Shipping Bill Meaning: Simplified With Pazago

Ever wondered how goods seamlessly move across international borders? The secret lies in a crucial document known as the shipping bill. 

This piece of paper—or digital file—is the backbone of customs clearance, ensuring compliance with international trade regulations. But what exactly is a shipping bill, and why is it so important? 

Let's uncover the meaning of the shipping bill and its role in the import-export industry.

What is a Shipping Bill?

In international trade, a shipping bill is a pivotal document. Simply put, it's a declaration submitted to customs authorities detailing the nature, quantity, and value of exported goods. 

This document serves multiple purposes, from facilitating customs clearance to ensuring compliance with trade regulations.

Purpose of a Shipping Bill

The primary purpose of a shipping bill is to provide customs with detailed information about the goods being shipped. This includes descriptions, quantities, values, and the destination of the goods. By doing so, it helps:

• Facilitate Customs Clearance: The shipping bill allows customs authorities to verify and clear goods for export.
• Ensure Trade Compliance: All international trade laws and regulations are adhered to.
• Accurate Duty Assessment: Customs can accurately assess and levy duties and taxes on the goods based on the information provided in the shipping bill.

Types of Shipping Bills

Shipping bills play a vital role in international trade, ensuring the smooth transit of goods across borders. There are four primary types of shipping bills, each serving a unique purpose:

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Contents of Shipping Bill

General Information

• SB No. & Date: Unique identifier and date of the shipping bill.
• Customs Station Code: Code of the customs station.
• IEC Code (GSTIN/UIN/PAN): Exporter's identification codes.
• Exporter Name & Address: Name and address of the exporter.
• Buyer Name & Address: Name and address of the buyer.
• Consignee (if different from Buyer): Details of the consignee if different from the buyer.
• Customs Broker & License No.: Details of the customs broker and their license number.

Also Read: Understanding the Importance and Use of e-BRC in Export Business

Transport Details

• Pre-Carriage by: Mode of transport before the main carriage (e.g., road, rail).
• Vessel/Flight No.: Identifier of the vessel or flight.
• Port of Loading: Port where the goods are loaded for export.
• Place of Receipt by Pre-Carrier: Location where the pre-carrier receives goods.
• Rotation No.: Rotation number for the vessel.
• Port of Discharge/Country of Discharge: Destination port and country.

Also Read: Understanding Transportation Charges and Their Different Types

Foreign Exchange Details

• Authorised Dealer Code: Code of the authorised dealer.
• RBI Waiver No. & Date, if any: Details of any RBI waiver.

Commercial Invoice Details

• Commercial Invoice Nos. & Date: Details of the commercial invoice.
• Invoice Value: Value of the goods on the invoice.
• Currency of Invoice: Currency in which the invoice is issued.
• Exchange Rate U/S 14 of Customs Act: Exchange rate as per customs.
• Total Value (in Rupees): Total value of the goods in Indian Rupees.
• INCOTERM: International Commercial Terms defining the responsibilities of buyers and sellers.
• Analysis of Export Value: Breakdown of export value into components like FOB, Freight, Insurance, Commission, Discount, and Other Deductions.
• Nature of Payment: Payment terms agreed upon.

Also Read: 10 Required Pre-Shipment Documents for Export Procedure and Shipping Process

Cargo Details

• Nature of Cargo: Type of cargo.
• Gross Weight: Total weight of the cargo.
• Net Weight: Weight of the cargo excluding packaging.
• No. and kind of packages: Number and type of packages.

Also Read: Understanding the Definition and Importance of Beneficial Cargo Owner (BCO) in International Shipping

Item Level Details

• Marks & Nos.: Identification marks and numbers on the packages.
• No. and kind of packages: Detailed description of packages.
• Description of Goods: Detailed description of the goods.
• Value (FOB): Free on-board value.
• PMV (Where applicable): Present Market Value, if applicable.
• Statistical Code: Code used for statistical purposes.
• Scheme Code: Code for any applicable export scheme.

Also Read: Different Types of Packaging Materials and Their Uses

Export Duty-Related Details

• Customs Tariff Head: Tariff classification of the goods.
• Assessable Value under Sec. 14 of CA: Section 14 of the Customs Act.
• Export Duty: Duty payable on export.
• Cess: Any additional cess.
• Total Export Duty & Cess Amount: Total amount of duty and cess payable.
• Duty payment particulars: Details of duty payment.

Also Read: What Is ENS In Shipping? Why There Is ENS Charges?

IGST Details

• Whether supply meant for export on payment of IGST (Y/N): Indication of whether IGST is applicable.
• The total amount of IGST paid, if applicable: Total IGST paid.
• Whether supply meant for export under bond or letter of undertaking without payment of IGST (Y/N): Indication if IGST exemption is applicable.
• Details of Bond or LUT: Details of the bond or letter of undertaking.
• Invoice Nos. & Date (Issued under GST Tax Invoice, Credit & Debit Notes Rules 2017): Invoice details.
• Item Sr. No.: Serial number of the item.
• Goods description: Description of goods.
• Value of Supply of Goods: Value of the goods supplied.
• Whether IGST Paid (Y/N): Indication of whether IGST is paid.
• The rate at which IGST is Paid: Applicable IGST rate.
• Amount of IGST Paid: Total IGST amount paid.

Also Read: Navigating GST on Export of Services: A Practical Guide for Indian Businesses

Export Scheme/Job Work/Re-export Details

• EPCG Scheme (Scheme Code): Details for Export Promotion Capital Goods scheme.
• Advance Authorisation/DFIA (Scheme Code): Details for Advance Authorization or Duty-Free Import Authorization scheme.
• Job Work Details: Information on job work related to the export goods.
• Exports under claim of drawback under section 74: Details for claiming drawback on exported goods.

Container Details

• Type of Container: Type of container used.
• Size of Container: Size of the container.
• Container No.: Container number.
• Seal No.: Seal number.

Declaration

• Declaration by Exporter/CB & Date: The exporter or customs broker confirms the accuracy of the details.

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Step-by-Step Guide on Generating a Shipping Bill

Here’s a detailed guide on generating a shipping bill, from registration to submission and verification, using the Indian Customs Electronic Gateway (ICEGATE) and the Indian Customs EDI System (ICES).

Overview of ICEGATE and ICES

ICEGATE

ICEGATE is the national portal of Indian Customs under the Central Board of Indirect Taxes and Customs (CBIC). It offers e-filing services to trade, cargo carriers, and other trading partners. 

Through ICEGATE, users can file bills of entry, shipping bills, and other documents electronically, streamlining the customs clearance process​.

ICES

ICES is an online platform that facilitates electronic data interchange for customs clearance. It automates the customs processes, enabling faster and more efficient clearance of goods through real-time data exchange.

Step-by-Step Guide to Generating a Shipping Bill

1. Registration on ICEGATE

To get started, you need to register on the ICEGATE portal. This involves:

• Creating an account on the ICEGATE website.
• Linking your Importer Exporter Code (IEC), Authorized Dealer Code (AD Code), and Customs House Agent (CHA) license number if applicable.
• Ensuring you have digital signatures set up for secure document handling.

2. Submission of Shipping Bill

Once registered, you can submit your shipping bill online. Here’s how:

• Log in to ICEGATE: Access the portal with your credentials.
• Fill out the form: Enter details about the exporter, buyer, and customs broker. Include transport details such as the vessel or flight number loading and discharge ports.
• Attach documents: Upload the invoice, packing list, and other required documents.
• Submit the form: Once all details are filled out, submit the shipping bill form.

3. Verification

After submission, the following steps ensure verification:

• Checklist generation: A checklist is generated, which you need to verify. This step helps catch any errors before final submission.
• Verification by customs: Customs officials will review the submitted documents. They may request additional information or documents.
• Approval: The system generates a shipping bill number endorsed on the checklist once verified.

4. Transmission to EDI System

• Data submission: The service centre operator submits the verified data to the EDI system.
• Processing: The EDI system processes the shipping bill. The Assistant Commissioner (Exports) might need to assess the shipment further for high-value shipments or those eligible for duty drawbacks.
• Let Export Order: Upon satisfactory assessment, a 'Let Export Order' authorises the export of goods​.

Correcting Errors Post-Submission

If errors are found after submission, amendments can be made:

• Before the 'Let Export' order: Amendments can be requested through the service center, provided the shipping bill has not been generated.
• After the 'Let Export' order: The Additional/Joint Commissioner of Customs must approve any changes needed after the 'Let Export' order is issued​.

Automation reduces the time spent on paperwork, allowing for quicker processing and approval. With Pazago Fulfilled, this entire process is handled for you, from purchase order processing to delivery.

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Shipping Bill vs Bill of Lading

Understanding the differences between a shipping bill and a bill of lading is crucial for smooth international trade operations. Both documents play essential roles in the shipping process but serve different purposes.

Contact us for expert guidance.

Also Read: How To Make Bill Of Lading? Best Tips, Simple Guide

Benefits of Digitizing the Shipping Bill Process

In today’s fast-paced world, efficiency and security are paramount. Traditional paper-based shipping bills can be cumbersome and prone to errors. This is where digitisation comes into play, offering numerous advantages:

1. Increased Efficiency

Digital shipping bills streamline the customs clearance process. Automation reduces the time spent on paperwork, allowing for quicker processing and approval. This means your goods can reach their destination faster, enhancing overall supply chain efficiency.

2. Enhanced Security

With digital shipping bills, the risk of document tampering and loss is significantly reduced. Digital records are more accessible to track and store, ensuring all information remains secure and easily accessible. This safeguards your business and builds trust with customs authorities and international partners.

3. Cost Savings

Digitising the shipping bill process can lead to substantial cost savings. Reduced paperwork and faster processing times translate to lower administrative costs and fewer delays, ultimately improving your bottom line.

Ready to streamline your documentation process? Discover how Pazago can manage your shipping bills efficiently and accurately.

Also Read: What Is Shippers Letter Of Instruction

Shipping Bill and Bill of Export (Forms) Amendment Regulations, 2019

In March 2019, the Central Board of Indirect Taxes and Customs (CBIC) introduced significant amendments to the Shipping Bill and Bill of Export (Forms) Regulations, 2017. 

These changes were implemented through Notification No. 25/2019-Customs (N.T.) and aimed to modernise and streamline the export documentation process for improved efficiency and compliance.

Key Amendments

The Shipping Bill and Bill of Export (Forms) Amendment Regulations, 2019, introduced several significant changes to the format and content of shipping bills. Here are the primary updates:

1. Digital Transformation: One of the amendments' primary focuses was the push toward digitisation. The updated regulations encourage using electronic formats for shipping bills, enhancing the speed and accuracy of the customs clearance process.
2. Standardised Formats: The amendments introduced standardised formats for shipping bills, ensuring uniformity and clarity. The revised forms include:some text
   • Form SB I for the Shipping Bill for Export of Goods (Original and Quadruplicate copies for export promotion).
   • Form SB III for the Bill for Export of Goods (Original and Quadruplicate copies for export promotion).
3. Detailed Information Requirements: The revised formats now require more detailed information at the item and invoice levels. This includes specific cargo details for each invoice, which helps customs officials conduct more precise assessments and examinations.
4. Enhanced Security: The amendments aim to improve the security and traceability of export documentation by adopting electronic formats and detailed information fields, reducing the risk of errors and fraudulent activities.

Impact on Exporters

These amendments mean a more streamlined and secure process for exporters to obtain customs clearance. The digitisation efforts reduce the paperwork burden and minimise the chances of delays caused by documentation errors. 

Additionally, standardised forms simplify the preparation of shipping bills, making it easier for exporters to comply with customs requirements.

Stay updated with the latest regulations. Let Pazago handle your trade documentation. Start today for hassle-free management.

Conclusion

Understanding the meaning of the shipping bill is vital for smooth customs clearance and legal compliance in international trade. 

Accurate shipping bills ensure timely delivery and operational efficiency, preventing costly delays and penalties. Utilising digital tools like ICEGATE streamlines the process, making it more efficient and secure. 

Always double-check the information on your shipping bill to avoid issues. Stay informed and compliant to keep your supply chain moving smoothly and effectively.

FAQs on Shipping Bill

1. How can I track the status of my shipping bill after submission?

You can track the status of your shipping bill through the ICEGATE portal. By logging into your account, you can use the "Track Status" feature to check the progress of your shipping bill. This feature updates whether your bill has been verified and assessed or whether customs authorities have raised any queries.

2. What are the penalties for incorrect information on a shipping bill?

Submitting incorrect information on a shipping bill can lead to penalties under the Customs Act. Penalties may include fines, delays in clearance, and, in severe cases, legal action. Ensuring all information is accurate and compliant with regulatory requirements is essential to avoid these issues.

3. What is the difference between an Electronic Data Interchange (EDI) and a manual shipping bill submission?

The primary difference lies in the method of submission. EDI submission is done electronically through the ICEGATE platform, which automates and streamlines the process, reducing paperwork and processing time. Manual submission involves physically submitting documents at the customs office, which can be more time-consuming and prone to errors. EDI also allows for real-time tracking and updates.

4. How does the Duty Entitlement Pass Book (DEPB) scheme affect the shipping bill process?

The DEPB scheme provides exporters with credits based on the export value of goods, which can be used to offset import duties. When filing a shipping bill under the DEPB scheme, the exporter must declare the goods eligible for this scheme, and the shipping bill will be printed on blue paper. This facilitates easier tracking and processing of duty credits.

5. What is the significance of the 'Let Export Order'?

The 'Let Export Order' is a crucial step in the export process. Customs authorities issue it after verifying and approving the shipping bill and the goods for export. This order signifies that the goods have been cleared for export and can be loaded onto the vessel. Without this order, the goods cannot legally leave the country.

6. Can a shipping bill be used as a document of title?

No, a shipping bill cannot be used as a document of title. It is primarily used for customs clearance and regulatory compliance. In contrast, a bill of lading can serve as a document of title, allowing the transfer of ownership of the goods during transit.