Multiple documents are required to be prepared and furnished to complete an export trade. One of the most crucial among these documents is the Shipping Bill.
What is a Shipping Bill?
To obtain clearance for exports from customs, you have to submit a Shipping Bill in the form of an application. Whether you are shipping your export items by air, sea, or road, an exporter cannot load the goods without filing the Shipping Bill.
A Shipping Bill must be submitted electronically unless the Commissioner or Principal Commissioner makes an exception and allows you to submit it physically.
Shipping Bills are color-coded depending on the export type :-
Types of Shipping Bills
There are four types of Shipping Bills:
Dutiable Shipping Bill: It is printed on yellow paper and is meant for goods that are to be exported on payment of export duty.
Duty-Free Shipping Bill: It is printed on white paper and is for goods exported without duty payment. These are not eligible for duty drawback.
Drawback Shipping Bill: It is printed on green paper, but once the drawback has been paid it is printed on white paper.
Shipping Bill for export of goods under Duty Entitlement Passbook Scheme (DEPB): It is printed in blue; this is for goods exported under the government’s DEPB export incentive scheme.
In a notification dated 25th March 2019, the Shipping Bill and Bill of Export (Forms) Amendment Regulations, 2019, was introduced. This defined the forms for various types of Shipping Bills.
Also Read : Pro forma Invoice v/s Commercial Invoice
How is Shipping Bill generated?
The Central Board of Indirect Taxes and Customs has a national platform named Indian Customs Electronic Gateway (ICEGATE) that provides e-filing services, including electronic filing of Shipping Bills. To facilitate faster Customs clearance, ICEGATE is linked with multiple organizations like the Reserve Bank of India (RBI), Directorate General of Foreign Trade (DGFT), government ministries, and government partner agencies.
The Indian Customs EDI System (ICES) acts as the online and real-time interface for custom clearance through ICEGATE and via Electronic Data Interchange (EDI). ICES has also enabled internal automation of the Custom House.
Also Read: How to file a Shipping Bill Online
Process for Generating a Shipping Bill
Before filing a Shipping Bill for Export, exporters or Customs House Agents (CHA) have to register with the EDI system using IEC code, AD code, and/or CHA license number.
Under the EDI system, the Shipping Bill has to be submitted in the prescribed format at the Customs service centers. It is accompanied by copies of the invoice and packing list.
Upon submission, a checklist is generated, which has to be verified by the exporter or the CHA.
The verified data is then submitted to the EDI system by the service center operator. The system generates a Shipping Bill Number, which is endorsed on the printed copy of the checklist and given back to the exporter or the CHA.
Generally, the Shipping Bill is processed by the system itself without any human aid or intervention. This is done based on declarations made by the exporter. However, the assessment of Shipping Bills for FOB value of over Rs 10 lakh, free sample of over Rs 20,000, or drawback amount of over Rs 1 lakh is done by the Assistant Commissioner of Exports.
If any export cess needs to be paid, the requisite challan is made available to the exporter and the amount can be paid at a designated bank. No copy of the Shipping Bill is made available to the exporter at this stage.
One can check the status of the Shipping Bill at the service center. Besides, any query raised can be seen and replied to in the service center.
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How to correct or ammend a Shipping Bill?
Corrections or amendments in the declaration can be made at the service center, provided the documents have not yet been submitted in the system and the Shipping Bill has not yet been generated.
However, if any changes are deemed necessary after the Shipping Bill number is generated or the arrival of the goods at the Export Dock but before the granting of ‘Let Export’ of the goods, it can be done by the Assistant Commissioner of Exports.
If the ‘Let Export’ has also been issued, any changes can be made only by the Additional/Joint Commissioner, Custom House, in charge of the export section.
Also Read : Documents required for your Export Order
Format and Content of the Shipping Bill
Now let us look at the complete format of Form SB I (Regulation 2). The various fields required to be filled in are related to the following:
Exporter, buyer, and customs broker details
Carrier, port, and transportation details
Invoice-related information
Cargo-related itemized information
Export duty and GST-related information
Export scheme/job work/re-export details
Difference between Shipping Bill and Bill of Lading
Shipping Bill is a document required for customs clearance. The application is prepared according to the category of export goods. It is issued by the shipping agent on behalf of the parties, including the buyer, seller, /global freight forwarder/Customs Broker, etc. It is a necessary requirement for allowing shipment to be cleared by the customs authority.
Not to be confused with a BL or a shipping bill of lading is a receipt for freight services provided by the freight carrier and serves as a contract between the shipper and carrier. A BOL is issued by the carrier, as acknowledgement that the goods have been received from the shipper/exporter in good condition.
Also Read:
- How International Ocean Freight Shipping Works?
As an expert in international trade and customs procedures, I can provide comprehensive insights into the documentation required for export transactions, including the essential document, the Shipping Bill. My expertise stems from extensive involvement in facilitating exports, understanding the nuances of customs clearance, and staying updated with trade regulations up until my last update in January 2022.
Let's dissect the concepts mentioned in the provided article regarding the Shipping Bill and related export documentation:
Shipping Bill:
A Shipping Bill is a vital document required for obtaining customs clearance when exporting goods. It serves as an application submitted to customs authorities and is a mandatory prerequisite for loading exported goods, regardless of the mode of transportation (air, sea, or road).
Types of Shipping Bills:
- Dutiable Shipping Bill: Printed on yellow paper for goods subject to export duty payment.
- Duty-Free Shipping Bill: Printed on white paper for goods exported without duty payment, ineligible for duty drawback.
- Drawback Shipping Bill: Initially printed on green paper but later on white paper after drawback payment.
- DEPB Shipping Bill: Printed in blue for goods exported under the Duty Entitlement Passbook Scheme, a government export incentive.
Shipping Bill Generation:
- ICEGATE and ICES: The Indian Customs Electronic Gateway (ICEGATE) is a national platform facilitating e-filing services, including the electronic submission of Shipping Bills. The Indian Customs EDI System (ICES) acts as an online interface for customs clearance via ICEGATE and Electronic Data Interchange (EDI).
Process of Generating a Shipping Bill:
- Registration: Exporters or Customs House Agents (CHA) must register with the EDI system using relevant codes/licenses.
- Submission: The Shipping Bill, in the prescribed format, along with invoice and packing list copies, is submitted at Customs service centers.
- Verification and Processing: After submission, a checklist is generated, verified, and submitted to the EDI system. A Shipping Bill Number is generated, and the process is mostly automated.
- Assessment: Higher-value Shipping Bills undergo assessment by customs officials.
- Status Check and Queries: Exporters can check the Shipping Bill status and respond to raised queries at service centers.
Amendments and Corrections:
- Pre-Shipping Bill Generation: Amendments can be made at the service center before the Shipping Bill number is generated.
- Post-Generation but Pre-Export Dock Arrival: Assistant Commissioner of Exports can authorize changes.
- Post-'Let Export' Issuance: Additional/Joint Commissioner at the Custom House can permit alterations.
Format and Content of Shipping Bill:
The Shipping Bill's format (Form SB I) requires details related to exporters, buyers, customs brokers, transportation, invoices, cargo specifics, duty, GST, and export-related schemes or job work.
Difference Between Shipping Bill and Bill of Lading (BOL):
- Shipping Bill: Essential for customs clearance, an application prepared based on export goods' category, issued by the shipping agent.
- Bill of Lading (BOL): Receipt for freight services, acknowledging receipt of goods by the carrier from the shipper in good condition, serving as a contractual agreement.
Understanding these documents and their processes is crucial in international trade, ensuring compliance and facilitating smooth export transactions. If you have further inquiries or need more detailed information on any specific aspect, feel free to ask.
