Topics
- Buyers Credit (55)
- Buyers Credit Accounting (1)
- Buyers Credit on Precious Metals (6)
- Currency Hedging (3)
- Form 15CA and Form 15CB (5)
- Income Tax (6)
- Letter of Comfort (LOC) / Letter of Undertaking (LOU) (5)
- Letter of Credit (LC) (2)
- LIBOR (6)
- Others (5)
- RBI Regulation & Circulars (18)
- Suppliers Credit (32)
- Withholding Tax (8)
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Articles
- Swift Code & Messages Used in Buyers Credit Transaction
- Tax Residency Certificate Not Required in Prescribed Format
- Surcharge and Education Cess on Withholding Tax
- Transfer of Limits from One Bank to Another : Buyers Credit Rollover Process
- Buyers Credit on Import of Precious and Semi Precious Stone
- Myanmar Economic Sanctions – Background, Recent Relaxation & Trade Finance
- Buyers Credit on High Sea Sales Transaction
- Withholding Tax (WHT) is applicable on Suppliers Credit Transactions
- How to Calculate Total Cost of Buyers Credit
- Bank Finance for Purchase of Gold
- Buyers Credit with 6 Month Libor Reset
- Review of Trade Credit All-In-Cost Ceiling
- Impact of Libor Review on Trade Finance in India
- Pushing the reset button on LIBOR – Speech by Martin Wheatley
- Certificate of Tax Residency under DDTA (Withholding Tax)
- Buyers Credit on Jewellery
- Overdue Interest and Late Payment Charges on Buyers Credit
- Prepayment of Buyers Credit
- Trade Credit Extended Upto 5 Years for Infrastructure Firms
- Difference Between EURIBOR & EUR Libor
- Banks Insisting of Forward Booking for Buyers Credit Exposure
- 5% WHT as per Sec 194LC not applicable to Buyers Credit
- Form 15CA & 15CB Not Applicable on Interest payment to Indian Bank Branches
- Basel III – Future Impact of Trade Finance
- Suppliers’ Credit or Buyers’ Credit is not available for Merchanting Trade
- IMO Number and Its importance in case of Buyers Credit
- Country-wise Double Taxation Summary Chart on Interest
- Consequence of Non Deduction of Withholding Tax (WHT / TDS)
- Form 15CA and 15CB under Section 195 of Income Tax
- OFAC Countries & Implication on Buyers Credit
- Review of all-in-cost ceiling – Trade Credit
- Buyers Credit All-In-Cost Ceiling may move back to L+200bps from 01/04/2012
- Buyers Credit for Imports Under Direct Documents
- Difference between Buyers Credit and Letter of Credit (LC)
- Comprehensive Guidelines on Foreign Exchange Derivatives
- Recent Changes to India’s Currency Forward Contract Norms for Hedging
- RBI Increase Buyers Credit All-in-Cost Ceiling
- Buyers Credit Accounting Entries
- Infrastructure Companies – Bridge Finance before availing ECB
- Buyers Credit on Capital Goods
- Buyers Credit Interest Rate (LIBOR + Margins)
- Bankwise Letter of Comfort / Undertaking Charges
- Buyers Credit on Gold Import
- LIBOR Rates: Brief, History, Currencies, Maturities
- Transaction where Buyer’s Credit is Restricted
- Sample format of Letter of Undertaking / Comfort (LOU / LOC)
- Import of Platinum, Palladium, Rhodium, Silver
- Buyer’s / Supplier’s Credit on Rough, Cut and Polished Diamonds
- Buyer’s Credit Rollover
- Buyer’s Credit from Mauritius Based Foreign Bank
Old Article
- Procedure for Buyers Credit in India
- RBI Trade Credit (Buyers/Suppliers Credit) Circular Extract
- WHT (Withholding Tax) on interest on Buyers Credit
- Letter of Comfort / Undertaking (LOC/LOU) Charges
- Buyer’s Credit in Cross Currency
- Supplier’s Credit India – Meaning & Process
- Difference between Buyer’s Credit and Supplier’s Credit
- Buyer’s / Supplier’s Credit Consultants
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Category Archives: Suppliers Credit
Swift Code & Messages Used in Buyers Credit Transaction
SWIFT code (ISO 9362, SWIFT-BIC, BIC code, SWIFT ID) is a standard format of Business Identifier Codes approved by the ISO. These codes are used when transferring money between banks, particularly for international wire transfers, and also for the exchange of other messages between banks. Swift Message type used in buyers credit are MT202, MT799 & MT999 Continue reading
Posted in Buyers Credit, Others, Suppliers Credit
Tagged BIC, Finance, Import Finance, International trade, ISO 9362, MT202, MT799, SWIFT, Trade Credit, Wire transfer
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Tax Residency Certificate Not Required in Prescribed Format
In September 2012, CBDT had prescribe a format in which Tax Residence Certificate (TRC) was required from April 2013. In the Amendments to Finance Bill 2013, requirement of prescribed format has been done away with. Continue reading
Surcharge and Education Cess on Withholding Tax
Withholding Tax rates may be limited by application of a tax treaty. The surcharge and education cess will not apply where the withholding tax is limited by a tax treaty. Continue reading
Posted in Buyers Credit, Suppliers Credit, Withholding Tax
Tagged Buyers Credit, Double taxation, DTAA, Finance, Import Finance, SME Finance, Tax treaty, Withholding Tax
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Myanmar Economic Sanctions – Background, Recent Relaxation & Trade Finance
Myanmar has been under various international economic sanction for more than a decade, which has crippled its international trade. Below article gives a background of economic sanctions on Myanmar, recent relaxations in these sanctions and what will be its likely impact on trade finance from Indian importers perspective. Continue reading
Buyers Credit on High Sea Sales Transaction
What is High Sea Sales ? High Sea Sales (HSS) is a sale carried out by the carrier document consignee to another buyer while the goods are yet on high seas or after their dispatch from the port/airport of origin and before their arrival at the port/ airport of destination. Continue reading
Posted in Buyers Credit, Suppliers Credit
Tagged article, Buyers Credit, Finance, Import Finance, International trade, SME Finance, Suppliers Credit, Trade Credit
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Withholding Tax (WHT) is applicable on Suppliers Credit Transactions
Withholding Tax is applicable on Suppliers Credit Under Sec 195 of Income Tax Act 1961. Additionally DTAA treaty of the respective country has to be referred for the definition of interest to arrive at final conclusion. Continue reading
Posted in Suppliers Credit, Withholding Tax
Tagged article, Double taxation, Finance, Import Finance, International trade, SME Finance, Suppliers Credit, WHT, Withholding Tax
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Buyers Credit with 6 Month Libor Reset
Banks and Importers consider various factors before going for Buyers Credit transaction for more than 6 months tenure. One such factor is buyers credit with 6 Month Libor Reset option. The below article elaborates on these factors. Continue reading
Review of Trade Credit All-In-Cost Ceiling
After the expiry of deadline of 30-09-2012, there was a prolonged uncertainty for last 9 days on what is the all in cost ceiling for Trade Credit (Buyers Credit / Suppliers Credit). Reserve Bank of India (RBI) issued a clarification or revised circular today clarifying the same. Summary of the same is given below Continue reading
Impact of Libor Review on Trade Finance in India
Trade Credit (Buyers Credit, Suppliers Credit etc.) perspective, recommendation which are the most relevant are the number of currencies and tenors for which LIBOR is published to be reduced and market participants using LIBOR should be encouraged to consider and evaluate their use of LIBOR Continue reading
Trade Credit Extended Upto 5 Years for Infrastructure Firms
Buyers Credit for import of capital goods has been extended from 3 years to 5 years for company classified as Infrastructure as defined in guidelines on External Commercial Borrowings (ECB). Trade Credit must be availed for Minimum fifteen months at one go and should not be in the nature of short-term roll overs. Continue reading
Difference Between EURIBOR & EUR Libor
EURO based buyers credit is currently funded by most of the banks using EURIBOR which is issued by European Banking Federation and ACI. A similar rate is issued by British Banking Association known as EUR Libor but is not often used by bankers for funding buyers credit transactions Continue reading
Basel III – Future Impact of Trade Finance
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 The Basel Committee on Banking Supervision (BCBS, or Basel Committee) is an institution created by the central bank Governors of 27 members from both developed and emerging economies. The most influential publications by the BCBS … Continue reading
Posted in Buyers Credit, Others, Suppliers Credit
Tagged Import Finance, International trade, SME Finance
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Suppliers’ Credit or Buyers’ Credit is not available for Merchanting Trade
The supplier of goods will be resident in one foreign country. The buyer of goods will be resident in another foreign country. The merchant or the intermediary will be resident in India. He will book the order from the buyer, place the order with the supplier, supervise and coordinate the shipment of goods from the supplier’s country and deliver the same to buyer’s country. Continue reading
Country-wise Double Taxation Summary Chart on Interest
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 Below Country-wise double taxation summary chart provides Tax rate and Article reference number applicable on interest payments to beneficiary outside India. Same will be useful at the time of filling up Form … Continue reading
Form 15CA and 15CB under Section 195 of Income Tax
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 Finance Act, 2008 inserted a new sub section (6) to section 195 effective from April 1, 2008, which requires the person responsible for making payment to a non-resident to furnish information relating to … Continue reading
Posted in Buyers Credit, Form 15CA and Form 15CB, Income Tax, Suppliers Credit
Tagged Finance, Import Finance, International trade
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OFAC Countries & Implication on Buyers Credit
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 What is OFAC Sanctions ? The Office of Foreign Assets Control (OFAC) is an office of the Treasury Department of United States of America (US). OFAC administers and enforces economic and … Continue reading
Review of all-in-cost ceiling – Trade Credit
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 In its circular dated 30/03/2012, RBI has decided to continue with the enhanced all-in-cost ceiling for Trade Credit for further period of six months. Maximum Cap on Interest Rate for tenure … Continue reading
Buyers Credit All-In-Cost Ceiling may move back to L+200bps from 01/04/2012
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 In its Circular dated 15/11/2011, RBI had increased the all-in-cost ceiling for Buyers Credit from 6 Month L+ 200 bps to 6 Month L + 350 bps subject to condition that … Continue reading
Recent Changes to India’s Currency Forward Contract Norms for Hedging
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 RBI via circular dated 15/12/2011 made changes in Foreign Exchange Derivative Contacts with immediate effect until further review. Below is the extract of the same related to importers and exporters. 1). … Continue reading
RBI Increase Buyers Credit All-in-Cost Ceiling
To Avail Buyer’s / Supplier’s Credit: E: sanjaymandavia@gmail.com, M: +919825560186 RBI reviewing the developments in global finance markets and the fact that domestic importers are experiencing difficulties in raising Trade Credit (Buyers Credit / Suppliers Credit) within the existing all-in-cost ceiling, RBI has … Continue reading
Infrastructure Companies – Bridge Finance before availing ECB
RBI allowed Indian companies which are in infrastructure sector to import capital goods by availing of short-term credit (including buyer’s credit and supplier’s credit) in the nature of “Bridge Finance” under the approval route,subject to following conditions Continue reading
Buyers Credit Interest Rate (LIBOR + Margins)
Factors which play important roles in Margin are Availability of Funds, Cost of Funds, Tenure, Banks Lines, Internal Minimum Margin and External Factors. Continue reading
Posted in Buyers Credit, Suppliers Credit
Tagged Buyers Credit, Cost of funds, Foreign Bank, Indian Bank
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Transaction where Buyer’s Credit is Restricted
Type of transaction where buyer’s credit cannot be done are Local Trade, Advance Payment, Merchanting Trade, Intermediary Trade Transaction and Import of Services. Continue reading
Posted in Buyers Credit, Suppliers Credit
Tagged article, Business, Buyers Credit, Finance, Import Finance, India, International trade, Suppliers Credit, Trade Credit
4 Comments
Buyer’s / Supplier’s Credit Consultants
Person / Firm who co ordinates with Indian Overseas Branches or Foreign Bank and arranges best possible quote for transactions. They do not directly represent any of these bank. They are also known as Buyers Credit Brokers & Buyers Credit Agents. Scope of Activity, Technical Aspect, arranging quote and get funding done. Continue reading
Posted in Buyers Credit, Suppliers Credit
Tagged article, Business, Buyers Credit, Comfort letter, Finance, Import, Import Finance, India, Updates
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Difference between Buyer’s Credit and Supplier’s Credit
Difference between buyers credit and suppliers credit are based on criteria like, Mode of payment, LC clauses, arrangement process, and cost involved. Continue reading
Supplier’s Credit India – Meaning & Process
Supplier’s Credit relates to credit for imports into India extended by the overseas suppliers or financial institutions outside India.Usance Bills under Letter of Credit (LC) issued by Indian bank branches on behalf of their importers are discounted by Indian bank overseas branches or Foreign bank. Paying your suppliers at sight against Usance bills under letter of credits. Continue reading
Useful links in relation to Buyers Credit
Buyers Credit Calculation Sheet, Current Exchange Rate, Future / Forward Rates of USD, EURO, GBP, & JPY. Relevant RBI Circulars in Relation to Forward Contract. DTAA, Withholding Tax, Income Tax Notification in Relation to Form 15CA, Form 15CB, Challan 281, Form 27Q and Filling Links / Format. Relevant RBI Circulars in relation to Trade Credit Continue reading
RBI Trade Credit (Buyers/Suppliers Credit) Circular Extract
Trade Credits’ refer to credits extended for imports directly by the overseas supplier, bank and financial institution for maturity of less than three years. Depending on the source of finance, such trade credits include suppliers’ credit or buyers’ credit. Suppliers’ credit relates to credit for imports into India extended by the overseas supplier, while buyers’ credit refers to loans for payment of imports into India arranged by the importer from a bank or financial institution outside India for maturity of less than three years Continue reading
Posted in Buyers Credit, RBI Regulation & Circulars, Suppliers Credit
Tagged article, Business, Buyers Credit, Finance, Import Finance, India, International trade, RBI, Trade Credit, Updates
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