Hello!
Say the LC is for 100MT of wheat and price is 10 per MT, total 1000 MT. The credit is silent on tolerance. As per UCP 600, the quantity can be from 95 to 105. if 105 MT is shipped then price would be 1050. but UCP 600 does not allow drawing exceeding the credit value. How should the invoice be prepared then?
help me with the calculation please
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pebble
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Art 30b !
I think it's so clearly as per Art 30b UCP600: a tolerance not to exceed more or less 5% than the quantity of the goods is allowed, but the total amount of the drawings does not exceed the amount of the credit.
So the invoice just can draw on the amount of credit for 1000, despite the manner of calculation is 1050. I think there is no way for this.
So the invoice just can draw on the amount of credit for 1000, despite the manner of calculation is 1050. I think there is no way for this.
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jim
- Posts: 91
- Joined: Fri Aug 15, 2008 11:58 am
How to show the extra
Dear sir
Thanks for your reply. How should the extra be shown then
5 mt as free or
50 usd as discount
Reduce the price?
Please help
Thanks for your reply. How should the extra be shown then
5 mt as free or
50 usd as discount
Reduce the price?
Please help
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pebble
- Posts: 10
- Joined: Tue Dec 23, 2008 12:42 pm
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Art 18b!
I think the extra amount could be show as a discount like yours.
Or the invoice can show both a total amount is 1050 and an amount claim is 1000.
Or in another way, the invocie can still show total amount drawing is 1050, in that case, Art 18b will be applied. This means the issuing bank or nominated bank may accept an invoice issued for an amount in excess of the amount permitted by the credit, provided that bank has not honoured or negotiated for an amount in excess of that permitted by the credit.
So you can understand that the bank will not be able to honour for an amount in excess the credit amount.
Hope this useful for you,
Best regards and Merry Christmas !
pebble (Ms.)
Or the invoice can show both a total amount is 1050 and an amount claim is 1000.
Or in another way, the invocie can still show total amount drawing is 1050, in that case, Art 18b will be applied. This means the issuing bank or nominated bank may accept an invoice issued for an amount in excess of the amount permitted by the credit, provided that bank has not honoured or negotiated for an amount in excess of that permitted by the credit.
So you can understand that the bank will not be able to honour for an amount in excess the credit amount.
Hope this useful for you,
Best regards and Merry Christmas !
pebble (Ms.)