Logistics Documentation, Insurance and Customs
This domain tests trade documents, their legal character, Indian customs valuation and duty structure, and marine cargo insurance. It is the most detail-heavy section of the paper.
Documents and their character
Commercial invoice (value and terms), packing list (quantity and packing), bill of lading (issued in three originals, negotiable, a document of title, clean versus claused), airway bill (non-negotiable, not a document of title), mate's receipt, certificate of origin, shipping bill for exports and bill of entry for imports, letter of credit governed by UCP 600, insurance certificate, IEC from DGFT and the e-way bill.
Customs and insurance rules
Imports are classified by 8-digit HS code. Assessable value is built on CIF; duty is basic customs duty (BCD) plus social welfare surcharge at 10% of BCD, and IGST on assessable value plus BCD and SWS, with IGST available as input tax credit. Export incentives include duty drawback and RoDTEP. The e-way bill is required above ₹50,000 consignment value, valid one day per 200 km or part thereof. Marine cover uses Institute Cargo Clauses A (widest), B and C (major casualties only), insured typically at 110% of CIF value; general average is shared proportionately by cargo owners.
Worked example
CIF value USD 10,000 at ₹83 = ₹8,30,000. BCD at 10% = ₹83,000; SWS at 10% of BCD = ₹8,300; IGST at 18% on (8,30,000 + 83,000 + 8,300) = ₹1,65,834. Total duty outflow ₹2,57,134, of which the IGST portion is creditable, so the real cost is BCD plus SWS.
Traps that cost marks
- Calling an airway bill a document of title, or issuing a B/L in one original.
- Computing IGST on the assessable value alone, ignoring BCD and SWS.
- Treating Clause C cover as all-risks; delay and inherent vice are excluded even under Clause A.
- Forgetting that e-way bill validity is per 200 km or part thereof.