payement terms

 -payment term depent on the credit standing of the importer buyer and exporter.

 -today’s international trade & compitation is no longer confined only to price, quality of deliveryschedule, but payment term as well.

 -more export order come due to attractive payment term.

types of payment term:-

 -advance

 -under export:-

 -supplier can call advance payment for expot. the export is required to be made with one year time period.if the same could not be done,advance can be return to buyer to intrest at libor previlling on date on refund plus 2% seller is allowed to send document directly to buyerin case of 100% advance received.

 -libor is landoninterbank offering tare-at sight(l/c d/p cad )

 -purpose for all above is same. under this termdocument are deliverd to buyer against payment only.

 -dp vs.dap

  -term ‘dp’must not be used as ‘dap’.’dp’ is a payment term and ‘dap’ is shipping term.

 -cad

 -its an old usage

 - this is still commonly used.

- risk involved

- buyer may or may not releage document.

 -under da documents

 -bank present bill of exchange to buyer.buyer sign bill of exchange in token of acceptance to pay on due date as agree.

- risk involved

  - this is very heigh risk.bank has no. responsibility to  pay if buyer refuse to pay.bank merely is hand over bill of exchange to seller for their furtherance.

- as far as risk is invoice , this is not at all recommended for new exporter.

 -defferd

    -an arrange in which the buyer is allowed to make partial payment more than one time is future date.

other types of payment:-

 -free of cost –allowed up to rs.5 lacks for non-status holders and rs.10lacks status holders.

 -export house  -20

 -star expot house  -100

 -trading house  -500

 -star trading house  -2500

 -premiertrading house   -7500 and above.