Month: February 2002

Understanding ex-factory is important if you are starting your export import business. Import export training institute explains the best on international trade. Join export and import training by Digital Exim and start your trade with expert guidance. Ex-Factory is the common delivery terms used in export and import. Ex- factory means the selling cost of goods from the seller’s factory. It is a common agreement between seller and buyer. It comes in one of the 11 incoterms. Ex-factory and ex works are same. When the buyer agrees to the ex-factor conditions, he/she takes full responsibility for the documents and the risks involved.

What is Ex- Factory? 

• This is a contract option that is particularly beneficial to the seller and less beneficial to the buyer.
• As per ex-factory terms, the buyer is responsible for all the expenses of transportation of goods or any kind of damage during transportation from the seller’s factory to buyer’s premise.
• The seller only has to ensure that goods are available at the place of dispatch.

• The entire process of loading of goods in trucks to covering all the process to deliver them at the location has been under the guidance of the buyer.

•  In order to collect goods from the seller’s factory to the buyer’s location, the buyer appoints a shipping and freight forwarding company.
• Because the buyer bears all the cost and work of shipping, the seller is only responsible for making sure that the goods are ready to dispatch when they arrive.

In ex-factory terms the buyer gets a clear picture of all costs he/she has to bear in the export import of goods. 

Disadvantages of Ex-Factory? 

Ex works terms have the disadvantage of a complicated customs clearance process at the country of origin. The customs clearance can have a number of risks, which the buyer will be responsible for. Clear details of the goods have to be submitted by the seller for clearance, and if there are any inaccuracies the buyer may have to pay extra for the full clearance.  

Ex-factory price-

Ex-factory price represents the price at which the goods are offered for shipment by the seller at his/her warehouse or business establishment. When a buyer pays you for the service of picking up goods from your place of business, this is called an ex works price.

Ex-Factory price does not include – 

• Pre-carriage
• On- carriage
• Customs clearance
• Cost of loading on collecting vehicle
• Import duties
• Export duties

Conclusion- 

By agreeing to the ex-factory terms, a buyer can get an accurate picture of all the costs associated with the import and export of the goods. As a result of the EXW option, the seller does not have to bear transport costs or risks. Import export training in India makes leading entrepreneurs. To live your dream of import export business, join our live webinar that too totally free. Click the link given below. https://chat.whatsapp.com/Bqz4SWH55nSGtKj3GnJAC8 Do visit our website to know more! 

FIRCs are important documents to own if you are a merchant or service exporter receiving international payments. Read on for more information. Know more about international business through import export training in India and start your business with us.  Foreign exchange dealers in India (FEDAI) and the Reserve Bank of India (RBI) define FIRCs (Foreign Inward Remittance Certificates) as proof of foreign transfers to India. It is used by many authorities as proof that individuals or businesses have received payments in foreign currency from abroad.  After your overseas client has remitted the proceeds of your sale to your account, your bank issues a certificate to that effect indicating the details of this remittance.  Various government agencies require this proof of receipt in order to apply for financial assistance and other forms of government support.  In India, sellers and service exporters must obtain FIRC certification, which takes over six months. Also, many banks charge excessive fees for processing FIRC applications.  You can download your digital FIRC within 7-15 days of receiving a payment if you receive your digital FIRC directly to your Payoneer account.    Did you enjoy our article? The information provided above is part of our Online Export Import Training course. To know more you can also join our import export training course.    

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India has implemented different frameworks from time to time for the promotion of import-export services. Export Promotion Capital Goods (EPCG), Duty Drawback, Export Oriented Units (EOU), Special Economic Zones (SEZ), etc., are some of the structures. These schemes concentrate mainly on the rebate or repayment of the various taxes or duties applicable to exporters. These export promotion schemes aim to neutralize the incidence of taxes based on the cardinal principle of trade, which is globally recognized: “Goods and services may be exported, but taxes should not be exported. We at Digital Exim – A leading organization that also runs an import-export course in Ahmedabad, brought you the major 5 differences between MEIS and Export -Import’s RoDTEP scheme. There have been several questions about the new regime in the industry, RoDTEP (Remission of Duties and Taxes on Exported Products), which will replace MEIS (Merchandise Exports Incentive Scheme).  If you also want to learn the basic and advanced fundamentals of import-export services, you can join our import-export training classes.

A Brief about RoDTEP 

Remission of duties and taxes on export products (RoDTEP) The Remission of Duties and Taxes on Export Products (RoDTEP) is a policy introduced by the GOI for the promotion of import-export services by way of reimbursement of duties and taxes which, in practice, are not exempted or rebated under any other scheme.  “Refund currently un-refunded” is the principle. The system was proposed to replace two related schemes aimed at promoting exports. These schemes are RoSCTL and MEIS. This new system is a synthesis of the characteristics of both systems. GST and import/customs duty are currently refunded or rebated by schemes such as Advance authorization, Duty Drawback, etc., on inputs needed to produce exported goods. But there are taxes, duties, or levies in the federal, central, or local levels imposed in the purchase and distribution of export goods but are not generally excluded or remitted under any other scheme.  The goal of RoDTEP is to cover all of these responsibilities and taxes. The goal is to refund the embedded duties and taxes through the electronic customs ledger in a duty credit / electronic script. Find the exclusive import export course in Ahmedabad and become a master of the field.  

A Brief about MEIS

The Merchandise Export Incentive Scheme (MEIS) goal was also to improve exports through the provision of incentives and rewards. It is part of India’s 2015-2020 foreign trade agenda.  Under this structure, exporters were given certain incentives and rewards through the ‘Service Credit Script’ (transferable). 

Product-to-product and country-to-country depended on the defined rates at which the rewards were to be offered. It was not a tax neutralization program but rather focused on providing exporters with incentives or rewards to fix infrastructural insufficiencies and related costs. The Ministry of Textiles was notified on 7 March 2019, of the RoSCTL (Rebate on State and Central Taxes and Levies). It was supposed to refund various state and central taxes/levies on apparel and made-up exports. This program was a substitution for the old Refund of State Levies scheme. Join our import-export training classes and get benefited from such deep insights and analysis of the Import-export market.  

5 Major differences between these two import-export services (MEIS vs. RoDTEP)

Sr. No.	Aspect	MEIS	RoDTEP
1	Percentage of Incentive	2 % to 5 % of Freight on Board value of Export	Product-based percentage incentive system- This is estimated to be lower than the current MEIS (rates to be declared later)
2	Compliance with WTO	It does not comply with WTO trade regulations.	It complies with WTO trade regulation.
3	Issuance	In the form of scripts that are transferable.	In the form of an electronic script/transferable duty credit stored in an electronic ledger.
4	Incentive Scheme	Additional benefits for the sale of goods other than the other reimbursements and disadvantages applicable to the undertaking regarding those exports.	Any established scheme does not currently reimburse the effect of indirect taxes on goods used in manufacturing the exported commodity.
5	Transferability	Freely Transferable	Freely Transferable

Bottom Line

The RoDTEP system was necessary for the moment. The Indian manufacturing exporters and merchandise industry need financial backing and an adequate climate to sustain cost competitiveness in the global arena after being affected by COVID-19. Also, being a signatory of WTO, India was required to comply with its global trade norms.  You can find many import-export courses in Ahmedabad, but at Digital Exim, we not just run the service of import-export training classes; we can help you set up the entire business of import-export services.  Connect with us at info@digitalexim.com or call us on +91-9505506333.