Preparation/Raising of Invoice for Third Country Exports under Marine Insurance
Now-a-days, it is a common practice that Indians are importing the material from other countries , especially from China , shipped from that country and further exported to other countries, through “High Seas Sale” , by raising the invoice from India. It is seen that the Indian invoice, shows the basic price at which the material is sold & the freight plus insurance charges are also shown separately. It is a wrong practice followed by the Indian Exporters, as per Foreign Exchange Management (Insurance)Regulations, 2002 AP (DIR Series) Circular no 18 (Sept 12,2002) and Committed countries agreement. Under this agreement; the importing country Trader cannot buy insurance from any other country, which is very obvious from the invoice; where the insurance charges are shown separately. Since such type of claims will arise only in foreign countries , the Surveyor of that country may raise an objection and claim settlement may become very difficult. Similarly FEMA Rules 2002 of India; also prohibits taking the insurance from other countries. Basically, any law of committed countries; do not permit transfer of foreign currency , to other committed countries on account of insurance without the permission of their countries. Hence, it is suggested that the insurance charges should not be shown separately in the invoice; rather these charges should be made a part of basic cost of the exported goods.