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Let Export Order or LEO : Everything You Need to Know | Drip Capital
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Let Export Order or LEO : Everything
You Need to Know
17/11/2021
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What is Let Export Order or LEO?
The Let Export Order (LEO) is the final step in the list of compliance
requirements required to export goods out of India. As you must have
seen from our previous articles, there are documents related to the
commercial aspect of the export transaction, insurance, quality, logistics
and compliance that must be prepared and/or submitted.
A LEO is provided when customs is satisfied with the assessment of the
value of goods and their inspection. This clears your shipment for export.
Once your goods are ready for export, you will have to arrange for
necessary customs clearance procedures at the location of the custom
from where the products are to be shipped. Your export customs
clearance procedures are done through the filing of a shipping bill and
other export documents. The designated customs officer would then
examine and assess the goods and documents and permit the export of
the goods by authorizing the ‘Let Export Order’ in the shipping bill.
Once the LEO is obtained in the shipping bill for a particular
consignment, the exporter or their customs house agent (CHA) can hand
over the consignment to the carrier entrusted to take it out of the
country.
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Also Read : 12 Documents Required for Export Customs Clearance
When is the LEO given?
As an exporter, you will need to keep ready all the required documents
that will be processed by the customs authorities. They will verify
various aspects such as the value and classification of goods (in case of
drawback shipping bills), duty and cess as applicable, description in
invoice and actuals, sample assessment, testing the exportability under
EXIM policy etc.
After your shipping bill is approved, the goods go to the shed appraiser
(export) for examination at the docks, based on the aspects mentioned
above. The clearance is given by passing the LEO and handing over the
exporter’s copy of the shipping bill to the exporter or the customs house
agent. Exporters can carry out the customs formalities and procedures
on their own, but to save time and benefit from the services of an expert,
many (or rather, most) hire a CHA.
Assuming that you have hired a CHA, you will be preparing the
commercial invoice and the packing list for them, along with a
statutory declaration form.
The CHA will file the shipping bill online, with the help of these
documents, through the centralized EDI-based system on which all
customs locations are linked. Of course, there is a non-EDI-based
shipping bill facility for non-EDI ports.
After the filing of the shipping bills with customs, the exportable
goods are transported to the airport, port, or container freight station.
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The unloading slot is decided based on the carrier’s handling location.
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Once the cargo is unloaded, the exporter or the CHA gets the goods
registered online for inspection by the customs inspector.
The job of the customs inspector is to physically examine the cargo
and make sure that all the export-related requirements and criteria
are met. This inspection is documented by the customs inspector in
the form of an online inspection report. This report is forwarded to the
appraising officer or higher authorities for approval.
Meanwhile, the value of the goods is determined by the appraiser.
This appraisal is critical as it is linked to taxes and export benefits.
The exporter can be penalized for any understatement or
overstatement of the invoice value.
Post the inspection and assessment, the online report is updated, and
the goods are allowed by the customs to be shipped outside India. It
does so by mentioning ‘Let Export’. Customs officials will now sign
the hard copy of the shipping bill for the specific shipment.
Once the goods arrive at the dock, the exporter contacts the customs
officer and present them with the checklist. It will have the endorsement
of the port authority along with other declarations and original
documents. Based on the verification of the quantity of the goods
actually received, the electronic shipping bill is marked and handed over
to the dock appraiser along with all original documents. The appraiser
generally assigns a customs officer for the examination of the goods, and
once satisfied with the examination, the LEO for the shipment is
assigned.
After the LEO is passed in the EDI system, two copies of the shipping bill
are generated – one for customs and the other for the exporter. On the
hard copy of the shipping bill, the signatures of the customs officer and
the CHA/exporter/representative is obtained, which is then stamped and
signed by the appraiser. This concludes the process of getting a Let
Export Order.
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Avani Ghangurde
Senior Associate Communications at Drip Capital
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