Who is applicant in letter of credit

Integrated Tax Rate Notification No. Integrated Tax Notification No. Issuing bank made the payment but deducted USD as discrepancy fee. The detail given for discrepancies were not actual discrepancies.

Can our bank take up with issuing bank for balance re-imbrues or can we claim from our bank as they have negotiated the documents. The shipping would be taken care by seller's local agent. James Cheng : On 19 February I was researching this type of financing for my export business and found your web site to be very educational. One question I have is would you know of any banks that would give me a letter of credit in the states?

Xavier Fornt: On 29 December In your article '' Who are the parties involved in a Letter of Credit '' you wrote that the applicant is one of the main parties involved I regreat to inform you, that the International Chamber of Commerce in his oficial publication Nr.

Is it possible to open a LC like it. It will be a direct shipment from America. Now in this case what will be documentation and what is the procedure. Will it attract sale tax in India. Whether it is allowed as per Indian applicable law. Please advice us detail procedure,for which we will be highly obliged Athimoolam Rajendran : On 11 August I read some articles at howtoexportimport.

I am also serving a Hindu temple as one of its trustees,in Fiji. I am sending a container full of fiber glass decorations to beautify the temple. Am I liable to pay any sales tax or any other taxes of Indian Govt. Please reply me on my email. Or request the bank to extend for how many months. The shipping line, customs, ports etc are not concerned with the LC.. However, any delay in the finalisation of the documents based on the LC could mean that you cannot get the original bill of lading for example and that would mean delay in getting release from the shipping line even if you have done customs clearance..

Extension period of LC will depend on your requirement and status of the shipment and reason for the delay in the first place.. It is very subjective and unique to the shipment.. Hi, I am Nagaraj and i wanted to know if a BL can be consigned to the actual importer Consignee and notify party even though the shipment is under LC?

Hi Cheng, thanks for raising this point.. Although this type is not covered in UCP, this can be issued if such terms are incorporated into the credit and this could happen occasionally, possibly due to ignorance, but the banks generally do not confirm a revocable documentary credit..

Have added this point to remind people that this possibility exists so they can keep it in the back of their minds.. Due to Covid, is this the risk to send the hard copy of LC documents to issuing bank at oversea country? Any other solution? Hi Liew, since COVID affects everyone, all entities are cautious and am sure with discussions there are some arrangements made like electronic transmission etc.. Is it valuable?

What are the documents we have to submit the bank for release of payment as job is already completed? Your kind advise will be highly appreciated. Thanks so much for walking us through, on how LC works in such a simple and straight forward style. Letter of Credit not received in our exporter bank, but cargo we sent at Nhava Sheva port.

The goods were shipped on 2 May , and the shipping documents were received on 15 May How does payment term come into picture? Let us say the payment terms between buyer and supplier are 90 days from the date of bill processing by buyer. In that case , when will the bank pay the seller the money? For LC mode of payment, the payment terms between Buyer and Seller, usually within 7 days, 14 days and 21 days maximum. Good Day tell me how would I protect myself if the seller says he gaurantees goods of the correct qualirty on arrival, can and will he only be paid once I have checked this?

Hello Mark, what is your terms of sale with the seller..?? Have you done business with him before..?? Dear Hariesh, how does the issuing bank protects its interests. Both parties being unknown to each other decide to go for an LC arrangement. The letter of credit assures Mr A that he will receive the payment from the buyer and Mr B that he will have a systematic and documented process along with the evidence of goods having been shipped.

Mr B buyer goes to his bank that is the issuing bank also called an opening bank and issues a Letter of Credit. Now that Mr A has received the confirmation he will ship the goods and while doing so he will receive a Bill of Lading along with other necessary documents.

The negotiating bank will make sure that all necessary requirements are fulfilled and accordingly make the payment to Mr A the seller. To understand each type in detail read the article, Types of letter of credit used in International Trade. A Bank guarantee is a commercial instrument. It is an assurance given by the bank for a non-performing activity. If any activity fails, the bank guarantees to pay the dues.

There are 3 parties involved in the bank guarantee process i. Whereas, a Letter of Credit is a commitment document. It is an assurance given by the bank or any other financial institution for a performing activity.

It guarantees that the payment will be made by the importer subjected to conditions mentioned in the LC. There are 4 parties involved in the letter of credit i. A key point that exporters need to remind themselves of is the need to submit documents in strict compliance with the terms and conditions of the LC.

Any sort of non-adherence with the LC can lead to non-payment or delay and disputes in payment. The issuing bank should be a bank of robust reputation and have the strength and stability to honor the LC when required.

Another point that must be clarified before availing of an LC is to settle the responsibility of cost-bearing. If you rely on a letter of credit to receive payment, make sure you:. Importers and exporters regularly use letters of credit to protect themselves. Working with an overseas buyer can be risky because you don't really know who you're working with. A buyer may be honest and have good intentions, but business troubles or political unrest can delay payment or put a buyer out of business.

Also, communication is difficult across thousands of miles, different time zones, and different languages. A letter of credit spells out the details so that everybody is on the same page. Instead of assuming that things will work a certain way, everybody agrees on the process up front. To better understand letters of credit, it helps to know the terminology.

Applicant: The party who requests the letter of credit. This is the person or organization that will pay the beneficiary. The applicant is often but not always an importer or buyer who uses the letter of credit to make a purchase. Beneficiary: The party who receives payment.

This is usually a seller or exporter who has requested that the applicant use a letter of credit because the beneficiary wants more security. Negotiating bank: The bank that works with the beneficiary. The beneficiary submits documents to the negotiating bank, and the negotiating bank acts as a liaison between the beneficiary and the other banks involved.

The issuing bank already guarantees payment, but the beneficiary may prefer a guarantee from a bank in their home country with which they are more familiar. This may be the same bank as the negotiating bank. Advising bank: The bank that receives the letter of credit from the issuing bank and notifies the beneficiary that the letter is available. This bank is also known as the notifying bank, and may be the same bank as the negotiating bank and the confirming bank. Intermediary: A company that connects buyers and sellers, and which sometimes uses letters of credit to facilitate transactions.

Intermediaries often use back-to-back letters of credit or transferable letters of credit. Freight forwarder: A company that assists with international shipping. Freight forwarders often provide the documents exporters need to provide in order to get paid. Shipper: The company that transports goods from place to place.

Legal counsel: A firm that advises applicants and beneficiaries on how to use letters of credit. In addition to the terms above, you might hear about different types of letters of credit , such as standby letters of credit.

To get a letter of credit, contact your bank.