DOCUMENTS RELATED TO PAYMENT under INTERNATIONAL TRADE(1) Letter of Credit. A letter of credit is a document-containing guarantee of a bank to make payment to the exporter, under certain conditions and up to a certain amount, provided the conditions contained in the letter of credit are complied with. For a detailed' presentation, reader may refer to the chapter on Export Financing.

(2) Bill of Exchange The Negotiable Instruments Act, 1881 defines a Bill of Exchange as " an instrument in writing containing an unconditional undertaking, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument".

There are five important parties to a Bill of Exchange:


The Drawer: The drawer is the person who has issued the bill. In an export transaction, exporter draws the bill as money is owed to him.

The Drawee: The drawee is the person on whom the bill is drawn .Exporter draws the bin on the importer who is the drawee. Drawee is the debtor who owes money to the exporter (creditor).

The Payee: The payee is the Person to whom the money is payable. The bill can be drawn by the exporter payable to the drawer (himself) or his banker.

The Endorser: The endorser is the person who has placed his signature on the back of the bill signifying that he has obtained the title for the bill on his own- account Or on t of the original payee.

The Endorsee: The endorsee is the person on obtain the payment from the drawer.



Travelers to India under import duty exemption, Frequently Asked Questions Part 2

Triangular export

Triangular shipment

Types of Insurance Documents.

Is DP terms of payment safe in export business?

Is Letter of Credit LC safe for an Importer?

Is ON BOARD CERTIFICATE required for LC negotiation

Who can inspect import cargo in US
Who decides shipping carrier on FOB shipments
Who gets benefits from this website?
Who is a ‘Manufacturer’ of excisable goods
Who is a prime banker to check authenticity of letter of credit?
Who is Stevedores
Who receives the amount of auctioned / resold imported unclaimed/un-cleared goods?
Why demurrage/detention waiver period is required at destination for import Transferability of Bill of Lading
Why do carriers balance weight and volume while charging freight amount in Exports?

Difference between IGST on International goods and IGST on domestic goods.

How is IGST calculated under Imports?

How is IGST rate on imports treated?

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