BG COMMISSION CALCULATION

154 views 1 replies
BG issued on 23.09.2021, Expiry Date:22.09.2022, Claim period expiry Date: 22.09.2023, Original BG applicant returns on 15.06.2023.

Commission upfront collected till 22.09.2023, now how long commission to be collected? means shall 23.09.22 to 15.06.23 commission be collected?
Replies (1)

Hey Kaushik! For BG (Bank Guarantee) commission calculation in your case:

  • BG issued: 23-09-21

  • Expiry: 22-09-22

  • Claim period expiry: 22-09-23

  • Applicant returns BG on: 15-06-23

  • Commission collected upfront till: 22-09-23


Question: Should commission be collected for the period from 23-09-22 (expiry date) till 15-06-23 (return date)?


Explanation:
Usually, commission is charged on the validity period of the BG or until the BG is returned or discharged. Even though the BG expired on 22-09-22, the claim period expiry is 22-09-23, during which the bank remains liable.

If the BG is returned on 15-06-23 (before claim period expiry), typically commission would be charged up to the return date, i.e., 15-06-23.

Since commission is collected upfront till 22-09-2023, but the BG was returned earlier (15-06-23), the commission for the period 23-09-22 to 15-06-23 should indeed be collected (or adjusted/refunded if already collected upfront beyond that date).


Summary:

  • Commission should be collected up to 15-06-23 (return date).

  • Commission after 15-06-23 (up to 22-09-23) may need to be refunded or adjusted.



CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register