Categories: Business

Shipping Bill: Definition & its usage in the Shipping Industry

Traders use this shipping bill, although it is not practically an export document, when transporting goods by sea between cities in the same country.

A successful international trade business runs on a pillar of loyal partnerships between importers and exporters, apart from a bucket full of underlying responsibilities. An exporter can only succeed in the league if he performs his tasks diligently. One such vital duty of an exporter is to acquire the shipping bill from the customs clearance department of his country.

The port and legal authorities must give their approval before an exporter can transport 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 out with the customs to complete the export formalities is termed the “Shipping Bill.”. The color 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 are transported as duty-free ex-bonds.

A shipping bill is categorized into five broad categories:

Free Shipping Bill

In this case, neither shipping duties nor export benefits apply to the goods covered by this bill. The shipper does not receive entitlements to export benefits.

VC

A refund on duties allows a drawback on the shipping bill for exported goods. The bill’s color changes from green to yellow when the drawback claim moves to the exporter’s SBI bank. Notably, an exporter must have a valid and active bank account in SBI and Air Cargo Complex to be eligible for the drawback duty.

Dutiable Shipping Bill

The bill is for items liable for export duty; paying duty doesn’t guarantee drawback claims for all goods.

Ex-Bond Shipment Shipping Bill

When a trader re-exports imported goods, he must acquire a shipping bill for an ex-bond shipment.

Coastal Shipping Bill

Traders use this bill, although it is not practically an export document when transporting goods by sea between cities in the same country.

Uses Of Shipping Bills

The bill primarily receives customs clearance and is used for seaborne transportation within a country, with additional uses.

Claim Excise Refunds

An exporter eligible for a refund of excise duty paid for export, under Section 11B of Central Excise Duty, can submit the required documentation to claim the refund. 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 shipping bill for the cargo stands as the pivotal document required to seek an excise refund. Without this crucial paperwork, the excise department holds steadfast in its policy of not considering or processing any requests for refunds, emphasizing the absolute necessity of this piece of documentation for any refund claims to be entertained.

Redeem Export Incentives

At numerous intervals, the Indian government offers a percent incentive on precise items aimed toward motivating investors to interact in exporting activities. Despite the strong international demand for those goods, Indian exporters showcase hesitance in committing to delivering them to distant places, probably because of uncertainties surrounding logistics, market conditions, or different factors. Nonetheless, the capability benefits of such incentives may serve as a compelling catalyst for exporters to reconsider their stance and take advantage of profitable possibilities inside the international market.

By following the guidelines outlined in the announcement and intending to export the desired goods, the exporter will become eligible to assert the inducement quantity. This claim can be processed upon submission of the shipping bill together with all other necessary helping documents confirming the successful completion of the export transaction according to the distinctive terms and conditions.

Since the bills are equipped with a comprehensive description of the merchandise, they hold significant importance for the intended use, providing essential details that aid in tracking and confirming the transactions, making them a vital tool in ensuring accuracy and transparency in business operations.

If an exporter complies with this announcement and exports the necessary goods, they will be eligible to obtain the incentive amount solely upon submission of the shipping bill together with the entire set of required files that substantiate the export transaction. This process ensures that exporters are duly rewarded for their adherence to the guidelines laid out inside the announcement, ultimately fostering an obvious and efficient export mechanism.

Since the bills provide an intricate and thorough account of the goods, they emerge as an indispensable document essential for various purposes such as tracking transactions, ensuring accurate record-keeping, and facilitating smooth communication between involved parties throughout the supply chain process.

Claim Duty Drawback

To successfully claim a duty drawback, it is imperative for an exporter to procure a specific shipping bill prior to dispatching the package. This bill serves as a crucial documentation requirement, and its absence could potentially result in the exporter forfeiting their opportunity to claim the duty drawback they are entitled to. Therefore, it is essential for exporters to diligently ensure that all necessary paperwork, including the specified shipping bill, is in order for a smooth and successful claim process.

There is no denying the essential position that shipping bills play within the export technique. These documents provide essential information approximately the value of the products being shipped, even once they have been successfully delivered. Therefore, exporters ought to stay knowledgeable about the contents of their shipping bills to ensure accuracy and compliance with rules. This proactive method also can help in resolving any potential disputes or issues that can arise throughout the shipping process.

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