| Topic : Getting Started in Exporting |
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Activity:
1 comments
1628 views
last activity : 07 06 2010 20:18:04 +0000
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Consignment exports are exports made by Indian exporters to their agents / associates / branches / trading offices located abroad. These are also called " stock and sale " exports. The consignee, after receipt of goods will arrange for sale and after sale, repatriate the proceeds to India.
In terms of FEMA, documents relating to consigment exports are to be necessarily routed through the foreign branch / foreign correspondent bank of the exporter's bank in India. Exporter's bank in India should instruct the foreign bank to deliver the documents to the consignee against a trust receipt or undertaking to deliver the sale proceeds of the export with in the prescribed period for realisation of export.
Further, the freight and insurance on the export are to be arranged in India and paid by the Indian exporter only, i.e. export to be necessarily on CIF terms.
The expenses relating to receipt of goods, warehousing, advertisement, selling and administration etc will be deducted from the sale proceeds by the consignee and net proceeds will be remitted to Indian exporter through the foreign bank which has delivered the shipping documents to the consignee. Consignee should also submit " Account Sales" detailing the expenses as mentioned above, supported by relative bills / vouchers which are to be verified by the bank in India.
For exporters with satisfactory record , RBI will permit on application, a longer period up to 12 months for realisation of export proceeds in respect of consignment exports sent to Russia and CIS countries.
In case of export of books on consignment basis, AD - banks approve proposals for realisation of export proceeds up to 360 days from the date of shipment. The exporters may also be permitted to abandon books which remain unsold at the expiry of the relative contract.
In order to stock the consignments, exporters may set up or hire on long term, warehouses abroad with the approval of AD- Banks. For this purpose their overdue export bills should not exceed 5 % of the exports made in previous financial year and the export turnover during the previous financial year should not be less than USD 100000.(US Dollars one hundred thousand).
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