You Ask We Answer
Q 417: We refer to your answer to our question which was published on September 5, 2024 in Exim Newsletter under Sr. No. 401. We are thankful to you for the information which was very useful to us.
We have further query regarding the list of documents to carry on this transaction. Also, guide us on the documents required by the bank and line to release the shipment at destination.
A: 1. We are happy to note that the answer we provided against your question was useful to you.
2. To consolidate the change in situation, the exporter will require preparing / changing certain documents.
3. If the exporter has shipped goods to a buyer ‘A’ in Dubai for USD 100, he must have made all documents accordingly.
4. If due to circumstances, he is now transferring the goods to new buyer ‘B’ in Dubai, then he has to make / modify the export documents to enable buyer ‘B’ to make payment and also to take delivery of the goods.
5. The exporter will make new commercial invoice in the name of buyer ‘B’ with new address.
6. The amount of the new invoice will be as per the revised rate agreed between exporter and buyer ‘B’.
7. Other particulars of the original invoice will be copied after proper editing.
8. It is advisable for the exporter to obtain new purchase order / confirmation (properly drafted email will be good enough; full details about the understanding should be reflected in the email). This email order will become the base for changed transaction.
9. Packing list is to be edited as per the new order.
10. Certificate of Origin is also to be obtained in the name of the new buyer ‘B’. For this purpose, the exporter will require to approach the issuing authority i.e. Chamber of Commerce.
11. The exporter is required to inform the Chamber of Commerce about the situation and request for cancellation of previously issued COO in the name of ‘A’.
12. The Chamber of Commerce will issue the new / replaced COO after getting satisfied about the transaction.
13. Bills of Lading issued by the shipping line will be in the name of buyer ‘A’ or it can be ‘to the order of’.
14. Exporter should contact the shipping line and / or its agent to understand the requirement of the line to give delivery to new buyer ‘B’.
15. A letter from the exporter explaining the situation of change of the buyer will be required by the shipping company to put on record.
16. Shipping company may ask for some declaration and / or some kind of indemnity letter.
17. Different shipping companies will have different systems / methods to handle this situation.
18. One cannot generalise the same. However, shipping company always wants to protect against future probable liability.
19. You can get further assistance from your Custom Broker.
20. If there is any payment involved for revised documentation, then the exporter will require bearing the same.
21. If the insurance policy is involved in the transaction, then exporter should immediately intimate the insurance company along with supporting documents.
22. Exporter must obtain confirmation in writing from the insurance company that they have taken on record the effect of the change of the buyer.
23. If in the export transaction there are any other documents, like Inspection Certificate / MSDS / Quality Certificate and so on, then exporter has to evaluate the requirement of revising the document.
24. If above documents are buyer-neutral, then they may be well accepted and no changes will be required.
25. It is essential that the change of buyer is intimated to your bank along with revised / new set of documents so that when the payment is received from buyer ‘B’, it will be appropriated by the bank against the invoice.
26. In this situation, please note that the name and address of the buyer in the Shipping Bill will be ‘A’ whereas the payment will be received from buyer ‘B’.
27. The bank will regularise this difference in the data on its own.
28. The exporter will generate EBRC once the bank has created IRM in the system.
29. For Duty Drawback, change in the buyer will have no impact.
30. If the amount realised is less than the amount mentioned in Shipping Bill, then the exporter has to refund Duty Drawback along with the interest.
31. Similarly, for IGST, change in the buyer will have no impact. If the amount realised is less than the amount mentioned in Shipping Bill, then the exporter has to refund IGST along with the interest.