30 November 2009
Can import payment be done to a third party who has funded our import- a party other than vendor. If no, restricted by which notification of RBI
30 November 2009
In absence of details as to mode of funding, very difficult to answer your query. However, these are ways third party funding is usually done.
Usually when a third party funds you by establishing a letter of credit on your behalf, he gets the b/l in his name first and then effects a high seas sale to you. If indeed this is your arrangement in India then there is no problem. However, if you have arranged a line of credit from some other country and you finally get the B/L, there is no restriction from RBI. You only have to comply with TDS for interest payments you make. If you need a little elaborate answer, please inform the mode of your transaction.
You should take following steps:- 1) Let shipper have B/L with consignee to order of (Your third party) and you as notify party. Your IEC Code should be mentioned on B/L and shipping instructions as that is mandatory these days. 2) Let the third party purchase the B/L from shipper and then bill you as a D/A transaction with interest included in the price. He delivers documents to you through bank and he invoices you as a seller himself and you pay him on deferred basis as contracted.
However if the terms are over 90 days, then adhesive stamp will have to be affixed on bill of exchange at the time of accepting the document.
This way the party is giving you goods on credit and there is no restrictions for this as long as documents come through your bank. It is better if your financier is himself the shipper in the bill of lading. Do note that if bulk of your aggregate purchases of import and domestic (say over 90%) is done on deferred basis with only 1 party internationally, TP regulations apply.
CAclubindia
