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Hi All,
I have a question related to invoice.

If the LC states:

goods guantity - 10 kg
unit price - USD 10 per 1 kilo.


May invoice show:

goods guantity - 10 kg
unit price - USD 10 per 1 kilo.

Total amount: USD 100
discount: USD 10
Amount to be paid : USD90

ISBP states that:

60. An invoice must evidence the value of the goods shipped or services or performance provided. Unit price(s), if any, and currency shown in the invoice must agree with that shown in the credit. The invoice must show any discounts or deductions required in the credit. The invoice may also show a deduction covering advance payment, discount, etc., not stated in the credit.

Is the invoice is acceptable in above mentioned case? I think Yes, am I correct?

Hi ,

You are right. It is acceptable and no discrepancy.

Many thanks!

The invoice in question is discrepant by virtue of art.30 (especially pct c) whereby tolerance 5% less has been exceeded even if the qty was shipped and in full and unit price was not reduced.
The art of ISBP quoted refer to the situations when gross invoice value covers an advance payment plus payment under L/C or other form, all in all not fully settled by LC.
.
I would consider invoice discrepant.
.
As an alternative for covering this issue benef will issue and invoice for 100 USD (under LC) and the bank in its covering schedule to claim only 90 USD to be settled at the request of beneficiary. As such, from commercial side, the beneficiary will make another discount invoice directly to applicant (buyer) and in this way they will both settle their bookkeepings.

Invoice in this case is discrepant, referring to UCP600 art. 30 c. as only 5% tolerance (LESS) would be allowed.

Even when ppartial shipments are not allowed, a tolerance not to exceed 5% less than the amount of the credit is allowed... etc

Thanks,
ybattia

dear all,

i would like to quote ISBP 60

60. An invoice must evidence the value of the goods shipped or services or performance provided. Unit price(s), if any, and currency shown in the invoice must agree with that shown in the credit. The invoice must show any discounts or deductions required in the credit. The invoice may also show a deduction covering advance payment, discount, etc., not stated in the credit.

the line seems very unconditional. please explain in detail.

berry wrote:60.
The invoice may also show a deduction covering advance payment, discount, etc., not stated in the credit.

Hi friend,

In my opinion, this line may have wide range of meaning. Yes, invoice may show advance payments, discounts not stated in the credit.
Let me try to give an example: LC issued for 1000 USD and you were presented an invoice stating
value of goods :1100 USD
discount : -100 USD
Net Amount : 1000 USD
Is the document discrepant? my opinion no. The Lc does not stay anything about discount but the invoice amount complies with LC amount.

Regards

Hi !

60. ..... The invoice may also show a deduction covering advance payment, discount, etc., not stated in the credit.

Why can we only interprete the rule literally?
It allows the discount not stated in the credit, then no discrepancy. :lol:

V.V.

Dear cristiand969,

Thank's a lot for your opinion.

Would you consider such invoice discrepant, if the partial shipments allowed under the LC?


regards,
Ozoda

Dear Ozoda,
In terms of what LC says and what you have detailed as being invoice produced, the question with partial shipment allowed has really nothing to do with the situation described as you shipped the quantity in full.
The (different) scenario presented by Navi is perfectly correct, namely when an invoice shows total amount of USD 1.100 and also a discount of USD 100 and net value reaching the value stated in the credit i.e. USD 1000 we have no discrepancy. But this cannot be applicable to this case unless Navi enlight us how one can make out such invoice of USD 1.100,00 without having discrepancy in the price or quantity stated? Please note that I decided not longer to reply to any posting making reference to different scenarios as it is like giving one answer to 2 diferent questions and is realy time consuming.
For a better understanding I will requote for wongvv what I said in my first posting:

cristiand969 wrote:The art of ISBP quoted refer to the situations when gross invoice value covers an advance payment plus payment under L/C or other form, all in all not fully settled by LC.

This is why what Navi presented in his scenario is correct (ONLY in case there is no price quoted in the credit)
Hope you make the difference!

cristiand969 wrote:Please note that I decided not longer to reply to any posting making reference to different scenarios as it is like giving one answer to 2 diferent questions and is realy time consuming.

i will miss the great possible discussions then...

this one has been considered complying as well by the experts

I would much appreciate posting a link or quote the full opinions of those experts. This is not that ' we want to show the results' but merely to see how they have come to that conclusion. There is always something in UCP or ISBP that everyone misses in some points or put into practice.
Thanks!

dear cristian,

i just had some email conversation and the answers came in a very ordinary fashion. the answers are based on the ISBP "The invoice may also show a deduction covering advance payment, discount, etc., not stated in the credit. "

regd

shahriar

Dear Shahriar,
Thanks for your feed-back. I always felt and ICC confirmed in one of its opinion, my assumption that when checking documents, the UCP600 prevails and failure to understand UCP one should refer to ISBP.
I feel there are here two very opponent situations in the context of presented query and not an ISBP explanation of that article - as a workflow. And I am entrusted you will ask yourself like me: if ISBP had prevailed in this situation what would have been the point in keeping in place art. Of UCP600
IF ISBP had allowed that in any situation there would have been NO APPLICABILITY for art. .. when referring to the amount of drawing. And to be honest I saw a lot of LCs having a condition like: LC subject to UCp and ISBP , In case there are conflicts between two, UCP prevails in checking docs. No comment whether or not this is a good or bad practice
Hope you understand my point.

dear cristian,

i do understand you point. to be honest, though i have been given the answers, im still to figure out the whole of it. to me rule is always a rule. if a discount is allowed in this manner, then is not it possible that only 1 USD can be claimed against a 1 million USD LC? i am sure that ICC will call me to be rational. they will ask why someone will do so? of course the question is correct, but as i said, rule should be rule. its not the only issue where UCP gives such option. exclusion clause in insurance.... you know the rest.

Yes you can show the deduction even if not called by the lc!

jenny yuan wrote:Yes you can show the deduction even if not called by the lc!

maybe this lovely smile will infer that the responder know more than she says or made it just for fun. Really I would expect what her reply was based on.

Please I need a professional and final answer to this issue stated in this form, can someone help
ISBP681 Art.60 VS UCP600 Art. 30.C.

UCP600 Article 30. C. states:
Even when partial shipments are not allowed, a tolerance not to exceed 5% less than the amount of the credit is allowed, provided that the quantity of the goods, if stated in the credit, is shipped in full and unit price, if stated in the credit, is not reduced..

If we will consider the above UCP article; then the invoice is Discrepant, because it shows a discount by more than the 5% tolerance allowed, even when the unit price and the quantity is shipped in full.

ISBP681 Art. 60 states that:
60. An invoice must evidence the value of the goods shipped or services or performance provided. Unit price(s), if any, and currency shown in the invoice must agree with that shown in the credit. The invoice must show any discounts or deductions required in the credit. The invoice may also show a deduction covering advance payment, discount, etc., not stated in the credit.

If we will consider the above ISBP article; then the invoice is NOT discrepant, but here the article mentioned Covering advance payment.. !!? not shipped goods invoice ?? is that correct, and if I am true, does this mean there is a conflict between both articles ?????????????

In field of swift you normally have UCP LATEST VERSION and not ISBP. Hence, even if there is an inclusion of ISBP in UCP, UCP shall prevail.

its quite unusual that there is such a sharp conflict between ISBP and UCP and no one has noticed that before. as i have mentioned earlier, experts opine that there is no discrepancy. im not sure but i think the scenario that two quotations are dealing with different.

UCP article, as we all know, deals with a situation in which the credit separately shows the freight or insurance cost.

now we need to find what this ISBP is dealing with. and from the paragarph it self its quite clear that its dealing with advance payment or discount. now i cant agree that a advance payment scenario as far as LC value is concern. because a credit value is not suppose to include the advance payment and even if it does, the advance payment value is not available for drawing. so we should not have any problem with the advance payment.

about discount; how much discount can a beneficiary give. if he has to give a discount, why would he ask for the full value undertaking? i think.... i still dont know the answer.

It is absolutely acceptable, there is no discrepancy.

.

Regards,

Shahriar et all,

ybattia wrote:ISBP681 Art. 60 states that:
60. An invoice must evidence the value of the goods shipped or services or performance provided. Unit price(s), if any, and currency shown in the invoice must agree with that shown in the credit. The invoice must show any discounts or deductions required in the credit. The invoice may also show a deduction covering advance payment, discount, etc., not stated in the credit.

.

The invoice has shown a discount and we have here no discrepancy on the basis that the discount is evidenced on the invoice.

Now:

ybattia wrote:UCP600 Article 30. C. states:
Even when partial shipments are not allowed, a tolerance not to exceed 5% less than the amount of the credit is allowed, provided that the quantity of the goods, if stated in the credit, is shipped in full and unit price, if stated in the credit, is not reduced..

and note also:
Art. 66 of same ISBP (for which some of you took it as a primary documentation in checking compliance) says:
Even when partial shipments are prohibited, a tolerance of 5% less in the credit amount is acceptable, provided that the quantity is shipped in full and that any unit price, if stated in the credit, has not been reduced. If no quantity is stated in the credit, the invoice will be considered to cover the full quantity. .
In this respect you have a clear a discrepancy.
.
The problem arose with the confusion between 'to show/evidence' something in a document (which in our case is permitted by one article) and the 'result' produced by such discount on total invoice value and ultimatelly the drawing which are in contradiction with other articles. .
An example of such discrepant 'statement' is clearly defined in art. 64 b where merchandise not called for in a credit even is free of charge is not acceptable (NOTWITHSTANDING IT DOEs NOT HAVE ANY IMPACT OF THE TOTAL AMOUNT ).

Therefore in consideration of the above, even the discount is permitted to be shown on invoice it produces contradiction on the final result as the same is inconsistent with UCP and even ISBP as described above.
This is my analitical point of view and I maintain my position that the invoice in this form is discrepant.

:lol: when i first read this simple looking post, i never imagined that its going to spark so much debate.

very well analysis dear cristain. what should i say. i just got another expert opinion declaring "no discrepancy".

from all the discussion i got a feeling that article 30c is in fact more closely related to the quantity of goods shipped rather than the amount of the credit.

by the way, i am quoting a ICC opinion here which may help us. its on UCP 500 article 39c

Sub-Article 39(c) covers the situation where the amount of the credit has been rounded up for sound commercial reasons, or where the terms are CFR or CIF and the price quotation is based on a hypothetical or soft quotation on the insurance premium and/or the freight charges. Upon presentation of the documents, the beneficiary invoices for the actual insurance and freight costs, which conceivably are less than those quoted originally in the purchase order. Therefore, a 5% tolerance is allowed in the beneficiary's invoice, always provided that the quantity of the goods, if stipulated in the credit, is shipped in full, and a unit price, if stipulated in the credit, is not reduced.

there is no end of this discussion unless we have a official opinion. and i can guarantee about the conclusion of the official opinion. NO DISCREPANCY!! :lol:

there is nothing much left to say on this issue. i just wanted to say, what if partial shipment is allowed? will you object to a document then that shows discount? of course not. then why so much fuss when partial shipment is not allowed. 30c is specially designed for a particular type of LC which has separate provision for freight cost.

yes I agree with the upper Floor, don't make it too complex, just read that sentense of ucp600, you will know the answer

hi,
if the invoice show as below, then can i say it's no discrepency any more?
Invoice shows
goods guantity - 10 kg
unit price - USD 10 per 1 kilo.

Total amount: USD 100
discount: USD 5
Amount to be paid : USD95

UCP600 Article 30. C. "Even when partial shipments are not allowed, a tolerance not to exceed... etc"

If the article speaks clearly about a tolerance (+/- Shipment), not a discount or a cost deduction from the invoice amount.. then I guess we should only start looking to ISBP alone, which in this case would be a complying invoice in this example.

Have a nice day,
Youssef