Inco Terms Rules
The Incoterms standards, are a set of pre-defined commercial terms published by the International Chamber of Commerce (ICC) that are frequently used in international trade. The Incoterms guidelines consist of three-letter trade word that are meant to clearly express the tasks, expenses, and dangers involved with common sales techniques. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries. First published in 1936, the Incoterms rules have been periodically updated, with the eighth version—Incoterms 2010—having been published on January 1, 2011. “Incoterms” is a registered trademark of the ICC.
INCOTERMS 2010
The eighth published set of pre-defined terms, Incoterms 2010 defines 11 rules, reducing the 13 used in Incoterms 2000 by introducing two new rules (“Delivered at Terminal”, DAT; “Delivered at Place”, DAP) that replace four rules of the prior version (“Delivered at Frontier”, DAF; “Delivered Ex Ship”, DES; “Delivered Ex Quay”, DEQ; “Delivered Duty Unpaid”, DDU). In the prior version, the rules were divided into four categories, but the 11 pre-defined terms of Incoterms 2010 are subdivided into two categories based only on method of delivery. The larger group of seven rules applies regardless of the method of transport, with the smaller group of four being applicable only to sales that solely involve transportation over water.
FAQ
INCOTERM is a registered trade mark of International Chamber of Commerce (ICC). Incoterms are series of predefined commercial terms published by the ICC. These are widely used in the international business. Governments and legal authorities recognize these terms worldwide. These terms help in reducing uncertainties and avoid giving different interpretations to these words by different people and help business partners in understanding their responsibilities and obligations to each other. Following terms are currently is use:
EXW=Ex Works (Delivery at Factory Gate; collection is buyer’s responsibility)
FCA= Free Carriage (named place of delivery)
CPT= Carriage Paid To
CIP=Carriage Insurance Paid To (This is equivalent to CIF)
DAT- Delivery at Terminal
DAP=Delivered at Place(named place)
DDP=Delivered Duty Paid
FAS=Free Alongside Ship
FOB=Free on Board
CFR= Cost and Freight
CIF= Cost Insurance Freight
A freight forwarder offering a consolidation service will issue its own Air Way Bill in case of export by air or bill of lading in case of exports by sea. This is called a Forwarder’s or House Air Way Bill with its equivalent House Bill of Lading in case of exports by sea. This acts as a contract of carriage between the shipper and the forwarder, who in this case becomes a Deemed Carrier. The forwarder in turn enters into contract with one or more carriers, often using more than one mode of transportation. The contract of carriage between the forwarder and carrier is called a Master Airway Bill (MAWB) or Master Bill of Lading (MBL).
Arrival manifest is filed by the person in-charge of a vessel; Import manifest is filed by the person in- charge of an aircraft. The person in-charge of a vessel / aircraft file these documents before their arrival at a customs station under section 30 of the Customs Act, 1962. Import Report is filed by the person in-charge of a vehicle on its arrival at a land customs station.
Arrival manifest and Import Manifest is filed prior to the arrival of the vessel or aircraft and Import Report is filed within 12hours of arrival of a vehicle at a customs station.
Yes, if there is no sufficient cause for delay, penalty up to Rs 50,000 can be imposed by the proper officer on the person in-charge of the conveyance or his authorized person (shipping agent) who was supposed to file the Import Manifest.
