Q. Due to the Covid-19 outbreak, the consequent lockdown and disruption of business activities, we are thinking of surrendering the ocean bill of lading to the shipping company at the port of loading, and asking them to send a telex to their counterparts at the port of discharge to release the goods to the buyers. In that case, we will not be able to present the complete set of bill of lading to the banks under letter of credit. Is there any way out?
You can ask for an amendment to the letter of credit calling for non-negotiable seaway bill instead of negotiable bill of lading. That way, the carriers will deliver the goods to the consignee without production of any original of the negotiable bill of lading. You can present the non-negotiable seaway bill to the bank under letter of credit. You may refer to Article 21 of the Uniform Customs and Practices for Documentary Credits (UCP 600).
Q. We had filed a bill of entry before arrival of the vessel and paid customs duty also. But the vessel got submerged near Kolkata port and we understand the IGM has not been cancelled. This is a major issue while filing marine insurance claims. So, what is the ideal time for filing the bill of entry? Should it be 30 days before expected date of arrival of the vessel or the date nearest to berthing?
Sinking of a vessel is not a regular occurrence. So, one bad experience need not influence your decision on when to file the bill of entry. It is always desirable to file the bill of entry well before arrival of the vessel and get the assessment through.
Q. A single import purchase order of ours has multiple supplies and hence many bill of entries. Is it lawful if different AD codes are used, as the payment process gets triggered depending upon shipment taking place in staggered manner -- e.g. 15 per cent advance, 65 per cent against shipment, 10 per cent on arrival and 10 per cent after quality acceptance?
Under the RBI Import Data Processing and Monitoring System (IDPMS), a bill of entry (BoE) should have one authorised dealer (AD) Code. Based on the AD code declared by the importer, the banks download the BoE issued by EDI ports from “BOE Master” in IDPMS. AD banks enter the BoE details (BoE number, port code and date) for outward remittance message (ORM) associated with the advance payments for import transactions, as per the message format “BOE settlement”. In case of payment after receipt of BoE, AD banks generate ORM for import payments made by its importer customer as per the message format “BOE settlement”. Multiple ORMs can be settled against single BoE, and multiple BoEs can be settled against one ORM.
Q. Our foreign suppliers mention in the documents that export to India is governed by FTP 2015-20. With a one-year extension to FTP, will any change in wording be required?
No. The same wording will do.
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