Saving Mantra Blogs

Step-by-Step Process for Third Party Export

Written by

Financial Analyst

in

Introduction

Third Party Export is a structure where the manufacturer sells goods to a third-party exporter, who then exports the goods under their own name. This model helps manufacturers focus on production while exporters handle all international documentation, logistics, and compliance. This guide provides a clear, actionable workflow to execute a Third Party Export smoothly and legally.

Step-by-Step Process

Step 1: Identify Manufacturer & Third-Party Exporter

The first step is to finalize:

  • Manufacturer (producer of goods)
  • Third-Party Exporter (registered exporter handling the export process)

Both parties must have:

  • Valid GST Registration
  • PAN
  • IEC (Importer-Exporter Code) of the exporter
  • Bank details for payment and remittance

Step 2: Execute Agreement Between Parties

A written agreement or purchase order helps define roles, pricing, and responsibilities:

  • Goods description & HS code
  • Export pricing terms
  • Delivery terms (Ex-Works/FOB/CIF etc.)
  • Payment terms
  • Quality checks and inspection

This helps avoid disputes at the time of customs verification.

Step 3: Manufacturer Issues Tax Invoice to Exporter

The manufacturer raises a tax invoice to the third-party exporter (not to the foreign buyer).
Key points:

  • The invoice is raised at the time of supply
  • GST rules for exports apply through the exporter
  • Goods move from manufacturer to port/airport/ICD directly

This invoice acts as proof of sale between the two parties.

Step 4: Goods Movement to Port / Customs Station

Goods can move:

  • Directly from manufacturer to port (most common), OR
  • From manufacturer to exporter’s warehouse (if required)

The transporter’s e-way bill must include:

  • Manufacturer as supplier
  • Exporter as buyer
  • Port/ICD as the delivery location

Step 5: Export Documentation Preparation

The exporter prepares complete export documentation:

  • Commercial Invoice (Exporter → Foreign Buyer)
  • Packing List
  • Shipping Bill
  • Bill of Lading / Air Waybill
  • Certificate of Origin
  • LUT/Bond for GST-free exports
  • Insurance certificate
  • Export contract with foreign buyer

Accurate documentation is crucial for customs clearance and GST refund claims.

Step 6: Filing the Shipping Bill

The exporter files the Shipping Bill on ICEGATE in their own name.
Documents required include:

  • Exporter’s IEC
  • Manufacturer’s invoice
  • Export invoice
  • Transport documents
  • Regulatory certificates (FSSAI, PQ, BIS, CDSCO if required)

The shipping bill establishes the exporter as the “shipper of record.”

Step 7: Customs Clearance & Cargo Examination

Customs authorities review:

  • HS code
  • Valuation
  • Classification
  • Regulatory approvals
  • Physical examination (if required)

Upon approval, customs issues the Let Export Order (LEO).

Step 8: Bill of Lading / Air Waybill Issuance

Once the goods are loaded on the vessel/aircraft:

  • The carrier issues BL/AWB in exporter’s name
  • Exporter shares documents with the overseas buyer for payment processing

This confirms that goods have officially left India.

Step 9: Realisation of Export Proceeds (Payment)

The exporter receives the foreign payment in their bank account.
Documents maintained:

  • Foreign Inward Remittance Certificate (FIRC)
  • Bank Realisation Certificate (BRC)

These are essential for claiming export incentives and GST refund.

Step 10: Post-Export Compliance

Both manufacturer and exporter must keep their respective records.
Exporter responsibilities:

  • File export returns
  • Claim IGST refund or input tax credit
  • Maintain shipping bill, BL, invoice, and payment documents

Manufacturer responsibilities:

  • Record domestic sale (to exporter)
  • Maintain e-way bill, invoice copy, and delivery records

Benefits of Third-Party Export

  • Manufacturer avoids export compliance
  • Exporter builds scale in international trade
  • Faster operations through division of responsibilities
  • GST refund eligibility to exporter
  • Easier logistics and documentation handling

Saving Mantra Support

Saving Mantra provides end-to-end support for Third Party Export:

  • Documentation drafting
  • Shipment workflow setup
  • HS code classification
  • LUT/Bond registration
  • GST refund assistance
  • Customs coordination
  • Export compliance and incentives advisory

Disclaimer

This blog provides general information on the Third Party Export process in India. Export rules, GST treatment, and customs requirements may vary depending on product category, government notifications, and transaction structure. This guide is not legal, tax, or customs advice. For case-specific guidance, please consult DGFT, CBIC, a chartered accountant, or a qualified export advisor. Saving Mantra can assist with personalized solutions for your business.

More posts