Tamilnadu State Board New Syllabus Samacheer Kalvi 11th Commerce Guide Pdf Chapter 26 Export and Import Procedures Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 11th Commerce Solutions Chapter 26 Export and Import Procedures

11th Commerce Guide Export and Import Procedures Text Book Back Questions and Answers

I. Choose the Correct Answer

Question 1.
EPC stands for ……………….
a) Export processing commission
b) Export Promotion Council
c) Export Carriage council
d) Export Promotion Congress
Answer:
b) Export Promotion Council

Question 2.
STC is expansion for ……..
a) State Training Centre
b) State Training Council
c) State Trading Centre
d) State Trading Corporation
Answer:
d) State Trading Corporation
Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 3.
An ……………. is document prepared by importer an sent to the exporter to buy the goods
a) Invoice
b) Indent
c) Enquiry
d) Charter Party
Answer:
b) Indent

Question 4.
The ………………… receipt is an acknowledgement of receipt of goods on the ship issued by the Captain
a) Shipping Bill
b) Bill of Lading
c) Mate’s Receipt
d) Consular Invoice
Answer:
b) Bill of Lading

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 5.
The Exporters appoint the …………… agent to fulfil the customs formalities
a) Clearing Agent
b) Forwarding Agent
c) Commission Agent
d) Factor
Answer:
b) Forwarding Agent

II. Very Short Answer Questions:

Question 1.
What is meant by Indent?
Answer:
An indent actually points to an order received from abroad for export of goods, i.e. sale of goods. The indent contains the details in the box.

Question 2.
Write any two export promotion institutions.
Answer:

  1. Export Promotion Council (EPC)
  2. Export and Credit Guarantee Corporation (ECGC).

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 3.
What is meant Charter Party?
Answer:

  1. Open Indent
  2. Closed Indent
  3. Confirmatory Indent

Question 4.
Write a short note on Mate’s receipt?
Answer:
Letter of Credit (LC) is an undertaking by its issuer (importer’s bank) that bills of exchange drawn by the foreign dealer on the importer will be honoured upon its presentation by the exporter’s bank up to a specified amount.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 5.
What is Bill of Lading?
Answer:
Bill of Lading, refers to a document signed by the shipowner or to his agent mentioning that goods specified have been received and it would be delivered to the importer or his agent at the port of destination if good condition subject to terms and conditions mentioned therein.

IV. Long Answer Questions

Question 1.
What are the procedures relating to Export trade?
Answer:

1. Receiving Trade Enquiry : Exporter receives trade enquiry (written request) from the importer / his agent who intends fir buy the product.

2. Receiving Indent and Sending Confirmation : After the scrutiny of quotation / proforma invoice, the buyer who intends to buy the goods sends an indent to exporter. The latter may either receive the order directly from the importer or through an agent who acts as an intermediary between the exporter and the importer.

3. Arranging Letter of Credit : Under this stage exporter intends to satisfy himself/herself about the trust worthiness of the importer. In this case the exporter is requested to arrange a letter of credit in his favour.

4. Obtaining Importer Exporter Code (IEC) and RBI Code Number : Exporter has to apply in Ayaat Niryatt Form 2 A (ANF2A) to the Regional Authority of the Director General of Foreign Trade (DGFT) in the region where the registered office of the company is located. Exporter has to mention the number in all the shipping documents.

5. Obtaining Registration cum Membership Certificate (RCMC) from Export Promotion Council/Commodity Board : An Exporter is required to obtain RCMC from Export Promotion Councils/Commodity Board/Development Authority in order to avail himself/herself of export incentives, concessions, and other facilities offered by Government.

6. Manufacturing/Procuring Goods and Packing items : Exporters steps into manufacturing and procuring of goods required by the importer.

7. Export Inspection Certificate : After the goods have been packed as per the specifications of importer, the exporter has to apply to the Export Inspection Agency (EIA).

8. Insurance of Goods : Exporter has to arrange for getting the goods insured to protect them against the various risks like deterioration.

9. Certificate of Origin : Import regulation of foreign countries may require that all this import consignments must accompany a certificate of origin.

10. Consular Invoice : Where the customs duties are charged on the basis of value of goods at import’s port (ad – valorem basis), the customs officers are empowered to open the consignment to calculate duties.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 2.
Distinguish between Bill of Lading and Charter Party:
Answer:

Bases of difference Bill of Lading Charter Party
1.Meaning This represents a document acknowledging receipt of goods on board for car­rying them over to specified port of destination It refers to an agreement to hire a whole or major part of ship when the goods take exported is heavy.
2.Transferable It can be transferred to third party by endorsement and delivery It cannot be trans­ferred to third party
3.loan Loan can be raised against it Loan cannot be raised against it
4.Crew Master and crew remain the agent of ship owner Master and crew become the agent of exporter for a temporary period
5. Lease It is not a lease of a ship It is a lease of a ship

Question 3.
What are the documents used in Export Trade?
Answer:
1. Documents Related to Goods

  • Indent
  • Certificate of Origin
  • Certificate of Inspection

2. Documents Related to Shipment

  • Mate’s receipt
  • Shipping Bill
  • Shipping Order
  • Bill of Lading
  • Marine Insurance Policy
  • Consular Invoice
  • Railway receipt/Lorry receipt

3. Documents Related to Payment

  • Letter of Credit
  • Commercial Invoice
  • Bills of Exchange
  • Bank Certificate Payment

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 4.
Explain the various functions of Export Trading Houses.
Answer:
The functions of the export house are mentioned below

  • Identifying a potential market for a product
  • Finding buyers and their agents and eliciting then the response for export proposal.
  • Establish product specifications in the light of market’-heeds, standards, and regulations in accordance with supplier’s capabilities.
  • Determining appropriate mode of transportation and routing keeping in mind the cost, quality of service and security.
  • Preparing the goods for delivery at destination
  • Determining buyer’s creditworthiness
  • Negotiating the transactions
  • Arranging proper insurance coverage against maritime risks and currency fluctuations
  •  Financing the transactions and paying for goods and services received.
  • Preparing document for international trade
  • Settling claim.

11th Commerce Guide Export and Import Procedures Additional Important Questions and Answers

I. Choose the Correct Answer:

Question 1.
The EXIM Bank was set up in the year ………………..
a. 1981
b.1982
c.1886
d.1892
Answer:
b.1982

Question 2.
The Indent which gives complete freedom to the exporter is known as …………………
a. Open Indent
b.Closed Indent
c.Confirmatory Indent
d. None
Answer:
a. Open Indent

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 3.
Expand RCMC …………………
a. Registration cum Membership Council
b.Registration cum Manufacturing council
c. Registration cum Membership Certificate
d. Registration commodity manufacturing council
Answer:
c. Registration cum Membership Certificate

Question 4.
The hiring of the entire ship for a specific time period is called ……………..
a.Shipping order
b.Voyage Charter
c.Charter Party
d.Time Charter
Answer:
d.Time Charter

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 5.
Dock Receipt is also called as ……………..
a. Port Trust Receipt
b. Shipping Bill Receipt
c. Bill of Lading
d. None of the above
Answer:
a. Port Trust Receipt

II. Very Short Answer Questions:

Question 1.
What.do you mean by EXIM bank?
Answer:
Export and Import Bank is one the specialized financial institutions wholly owned by the Government of India was set up in the year 1982 for financing, facilitating, and promoting foreign trade of India.

Question 2.
What is the main objective of EXIM Bank?
Answer:
The main objective of EXIM Bank is to co-ordinate the various activities of institutions and banks engaged in financing foreign trade.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 3.
Who is a forwarding agent?
Answer:
A forwarding agent is appointed by the exporter to fulfill the customs and shipping related formalities and certain logistic functions.

III. Short Answer Questions:

Question 1.
Write a short note on Consular Invoice:
Answer:
It is a document certifying a shipment of goods and shows information such as the consignor, consignee, and the value of the shipment. A consular invoice can be obtained through a consular representative of the country in which the shipping is done.

Question 2.
Who is a Commission Agent?
Answer:
Commission Agent is an international agent who is paid a certain percentage of commission for the order booked by him abroad. He offers products to potential customers in the territory allotted to him in accordance with the terms and conditions specified by the principal. However, there is no employment relationship between the agent and the principal and the relationship is purely temporary. The agents get commission only at the end of the deal.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 3.
What is the purpose of the establishment of the export trading house?
Answer:
Export Trading House has been established to increase the export, strengthen the global market, capacity and get necessary facilities for increasing the export performance of our country.

Question 4.
Who are all the parties involved in Export Trading House?
Answer:
It consists of merchants, exporters, trading companies, export-oriented units, units located in export processing zones, electronic hardware technology park, etc.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 5.
What are all the documents used in import trade?
Answer:

  • Import License
  • Indent
  • Letter of Credit
  • Bill of Entry
  • Bill of sight
  • Port Trust Dues Receipt
  • Bill of Lading
  • Bill of Exchange
  • Advice Note

IV. Long Answer Questions

Question 1.
What are all the main functions of EXIM bank?
Answer:
The main Functions of EXIM Bank are listed below:

  • It provides direct financial assistance to exporters of plant, machinery, and related services.
  • It underwrites the shares, debentures, and bonds of the companies engaged in exports
  • It provides a re-discount facility in respect of export bills for a period not exceeding 90 days against short-term export bills discounted by a commercial bank.
  • It gives overseas buyer credit to foreign exporters for the import of Indian capital goods which are used for manufacturing export products.
  • It finances export-oriented industries.
  • It collects and provides market and credit information about foreign trade to those engaged in international business.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 2.
Briefly explain the financial assistance provided by commercial banks:
Answer:
Commercial Banks provide financial assistance in the following two ways:

1. Pre-Shipment Financial Assistance: This is the type of assistance given to enable exporters to purchase raw materials process them and create finished goods for the purpose of export. This credit is given on the basis of export orders and letters of credit opened in favour of the overseas buyers.

2. Post-Shipment Financial Assistance: Post-shipment financial assistance is assistance granted in the form of advances on the basis of bills of exchange and shipping documents drawn under letters of credit. This type of export finance is granted right from the date of shipment of the goods to the date of realization collection of export proceeds for the purpose of meeting a capital need, paying insurance charges. ECGC premium commission and brokerage to agent export promotion expenses and so on and so forth.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 3.
Briefly explain the objectives of Export Trade: (Any five):
Answer:
The important objectives of the export include the following:

  1. Facilitating selling of goods to countries which desperately need such goods
  2. Expanding the market for goods by producing them on a large scale.
  3. Earning foreign exchange through exports
  4. Helping a country increase the national income
  5. Creating employment opportunities in a country by promoting export-oriented and export-related enterprises.

Question 4.
Briefly explain the objectives of Import Trade:
Answer:
Achieving Rapid:
Industrialization Developing countries can achieve rapid industrialisation by importing advanced technology scarce raw materials, capital goods like machinery equipment, etc., and talents from other countries.

Meeting Consumer Demand:
Certain goods are either not available or cannot be manufactured/produced adequately to meet the growing demand in the home country. Hence import is necessary to meet the short supply of those goods.

Upgrading Standard of Living of the People:
Consumers are able to use a wide variety of goods like cell phones, car laptops, television audio systems, washing machines, perfume, soaps, etc., manufactured in foreign countries and enhance their standard of living through import trade.

Meeting Shortage Situation:
During famine, earthquake, flood drought, tsunami, and abnormal price-increase situations, and so on food grains, vegetables, and other essential commodities are imported from foreign countries and the bad situation arising from the above situations are thus overcome.

Strengthening Defence:
Many countries around the world import defense equipment for their armed force. Such imports enable the country to ensure its sovereignty and territorial integrity.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures

Question 5.
Explain the intermediaries in Import Trade:
Answer:
Indent Houses/ Import Agent: This intermediary is specialized in a particular trade. He charges fees for his service. The importer has to enter into a contract with the indent house to avail himself of his service.

Clearing Agent: Clearing Agent is specialised in clearing the goods from the port of discharge destination and transport them over to the importer. They fulfill the various custom formalities on behalf of the importer and get the goods cleared from the port. They charge a commission for their service.

Samacheer Kalvi 11th Commerce Guide Chapter 26 Export and Import Procedures