Chamber Voice – April 2018

President's Letter

Dear Friends,

Greetings to all!

The Financial Year (2017-18), saw trade and industry face many challenges such  as the aftermath of demonetisation and the introduction of the Goods and Services Tax. The current financial year is going to assess how industry has been able to cope with the changes and the results thereof.

Anticipating the roll-out of the “GST – E-way Bill,” on the 1st of April 2018, the Cochin Chamber organised a Half-Day Workshop on the subject on the 24th of March 2018. Ms. Nisha Menon, Director, Tax & Regulatory Services, PwC India, was the Speaker at the Session. This event was organised to give trade a better understanding of the new system coming into effect. The programme was attended by over 75 participants from various sectors of trade and industry.

Technology has today become the driving force of businesses the world over. With the advances that are being made where technology is concerned, the prospects and opportunities opening up in business are many. Understanding the importance of technology today vis a vis business and appreciating the fact that all businesses are going to be technology driven in the future with the advent of block chain technology, artificial intelligence, robotics etc. the Chamber invited Ms. Sujata Madhav Chandran, Global Head – Asset Leveraged Solutions, Analytics and Insights Unit, TCS Kochi, as the speaker to the 6th CEO Forum Breakfast meeting held on the 6th of April 2018. Ms. Madhav spoke on “Waves of Technology”. The session covered the proper use of technology in business and the possibilities that technology holds for new and existing businesses. I must say that this session was one of the more informative and content heavy sessions that we have had so far. I believe all who attended the session found it informative and useful.

The Foreign Trade Policy (2015-2020) of the Government of India has had some mid-term changes made to it to improve the country’s export performance and competitiveness. In order to highlight these changes and also to explain the impact of GST on the EXIM trade, the Chamber is conducting an exclusive One Day Workshop for the Export-Import Community on the “Amendments to the Foreign Trade Policy (2015-2020) and the implications of the Goods and Services Tax” on Friday, 27th April, 2018, at Hotel Abad Plaza, M.G. Road, Ernakulam. I take this opportunity to invite members from the EXIM community to take advantage of this programme to remain updated on the changes and their impact where exports and imports are concerned.

The next CEO Forum Breakfast meeting will be held on Friday, 4th of May 2018 at Taj Gateway Hotel. Mr. V. Venugopal, Vice-President Legal of Harrisons Malayalam Limited, one of the largest employers in the State will be speaking on “ Land Laws in Kerala and the Plantation Industry.”  As you might already know, Mr. V. Venugopal is also the Vice President of the Chamber.

As always, do feel free to get in touch with the Chamber Secretariat for any clarifications regarding the services provided or to participate in any of our programmes. You could also visit www.cochinchamber.org to remain updated about what we do and our forthcoming events.

Shaji Varghese

President

Recent Events

Workshop on E-way Bill | 24-03-2018

The Cochin Chamber of Commerce & Industry in association with PwC India organised a Workshop on the “E-way Bill” on Saturday the 24th of March 2018, at Hotel Abad Plaza, M.G. Road, Ernakulam.

Ms. Nisha Menon, Director, Tax & Regulatory Services, Cochin was the speaker at the session.

The half day session was a very interactive one, with over 75 participants.

The session was organised to help the participants clear their doubts about E-way Bill, it’s implementation and implications.

CEO FORUM Breakfast Meeting - Waves of Technology | 06-04-2018

The Sixth meeting of the CEO Forum 2017-2018 was held on 6th April 2018 at the Taj Gateway Hotel. Ms Sujata Madhav Chandran, Global Head – Asset Leveraged Solutions, Analytics and Insights Unit, TCS Kochi spoke on “The Waves of Technology”.

Mr. V. Venugopal, Vice President of the Chamber introduced the Speaker and welcomed the CEOs present at the meeting.

Ms. Nisha Menon, Director – Tax, PwC India (Knowledge Partner of the Chamber) spoke on the Tax and Regulatory aspects pertaining to Limited Liability Partnerships.

Mr. C.S. Kartha, Immediate Past President presented a memento to Ms. Sujata Madhav Chandran.

Ms. Vinodini Isaac, Executive Committee Member of the Chamber thanked the member CEOs. The session was followed by a Networking Breakfast.

Upcoming Event

Workshop on Foreign Trade Policy and GST for EXIM Trade | 27-04-2018

The Ministry of Commerce and Industry, through a Press Release on 5th December 2017 had released the Mid-term Review of the Foreign Trade Policy (FTP) 2015-20 in New Delhi. While restoring the benefits under the export promotion schemes of duty free imports under Advanced Authorisation, Export Promotion Capital Goods and 100 percent Export Oriented Units and thus resolving the problem of blocked working capital for exporters following the roll out of GST, the FTP review has focused on increasing the incentives for labour intensive MSME sectors.

The Cochin Chamber of Commerce & Industry is organising an Exclusive One Day Workshop for the Export-Import Community on the Amendments to the Foreign Trade Policy (2015-2020) and the implications of the Goods and Services Tax on Friday, 27th April 2018 from 10 a.m. to 5 p.m. at Hotel Abad Plaza, M.G. Road, Ernakulam.

The Workshop will be handled by Mr. M.S. Venkataraman and Mr. M. Bhasker, Founder Members of Freight Club, Chennai.

For registrations,

The Cochin Chamber of Commerce and Industry, Willingdon Island, Cochin-682 003.

Phone: 0484 2668349/ 2668650 Mob: +919895676827/ +919744629992 Email: events@cochinchamber.org

Tax and Regulatory Updates from PricewaterhouseCoopers

Indirect tax:

GST Council temporarily extends the present system of filing of returns and export benefits for procurement of goods and recommends implementation of e-way bill scheme in a phased manner from 01 April 2018.

In its 26th meeting held on 10 March 2018, the GST Council has decided to extend the present system of compliance for taxpayers for another 3 months up to June 2018, and the export benefits for procurement of goods for another 6 months up to 01 October 2018. The e-way bill scheme would be implemented in a phased manner from 01 April 2018. While most of these decisions have been implemented by way of Notifications/Circulars, please find some of the key recommendations re-extracted:

GST COMPLIANCE: The GST Council decided to continue the present system of compliance up to 30 Jun’18.

FILING OF GST RETURNS: Assessees to file GSTR-3B and GSTR 1 up to the month of June 2018, till the new system of filing Returns is finalized. A Group of Ministers would discuss and finalize the new system.

LIABILITY UNDER RCM: The liability to pay GST under RCM has been deferred till 30 June 2018. A Group of Ministers would look into the modalities of implementation.

IMPLEMENTATION OF THE TDS/ TCS SCHEME: The provisions relating to deduction of tax at source (TDS) as well as collection of tax at source (TCS) have been suspended till 30 June 2018. The modalities for linking State and Central Governments’ accounting system with GSTN are still being worked out for implementation to make available seamless credit to registered traders who are subject to TDS/ TCS.

EXPORT BENEFITS: Exemptions for procurement of goods for export – The GST Council has decided to continue the present exemptions up to 01 October 2018. This includes:

  • Exemptions on imported goods for exports (i.e. Advance Authorisation, EPCG and EOU schemes).
  • Deemed export benefit for domestic procurements made under Advance Authorisation, EPCG and EOU schemes.
  • Procurement of goods by merchant exporters on payment of GST @ 0.1%.

E-WALLET SCHEME: The e-Wallet scheme provides for use of virtual/ notional currency by exporters for payment of GST on domestic procurement of goods and imports. The scheme is being finalised and has been deferred up to 01 October 2018.

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EXPORT REFUNDS: The GST Council reviewed the progress in grant of export refunds of both IGST paid on exports and input tax credit and directed speedy disposal of pending claims for immediate sanction and disbursal.

E-WAY BILL SCHEME: The GST Council has recommended implementation of the e-way bill scheme in the following manner:

  • Inter-State Movement of goods: With effect from 01 April 2018.
  • Intra-State Movement of goods: Phased manner with effect from a date to be announced, but not later than 01 June 2018.

GRIEVANCE REDRESSAL MECHANISM: The responsibility for redressal of grievances of the taxpayers arising out of IT glitches will be handled by the GST Implementation Committee.

PwC Comments: While the temporary extension of the present return filing system till finalisation of a new system and the export benefits is welcomed, the delay in finalising the new system is creating a lot of anxiety and uncertainty amongst the assessees. The IT glitches in the returns filing process or the e-way bill scheme is still a matter of significant concern for the trade and industry. The phased implementation of e-way bill scheme is also likely to complicate the system for multi-locational units having presence in different States, as it involves re-alignment of their IT systems in time with the introduction of scheme in different States. While the implementation of various schemes are being deferred & the Government is taking a lot of initiatives & efforts to address most issues, trade & industry is concerned about readiness of the IT infrastructure to handle complexities in GST.

Supreme Court holds that no service tax is payable on reimbursable expenditure or cost incurred by the service provider before 14 May, 2015

The tax payer had challenged the inclusion of amounts of reimbursable expenditure recovered from the customer in the value of taxable services and the Delhi High Court had also decided in favor of the tax payer. The tax authorities appealed against this decision in the Supreme Court. In the meanwhile, section 67 of the Finance Act, 1994 (which deals with Valuation under Service Tax) was amended to specifically include the amount of reimbursable expenditure in the value of taxable services. The SC rejected the appeal filed by the tax authorities and observed as under:

  • Undoubtedly, rule 5 of the Valuation Rules brings within its sweep the expenses which are incurred and reimbursed by the service receiver to the service provider while providing the service. As per these rules, reimbursable expenses also form part of the ‘gross amount charged’. Therefore, the core issue in the appeal is whether section 67 of the FA, 1994 permits the subordinate legislation to be enacted in the said manner, as done by Rule 5.

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  • Undoubtedly, rule 5 of the Valuation Rules brings within its sweep the expenses which are incurred and reimbursed by the service receiver to the service provider while providing the service. As per these rules, reimbursable expenses also form part of the ‘gross amount charged’. Therefore, the core issue in the appeal is whether section 67 of the FA, 1994 permits the subordinate legislation to be enacted in the said manner, as done by Rule 5.
  • Section 66 of the FA, 1994 specifically mentions that the service tax will be on the ‘value of taxable services’. Thus, service tax is to be determined with reference to the value of services which are actually rendered.
  • In section 67 of the FA, 1994, the expression ‘such’ is important and in deciding the value of taxable services for charging service tax, the authorities had to find out what was the gross amount charged for providing ‘such’ taxable services.
  • Any other amount which was calculated not for providing such taxable service could not form part of valuation as that amount was not for providing such ‘taxable service’.
  • Accordingly, rule 5 of the Rules went much beyond the mandate of section 67 and the Delhi HC was right in interpreting sections 66 and 67 to hold that the value of taxable service shall be gross amount charged by the service provider ‘for such service’ and the valuation for service tax could not be anything more or less than the consideration paid as quid pro quo for rendering such a service.
  • The amendment in section 67 with effect from 14 May, 2015 to include the reimbursable expenditure within the meaning of ‘consideration’ was a substantial change in the law and had to be prospective in nature.
  • The Court also held that the value of free supplies of diesel and explosives by the recipient of service would not warrant inclusion in the value of gross amount charged by the service provider for the purposes of payment of service tax and that is not a consideration for rendering the service.

PwC Comments: The SC decision comes as a huge relief to the assessees who have been litigating levy of service tax on reimbursable expenditure before 14 May, 2015. The industry may assess the implications of this decision under the GST regime. The GST Act specifically provides for inclusion of incidental expenses charged by the supplier in the value of supply and the Valuation Rules provide for exclusion of expenditure incurred as a pure agent.

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Supreme Court holds that holds that the value of free material given to a contractor is not includible in valuation of the taxable service

The assessee was a construction service provider, availing the option under notification no. 15/2004-ST, to either pay service tax on 33% of the gross amount charged for provision of services or on the actual value of services. With effect from 01 March, 2005, an explanation was added in the notification, stating that the gross amount charged shall include the value of goods and material supplied free by the service recipients and used by the provider of construction services for providing such service. While the assessee was claiming the benefit of the notification, in some cases, the service recipient provided some of the goods (e.g. steel and cement) free of cost to the assessee for use in the construction. The tax authorities contended that the value of such goods supplied free of charge by the service recipients should be added to the gross amount charged, to compute the service tax liability.

The Supreme Court upheld the decision of the larger bench the CESTAT in favour of the taxpayer on the following grounds:

1) As per section 67 of the Finance Act, 1994, the value of the services should be the gross value charged for the services. Since the provider was not charging anything for such goods supplied free of cost by the recipient, the value of such goods could not be included in the value of taxable services.

2) Merely by use of the word ‘gross’ the department could not ignore the contract value or the amount actually charged by the service provider. A value which was not a part of the contract between the service provider and the service recipient had no relevance in determining the value of taxable service. Section 67 also refers to the amount charged for the service provided. In this case, the value of the goods supplied free of cost could not be said to be consideration for the service provided by the service provider. Hence, the value of such supplies could not be included in the value of taxable services. One could not say that there was a service provided by the service provider in respect of such goods and hence, it could not be considered as taxable.

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PwC Comments: Inclusion of value of goods supplied free of cost had been a subject matter of intense litigation. This decision affirming the larger bench decision of the CESTAT concludes the issue in favour of the assessee and and reiterates that commercial terms of a contract would determine tax liability. The decision pertains to the service tax regime and the industry should assess its impact in the GST regime, including applicability of the principles laid out in the context of the provisions of the GST laws.

Delhi HC dismisses writ petition seeking utilisation of accumulated credit of education cesses after abolition of the said cesses. 

The major observations made by the HC were as under:

  • No promise or a statement was made that credit of EC & SHEC would be allowed to be utilised against excise duty/ service tax; the credit of EC & SHEC was never allowed to be cross utilised against excise duty/ service tax.
  • The contention that EC and SHEC are “subsumed” into excise duty/ service tax as per the Finance Minister’s speech and Budget memorandum is not acceptable. Reliance on the speech and memorandum is not relevant as it is permissible to look into the same for the limited purpose of appreciating the background and antecedent factual matrix leading to the legislation, not as a sole material, but with other material & external aids.
  • There is no vested right available to the petitioners to avail the benefit of the unutilised amount of EC and SHEC.

PwC Comments: This is an important decision on the right of the industry to utilise the accumulated CENVAT credit of EC and SHEC for discharging excise duty/ service tax liability. The industry will now need to, inter-alia, assess the implications of this decision on the stand taken for claiming transitional credit of accumulated CENVAT credit of EC and SHEC in GST regime or retaining such credit as is or writing-off the same.

Larger bench of CESTAT holds that the due date for filing refund claims of unutilised CENVAT credit by the exporters under rule 5 of the CENVAT Credit rules is one year from the end of the quarter during which payment is received and not from the date of receipt of payment.

The larger bench of CESTAT held as under:

  • Since the relevant notification issued under rule 5 of CENVAT Credit Rules refers to the time limit specified under section 11B of the Central Excise Act (viz. one year from the relevant date), the limitation period could not be ignored and refund claims would need to be filed within that period. Hence, the provision would need to be interpreted qua service providers.
  • While the issue had been settled for the periods after March, 2016, due to a specific amendment in the relevant notification stating the period as one year from the date of receipt of foreign exchange, such amendment was prospective in nature. The CESTAT referred to the constitution bench decision of the Supreme Court in case of Vatika Township, which held that any amendment to the statute which is beneficial to the assessee may be applied retrospectively, but any amendment imposing the burden on the public should be prospective. Relying on this ratio, since the amendment in the notification was adverse for the assessees, the larger bench held that the due date for filing the refund claims for unutilised CENVAT Credit by exporters was one year from the end of the quarter in which the payment for such services exported was received where the refund claims were filed on quarterly basis.

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PwC Comments: This is an important decision in favour of the assessees and gives substantial relief to the exporters whose claims were denied on account of breach of the limitation period. The assessees whose refund claims were rejected on the grounds of delayed filing on this issue and had appealed against such denial, can now approach the appellate authorities for early disposal of pending appeals, on the basis of this decision and pursue their refunds.

International Tax:

India signs Double Taxation Avoidance Agreement with Hong Kong

India and Hong Kong signed a Double Taxation Avoidance Agreement (DTAA) on 19th March’18 that seeks to improve transparency in tax matters and help curb tax evasion/avoidance. The key highlights of the DTAA are as under:

  • Capital gain arising on sale of shares of an Indian company to be chargeable to tax in India
  • Capital gain arising on sale of Indian securities (other than shares eg. derivatives, debt securities, etc.) to be chargeable to tax in India
  • Interest income to be taxed @ 10%, subject to satisfying beneficial ownership test
  • Fees for technical services payable to a resident of Hong Kong to be taxed @ 10%, subject to satisfying beneficial ownership test
  • Article on Permanent Establishment (PE) includes amongst others service PE clause with a threshold of 183 days within a 12 month period
  • Other income arising in India will be chargeable to tax in India
  • Articles of the DTAA are aligned to the provisions of Multilateral Instrument to implement tax treaty related measures to prevent Base Erosion and Profit Shifting.

The same will come into force once both countries notify in writing the completion of the procedures required by its respective laws.

Direct Tax:

Date of agreement to sell, not date of sale deed, relevant for determining the period of holding, if all conditions prescribed for transfer are satisfied.

In a recent decision, the Jaipur bench of the Income-tax Appellate Tribunal (Tribunal) has held that for the purpose of computing the holding period, the date of agreement to sale will be regarded as the date of transfer if all the conditions prescribed under section 2(47) of the Income-tax Act, 1961 (the Act) have been complied.

PwC Comments: This ruling of the Tribunal highlights that in case of a purchase transaction involving a series of documents/ events, one needs to arrive at a conclusion about the date of purchase having regard to substance of the transaction and not merely by the date of execution of the sale deed. Reaffirms that the intention of parties are relevant for determining the period of holding and that must be ascertained from documents as a whole. Further, the judgement reiterates the nuance highlighted by SC in the case of Sanjay Lal that an agreement to sale creates a legitimate right to enforce specific performance of the agreement by which the seller is restrained from selling the immoveable property. 

Co-ownership of property to be determined from documents not intent; Tribunal rejects splitting of capital gains between husband and wife.

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In a recent ruling, the Bangalore bench of the Income-tax Appellate Tribunal (Tribunal) rejected both husband’s (taxpayer) and wife’s claim that long-term capital gains (LTCG) arising on sale of property, which was registered in the name of the husband, should be split equally in their hands and taxed accordingly. The Tribunal rejected the taxpayer’s co-ownership plea and denied the exemption claimed under section 54EC/ 54F of Income-tax Act, 1961 (the Act) in the hands of the wife

PwC Comments: This ruling of the Tribunal highlights that co-ownership in a property can only be considered from the recitals of the relevant documents and not from any stated intention or claim made, which is legally unsustainable.

Penalty not absolved in case of voluntary disclosure of additional income in a revised return filed after survey proceedings.

In a recent decision, the Delhi High Court (HC) following the decision of the Supreme Court (SC) held that the voluntary disclosure of additional income in a revised return of income filed after survey proceedings would not absolve the taxpayer from levy of penalty under section 271(1)(c) of the Income-tax Act, 1961 (the Act).

PwC Comments: The HC reaffirmed the SC’s decision that the plea of the taxpayer like “voluntary disclosure”, “buy peace”, “avoid litigation”, “amicable settlement”, etc. need not be considered by Revenue. Voluntary disclosure of additional income during the course of survey proceedings to buy peace of mind or to avoid further proceedings would not immune the taxpayer from the levy of penalty. 

Trading in commodity derivatives prior to insertion of clause (e) of proviso to section 43(5) to be regarded as speculative transaction.

In a recent ruling, the Mumbai bench of the Income-tax Appellate Tribunal (Tribunal) allowed the set-off of losses from commodity derivatives business against the profits of same business where transactions were carried out prior to insertion of clause (e)2 of proviso to section 43(5) of the Income-tax Act, 1961 (the Act).

PwC Comments: This ruling reinforces the principle that loss from a business should be allowed to set-off against profit of same business, irrespective of the nature of the transaction (i.e., speculative/ non-speculative). This ruling reaffirms that the business activity of trading in commodity derivatives undertaken before 01 April 2014 has to be considered as speculative business and do not fall under the purview of clause (d) of proviso to section 43(5) of the Act.

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Regulatory Issues:

Discontinuance of LoUs and LoCs for Trade Credits.

The Reserve Bank of India has discontinued the practice of issuance of Letter of Undertaking (LoUs) and Letter of Comfort (LoCs) for Trade Credits for imports into India by Authorised Dealer Category-I banks with immediate effect.

However, Letters of Credit and Bank Guarantees for Trade Credits for imports into India may continue to be issued subject to compliance with the provisions contained in Master Circular on Guarantees and Co-acceptances issued by the Department of Banking Regulation.

 

REFERENCES:

Civil Appeal No. 2013 of 2014 (TS-72-SC-2018-ST)

Civil Appeal Nos. 1335-1358 of 2015 and others (TS-47-SC-2018-ST)

[Writ petition (Civil) No. 7837/2016] [2018-TIOL-310-DEL-ST]

Appeal no. ST/20705/2016 (TS-35-CESTAT-2018(Bang)-ST)

ITA No. 680 & 681/JP/2017

Sanjay Lal v CIT [2014] 365 ITR 389 (SC)

ITA No. 2007/Bang/2016

ITA 219/2017 order dated 20 February, 2018

MAK Data Private Limited v. CIT [2013] 358 ITR 593 (SC)

ITA No, 5179/ Mum/ 2016

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AGRI CONCLAVE 2018

The President of the Cochin Chamber of Commerce & Industry Mr. Shaji Varghese, at the inaugural function of the AGRI-Conclave 2018.

Trivia

Upcoming Event

7th CEO Forum Breakfast Meeting - "LAND LAWS IN KERALA & THE PLANTATION INDUSTRY" | 04-05-2018

Ten steps to successful exports

1. Decide where to sell

Research is vital! Identify the markets with a little desk research. Find the consumption / import figures of products similar to your own and the economic growth rate of a potential new market. Look up the demographics, cultural and religious practices and your potential competition.

2. Have a plan

Your export plan should include your people.

Your People
Can someone from your team drive this programme or do you need to recruit?

Your Capacity
Do you have enough capacity to meet a new market’s demands? Do you need to upscale?

Your Packaging
Will your packaging design appeal to your market? Is there a legal requirement to label things differently or do you need to translate your labelling?

Your Knowledge
Visit your potential new market. Showcase your products at trade fairs and build new contacts.

3. Choose a route to market

You can do one of four options:

a. Sell directly
b. Use a distributor
c. Use a sales agent
d. Create a joint venture.

Whichever option you chose, you must ensure clarity of responsibility for things like delivery and payment and ALWAYS remember to protect your intellectual property.

4. Find the opportunities

Trade fairs are one of the best ways to find opportunities both in the UK and abroad. Meet buyers and generate new business. Check with us about available grants to subsidise the cost of exhibiting, or see if you can share the cost of a stand with another business.

Click here for hundreds of trade enquiries posted to the site each week.

5. Start marketing

Adverts can help you gain exposure but can be expensive. As with the UK, be mindful of the target audience and expense vs. return on investment. Another option is to create a website with content translated according to your target market. Global social media sites such as Linkedin, Facebook and Twitter can also help you to promote your message quickly and free of charge. Although these do not cost anything to set up, they need time invested to keep updated. Whatever you use, make sure all your marketing materials have up-to-date contact details for your company along with the person responsible for export sales.

6. Understand the admin

There are certain admin obligations that need to be correct from the start. HMRC and the UK Embassy of the destination country will help you to clarify the requirements for customs registration, forms, and payments.

Documentation is at the very heart of exporting, without it there is no contract, no transport and no payment. The requirements vary from country to country.

We can complete the paperwork on your behalf – in part or in full depending on your requirements. Contact Roy Broadhead, our specialist on Import/Export Services on 0845 034 7200 or email to ask about our back office support services.

There are two main geographic areas that your exports will fall into:

a. European union

Products can move freely across borders without customs checks and we can advise on any paperwork likely to be required. The buyer’s VAT registration number must be shown on the invoice. If this isn’t shown then you must charge VAT at the UK rate.

b. Rest of the world

Exporting outside the EU can open up wider opportunities and create new challenges. Although VAT is simpler (exports from the UK are zero rated) you may encounter Letters of Credit for the first time or come across requirements for specific customs forms. Contact Hayley Bates on 0845 034 7200 or email to check what you need.

c. Get paid and get insured

Once the orders start to come in, you need to be paid. We can help make sure you do that with:

Incoterms

Internationally agreed rules setting out delivery terms for goods traded across borders. Buyer and seller agree details on the terms of sale to prevent misunderstandings or disputes. Incoterms set out responsibility for the cost of transporting goods, insurance, taxes or duties, pick up points, destinations, and responsibility for the goods at each stage.

Export documentation

Get the right documents to enter the market.

Written quotations

A written quotation must set out the details of your product including the size and packaging formats, as well as any potential additional cost for providing export labelling and packaging which you may be charging on to the customer. Setting out the price and delivery terms (incoterms), the estimated date of shipment on arrival and payment terms and conditions is vital to avoid any disputes further down the line. Late, or non-payment of bills is a risk and insurance could be a consideration. Any new customers requesting a form of trade credit need a credit check. An irrevocable letter of credit could be advised which will secure payments according to the terms of the credit and at an agreed rate. Make sure you are insured for your goods during transportation.

8. Legal considerations 

Understanding the legal and regulatory environment in all countries to which you would like to export is vital. We can help get your paperwork in place and put you in touch with international lawyers should it be required.

Things to consider:

Are your product compliance certificates and liability cover valid overseas?
Check your intellectual property rights and registered trademarks.

9. Transport logistics

Now you’ve made the sale and agreed the terms, you have to get the goods there! We can help make sense of transportation. From your Incoterms insurance, duties and customs clearance, to the packaging you require and the method(s) of transport or freight forwarders required.

10. Success!

Congratulations. Now you have successfully become an international exporter. The work doesn’t stop here. Now you need to increase your chances of repeat business and become a reliable international exporter with a solid brand.

Top tips include:

  • Keep in regular contact with your customers and get feedback to improve your offer.
  • Deliver on time and don’t keep people waiting. If delays cannot be avoided make sure you communicate early and often with your customers and keep them updated on progress.

Don’t rest on your laurels. Keep an eye on other potential customers so that you can grow your sales. Continue with your promotional activity and keep visiting the tradeshows.

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