Letter of credit
This query is : Resolved
02 September 2011
hi,
plz help me regarding this issue
a 90 days letter of credit was issued by buyer to the seller..the seller produced the documents to the negotiating bank upon delivering the goods..the seller's bank discounted the bill & paid the amount..mean while the the seller's bank could not recover the amount from buyer's bank & letter of credit got expired after 90 days..henceforth the seller's bank without prior permission, deducted the discounted amount from seller's bank account.
kindly let me know, what legal action can seller take against seller's bank & buyer's bank.
plz help me regarding this issue
a 90 days letter of credit was issued by buyer to the seller..the seller produced the documents to the negotiating bank upon delivering the goods..the seller's bank discounted the bill & paid the amount..mean while the the seller's bank could not recover the amount from buyer's bank & letter of credit got expired after 90 days..henceforth the seller's bank without prior permission, deducted the discounted amount from seller's bank account.
kindly let me know, what legal action can seller take against seller's bank & buyer's bank.
02 September 2011
PLZ SEE THE EXAMPLE
LC OPEN DATE 01.01.2011
LC DAYS 90 DAYS
LC EXPIRE DAYS 31.03.11
MATERIAL PURCHASE 15.01.2011
B.O.E. MADE 22.01.2011
SELLER CAN GET PAYMENT FROM BANK UPTO 31.03.2011 BEFORE EXPIRY OF LC.
IF SELLER'S BANK COULD NOT RECOVER THE AMOUNT FROM BUYERS BANK IT IS NOT MISTAKE OF THE SELLER. IT MEANS LC IS FAILED. IT MAY BE POSSIBLE THAT SELLE BANK PRODUCED THE DOCUMENT TO BUYERS BANK AFTER EXPIRY OF LC DATE. PLEASE GIVE THE DETAIL OF THE CASE DATE WISE satbirca2009@gmail.com
LC OPEN DATE 01.01.2011
LC DAYS 90 DAYS
LC EXPIRE DAYS 31.03.11
MATERIAL PURCHASE 15.01.2011
B.O.E. MADE 22.01.2011
SELLER CAN GET PAYMENT FROM BANK UPTO 31.03.2011 BEFORE EXPIRY OF LC.
IF SELLER'S BANK COULD NOT RECOVER THE AMOUNT FROM BUYERS BANK IT IS NOT MISTAKE OF THE SELLER. IT MEANS LC IS FAILED. IT MAY BE POSSIBLE THAT SELLE BANK PRODUCED THE DOCUMENT TO BUYERS BANK AFTER EXPIRY OF LC DATE. PLEASE GIVE THE DETAIL OF THE CASE DATE WISE satbirca2009@gmail.com
RAMESH KUMAR VERMA
(Expert)
02 September 2011
The letter of credit should have an expiration date that gives sufficient time to the seller to get all the tasks specified and the documents required in the LC. If the letter of credit expires, the seller is left with no protection.
Most LC s fail because Sellers/Exporters/Beneficiaries were unable to perform within the specified time frame in the LC.
Three dates are of importance in an LC:
a) The date by when shipment should have occurred. The date on the Bill of Lading.
b) The date by when documents have to be presented to the Bank
c) The expiry date of the LC itself.
in view of above in your case asking bank to issue a letter of indemnity in order to take up the goods without surrender of an original bill of lading.
Most LC s fail because Sellers/Exporters/Beneficiaries were unable to perform within the specified time frame in the LC.
Three dates are of importance in an LC:
a) The date by when shipment should have occurred. The date on the Bill of Lading.
b) The date by when documents have to be presented to the Bank
c) The expiry date of the LC itself.
in view of above in your case asking bank to issue a letter of indemnity in order to take up the goods without surrender of an original bill of lading.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Late Filing Fee Waiver for Q1 Form 144 (Earlier 27Q) – Transition to Income-tax Act, 2025
- GST input credit on commercial property
- GSTR-9C filing
- GST ITC as per notification 12/2023- central tax
- Urd purchase entry in tally prime
- Gift to nri relatives residing in usa
- TDS- 2026-27 Q1 Correction
- Capital Gains Tax on Inherited Mutual Fund
- Royalty payments to the Mining Department for procurement of murum - GST input
- Capital gains in IT returns
- LLP audit and disclosure
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
