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Topic : Getting Started in Exporting
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By : veguru vijayakumar babu, General Manager, Sujana Group Of Companies
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Consignment Exports

Activity:  2 comments  3025 views  last activity : 04 09 2013 11:19:40 +0000
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Consignment exports are exports made by Indian exporters to their agents / associates / branches / trading offices located abroad. These are also called " stock and sale " exports. The consignee, after receipt of goods will arrange for sale and after sale, repatriate the proceeds to India.

In terms of FEMA, documents relating to consigment exports are to be necessarily routed through the foreign branch / foreign correspondent bank of the exporter's bank in India. Exporter's bank in India should instruct the foreign bank to deliver the documents to the consignee against a trust receipt or undertaking to deliver the sale proceeds of the export with in the prescribed period for realisation of export.

Further, the freight and insurance on the export are to be arranged  in India and paid by the Indian exporter only, i.e. export to be necessarily on CIF terms.

The expenses relating to receipt of goods, warehousing, advertisement, selling and administration etc will be deducted from the sale proceeds by the consignee and net proceeds will be remitted to Indian exporter through the foreign bank which has delivered the shipping documents to the consignee. Consignee should also submit " Account Sales" detailing the expenses as mentioned above, supported by relative bills / vouchers which are to be verified by the bank in India.

For exporters with satisfactory record , RBI will permit on application, a longer period up to 12 months for realisation of export proceeds in respect of consignment exports sent to Russia and CIS countries.

In case of export of books on consignment basis, AD - banks approve proposals for realisation of export proceeds up to 360 days from the date of shipment. The exporters may also  be permitted to abandon books which remain unsold at the expiry of the relative contract.

In order to stock the consignments, exporters may set up or hire on long term, warehouses abroad with the approval of AD- Banks. For this purpose their overdue export bills should  not exceed 5 % of the exports made in previous financial year and the export turnover during the previous financial year should not be  less than USD 100000.(US Dollars one hundred thousand).

 
2 comments on "CONSIGNMENT EXPORTS"
  Commented by  Rohan Vij, Director on Board, Vij Books India Pvt Ltd    | 04 09 2013 11:19:39 +0000
Say once you have an arrangement in a foreign country to stock items how to proceed with the paperwork and what kind of permission have to be taken and who given them? Please advice
  Commented by  Hardik Patel, Team Lead (Staffing and Recruitment), Rishabh Softwares Pvt. Ltd. / Rishi Infotech Pvt. Ltd    | 07 22 2008 15:04:15 +0000
Rating : +1 
good one.
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