Dos and Don't Dos in Imports


  • Do's
  • Don,ts

Do's

  • Open LC or import transactions only for customers and open only if the party has got sanction limit.
  • Allow import of restricted items as per procedure laid down in the Exim Policy.
  • Handover import documents only to drawee or his PA holder against property acknowledgement.
  • Allow payment for import by debit to customer’s account.
  • Allow payment for the bills beyond six months and also allow payment of overdue interest on sight bills for a period not exceeding six months.
  • Allow payment to local agents on commission basis. In case of overseas agent, allow commission as per FEMA guidelines.
  • Verify the imported items under the LC.
  • Issue amendments to LC only on the basis of written request.
  • Verify whether the payment method in Letter of Credit is done as per FEMA guidelines or not.
  • In case of default payment, crystallise the bill on 10th day of the month.
  • Allow import provided goods are consigned to bank account opener.
  • Insist for insurance cover at the time of opening the LC.
  • Allow opening of LC on DA basis provided the Usance does not exceed more than 180 days.
  • Allow opening of Transferable LCs provided transfer is restricted to specified second beneficiaries whose credit report is satisfactory.
  • 15. Verify the Letter of Credit application form to ensure whether they are properly filled and stamped.
  • Report to the RBI (Reserve Bank of India) if the bill of entry is not received.
  • Sell the imported goods, only after getting permission from ITC authorities.
  • Keep one copy of shipping documents, invoice and other papers for future inspection by the custom inspector or the Reserve Bank of India.

Don'ts

  • Issue the Letter of Credit if the customer doesn’t have IEC number.
  • Open LC without proper transport documents.
  • Allow advance payment without proper documentation.
  • Forward the documents to third party without permission from the importer.
  • Import prohibited or restricted items without import license. 
  • Allow direct remittance of import bills beyond the limit and without EC copy of bill of entry.
  • Open revolving LC without safety clause.
  • Amendments to the Letter of Credit for import of those items which is either restricted or prohibited. 
  • Allow import documents received under collection paid without verifying importers line of business and financial standing.