Jan 27, 2020 - 06:33 PM
Any export conducted by an exporter or manufacturer on behalf of another exporter is called a third party exports. Here, the legal document of the shipping bill has to be mentioned both addresses of manufacturer exporter and third party exporter.
In third party export, the overseas order is obtained by a third party exporter. So, the Foreign Inward remittance is received by the third party exporter, as he had obtained the export order. So the purchase order from an overseas buyer, Foreign Inward Remittance Certificate (FIRC), etc. will be in the name of third party exporter and not in the name of manufacturer exporter.
So the Reserve Bank's point of view, the regulation of inward remittance is monitored with the third party exporter.
In third party exports, the export order is obtained by a third party exporter and he may not have goods under the said purchase order. He procures goods from another manufacturer exporter and exports the goods on his name and obtain foreign exchange by the third party exporter.
Once after obtaining a purchase order from an overseas buyer, third party exporter issues a purchase order locally to the manufacturer exporter lesser price than he contracted with an overseas buyer.
The third-party exporter pays the value of goods to the manufacturer exporter as per mutually agreed terms and conditions. Normally third party exporter pays the value of goods in local currency to manufacturer exporter. In turn, the third party exporter receives his export proceeds from an overseas buyer in foreign currency.
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