Banks can remit advance payment up to $1 million

CHATROOM

For our imports, the seller has demanded 40 per cent advance and balance 60 per cent against fax Bill of Lading. We are not sure whether we can accept such payment terms. Please inform whether there is any restriction and what precautions we need to take?

Usually, the banks can remit payments against shipping documents. But, if you want to send advance remittance up to $100,000, the banks can allow that. For advance remittances in excess of that amount, you need to obtain from the seller a bank guarantee.

However, banks can remit advance payment up to $1,000,000, without bank guarantee, if they are satisfied about your track record and bonafides. For import of rough diamonds, aviation related imports and imports by public sector undertakings and government departments, separate provisions are made. You may refer to Reserve Bank's Master Circular no. 8/2007-08 dated July, 2, 2007, for details. The remittance must be made directly to supplier and not any third party or numbered account. Physical imports into India must be made within six months (three years in case of capital goods) and evidence to that effect must be submitted to bank within fifteen days from the end of that period. If no import is made, you must arrange to get the amount repatriated.

Commercially, you may take such precautions that you would normally take for giving advance to anyone. These are left to your commercial judgment. For remittance against fax Bill of Lading, you may nominate a vessel, ask for 'on board' Bill of Lading', get the fact of loading verified from tracking facility that shipping companies give and even ask for confirmation from the shipping company agent about the fact of loading and sailing particulars.

We have made excess payment of Customs duty i.e. in excess of what is assessed, by mistake. We want to know the procedures to claim back the same.

You may refer to Customs Refund Application (Form) Regulations, 1995, notified through M.F. (D.R.) Notification No. 34/95-Cus. (N.T.), dated May 26, 1995.You have to make application for refund in duplicate in the form appended to the Regulations [Customs Series Form No. 102] to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, having jurisdiction over the Customs port, Customs airport, land customs station or the warehouse where the duty of Customs was paid.

The manufacturer exporters registered with Central Excise who have paid excise duty of Rs. 1 crore or more during the preceding financial year are exempted from executing bank guarantee under Advance Authorisation and EPCG Schemes in terms of Para 3.1(e) of CBEC Circular No. 58/2004-Cus., dated October 21, 2004. Can payments through Cenvat credit accounts can also be taken into consideration while calculating the total duty paid?

According to the CBEC Circular no. 30/2007 dated Augist 21, 2007, excise duty paid through Cenvat credit shall also be taken into account while calculating the excise duty paid by a manufacturer exporter for the purposes of Para 3.1(e) of the above mentioned circular.

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