9. There are six parties which are normally associated with the Letter of Credit.
Q 434: We wish to download software from the website of an overseas company. It will be our import. How do we pay import duty? In case we import pen drive or disc physically, how will this import be regarded? If we export this imported pen drive/disc by adding some features and making the product more useful, what benefits do we get against earning of foreign exchange?
A: 1. Downloading of software from the website of overseas company is very common practice by Indian importers dealing in software/IT.
2. This will be your import.
3. When you approach your bank for remittance against the invoice received from the overseas supplier of software, the bank will insist for payment of applicable import duty.
4. You do not require filing Bill of Entry for this import but the payment of import duty has to be done to Customs.
5. Copy of duty paid challan is required to be submitted to the bank to enable the bank to effect outward payment to the overseas supplier.
6. Some banks also insist on a certificate from a Charted Accountant for the conformation of the value of import.
7. Your import of pen drive or disc will be regarded as import of goods.
8. It will be physical import.
9. Proper procedures of import, including documentation, will be required to be followed.
10. Bill of Entry will be filed under appropriate 8-digit HSN Code.
11. If there are any other Customs compliances required against specific HSN Code, then importer will also require to fulfil the same.
12. If you are exporting the imported goods after adding some features, which makes your export products distinct than the imported product, then you will be exporting the products on merit.
13. Eligible export incentives can be claimed.
14. Customs Invoice, Packing List, Export Value Declaration form etc. will be required.
15. At the time of shipment, proper INCOTERMS @ 2020 should be used.
16. Shipping Bill is to be filed.
17. Exporter will be under statutory obligation to realise the export proceeds from overseas within stipulated period.