goods at import’s port (ad – valorem basis), the customs officers are empowered to open the consignment to calculate duties. In order to avoid this problem, exporter obtains a consular invoice and sends it over to the importer.
Question 3.
What is meant by Charter Party?
Answer:
A charter party is a formal agreement between shipowner and the exporter under which exporter hires an entire ship or a major part of ship either for a particular voyage or for a specific time period when the shipping is heavy. The hiring of ship for specific voyage is called voyage charter while this hiring of entire ship for a specific time period is called time charter.
Question 4.
Write a short note on Mate’s receipt?
Answer:
Mate’s Receipt is the document issued by the captain of the ship acknowledging the receipt of goods on board by him to the port of specified destination. This contains details like quantity of goods shipped, number of packages condition for packing, etc.
Question 5.
What is Bill of Lading?
Answer:
Bill of Lading, refers to a document signed by shipowner or to his agent mentioning that goods, specified have been received and it would be delivered to the importer or his agent at the port of destination if good condition subject to terms and conditions mentioned therein.
IV. Long Answer Questions
Question 1.
What are the procedures relating to Export trade?
Answer:
1. Receiving Trade Enquiry: Exporter receives trade inquiry (written request) from the importer / his agent who intends fir buy the product.
2. Receiving Indent and Sending Confirmation: After the scrutiny of the quotation / proforma invoice, the buyer who intends to buy the goods sends an indent to the exporter. The latter may either receive the order directly from the importer or through an agent who acts as an intermediary between the exporter and the importer.
3. Arranging Letter of Credit: Under this stage exporter intends to satisfy himself/herself about the trustworthiness of the importer. In this case, the exporter is requested to arrange a letter of credit in his favour.
4. Obtaining Importer Exporter Code (IEC) and RBI Code Number: Exporter has to apply in Ayaat Niryatt Form 2 A (ANF2A) to the Regional Authority of the Director-General of Foreign Trade (DGFT) in the region where the registered office of the company is located. Exporter has to mention the number in all the shipping documents.
5. Obtaining Registration cum Membership Certificate (RCMC) from Export Promotion Council/Commodity Board: An Exporter is required to obtain RCMC from Export Promotion Councils/Commodity Board/Development Authority in order to avail himself/herself of export incentives, concessions, and other facilities offered by Government.
6. Manufacturing/Procuring Goods and Packing items: Exporters’ steps into manufacturing and procuring of goods required by the importer.
7. Export Inspection Certificate: After the goods have been packed as per the specifications of the importer, the exporter has to apply to the Export Inspection Agency (EIA).
8. Insurance of Goods: Exporter has to arrange for getting the goods insured to protect them against the various risks like deterioration.
9. Certificate of Origin: Import regulation of foreign countries may require that all these import consignments must accompany a certificate of origin.
10. Consular Invoice: Where the customs duties are charged on the basis of the value of goods at import’s port (ad – valorem basis), the customs officers are empowered to open the consignment to calculate duties.
Question 2.
Distinguish between Bill of Lading and Charter Party.
Answer:
| Basis | Bill of Lading | Charter Party |
| 1. Meaning | This represents a document acknowledging receipt of goods on board for carrying them over to a specified port of destination. | It refers to an agreement to hire a whole or major part of a ship when the goods take exported are heavy. |
| 2. Transferable | It Can be transferred to a third party by endorsement and delivery. | It cannot be transferred to a third party. |
| 3. Loan | The loan can be raised against it. | The loan cannot be raised against it. |
| 4. Crew | Master and crew remain the agent of shipowner. | Master and crew become the agent of the exporter for a temporary period. |
| 5. Lease | It is not a lease of the ship. | It is a lease of the ship. |
Question 3.
What are the documents used in Export Trade?
Answer:
1. Documents Related to Goods
- Indent
- Certificate of Origin
- Certificate of Inspection
2. Documents Related to Shipment
- Mate’s receipt
- Shipping Bill
- Shipping Order
- Bill of Lading
- Marine Insurance Policy
- Consular Invoice
- Railway receipt/Lorry receipt
3. Documents Related to Payment
- Letter of Credit
- Commercial Invoice
- Bills of Exchange
- Bank Certificate Payment
Question 4.
Explain the various functions of Export Trading Houses.
Answer:
The functions of the export house are mentioned below:
- Identifying a potential market for a product
- Finding buyers and their agents and eliciting their response for export proposal.
- Establishing product specifications in the light of market needs, standards, and regulations in accordance with suppliers’ capabilities.
- Determining appropriate mode of transportation and routing keeping in mind the cost, quality of service, and security.
- Preparing the goods for delivery at destination.
- Determining buyer’s creditworthiness.
- Negotiating the transactions.
- Arranging proper insurance coverage against maritime risks and currency fluctuations.
- Financing the transactions and paying for goods and services received.
- Preparing documents for international trade.
- Settling claim.
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