15 May 2024
Reference: Master Direction – Export of Goods and Services (Updated as on November 22, 2022) RBI/FED/2015-16/11 FED Master Direction No. 16/2015-16 C12> (iv) In case the goods are exported on consignment basis, freight and marine insurance must be arranged in India.
I have a case where an overseas buyer is paying for the freight and insurance in case of consignment exports and also for the re-import of goods of the same consignment exports so we export on the basis of FOB. Our bank says that as per RBI Master Circular it cannot be FOB as freight and insurance has to be paid in India. I would like to understand the interpretation of this guideline. Does it mean that: 1) Freight and Insurance has to be paid by the exporter 2) Freight and Insurance has to be paid in India by anyone of the exporter/overseas party/third party 3) Freight and Insurance has to be "arranged" in india at the time of exporting but can be paid by anyone anywhere 4) Freight and Insurance has to be paid/arranged in India only so as to safeguard the FOREX involved in the transaction in case of any loss/damage of the product (since in case of consignment the ownership has not yet passed to the overseas buyer)
CAclubindia
