Solution on the finished goods not taken by the buyer

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Dolours (Querist)
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17 October 2013 Sir,
I am a garment exporter. One of my buyer pay 20% advance and made me to complete the order. Also he asked me to hold 2 POs not to proceed till his confirmation after I purchased the fabrics, trims & accessories for the 2 POs. The problem is .........He didn't pay and take the goods ontime as promised and he dragged for 6 months, then he paid part payment and asked me to send part goods. I asked him to pay the balance payment, interest, demurrage, Insurance, service cost for 6 months and take the take the entire goods. He is not agreeing with me and he is telling, he will not accept this. What I can do ? I am paying interest, storage, Insurance for this ready goods and the materials purchased for the 2 POs. Guide me how to move ahead

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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17 October 2013 bed news for you.......

write a letter to RBI and intimate this matter.

if you are registered in ECGC filed an application for the said matter.

law
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In terms of Regulation 16 of Notification No. FEMA 23/2000-RB dated May 3, 2000, where an exporter receives advance payment (with or without interest), from a buyer outside India, the exporter shall be under an obligation to ensure that –

the shipment of goods is made within one year from the date of receipt of advance payment;

the rate of interest, if any, payable on the advance payment does not exceed London Inter-Bank Offered Rate (LIBOR) + 100 basis points; and

the documents covering the shipment are routed through the AD Category – I bank through whom the advance payment is received.

Provided that in the event of the exporter’s inability to make the shipment, partly or fully, within one year from the date of receipt of advance payment, no remittance towards refund of unutilized portion of advance payment or towards payment of interest, shall be made after the expiry of the said period of one year, without the prior approval of the Reserve Bank.

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Dolours

Dolours (Querist)
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17 October 2013 Thanks for your reply. We are not registered under ECGC but we have visited ECGC office, they told they cannot do anything because the goods are with here and also we were not registered with them. They told, as he had paid advance and part payment for the goods, you calculate all your loss and send a mail that we have lost this much and we can ship the goods for this value only and handover the goods to his forwarding agency. Meantime you have to sit with your banker and discuss how to answer RBI. We are telling, you are not at fault but you need to answer RBI for the money received when the goods not exported. Now the buyer is not ready to proceed the POs on hold and not ready to pay interest or demurrage. What is the solution for us ?

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RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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17 October 2013 dear member,

write a letter to RBI IN THIS MATTER AS WELL AS YOUR BANKER taking FIRC /PAYMENT RECEIPT.

REGARDS,

Dolours

Dolours (Querist)
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17 October 2013 Dear Sir,
Thanks for these details. Another problem in this transfer is, the buyer had made the payment in INR and so how to get FIRC/Payment receipt. This buyer is working with us for the past 1 year and the problem happened when he failed to pay and take the shipment ontime and made us to hold the POs. I am speaking to my Auditor and she told she will speak with persons in inward payment department(Foreign exchange and INR) associated with RBI. I will tell her about your reply now. Please guide me to get a great relief from this issue
Regards

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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18 October 2013 dear author.

No problem.

i have already tell you intimate to RBI in this regarding for resolved the matter also produce EXPORT SALES CONTRACT (IF EXECUTED Between (you and buyer)

Regards,

Dolours

Dolours (Querist)
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05 December 2013 Sir, Finally we spoke to RBI related people and our auditor told us, we have received 10 POS and we shipped 6 shipments to the same buyer and the POs 7 & 8 produced were with us and he failed to take and he stopped the POs 9 & 10. He didn't explain why he is delaying to take the goods and he is not at all replying. Now the new progress in past three weeks are : he had paid part payment and asked certain garments. We told him, the goods were with us for the past one year and the material purchased are with us. You have to pay us interest, demurrage, insurance for entire goods and take your goods. He refused our request last week and nothing happened. We sent a lawyer notice to him and he too had sent a lawyer notice from India. We had told, he should pay everything and take the goods. His advocate's notice says, he had made a payment for a shipment and we refused to give the shipment. It is not true and we are preparing a reply. One of our friend told, we can contact Ministry of Commerce. What we can do to get a solution. Thanks