BG COMMISSION CALCULATION

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.