Merchanting Trade Transactions - Revised guidelines

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....f the recommendations of the Technical Committee on Services / Facilities to Exporters (Chairman: Shri G. Padmanabhan) to further liberalise and simplify the procedure. 2. In view of suggestions received from merchanting traders and trade bodies, the guidelines on merchanting trade transactions have been further reviewed. Accordingly, it has been decided to issue revised guidelines as under: i.    For a trade to be classified as merchanting trade following conditions should be satisfied ;         a. Goods acquired should not enter the Domestic Tariff Area and         b. The state of the goods should not undergo any transformation ; ii. &....

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....nbsp; Short-term credit either by way of suppliers' credit or buyers' credit will be available for merchanting trade transactions, to the extent not backed by advance remittance for the export lag, including the discounting of export leg LC by an AD bank, as in the case of import transactions ; viii.    In case advance against the export leg is received by the merchanting trader, AD bank should ensure that the same is earmarked for making payment for the respective import leg. However, AD bank may allow short-term deployment of such funds for the intervening period in an interest bearing account ; ix.     Merchanting traders may be allowed to make advance payment for the import leg on demand ....