Download Lime Go Import Export Practice Exam and more Exams Technology in PDF only on Docsity!
Question 205. Which Incoterm places the greatest responsibility on the seller for costs, risks, and customs clearance up to the buyer’s premises? A) EXW B) FOB C) DAP D) DDP Answer: D Explanation: DDP (Delivered Duty Paid) requires the seller to handle all costs, risks, and customs formalities until the goods reach the buyer’s doorstep.
Question 206. In a documentary credit, the term “sight” refers to: A) Payment to be made after a 30‑day grace period B) Immediate payment upon presentation of compliant documents C) Payment after the goods have been delivered to the port of discharge D. Payment only after the buyer’s acceptance of the goods Answer: B Explanation: A “sight” L/C means the bank will pay the beneficiary immediately when the required documents are presented and found compliant.
Question 207. Which of the following marine insurance clauses provides the broadest coverage, including “all risks” except those specifically excluded? A) Institute Cargo Clauses (C) B) Institute Cargo Clauses (B) C) Institute Cargo Clauses (A) D. War and Strikes Clause only Answer: C Explanation: Institute Cargo Clauses (A) is the most comprehensive, covering all marine risks except those expressly excluded in the policy.
Question 208. The “Certificate of Origin” is most critical when a shipment is eligible for: A) General duty rates B. Preferential tariff rates under a Free Trade Agreement (FTA) C. Anti‑dumping duties D. Domestic sales tax exemption Answer: B Explanation: A CO proves the product’s origin, allowing the importer to claim reduced or zero tariffs under an FTA.
Question 209. Which of the following is NOT a recognized type of Letter of Credit under UCP 600?
A) Executed on a recognized stock exchange only B. Registered with the RBI within 30 days of execution C. Unregistered, as it is considered a private arrangement D. Approved by the Ministry of Commerce Answer: B Explanation: FEMA mandates that forward contracts for export‑import transactions be reported to the RBI within 30 days to ensure transparency.
Question 212. Which of the following is the primary purpose of a “Bank Realization Certificate” (BRC) in India? A) To certify that the exporter has paid customs duty B. To confirm that foreign exchange proceeds from an export have been realized in India C. To authorize the opening of a foreign currency account D. To waive GST on exported goods Answer: B Explanation: A BRC is issued by the bank to confirm that the exporter has received the foreign exchange proceeds, a prerequisite for many export incentives.
Question 213. The “Export Promotion Capital Goods (EPCG)” scheme requires an export obligation of 10 % of the CIF value of the imported capital goods. This obligation must be met within:
A) 1 year B) 3 years C) 5 years D. 7 years Answer: C Explanation: EPCG obliges exporters to achieve export sales equal to at least 10 % of the CIF value of the duty‑free capital goods within five years.
Question 214. Which of the following documents is essential for customs clearance of a containerized shipment arriving by sea? A) Airway Bill (AWB) B) Bill of Lading (B/L) C. Certificate of Origin D. Packing List Answer: B Explanation: The Bill of Lading serves as the contract of carriage and title document required for customs clearance of sea cargo.
Question 215. In the context of international trade, “Revealed Comparative Advantage” (RCA) is calculated as:
Question 217. The “Advance Authorization” scheme in India allows duty‑free import of inputs for export production. Which of the following is a mandatory condition for its utilization? A) Exporter must have a minimum turnover of INR 5 crore B. Exporter must furnish a bank guarantee covering 100 % of the import value C. Exporter must have a confirmed export order for the inputs being imported D. Exporter must be a public sector undertaking Answer: C Explanation: Advance Authorization is granted only when the exporter can demonstrate a specific export order that justifies duty‑free import of inputs.
Question 218. Which Incoterm requires the seller to deliver the goods cleared for export but places the risk on the buyer as soon as the goods are handed over to the carrier? A) EXW B) FCA C) FOB D. DAP Answer: B Explanation: Under FCA (Free Carrier), the seller clears the goods for export and delivers them to a carrier nominated by the buyer; risk transfers at that point.
Question 219. When a buyer requests a “standby Letter of Credit”, it is primarily used as: A) A payment mechanism for routine purchases B. A guarantee that the seller will perform contractual obligations, payable upon default C. A document of title for the goods D. A method to obtain foreign exchange Answer: B Explanation: A standby L/C acts as a guarantee; the bank pays the beneficiary if the applicant fails to meet contractual obligations.
Question 220. Which of the following is the correct sequence of documents that a freight forwarder typically prepares for an export shipment? A) Commercial Invoice → Packing List → Bill of Lading → Certificate of Origin B. Packing List → Commercial Invoice → Certificate of Origin → Bill of Lading C. Commercial Invoice → Certificate of Origin → Packing List → Bill of Lading D. Bill of Lading → Commercial Invoice → Packing List → Certificate of Origin Answer: C Explanation: The usual order is Commercial Invoice (value), Certificate of Origin (origin), Packing List (details), then Bill of Lading (transport).
Question 223. Which of the following is a common method to mitigate country risk in export transactions? A) Using a higher freight forwarder fee B. Purchasing export credit insurance from a domestic agency C. Requesting payment in the exporter’s local currency D. Shipping the goods via air instead of sea Answer: B Explanation: Export credit insurance protects against political and economic events that could prevent payment, directly addressing country risk.
Question 224. In the context of export documentation, the “Proforma Invoice” is primarily used for: A) Final billing after shipment B. Requesting advance payment or opening a Letter of Credit C. Customs clearance at the destination port D. Determining the HS code of the product Answer: B Explanation: A Proforma Invoice is a quotation used to request advance payment, secure a L/C, or obtain import permits before the actual sale is finalized.
Question 225. Which of the following is NOT a typical feature of the “Export Promotion Capital Goods (EPCG)” scheme? A) Duty remission on imported capital goods B) Mandatory export of the same product for a fixed period of 10 years C) Export obligation of 10 % of the CIF value of the capital goods D. Eligibility for both goods and service exporters Answer: B Explanation: EPCG does not require a fixed 10‑year export commitment; the obligation is 10 % of CIF value within five years.
Question 226. When a seller offers “Documents Against Acceptance” (D/A) to the buyer, the buyer: A) Pays immediately upon presentation of documents B. Accepts a time‑draft and pays at a later date, after receiving documents C. Receives the goods before any documents are presented D. Must provide a bank guarantee before documents are released Answer: B Explanation: D/A allows the buyer to accept a draft promising future payment; the bank releases shipping documents after acceptance.
Question 229. Which of the following international standards governs the labeling of hazardous chemicals for export? A) ISO 9001 B. UN Globally Harmonized System (GHS) C. IEC 60601 D. ASTM A Answer: B Explanation: The UN GHS sets uniform classification, labeling, and safety data sheet requirements for hazardous chemicals worldwide.
Question 230. The “Export Promotion Capital Goods (EPCG)” scheme can be utilized for which of the following types of capital equipment? A) Vehicles used exclusively for domestic distribution B. Machinery used for the manufacture of export‑eligible products C. Office furniture for the exporter’s headquarters D. Personal computers for administrative staff Answer: B Explanation: EPCG duty remission applies only to capital goods employed directly in the production of export‑oriented goods or services.
Question 231. Which of the following is a key advantage of using a “Revolving Letter of Credit” for an exporter with frequent repeat orders from the same buyer? A) The credit amount automatically renews after each drawdown, reducing the need for new L/C applications B. The buyer can change the underlying contract terms without notice C. The L/C can be transferred to a third‑party supplier without restriction D. The exporter receives immediate payment without presenting documents Answer: A Explanation: A revolving L/C replenishes the available limit after each usage, streamlining financing for recurring shipments.
Question 232. When exporting electronic equipment, which of the following certifications is often required by the importing country to verify compliance with safety standards? A) CE Mark B. ISO 14001 C. FSSAI License D. Halal Certification Answer: A Explanation: The CE Mark indicates conformity with EU safety, health, and environmental protection standards, commonly required for electronics.
Question 235. Which of the following is NOT a typical component of a “Bank Guarantee” issued to an overseas buyer? A) Commitment to pay the seller if the buyer defaults B. Specification of the maximum liability amount C. Detailed description of the underlying commercial contract D. Requirement that the buyer must provide a performance bond Answer: D Explanation: A bank guarantee is a unilateral promise by the bank; it does not require the buyer to furnish a separate performance bond.
Question 236. In the context of export pricing, “price elasticity of demand” refers to: A) The change in price due to fluctuations in exchange rates B. The sensitivity of quantity demanded to changes in price in the target market C. The impact of freight cost on the final export price D. The effect of credit terms on buyer’s willingness to purchase Answer: B Explanation: Price elasticity measures how much the quantity demanded changes in response to a price change, crucial for setting competitive export prices.
Question 237. Which of the following best describes the purpose of a “Customs Bond” in India?
A) To guarantee payment of customs duty and other liabilities if the importer defaults B. To provide a discount on customs duty for exporters C. To certify that the goods meet quality standards D. To replace the need for an IEC Answer: A Explanation: A customs bond acts as a security for the payment of duties, taxes, and penalties in case the importer fails to fulfill obligations.
Question 238. When a seller uses “FOB (Free on Board)”, which of the following costs is the seller NOT responsible for? A) Loading the goods onto the vessel at the port of shipment B. Freight to the destination port C. Export customs clearance D. Inland transportation to the port of loading Answer: B Explanation: Under FOB, the buyer bears freight costs from the port of shipment to the destination.
Question 239. Which of the following is a primary advantage of using “Electronic Data Interchange” (EDI) in export documentation? A) Eliminates the need for any physical documents
B. Detailed description of the goods and required documents C. Proof of the exporter’s creditworthiness (e.g., bank guarantee) D. Confirmation that the exporter has a valid IEC Answer: C Explanation: While the exporter’s creditworthiness is considered, a separate bank guarantee is not a mandatory prerequisite for L/C issuance.
Question 242. Under the Indian GST law, the “LUT‑Bond” scheme allows exporters to: A) Export goods without paying IGST and without furnishing any bond B. Export goods without paying IGST, provided a bond is furnished that can be called upon if IGST is later demanded C. Claim a 100 % GST refund instantly after export D. Avoid filing any export documentation Answer: B Explanation: The LUT‑Bond scheme permits zero IGST payment on exports, with a bond acting as security in case the tax authority later demands payment.
Question 243. Which of the following best explains the concept of “Anti‑Dumping Duty”? A) A duty imposed to protect domestic producers from imports priced below normal value, causing injury
B. A duty levied to compensate for exchange rate losses C. A duty applied to all imported goods regardless of price D. A duty that encourages dumping of surplus inventory abroad Answer: A Explanation: Anti‑dumping duties counteract imports sold at unfairly low prices that harm domestic industries.
Question 244. In export logistics, “transshipment” refers to: A) Direct loading of cargo from the factory to the destination port B. Shifting cargo from one vessel or mode of transport to another at an intermediate hub before reaching the final destination C. Consolidating multiple small shipments into a single container at the port D. Shipping cargo via both sea and air simultaneously Answer: B Explanation: Transshipment involves moving cargo between carriers at an intermediate location en route to the final destination.
Question 245. Which of the following is a key requirement for a “Free Trade Agreement” (FTA) to be applicable to a specific export shipment? A) The goods must be manufactured entirely within the exporting country
