KNOWLEDGE CENTRE / NEWS

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Filing of Income Tax Return due date extended to December 10, 2025 for A.Y. 2025-26

 The Central Board of Direct Taxes (CBDT) has officially extended the due date for filing Income Tax Return  for the Previous Year 2024-25 (Assessment Year 2025-26) from October 31, 2025, to December 10, 2025 .

Letter of Credit commonly known as LC is a most safest Banking Instrument used in Domestic / International Trades guaranteeing the Payment to the Seller / Supplier by the Bank . Once seller/ Supplier make the shipment and submit the shipping documents to the Bank, the Seller / Supplier Payment is Confirmed .

Letter of Credit (LC) is governed by UCP 600 of ICC Publications.

BANK s Involved in the Letter of Credit (LC) :

Applicant Bank / LC Issuing Bank : The Bank issue the LC is called Issuing Bank / Applicant Bank. It is an irrevocable undertaking by the Issuing Bank to make the payment to the Seller / Supplier on supply of Goods . The Prime Liability / obligation to make the payment always with the LC issuing Bank.

Advising Bank : The Bank which advise the Letter of Credit (LC) to the Seller / Beneficiary is called Advising Bank . Advising Bank has no liability or obligation of payment . It just advise the LC to the Seller / Beneficiary on behalf of the LC Issuing Bank.

Negotiating Bank : The Bank which negotiate the LC documents is called the Negotiating Bank. Negotiation means purchase the Shipping  Documents  of the Seller / Beneficiary and make the payment. Normally Negotiating Bank check the Documents submitted by the Seller / Beneficiary and if found the documents are in as per the terms of the LC , it purchase / negotiate the documents and send all the original Documents to the LC issuing Bank certifying that Documents are as per the LC terms and Claim the  payment from LC issuing Bank and make the payment to the Seller / Beneficiary.

Confirming Bank : Confirming Bank normally a First class International Bank who confirm the Letter of Credit (LC). Confirm of LC means the Confirming Bank guaranteeing  the payment in case the failure of LC opening Bank. Confirming Bank has similar liability / obligation of Payment like the LC opening Bank has.

PROCESS OF LETTER OF CREDIT :

LC Issuing Bank issue the LC......................Advising Bank Advise the LC to the Seller / Beneficiary...........Seller / Beneficiary make the Shipment to the Buyer.......................Seller / Beneficiary submit the Shipping documents to LC negotiating Bank for Negotiation ....................LC Negotiating Bank check the Documents , if found complying the terms of LC, forward the Documents to LC Issuing bank and claim the Payment.......................LC issuing Bank accept the Shipping Documents and make the payment to the Negotiating Bank...............Negotiating bank receive the payment from LC issuing Bank and make the payment to Seller / Beneficiary..........Buyer / Applicant make the Payment to LC Issuing Bank and receive the Shipping Documents from the Bank..........Buyer Submit the Shipping Documents to the Shipping Company / Transporter and receive the Goods.

TYPE OF LETTER OF CREDIT :

Irrevocable Letter of Credit : Irrevocable Letter of Credit can not be revoked by the LC issuing Bank once its issued to the Seller / Beneficiary. Normally all the LC used in trades are irrevocable Letter of Credits.

Confirmed Letter of Credit : Confirmed Letter of Credit is confirmed by a third Bank other then LC issuing Bank. Confirming Bank Guaranteeing the payment of LC in case the LC issuing Bank fails to make the payment.

Revolving Letter of Credit : Revolving Letter of Credit is one type of Letter of Credit which automatically revolved for a certain amount after the completion of the transaction. One payment made under the Revolving LC the same limit can automatically available . The Seller / Beneficiary can make any numbers of Draw in a Revolving Letter of Credit. This is useful in case of continue shipments without issuance of a Fresh LC for each Shipment.

Transferable Letter of Credit : A Transferable Letter of Credit are one type of Letter of Credit permitting the transfer of the LC  if favour of a Third party other then the Beneficiary . The Third Party Ship the goods and Claim the LC payment by negotiating the Documents. Normally Beneficiary gets a commission from the Third Party by transferring   the LC which is a payment outside the LC. Normally Brokers get the LC from the Buyer in their own Name and transfer the same to the Actual Supplier and get their Commission.

Sight Letter of Credit : Sight letter of Credits are those letter of Credit for which drafts drawn on sight which means the Seller / Beneficiary can get the payment immediately on negotiation of the Shipping Documents with the Negotiating Bank.

Usance Letter of Credit : Usance LC are those LC where drafts drawn for a usance period which means payment will be made on 30 days / 45 days / 90 days / 180 days/....../....... etc. These usane LC are the deferred payment instruments by the Banks.

Stand by Letter of Credit (SBLC) : Standby Letter of Credits (SBLC)  is a Bank Guarantee different from a Normal Letter of Credit. The Laws of few Countries in the World does not allow to issue Bank Guarantees, hence they issued Stand By Letter of Credit (SBLC) in stead of a Bank Guarantee. SBLC is similar to a Bank Guarantee. SBLC guaranteeing the Payment to the Seller if Buyer fails to make the Payment.

How to Issue / Open a Letter of Credit :

For Issuance of a Letter of Credit you need to have Bank LC limits. If you do not have the Bank LC limits , you can also request the Banks to issue / open the LC by providing 100% cash  margin. 

If you have Bank LC limits ,  Banks normally charged between 10% to 25 % cash margin depends upon the profile of the Customer.

You need to make a request letter to the Bank and fill the LC opening form containing the details of the LC and you also need to Authorise your Bank to debit your Account for margin and Bank charges.

LC charges : LC charges depends upon the Customer Profile, cash margin given etc. If you will give 100% cash margin the Bank charges will be less if you will give 10% cash margin the Bank charges will be high..

LC charges contains  Issuance Charges and commitment charges which is also called usance charges. A sight Lc costs you less as comparing to the Usane LC. 

Now a days, it is a very difficult task to prepare ourselves for the job interview. Specifically this is the most common problem for the Fresher's. Even if they are talented, even if they are confident, but they are unable to get the Job. 

Following are few tips everyone should follow during the job interview :  

Most common question asked in the job interview that " tell me something about yourself ?". In the answer do not say " my name is so..so.., my Father's name is so..so.., my age is so..so.., my hubby is so..so..etc". All these things already written in your resume. Say about your talent, past achievement, your strength, your confidence, your hard working, how you are different from others and how you are suitable for the job.  

Second most common question is "what is the reason to leave your present job?". In the answer never say either for growth or for number of short comings of your present company. Show some other reason that my interest is some different areas or company is going to shift some different place or for some other personal reason. Every company wants to hire a person who must have stability and who will work for a long run.  

In the interview never blame your present company or management. Never disclose confidential information of your present company.  

If the interviewer does not ask about your strong areas of your education or carrier, still you should explain these things. 

During interview you should show that you are enough confident to full feel the requirements of the Job.

Be positive... Leave fear and you will get success. 

Good Luck....

Third Party Exports by SEZ / DTA Manufacturers through Merchant Exporters.

Not like the Normal Export where 2 parties involved One is Exporter and another is Overseas Buyer, in Third party Export 3 parties Involved First is Manufacturer Exporter and Second is Merchant Exporter and Third is Overseas buyer. Exports made by the Merchant Exporters on behalf of Manufacturer Exporters to the Overseas Buyer.

Merchant Exporters get Export Orders from Overseas Buyers and place back to back orders on Manufacturers of DTA / SEZ

In this case Exports is made as “Third Party Export” as defined in Para 9.60 & 2.42 of Foreign Trade Policy (FTP) where Merchant Exporter will be the Exporter and SEZ / DTA manufacturer will be as Supporting Manufacturer.

Para 9.60 of Foreign Trade policy (FTP) :

“Third-party exports” means exports made by an exporter or manufacturer on behalf of another exporter(s). In such cases, export documents such as shipping bills shall indicate names of both manufacturer exporter/manufacturer and third-party exporter(s). Bank Realisation Certificate (BRC), Self-Declaration Form (SDF), export order and invoice should be in the name of third-party exporter.”

Rule 46 of SEZ Rules allows SEZ units to export their goods through merchant exporters. Such exports would be counted for the purpose of calculation of Net foreign Exchange (NFE) earning by the SEZ units to the extent of the value at which, the goods have been sold by the SEZ unit to the merchant exporters.

Rule 46(11) of SEZ provides the procedure for the merchant export transactions.

 It provides that :

(i) Goods shall be exported directly from the Special Economic Zone or through any other port where the merchant exporter files his shipping bill, in which case the goods shall move directly from  the Special Economic Zone to the said port of export on the basis of pink shipping bill as if these were movement of goods from one Warehouse to another 

(ii) Export document shall contain the name of the merchant exporter or the status holder and the Unit;

(iii) Merchant exporter or status holder, as the case may be, shall export goods under a free Shipping Bill and submit a disclaimer that no Drawback, Duty Exemption Pass Book credit or fulfilment of export obligation under any export promotion scheme under the Foreign Trade Policy shall be availed by him on the goods so exported.

Merchant Exporter will raise Export Invoice on the Overseas Buyer and receive the payment in Foreign Exchange / INR in their Bank account from Overseas Buyer and also submit all the Export Documents to Their Authorised Dealer (AD) Bank for BRC.

DTA Manufacturer will issue their Local Sale Invoice on Merchant Exporter and will charge concessional GST @ 0.10%.

SEZ Manufacturer will issue their Export Invoice on Manufacturer Exporter and will not charge any GST.

Merchant Exporter will pay to DTA / SEZ Manufacturer from their Bank Account as per Invoice raised by them.

Micro, Small and Medium Enterprises (MSME) is a Sector of Indian Industry governed by the Ministry of  Micro, Small and Medium Enterprises (MSME)  with a clear vision of Development of MSME Sectors in India.

MSME sectors plays a vital role to the contribution to Indian Economy. This MSME sectors spread all over India and contributing largest employment generation for the growth of the Nation.

Benefits of MSME : MSME Sectors carries a number of Benefits like concessional Interest on Bank loans, Government subsidies, Tax Benefits , less compliance , exemption of Tender fees in certain Government Tenders, exemption of Eligibility criteria in Certain Government Tenders, Timely payment for their sales / Services provided to Government and Private entities.

MSME New Rule for Registration :

As per  Union Budget 2025 , new  MSME  classification / rule will be : An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely:--

(a) a micro enterprise, where the investment in plant and machinery or equipment does not exceed 2.5 crore rupees and turnover does not exceed 10 crore rupees;

(b) a small enterprise, where the investment in plant and machinery or equipment does not exceed 25 crore rupees and turnover does not exceed 100 crore rupees; and 

(c) a medium enterprise, where the investment in plant and machinery or equipment does not exceed 125 crore rupees and turnover does not exceed 500  crore rupees. 

For MSME Registration you need to do Udyam Registration in Ministry of MSME Portal.

For MSME Bank Loans, please leave your requirement in our "MSME Loan page".