Discuss the Procedure of Import
Goods in Pakistan can be imported either by the importer himself or by the selling branches of the exporting countries or by importing houses. The person firm or organization desirous of importing any product should ensure whether the import of the product is allowed or not and if allowed then what benefits he could get.
The majority of the merchants in our country buy their goods through the importing houses and this trade is known as indent business. There are foreign as well as Pakistani indent firms which sell the imports transactions. These firms either work as middlemen between the merchants and foreign suppliers.
As regard import trade of Pakistan, since the introduction of bonus schemes the importers has started importing goods usually without the help of these intending firms. The procedure of import trading is as follows;
1. OBTAIN THE IMPORT LICENSE
The first stage is to obtain the license of the goods which importer wants to import. The license is issued by the chief controller of import and export. Import license is the permit given by the government to import certain goods.
2. PLACING INDENT OR ORDER
The importer will then send an order to the exporter in foreign country stating importer’s name, full particulars of goods wants, such as the type of good , the quality, price, the mode of payment and shipping etc.
3. OPENING LETTER OF CREDIT (L/C)
After the order has been accepted by the exporter the importer has to arrange for the opening of letter of credit through his local bankers. The L/C is then forward to the exporter through the banker.
4. ADVICE OF SHIPMENT
The importer has nothing to do until the arrival of goods at the port of the country. In the mean time the agent or branch of exporter’s bank in importing country informs him of the arrival of the document leading to the delivery of good so that he can arrange for necessary funds to pay off the bills of exchange.
5. APPOINTMENT OF A CLEARING AGENT
The importer can himself undertake the custom formalities or can use the service eof clearing agent. If the importer is unaware of custom formalities or has no time to attend the custom house for taking delivery of commodities, the services of a clearing agent are taken. All the documents are handed over you the agent so that he may be able to take delivery of the goods. The clearing agent is paid certain commission for his service.
6. PAYMENT OF THE BILL
In this stage the agent or the branch of the country of export will present the bills of exchange along with related shipping documents to the importer. The importer will pay the bill. If the importer falls to pay the bill he may ask his banker to pay the bill by granting him loans against the goods imported. In that case, the bank will ask the importer to give the letter of hypothecation on the strength of which the bank will hold the goods.
7. CUSTOM FORMALITIES:
Before delivery of the goods, custom formalities are to be fulfilled. If the goods are duty free the importer has to face no difficulty in taking the delivery of the goods. Delivery is allowed after the usual examination and the importer collects or takes the goods to his godowns. On the other hand if goods are liable to duty, the importer has to pay the duty and then take the delivery of the good.
8. FREIGHT CHARGES
If the freight has not been paid by the exporter, the importer will have to pay the amount of freight at the office of the shipping company. The shipping documents are then handed over to the shipping company to issue a ship delivery order without which the goods cannot be released from the ship.
9. ENDORSEMENT FOR DELIVERY
The first thing for taking delivery of the goods is the endorsement for delivery from the shipping company. It is done by presenting the bill of the lading at the office of the shipping company.
10. TAKING DELIVERY OF GOODS
After all the payments have been made the goods are handed over to the clearing agents or the importers. He will examine the goods carefully and will inform the shipping company if the goods are found damaged. The damage is charge from the insurance company after it is proved.
11. DISPATCHING GOODS
If the goods are taken by the clearing agent he will arrange to dispatch them to importer. He also sends an invoice note and a railway receipt if the goods are dispatched by the government.
12. CLOSING THE TRANSACTION
If the importer is satisfied with the goods supplied then the transaction is closed. In case of a disputed or discrepancy, the matter will be settled by means of corresponding between the parties.
IMPORTANT DOCUMENTS USED IN CONNECTION WITH IMPORT
1. THE IMPORT LICENSE
Import license is the permit given by the government to import certain goods from foreign countries.
2. LETTER OF CREDIT (L/C)
It is the important document financing of foreign trade and is issued by the importer’s banker to the exporter.
3. BILLS OF EXCHANGE
It is the document in which exporter orders the importer to pay the amount at a fixed date only to a specified person or its bearer.
4. INSURANCE COVER NOTES
It is the document issued by the insurance companies to cover the risks during the transit of the goods.
5. PROFORMA INVOICE
It is the form of an invoice which could be a sort of pukka document.
6. BILL OF LADING
It is the receipt issued by shipping company showing that goods mentioned therein have been taken on board the ship. Importer cannot take delivery without producing it.
7. MATE RECEIPTS
This is the receipt from the ship Capitan showing the consignment receipt on board the ship and identification marks.
8. CERTIFICATE OF ORIGIN
It is prepared by the exporter. It states the place of origin of goods and it is issued by the chamber of commerce of the country.
9. PACKING LIST
This list shows contents of each packing with serial numbers, identification marks etc.
10. VBF FORM
A form in which the importer makes a declaration about the imported goods, their values etc.
11. BILL OF ENTRY
It is a list of goods lying at the ships. The importer has to submit this list to identify the goods.
12. LETTER OF HYPOTHECATION
It is the document signed by the customer conveying the banker the full owner ship of the goods in consideration of an advance.
13. DOCK WARRANT
This warrant is issued by the dock authorities to the owner of the goods as s recognition of Owners title to goods lying at the dock.