F.o.c invoice.
This query is : Resolved
05 November 2013
Dear Experts,
When can I raised F.O.C.(FREE OF COST) Invoice?
Please help regarding this subject.
Thanks and regards
RD
When can I raised F.O.C.(FREE OF COST) Invoice?
Please help regarding this subject.
Thanks and regards
RD
06 November 2013
FOB-Free on Board-(named port of shipment)
"Free on Board" means that the seller fulfils his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.
The FOB term requires the seller to clear the goods for export.
This term can only be used for sea or inland waterway transport. When the ship's rail serves no-practical purpose. such as in the case of roll-on/roll off or container traffic the FCA term is more appropriate to use.
FCA-Free Carrier-(named place)
"Free Carrier" means that the seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose within the place or range stipulated where the carrier shall take the goods into his charge. When, according to commercial practice, the seller's assistance is required in making the contract with the carrier (such as in rail or air transport) the seller may act at the buyer's risk and expense.
This term may be used for any mode of transport, including multimodal transport. "Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes. If the buyer instructs the seller to deliver the cargo to a person, e.g. a freight forwarder who is not a 'carrier', the seller is deemed to have fulfiled his obligation to deliver the goods when they are in the custody of that person.
"Transport terminal" means a railway terminal, a freight station, a container terminal or yard, a multipurpose cargo terminal or any similar receiving point.
"Container" includes any equipment used to unitise cargo, e.g. all types of containers and/or flats, whether lSO accepted or not, trailers, swap bodies, ro-ro equipment, igloos, and applies to all modes of transport.
FAS-Free Alongside Ship-(named port of shipment)
"Free Alongside Ship" means that the seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
The FAS term requires the buyer to clear the goods for export. It should not be used when the buyer cannot carry out directly or indirectly the export formalities.
This term can only be used for sea or inland waterway transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formality
Render the buyer, at the latter's request, risk and expense, every assistance in obtaining
any export licence or other official authorisation necessary for the exportation of the goods.
A.3. Contract of carriage and insurance
a) Contract of carriage
No obligation.
b) Contract of insurance
No obligation.
EXW-Ex Works
"Ex works" means that the seller fulfils his obligation to deliver when he has made the goods available at his premises (i.e. works, factory, warehouse, etc) to the buyer. In particular, he is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination. This term thus represents the minimum obligation for the seller.
This term should not be used when the buyer cannot carry out directly or indirectly the export formalities. In such circumstances, the FCA term should be used.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Render the buyer, at the latter's request, risk and expense, every assistance in obtaining any export licence or other official authorisation necessary for the exportation of the goods.
A.3. Contract of carriage and insurance
a) Contract of carriage
No obligation.
b) Contract of insurance
No obligation.
DES-Delivered Ex Ship-(named port of destination)
"Ex Ship" means that the seller fulfils his obligation to deliver when the goods have been made available to the buyer on board the ship uncleared for import at the named port of destination. The seller has to bear all costs and risks involved in bringing the goods to the named port of destination.
This term can only be used for sea or inland waterway transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Obtain at his own risk and expense any export licence or other official authorisation and carry out all customs formalities necessary for the exportation of the goods and, where necessary, for their transit through another country.
A.3. Contract of carriage and insurance
a) Contract of carriage
Contract at his own expense for the carriage of the goods by a usual route and in a customary manner to the named place at the named port of destination. If a point is no agreed or is not determined by practice, the seller may select the point at the named port of destination which best suits his purpose.
b) Contract of insurance
No obligation.
A.4. Delivery
Place the goods at the disposal of the buyer on board the vessel at the usual unloading point in the named port of destination uncleared for import on the date or within the period stipulated, in such a way as to enable them to be removed from the vessel by un loading equipment appropriate to the nature of the goods.
A.5. Transfer of risks
Subject to the provisions of B.5., bear all risks of loss of or damage to the goods until1 such time as they have been delivered in accordance with A.4.
A.6. Division of costs
Subject to the provisions of B.6.
- in addition to costs resulting from A.3.a), pay all costs relating to the goods until1 such time as they have been delivered in accordance with A.4.;
- pay the costs of customs formalities necessary for exportation as well as all duties, taxes or other official charges payable upon exportation and, where necessary, for their transit through another country.
A.7. Notice to the buyer
Give the buyer sufficient notice of the estimated time of arrival of the named vessel in accordance with A.4. as well as any other notice required in order to allow the buyer to take measures which are normally necessary to enable him to take the goods.
A.8. Proof of delivery, transport document or equivalent electronic message
Provide the buyer at the seller's expense with the delivery order and/or the usual transport document (for example a negotiable bill of lading, a non-negotiable sea waybill, an inland waterway document, or a multimodal transport document) to enable the buyer to take delivery of the goods.
Where the seller and the buyer have agreed to communicate electronically, the document referred to in the preceding paragraph may be replaced by an equivalent electronic data interchange(EDI) message.
DEQ-Delivered Ex Quay (duty paid)
"Delivered Ex Quay (duty paid)" means that the seller fulfils his obligation to deliver when he has made the goods available to the buyer on the quay(wharf) at the named port of destination, cleared for importation. The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods thereto.
This term should not be used if the seller is unable directly or indirectly to obtain the import licence.
If the parties wish the buyer to clear the goods for importation and pay the duty the word 'duty unpaid' should be used instead of "duty paid".
If the parties wish to exclude from the seller's obligations some of the costs payable upon importation of the goods (such as value added tax(VAT)), this should be made clear by adding words to this effect; "Delivered ex quay, VAT unpaid ...(named port of destination)".
This term can only be used for sea or inland waterway transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Obtain at his own risk and expense any export and import licence or other official authorisation and carry out all customs formalities for the exportation and importation of the goods and, where necessary, for their transit through another country.
DDU-Delivered Duty Unpaid
"Delivered duty unpaid" means that the seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities. The buyer has to pay any additional costs and to bear any risks caused by his failure to clear the goods for import in time.
If the parties wish the seller to carry out customs formalities and bear the costs and risks resulting therefrom, this has to be made clear by adding words to this effect.
If the parties wish to include in the seller's obligations some of the costs payable upon importation of the goods (such as value added tax(VAT)), this should be made clear by adding words to this effect: "Delivered duty unpaid, VAT paid, ... (named place of destination)".
This term may be used irrespective of the mode of transport.
DDP-Delivered Duty Paid
"Delivered duty paid" means that the seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, cleared for importation. Whilst the EXW term represents the minimum obligation for the seller, DDP represents the maximum obligation.
This term should not be used if the seller is unable directly or indirectly lo obtain the import licence.
If the parties wish the buyer to clear the goods for importation and to pay the duty, the term DDU should be used.
If the parties wish to exclude from the seller's obligations some of the costs payable upon importation of the goods (such as value added tax(VAT)), this should be made clear by adding words to this effect: "Delivered duty paid, VAT unpaid ... (named place of destination)".
This term may be used irrespective of the mode of transport.
DAF-Delivered at Frontier
"Delivered at Frontier" means that the seller fulfils his obligation to deliver when the goods have been made available, cleared for export, at the named point and place at the frontier, but before the customs border of the adjoining country. The term "frontier" may be used for any frontier including that of the country of export. Therefore, it is of vital importance that the frontier in question be defined precisely by always naming the point and place in the term.
The term is primarily intended to be used when goods are to be carried by rail or road, but it may be used for any mode of transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Obtain at his own risk and expense any export licence or other official authorisation or other document necessary for placing the goods at the buyer's disposal. Carry out all customs formalities for the exportation of the goods to the named place of delivery at the frontier and, where necessary, for the prior transit through another country.
CPT-Carriage Paid to
"Carriage paid to..." means that the seller pays the freight for the carriage of the goods to the named destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier.
"Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage, by rail, road, sea, air, inland waterway or by a combination of such modes.
If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier.
The CPT term requires the seller to clear the goods for export.
This term may be used for any mode of transport including multimodal transport.
CIF-Cost, Insurance and Freight
"Cost, Insurance and Freight" means that the seller has the same obligations as under CFR but with the addition that he has to procure marine insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium.
The buyer should note that under the CIF term the seller is only required to obtain insurance on minimum coverage.
The CIF term requires the seller to clear the goods for export.
This term can only be used for sea and inland waterway transport. When the ship's rail serves no practical purposes such as in the case of roll-on/roll-off or container traffic, the CIP term is more appropriate to use.
CFR-Cost and Freight
"Cost and Freight" means that the seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment.
The CFR term requires the seller to clear the goods for export.
This term can only be used for sea and inland waterway transport. When the ship's rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the CPT term is more appropriate to use.
more infor:
http://www2.miq.com/cms/INCOTERMS2013/
"Free on Board" means that the seller fulfils his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.
The FOB term requires the seller to clear the goods for export.
This term can only be used for sea or inland waterway transport. When the ship's rail serves no-practical purpose. such as in the case of roll-on/roll off or container traffic the FCA term is more appropriate to use.
FCA-Free Carrier-(named place)
"Free Carrier" means that the seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose within the place or range stipulated where the carrier shall take the goods into his charge. When, according to commercial practice, the seller's assistance is required in making the contract with the carrier (such as in rail or air transport) the seller may act at the buyer's risk and expense.
This term may be used for any mode of transport, including multimodal transport. "Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes. If the buyer instructs the seller to deliver the cargo to a person, e.g. a freight forwarder who is not a 'carrier', the seller is deemed to have fulfiled his obligation to deliver the goods when they are in the custody of that person.
"Transport terminal" means a railway terminal, a freight station, a container terminal or yard, a multipurpose cargo terminal or any similar receiving point.
"Container" includes any equipment used to unitise cargo, e.g. all types of containers and/or flats, whether lSO accepted or not, trailers, swap bodies, ro-ro equipment, igloos, and applies to all modes of transport.
FAS-Free Alongside Ship-(named port of shipment)
"Free Alongside Ship" means that the seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
The FAS term requires the buyer to clear the goods for export. It should not be used when the buyer cannot carry out directly or indirectly the export formalities.
This term can only be used for sea or inland waterway transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formality
Render the buyer, at the latter's request, risk and expense, every assistance in obtaining
any export licence or other official authorisation necessary for the exportation of the goods.
A.3. Contract of carriage and insurance
a) Contract of carriage
No obligation.
b) Contract of insurance
No obligation.
EXW-Ex Works
"Ex works" means that the seller fulfils his obligation to deliver when he has made the goods available at his premises (i.e. works, factory, warehouse, etc) to the buyer. In particular, he is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination. This term thus represents the minimum obligation for the seller.
This term should not be used when the buyer cannot carry out directly or indirectly the export formalities. In such circumstances, the FCA term should be used.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Render the buyer, at the latter's request, risk and expense, every assistance in obtaining any export licence or other official authorisation necessary for the exportation of the goods.
A.3. Contract of carriage and insurance
a) Contract of carriage
No obligation.
b) Contract of insurance
No obligation.
DES-Delivered Ex Ship-(named port of destination)
"Ex Ship" means that the seller fulfils his obligation to deliver when the goods have been made available to the buyer on board the ship uncleared for import at the named port of destination. The seller has to bear all costs and risks involved in bringing the goods to the named port of destination.
This term can only be used for sea or inland waterway transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Obtain at his own risk and expense any export licence or other official authorisation and carry out all customs formalities necessary for the exportation of the goods and, where necessary, for their transit through another country.
A.3. Contract of carriage and insurance
a) Contract of carriage
Contract at his own expense for the carriage of the goods by a usual route and in a customary manner to the named place at the named port of destination. If a point is no agreed or is not determined by practice, the seller may select the point at the named port of destination which best suits his purpose.
b) Contract of insurance
No obligation.
A.4. Delivery
Place the goods at the disposal of the buyer on board the vessel at the usual unloading point in the named port of destination uncleared for import on the date or within the period stipulated, in such a way as to enable them to be removed from the vessel by un loading equipment appropriate to the nature of the goods.
A.5. Transfer of risks
Subject to the provisions of B.5., bear all risks of loss of or damage to the goods until1 such time as they have been delivered in accordance with A.4.
A.6. Division of costs
Subject to the provisions of B.6.
- in addition to costs resulting from A.3.a), pay all costs relating to the goods until1 such time as they have been delivered in accordance with A.4.;
- pay the costs of customs formalities necessary for exportation as well as all duties, taxes or other official charges payable upon exportation and, where necessary, for their transit through another country.
A.7. Notice to the buyer
Give the buyer sufficient notice of the estimated time of arrival of the named vessel in accordance with A.4. as well as any other notice required in order to allow the buyer to take measures which are normally necessary to enable him to take the goods.
A.8. Proof of delivery, transport document or equivalent electronic message
Provide the buyer at the seller's expense with the delivery order and/or the usual transport document (for example a negotiable bill of lading, a non-negotiable sea waybill, an inland waterway document, or a multimodal transport document) to enable the buyer to take delivery of the goods.
Where the seller and the buyer have agreed to communicate electronically, the document referred to in the preceding paragraph may be replaced by an equivalent electronic data interchange(EDI) message.
DEQ-Delivered Ex Quay (duty paid)
"Delivered Ex Quay (duty paid)" means that the seller fulfils his obligation to deliver when he has made the goods available to the buyer on the quay(wharf) at the named port of destination, cleared for importation. The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods thereto.
This term should not be used if the seller is unable directly or indirectly to obtain the import licence.
If the parties wish the buyer to clear the goods for importation and pay the duty the word 'duty unpaid' should be used instead of "duty paid".
If the parties wish to exclude from the seller's obligations some of the costs payable upon importation of the goods (such as value added tax(VAT)), this should be made clear by adding words to this effect; "Delivered ex quay, VAT unpaid ...(named port of destination)".
This term can only be used for sea or inland waterway transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Obtain at his own risk and expense any export and import licence or other official authorisation and carry out all customs formalities for the exportation and importation of the goods and, where necessary, for their transit through another country.
DDU-Delivered Duty Unpaid
"Delivered duty unpaid" means that the seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities. The buyer has to pay any additional costs and to bear any risks caused by his failure to clear the goods for import in time.
If the parties wish the seller to carry out customs formalities and bear the costs and risks resulting therefrom, this has to be made clear by adding words to this effect.
If the parties wish to include in the seller's obligations some of the costs payable upon importation of the goods (such as value added tax(VAT)), this should be made clear by adding words to this effect: "Delivered duty unpaid, VAT paid, ... (named place of destination)".
This term may be used irrespective of the mode of transport.
DDP-Delivered Duty Paid
"Delivered duty paid" means that the seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, cleared for importation. Whilst the EXW term represents the minimum obligation for the seller, DDP represents the maximum obligation.
This term should not be used if the seller is unable directly or indirectly lo obtain the import licence.
If the parties wish the buyer to clear the goods for importation and to pay the duty, the term DDU should be used.
If the parties wish to exclude from the seller's obligations some of the costs payable upon importation of the goods (such as value added tax(VAT)), this should be made clear by adding words to this effect: "Delivered duty paid, VAT unpaid ... (named place of destination)".
This term may be used irrespective of the mode of transport.
DAF-Delivered at Frontier
"Delivered at Frontier" means that the seller fulfils his obligation to deliver when the goods have been made available, cleared for export, at the named point and place at the frontier, but before the customs border of the adjoining country. The term "frontier" may be used for any frontier including that of the country of export. Therefore, it is of vital importance that the frontier in question be defined precisely by always naming the point and place in the term.
The term is primarily intended to be used when goods are to be carried by rail or road, but it may be used for any mode of transport.
A. The seller must
A.1. Provision of goods in conformity with the contract
Provide the goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale and any other evidence of conformity which may be required by the contract.
A.2. Licences, authorisations and formalities
Obtain at his own risk and expense any export licence or other official authorisation or other document necessary for placing the goods at the buyer's disposal. Carry out all customs formalities for the exportation of the goods to the named place of delivery at the frontier and, where necessary, for the prior transit through another country.
CPT-Carriage Paid to
"Carriage paid to..." means that the seller pays the freight for the carriage of the goods to the named destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier.
"Carrier" means any person who, in a contract of carriage, undertakes to perform or to procure the performance of carriage, by rail, road, sea, air, inland waterway or by a combination of such modes.
If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier.
The CPT term requires the seller to clear the goods for export.
This term may be used for any mode of transport including multimodal transport.
CIF-Cost, Insurance and Freight
"Cost, Insurance and Freight" means that the seller has the same obligations as under CFR but with the addition that he has to procure marine insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium.
The buyer should note that under the CIF term the seller is only required to obtain insurance on minimum coverage.
The CIF term requires the seller to clear the goods for export.
This term can only be used for sea and inland waterway transport. When the ship's rail serves no practical purposes such as in the case of roll-on/roll-off or container traffic, the CIP term is more appropriate to use.
CFR-Cost and Freight
"Cost and Freight" means that the seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment.
The CFR term requires the seller to clear the goods for export.
This term can only be used for sea and inland waterway transport. When the ship's rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the CPT term is more appropriate to use.
more infor:
http://www2.miq.com/cms/INCOTERMS2013/
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