What are the EXW terms of the supplier's quotation?
Let's first look at the definition of EX-Works:
Ex Works means that the seller shall deliver the goods as soon as they are made available to the buyer at the seller's premises or other designated premises (e.g. factory, plant, warehouse, etc.). The seller shall not be obligated to load the goods onto a collecting vehicle or to clear the products for export.
However, if the parties wish the seller to take over the responsibility for loading the goods at the place of dispatch and bear all the risks and costs of such loading, this should be clearly stated in the appropriate addendum to the contract of sale.
What are the responsibilities of the buyer and seller of an EXW agreement?
EXW as Incoterms requires the seller to deliver the goods to the buyer at its warehouse, site, or terminal. Once the buyer picks up the goods, the buyer assumes other transportation responsibilities, including transportation to the port of destination. Under this clause, once the goods are packed in export packaging and received, the buyer shall arrange for shipping, export documentation, shipping charges, and complete the import and delivery process.
Seller's Responsibilities:
The seller puts the goods at the buyer's disposal at the agreed date and place (such as a factory, warehouse, or premises).
Make sure that the goods are packaged for transport according to export requirements, and the necessary labels are attached.
The seller delivers the goods in accordance with the sales contract together with the commercial invoice, and any other documents mentioned in the contract.
At Buyer's request and at Buyer's risk and expense, Seller must give Buyer all assistance in obtaining export licenses or other official authorizations required for the export of the Goods.
The seller provides the buyer with any information required to apply for insurance coverage.
Buyer's Responsibilities:
Load the goods at the pick-up location so that the goods can be transported to the port of export (if the seller is required to undertake it, the two parties must expressly agree in advance).
Ship the goods to the port of departure to begin declaring exports.
Prepare all export declaration documents and pay the relevant fees.
Pay all relevant fees charged by the port of departure.
Bear the freight from the port of departure to the port of destination.
Take out shipping insurance.
Pay all fees charged by the port terminal upon arrival at the destination port.
Pay import duties, VAT that may be charged, and other customs clearance fees.
Shipping the goods from the port of destination to the final destination.
The cargo is unloaded after reaching its final destination.
Standard EXW Operating Procedures
The seller quoted EXW USD price
The seller gets the payment in US dollars from overseas
Delivery at the seller's location
After the buyer receives the goods, the buyer will go through the export procedures by himself, and the seller will assist in providing the goods data (invoice, packing list)
The buyer declares on the seller's head
Customs generates customs declaration records
The designated freight forwarder issues the bill of lading, and the Shipper is the seller (the seller can ask the designated freight forwarder for customs declaration and electronic bill of lading)
Seller prepares tax refund documents for tax refund
For the buyer, EXW has advantages for the buyer, although it needs to bear the responsibility for freight and import and export: the buyer can fully understand and control the logistics cost.
Why should the designated freight forwarder declare customs in the name of the seller's company?
Under the standard EXW sales process, after the seller collects the payment in US dollars and delivers the goods to the buyer for disposal, the responsibility is completed. Since the seller is not responsible for the specific matters of customs declaration, it needs to provide the customs declaration invoice, packing list, and other information.
Moreover, if the tax refund factor has been taken into account when reporting the EXW US dollar price, in order to avoid the loss of tax refund, you should promptly confirm with the designated freight forwarder whether the seller will file a customs declaration.
Because when quoting EXW dollars, most business personnel will take into account the tax rebate income and lower the price accordingly to retain price competitiveness.
According to the principle of whoever declares the customs will get the export tax rebate if the buyer designates the freight forwarder in the actual customs declaration and does not declare the seller as the main body of the customs declaration, the customs do not have a customs declaration record with the seller's title as the main body of the declaration, and the seller cannot obtain the export tax rebate. , resulting in tax refund losses.
In addition, the seller's public account has received the payment in US dollars but has not declared the export. If it cannot explain and prove that there is a real export fact, the tax treatment is usually regarded as domestic sales, but it needs to pay the value-added tax for domestic sales.
Therefore, in the case of EXW, if the seller wants to get a tax refund, it must charge US dollars, and the main body of the consignor of the customs declaration must be the seller's company.
