Ask Ramani
Mr. Ramani is a walking, talking encyclopaedia on global regulations of international commerce. So clear your doubts, clarify issues and seek advice on-line. Ask ramani@autopartasia.com
QUESTIONS
Q1. My name is Montek Singh. I am from Chandigarh, Punjab. I am an Exporter of auto parts. If I receive in advance the money towards Exports, can I forward the Bill of Lading direct to the buyer abroad?
Q2. I am Mandal from Patna. Where is the necessity of a GSP Certificate of Origin, to be forwarded to the buyers abroad?
Q3. I am Gajendran from Tirupur. Can we accept an export order from a buyer in USA with instructions to ship the goods to Dubai?
Q4. I am a Merchant Exporter. Can you explain as to how I can comply with the procedure of not charging the sales tax in respect of an Export transaction?
Q5. I am Gundappa from Bangalore. Can you explain to me as to what are the incentives available for an Exporter today
Q6. I am Ganguly from Calcutta. What do I do for not charging the excise duty on excisable items exported?
Q7. I am Chandrababu from Bellary. Can you explain as to how quality claims can be settled with the buyers abroad.
Q8. I am Siddhartha Basu from Calcutta. Supposing I do not receive the export proceeds within 6 months from the date of shipment, what do I do?
Q9. I am Rane from Mumbai. In respect of export transactions covered by Letters of Credit established by the buyers, what is it that we must ensure?
Q10. I am Korgaokar from Pune. Supposing I want to send samples of auto parts to a prospective buyer abroad on f.o.c basis, how do I handle such transactions? Value of such goods will be approximately Rs.5000/-.
QUESTION AND ANSWER LISTING
1. My name is Montek Singh. I am from Chandigarh, Punjab. I am an Exporter of auto parts. If I receive in advance the money towards Exports, can I forward the Bill of Lading direct to the buyer abroad?
It is always advisable to route the Bill of Lading and other shipping documents through Authorised Dealers viz., Banks. If the export proceeds are received in advance, please arrange to get a FIRC (Foreign Inward Remittance Certificate) from the Bank, at the time of receipt, indicating therein the purpose for the inward remittance. You can request your Bank to courier the Bill of Lading direct to the Buyer abroad to save time, instead of routing the documents through the Buyer's Bank abroad. While asking your Bank to do so, please link up the FIRC towards such transactions.
2. I am Mandal from Patna. Where is the necessity of a GSP Certificate of Origin, to be forwarded to the buyers abroad?
Under the Generalised Scheme of Preferences, if the buyer abroad imports goods from a developing country, there are duty concessions available for such goods in the importing country. For this purpose, the exporter has to obtain a GSP Certificate of Origin from the Export Inspection Agency, Ministry of Commerce, Govt. of India, before actually shipping the goods. To repeat, the GSP Certificate of Origin helps the importer abroad to clear the goods imported from developing countries, at a concessional duty.
3. I am Gajendran from Tirupur. Can we accept an export order from a buyer in USA with instructions to ship the goods to Dubai?
Why not - By all means, you can do so. What is important is that you should ensure receipt of the export proceeds within the stipulated time, through an authorised dealer, viz., the Bank.
4. I am a Merchant Exporter. Can you explain as to how I can comply with the procedure of not charging the sales tax in respect of an Export transaction?
You should obtain from the Manufacturer Exporter Form H, as the export despatch that he makes through you is in the stream of exports.
5. I am Gundappa from Bangalore. Can you explain to me as to what are the incentives available for an Exporter today
You can get Drawback of duty for items where the All Industry rates are fixed by the Govt.
or
You can get Duty Exemption Passbook Credit, at rates fixed by the Govt.
May be, you can also get benefit of exchange fluctuation, if the foreign currency under which the export transaction is negotiated, appreciates in between the negotiation of documents and actual receipt of proceeds.
6. I am Ganguly from Calcutta. What do I do for not charging the excise duty on excisable items exported?
Please follow the AR4 procedure under Central Excise Rules and get AR4 the forms signed by the Range Office under whose jurisdiction your Unit is situate.
7. I am Chandrababu from Bellary. Can you explain as to how quality claims can be settled with the buyers abroad.
It is always advisable to make export of goods which are 100% OK from the point of view of the buyer's specifications. In case of a quality claim, the Exchange Control Manual permits you to settle upto 15% of the value of exports towards quality claims, by accepting 85% payment against the invoice value. Otherwise, through proper documentation, you have to provide proof to RBI through the authorised dealer through whom you negotiated the export bill on the circumstances that led to the quality claim and after seeking their specific permission, you can always arrange to settle the claim by means of a Demand draft.
8. I am Siddhartha Basu from Calcutta. Supposing I do not receive the export proceeds within 6 months from the date of shipment, what do I do?
It is always advisable to satisfy yourself about the credit worthiness of the buyers abroad, before you enter into an export trtansaction. Six months is a fairly long period stipulated by the Govt. for receiving the export proceeds. While you can always apply to RBI Calcutta and seek their permission for extension of the time limitto receive the export proceeds, you have to be doubly sure about the credentials of the buyer before you actually ship the goods.
9. I am Rane from Mumbai. In respect of export transactions covered by Letters of Credit established by the buyers, what is it that we must ensure?
Please ensure that the Bill of Lading or the Airwaybill is prepared strictly in accordance with the various terms and conditions as stipulated in the LCs.
10. I am Korgaokar from Pune. Supposing I want to send samples of auto parts to a prospective buyer abroad on f.o.c basis, how do I handle such transactions? Value of such goods will be approximately Rs.5000/-.
No problem - By all means you can do so. Please arrange to get a certificate from your Bankers in Pune that the transaction covered by your f.o.c invoice does not involve any foreign exchange transaction and produce it to Customs. They will pass such shipping bills.
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