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REGISTERED No. D-(D)-72

The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No 125] NEW DELHI, WEDNESDAY, JULY 2, 1975/ASADHA 11, 1897

Separate paging is given to this Part in order that it may be filed

as a separate compilation

MINISTRY OF COMMERCE

PUBLIC NOTICE

IMPORT TRADL CONTROL

New Delhi, the 2nd July 1975

SUBJECT.—Terms, and conditions applicable to import licences issued under West German Capital Goods Credit of DM 15 Million for 1974-75.

No. 58-lTC(PN)/75.—The terms and conditions governing the issuance of import licences under the West German Capital Goods Credit of DM 15 Million for 1974-75 as given in Appendix to this Public Notice are notified for information.

APPENDIX

CONDITIONS ATTACHED TO IMPORT LICENCES ISSUED UNDER THE WEST GERMAN CAPITAL GOODS CREDIT OF DM 15 MILLION FOR 1974-75

Section I—General Conditions

1. (i) These conditions will apply to such cases of import by public and private sector undertakings as have been specifically approved by the Capital Goods Committee of the Government of India for financing under the West German Capital Goods of DM 15 Million for 1974-75.

1. (ii) Where the value of allocation approved by the Capital Goods Committee exceeds the rupee equivalent of DM 1 million [the rupee equivalent being determined

( 7 9 9)

at the exchange rat" notified by lire Department of Revenue (Customs) under Section 15 %• th.e, Customs Act, 1962], the prior concurrence oi the West German authorities [Kreditanstalt fur Wicderautbau (K±*W) to the allocation is oblatory, and this would oe obtained by the Depaninent of Economic Attairs on me basis oi me pro.cu urn a to be supplied by the Indian importer in the torm a,t Annexure I j. im such concurrence trom the We&t German authorities Is communicated to the Licensing authorities (CUtfrfc) Dy the Vepartment of Economic Affairs, no import licence can be issued m favour ot the Indian importer.

1. (in) The licence shall bear the supercription "DM 15 Million West German Capital Oooos Credit tor 19/4-75". The licence code for the first and second suffix win be b/ON¹. Ihese will also be repeated in the CCI&E's letter forwarding the import

licence.

1. (iv) No remittance of foreign exchange will be permitted against t/ie import licence, except bank charges which may be remitted through normal banking channel. Payment* towards Indian agent's commission, if any, should be made in Indian iupees to the agenu in India. Such payments however, will form part of the licence value and will lhcreiori be charged to the licence.

1, (v) The goods and related services to be procured under this import licence can be imported from the federal Republic of Germany Including the Land Berlin or any other country. The overseas supplier is, therefore, free to procure material, etc. from a third country if found necessary, for the execution of the contract,

1. (vi) The minimum value- for which an import licence; can be issued under this Credit is the rupee eqnivutem 61 • DM -30,000- [rupee equivalent being calculated at the rate of exchange notified by the Department of Revenue (Customs) which rate of exchange should be indicated in the import licence as per para 2 of the Public Notico Mo. 78-lT£Xl>N)/74, datpd, 6th June, 1974 issued .by the Chief Controller of Irnports and Exports J. f *

' '

1. (>^"T>t MVHt. )ipe.n

> r " n t - -< . - v ,,-JH f i v, u , . T f , , f "JJ j c , , , 1. (viii) Firm orders (meaning thereby Purchase Order by the Indian Licensee on the foreign suppliun BUppwteA byt LPART I—SEC. 1] IHE GAZETTE OF INDIA EXTRAORDINARY 8oi

Section II—Special pointy to be kept in view while concluding purchase contracts

2. (i) The contract price should invariably be expressed in the currency of the country in which the foreign supplier is situated. Jhe contract price should be firm and final and no provision for any escalation would be permitted. If any commission is payable to an Indian Agent of the foreign supplier it must be distinctly shown in the contract as an item of cost payable in Indian Rupees in India and the net amount payable to the foreign supplier in foreign currency should, therefore, be shown exclusive of such Indian Agent's commission. 1-or the purpose of calculating th" value in ioreign exchange upto which purchase orders can be placed against the import licence, the value of tfie import licence should bo computed at the rate of exchange notified by tne Department 01 Kevenue (.Customs) under section 15 of tne Customs ACI, iybz ana muicaiea in me import licence as per para 2 of the Public Motice Mo. 7H-llC(FN)//4, aaied bin June, iy/4 issued by the Chief Controller of imports and txports.

2. (li) Supply orders should be placed either on CIF or on C&l basis in the case

of private sector Importers. In the case of public sector importers the orders should be

placed only on C&F basis.

2. (.in) It should clearly be understood that the purchase contracts under the import licence should be placed after obtaining comparable bids from overseas suppliers. In this connection it may be noted that the Indian importer is free to import from any country of his choice, as approved by the Capital Goods Committee of the Government of India.

2. (iv) Minimum value of eligible contract.—Provided that the aggregate value of purchase contracts under an import licence is not less than DM 30,000 {in the case of purchases made wholly from, the Federal Republic of Germany) or equivalent of DM 3(W?0() ,(in ffre pgse of purchase made wholly at panlylfrapi countries other than the Jroderai .Republic of Germany) it is permissible tor the irafK>rter to enter into individual purchase contracts for a value of less than DM 3O,OuO or equivalent of DM 30,000. This is, however, subject to the condition prescribed in para 2 uun) below m respect of purchase contracts under an import licence the value of which does not exceed the rupee" equivalent of DM 1 million.

, . 2. (v) The purchase contract under the import licence is required to bo specifically approved by the Government of India and the Kreditanscalt rur Wiederauftmu (.Krw) (tne West Gorman Development Bank through which the West German Capital Uooas Credit of DM 15 million has been made available) and therefore, should incorporate a specific clause to this effect in the purchase contract.

(b) In tho case of contracts entered into against an import licence whose value is the rupee equivalent of DM 1 muUion or less (.calculated at tho exchange rate notified by the Department of Revenue (Customi)J, tho approval of the contracts will not bo specifically intimated to the importer. Once the Ministry of Finance, Department of Economic Allans have forwarded tho contract documents to the KFW under intimation to the importer, he may proceed as if the contract has been approved by the KFW also unless tho KFW raise any objection subsequently in which event the importer will be informed suitably.

(c) In the case of Contracts entered into against an import licence whose value i" for an, amount exceeding the rupee equivalent of DM 1 million [calculated at the rate of exchange notified by the Departmept of Revenue (Customs) the approval of the KFW will be first obtained by the Government of India, Ministry of Finance, Department of Economic Affairs and specifically communicated w the Indian importef and until ttie.n the' contracts, should be treated as provisional. For this purpose four copied of the purchase contract along with a certificate (in triplicate) that brdori have been placed after obtaining comparable bids from foreign suppliers are required to bo §ent by the Indian importer to the Ministry of Finance, Department of Economic Affairs (WE-I Section), Room No. 270, North Block] within a fortnight from the date of conclusion of the purchase contract. • i

2. (vi) Where contract is placed on CIF basis and accordingly the foreign supplier takes out the marine insurance, the foreign supplier should arrange. to take out insurance in a freely convertible currency and obtain an undertaking from the insurance company concerned that payment if any arising out of insurance claims, would be made directly in DM to KPW (AC/No. 504 09100 with Deutsche Bundesbank, Frankfurt/Main).

2. (vii) Where contracts are placed on C&F basis, the marine insurance should be taken out with an Indian insurance company and the premium should "accordingly be

paid in Indian Rupees. However, the Indian importer should obtain the following unaertaKmg from the Indian insurance company:

"We shaii make remittance in foreign currency to the overseas supplieu for any replacement that may be necessitated by loss or damags to goods".

2. (yiii) As the contracis are required to be placed either on ClF basis or on C&F basis an per para 2 (u) above, the toreign supplier* should be mnac responsible to pay the freignt cnarges in foreign currency, even where Indian ships are used, in n"J circumstances the. ireight charges should bo paid in Indian rupees.

2. (ix) Payments to foreign, suppliers against the licence will be made by means of

a 'Special' letter of credit as explained in Section III below and no remittance facility

will be permitted against the import licence for this purpost.

2. (x) As regards transporation of goods purchased against the import licence, the party responsible, for arranging shipment of the goods unacr tho purchase contract will be tree to choose- the carriers.

2. Cxi) For contracts whose value exceeds DM 1 million in the caa" of purch"s"!> from tne Federal Kepublic of Germany including Lund Benin or, in the caie oi purchases from other countries, for contracts tne DM equivalent ot whose value exceeas DM 1 million, the purchase contracts should provide for furnishing of performance guarantee by the foreign supplier m regard to lhe performance of the goous supplied. (In the case oi other contracts, namely for contracis whoso value is less than the limit indicated above, the Indian importer is free to decide the question whether or not he needs a performance guarantee from the foreign supplier). Thq form of tho performance guarantee can however be settled by the Indian importer with the foreign supplier by mutual consent. It should, however, be ensured by the Indian importer that payments, if any, due to him from the foreign supplier arising from the performance guarantee stipulations should be made direct to Kreditanstalt fur Wideraufoau (Acct. No. 304 OyiOO with Deutsche Bundesbank., Frankfurt/Main).

2. (xii) Payments to the foreign suppliers under the import licence should be coir\- pleted by the Hit March, 1977. A suitable provision should, therefore, be made im the purchase orders/contracts to ensure completion of shipments and payments by 31st March, 1977. In case it is anticipated that payments cannot be completed by that date, a request for extension with adequate justification must be made to the Department of Economic Affairs (Controller of Aid Accounts and Audi,t), U.C.O. Bank Building, Parliament Street, New Delhi) by 31st December, 1976. SuCli requests will be considered on merits.

2. (xiii) In the case of import licences whose value does not exceed the rupee equivalent of DM 1 million, the purchase contracts are required to be submitted by the Indian importer to the Department of Economic Affairs in a single lot. Submission of contracts piecemeal will not be entertained. In this connection the minimum value for eligible contracts explained in para 2 (iv) above should be kept in view.

Section lll^-Payment to foreign suppliers—"Special" Letter of Credit Procedure

3. (i) Request for issue of letter of authority,—Within a fortnight of conclusion of purchase contracts with foreign suppliers against an import licence whose value does not exceed rupee equivalent of. DM 1 million [at the rate of exchange notified by the Department of Revenue (Customs)] or within a fortnight from the date of communication of the Government of India [vide para 2 (v)(c) above] conveying the approval of KFW to the contracts placed against an import licence whose value exceed the rupee equivalent of DM 1 million [at the, rate of exchange notified by the Department of Revenue (Customs)], as the case may be, the licensee should submit the following documents to the Ministry of Finance, Department of Economic Affairs, WE-I Section, North Block, New Delhi with the request for the issue of Letter of Authority for opening an irrevocable letter of credit in favour of the foreign supplier concerned;—

(a) In respect oj contracts against Import licence whose value does not exceed the rupee equivalent of DM 1 million.—(i) Three copies of the Purchase, Order; and three copies of the foreign supplier's confirmation thereto, duly signed by the Importer and Suppliers respectively or photo copies thereof, Attested - copies are not acceptable.

OR

Three copies of the purchase contract duly signed by both the Indian importer and tho foreign supplier or photo copies thereof. Attested copies are not acceptable.

" ^(ii) A request (in duplicate) for issue of Letter of Authority in the form prescribed in Annexure 11.

(iii) A Bank Guarantee in the prescribed form as in Annexure III from an Indian Bank authorised to deal in foreign exchange (not applicable in the case of Public Sector importers).

(iv) In the case of C&F contract, three copies of the undertaking from the Indian Insurance Company vide para 2 (vii) above.

(v) A certificate in triplicate vide para 2 (iii) above that orders have been placed after obtaining comparable bids from foreign suppliers; and

(vi) A certificate that no further contracts will be placed under licence vide p*ra 2 (xiii) above.

(b) In respect of contracts against import licence whose value exceeds (he rupee equivalent of DM I million.—In addition to the contract documents furnished earlier (in respect of which KFW's approval will have been obtained by the Ministry of Finance, Department of Economic Affairs) [vide para 2 (v)(c) above], the following documents should be submitted:—

(i) A request (in duplicate) for the issue of Letter of Authority in the form prescribed in Annexure II.

(ii) A Bank Guarantee in the prescribed form a? in Annexure ITT from an Indian Bank authorised to deal in foreign exchange (not applicable in the case of Public Sector imports); and

(iii) Tn the case of C&F contract, three copies of the undertaking from tho Indian Insurance Company vide para 2 (vii) above.

3. (ii) Tt is clarified that in the case of public sector importers, no bank guarantee is required.

3. (iii) Opening of Letter of Credit.—Letter of Credit can be opened on the strength of the Letter of Authority on any one of the following five German banks designated for this purpose:—

(i) The Bayerische Vereinsbant, Munich, (ii) The Commerzbank, A.G.. Frankfurt, (iii) The Deutsche Bank, A.G., Hamburg. • (iv) The Dresdner Bank, A.G., Jungfernstief, Hamburg,

(v) Berliner Handles Gasell-schaft Frankfurter Bank.

The importers (both in the public sector and private sectors) and their bankers should specifically indicate the German Bank selected by them out of the five banks mentioned in para 3 (iii) above.

3. (iv) Failure to make the request for issue of letter of authority within a fortnight (a) from the date of placement of firm orders in the case of orders against an import licence whome value is the rupee- equivalent of DM 1 million or less or (b) from the date of communication of approval of contract by the Ministry of Finance, Department of Economic Affairs in the case of contracts against an import licence whose value exceeds the rupee equivalent of DM 1 million as the case may be, may be deemed to be a violation of the Import Control Regulations.

3 (v) Bank Guarantee—amount for which it should be executed.—Tfae. Bank Guarantee, where necessary, should be for an amount representing the rupee equivalent of tho amount Jn foreign exchange for which the Letter of Authority is sought plus 1 per cent of that amount towards incidental and commitment charges and in addition interest and other charges as mentioned in Annexure V. The prevailing rate of conversion shall he at the exchange rate notified by the Department of Revenue (Customs) under Section 15 of Customs Act. 1962 and indicated in the import licence as per para 2 of Public Notice No 78-/rC(/W)/74, dated 6th June, 1974. This rate in meant only for purpose of arriving at the value of hank guarantee to he furnished by the importer. For purpose* of making rupee deposits into Government account towards the foreign exchange cost of Import* made under the licence the rupee equivalent will have to be worked out at the composite 'rate for the T) M amounts spent by the German Bank in arranging payments to the foreign supplier i c, either in DM if the foreign supplier is situated In West German (including Land Berlin) or the DM amount for effecting payment in the currency of anv other country in which the foreign Supplier U located, in terms of therf^^otke Wo J⁵; 7TC(PN)/72 dated ZSrh January, 1972 and Public Notice No. \W-1TC(PN)/12. dated

21st July, 1972 until further notice. Any change in this regard will be notified as and

when necessary.

3. (vi) issue of Letter of Authority.—If the documents specified in para 3 (i) above are found to be in order, the Ministry of Finance (Controller of Aid Accounts &, Audit), Department of Economic Affairs, U.C.O. Bank Building, Parliament Street, New Delhi will issue a letter of authority to the German Bank concerned (as in Annexure IV) authorising payment upto the specified amount to the foreign suppliers on the basis of a "special" letter of credit to be opened by the importer's bank in India on the nominated German Bank. A copy of such authorisation will be sent to Indian Licensee. The original Letter of Authority along with a copy thereof will be sent to the concerned Indian bank authorised to open the Letter of Credit, asking it to submit the original Letter of Authority to the German Bank concerned alongwith Letter of Credit opened by it. (Such a direction will be as in Annexure V ). A copy of this communication will also be addressed to the importer.

No Bank in Tndia should provide facilities to the licensee for establishing a Letter of Credit unless a Letter of Authority as explained in thi\ para has been received by such a Bank directly from the Controller of Aid Accounts & Audit, Department of Economic Affairs, Ministry of Finance.

3. (vii) The "special Letter of Credit on the German Bank should be opened within

thirty days from the date of the issue of Letter of Authority under intimation to the

Controller of Aid Accounts & Audit Department of Economic Affairs, Ministry of Finance,

U.C.O, Bank Building, Parliament Street, New Delhi. Otherwise the Letter of Authority

already iswed will be deemed to be no longer valid,

3. (viii) The payments to the foreign suppliers will be made by the German Bank concerned on collection of requisite documents and statements. Even where the foreign supplier is situated in a country other than the Federal Republic of Germany (including Land Berlin) the negotiation and payment of documents would be done by the German Bank concerned. The German Bank concerned will obtained reimbursement of the DM amounts from the West German authorities. In the case of supplies by countries other than the Federal Republic of Germany, the German Bank will obtain reimbursement from the West German authorities of the amounts in DM spent bv it to make, the payments to the overseas suppliers in the currency of the country in which they are located.

3. (ix) Incidental bank charges incurred by the German Bank both for payment in the Federal Republic of Germany as well as for arranging the payment in third country wherever applicable will be remitted by the concerned bank in India to the German Bank through the normal banking channel without affecting the Government of India's account.

Section lV~Responsibility for Rupee Deposits into Government Account

4. (i) The original shipping documents should invariably be forwarded by the German Bank concerned, bath in the case of imports from West Germany including Land Berlin and other countries, to the concerned bank in India who should, within 10 days of the receipt of the documents, release these negotiable set of documents to the licensee but only after ensuring that the rupee equivalent of DM amount paid to the German supplier or the DM amount spent in arranging the payment to the supplier in third country bv the German Bank concerned plus 1 per cent thereof towards incidental and commitmen. charges, together with interest charges on the above aggregate amount calculated at the rate of 6 per cent per annum for the period from the date of payment to the foreign as amended by the Public Notice No. 108-TTC(PN)/72, dated 21st July, 1972, or as may be notified by the Government from time to time through Public Notices of the CCI&E or through the Exchange Control Circulars of the Reserve Bank of India. It will be the responsibility of the Indian Bank concerned to ensure that the amounts due are supplier to the date of deposit of the rupee equivalent into the Government Account. The exchange rate to lie adopted for computing the rupee equivalent of the foreign currency payments made to the foreign supplier will be the composite rate of exchange as laid down in CCT&E's Public Notice No. 15-ITC(PN)/72, dated 28th January, 1972, correctly deposited into Government Account before¹ the original shipping documents are handed over to the importers. The licensee should also ensure that the amounts due are correctly deposited into Government Account before taking delivery of the documents from their bankers.

4 (ii) The deposits envisaged in para 4 (i) above may be made in cash cither at the Reserve Bank of India, New Delhi or the State Bank of Tndia, Tis Hazari, Delhi, or if this is not feasible, the amounts may be remitted by means of a demand draft drawn on and in favour of the Agent, State Bank of India, Tis Hazari, Delhi-& for credit to Government account as contemplated in Public Notice No. 233-ITC(PN)/68, dated Ifoe 24tn October, 1968 as amended vide public Notice Np, 74-TTC(PN)/74, dated 31st

May 1974 and Public Notice No. 132-TTC(PN)/71, dated the 5th October, 1971 The Head of Account to be credited is- "K-Deposits and Advances—h-Deposits not bearing interest—843-Civi| Deposits—Deposits for purchases, etc. abroad—Direct Payment Procedure Deposits for cost of supplies and equipment obtained under the West merman Capital Goods Credit for 1974-75 (DM 15 Million Credit)".

4. (iii) Remittance will be made in the Challan form prescribed in Public Notice

No. 74-ITC(PN)/74, dated the 31st May, 1974.

4. (iv) One copv of the Challan from the Reserve Bunk of Tndia. New Delhi or the State Bank of Tndia, Tis Hazari, Delhi-6 or intimation rppardinp the submission nf Demand Draft to the State Bank of India. Tis Hp^ari, Ddhi-6 oh^ild be sent bv the Indian Bank, which has issued the guarantee to the Controller of Aid Accounts & Audit Department of Economic Affairs, Ministry of Finance. UC.O. Bank Building, Parliament Street, New Delhi-1 along with a forwarding letter. Riving full details of the Advice Notes received from the concerned nominated German Bank.

4, (v) It will be obligatory for the importers to make the requisite ruwr deposits through authorised dealers onlv and also to set the exchnnec mntrnl cony of the licence endorsed bv them as reauired in Public Notice No. 184 ITC(FN)/68. dated the 30th Aumist, 196R They should also fill in the requisite "S" forms as prescribed by the Reserve Bank of India.

4. (vi) After the imports under a licence are completed and the importers/banker* have deposited into Government account all the amounts due details of the imports received and of rupeei deposits made shouli be furnished to the Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, New Dclhi-1 in the proforma prescribed as Annexure VI to enable the Ministry of Finance to verify and arrange for release of the bank guarantee furnished by the importers, wherever necessary.

Section V—Alteration in the contract

Any material alteration in the contracts pertaining to the list of goods, terms or schedule of payment, value of goods, etc. will require the prior approval of the Ministry of Finance and the KFW authorities, whether it results in earlier payments, or in postponement on payments.

Such alteration(s) should be promptly intimated [by the importer to the Department of Economic Affairs Ministry of Finance, New Delhi. (WET) Section, North Blockl for securing the approval of the Government of Tndia/KFW in the same manner as explained in para 2 (v) above.

Section VI—Reporting

A Quarterly report commencing from the date of issue of the licence should be furnished in duplicate as in Annexure VII to the Ministry of Fimnce, Department of Economic Affairs (WE-I Section, Room No. 270, North Block), New Delhi showing progress of ordering, delivery of goods, payments to foreign suppliers, etc and should be continued till all shipments and payments under the contract have been completed. In the case of allocation exceeding the rupee equivalent of DM 1 million [at the exchange rate notified by the Department of Revenue (Customs)] the licensee should, in addition to the above mentioned quarterly reports, submit a half-yearly report on special event, if any, on the progress of the project and on adherence to the time-schedule for completion of project. Annual reports (2 copies) of the Indian importing company will also required to be furnished for at least three years until completion of the project.

Section VII—Miscellaneous Provisions

7. (i) The licensee should apprise the supplier of any special provisions, in the import licence which may affect the suppliers in carrying out the transactions.

7. (ii) Disputes..—It should be understood that the Government of India will not undertake any responsibility for disputes if any that may arise between t*i<; Indian importer and the foreign supplier.

7. (iii) Compliance with Instructions.—The licensee shall promptly comply with any directions, instructions or orders issued by the Government of India from time to time regarding any and all matters arising from or pertaining to the import licence and for meeting all obligations under the DM 15 Million Capital Goods Agreement with the KFW authorities.

7. (iv) Breach or Violations.—Any breach or violation of conditions set forth in $he above clauses will result in appropriate action under the Imports and Exports (Control) Act.

7.  (v) List  of  Annexures
   Annexure      I     Project  data  form.
    Annexure    II     Form  of  Request  for  issue  of  Letter  of  Authority,
    Annexure   III     Form  of  Bank  Guarantee.
    Annexure  IV       Form  of  Letter  of  Authority.
    Annexure    V      Letter  of  Instructions  forwarding  the Letter  of  Authority.
    Annexure   VI      Form  of  report  of  rupee  deposits-cH/n-application  for  release  of
                           Bank  Guarantee.
    Annexuro  VII      Form  for  submitting  quarterly  report.

ANNEXURE I

PROJECT DATA FORM

KRED1TANSTALT FUR WIEDERAUFBAU

6, Frankfurt/Main, Federal Republic of Germany

Paimengartenstrasse 5—9

Application for Foreign Exchange from German Capital Goods Loan

PROJECT DATA

(1) Applicant (Firm)

(a) Registered Office (address incl. State). (b) Public Sector or Private Sector undertaking, (e) Business Line/Branch of industry.

(d) Partners of Company.

(e) Foreign Collaboration Agreement.

(2) Type of capital goods to be financed,

(3) Choice of capital goods based on.

(4) Suppliers (Name and Address).

(5) Short description of the whole project (for which such capital goods are required).

(6) Local and foreign exchange cost of the whole Project, with following break-down of figures:—

Land and buildings. Machinery and equipment. Operating Funds. Miscellaneous.

(7) Local and foreign financial sources for the whole project, with (Quantitative statement concerning means of financing. It should be confirmed that Rupee- Financina is secured and that foreign exchange requirements not covered by this application are met).

(8) Letter of Intent for Industrial Licence received.

(9) Annual reports with balance sheet* and profit and loss accounts for the last two years. If available forecast of cash-flow and profitability.

(10) Capacity

(a) Average utilization of existing capacity during the last two years. (b) In case of under-utilization, please give main reasons.

(11) Sales (last two years).

(12) Market position of the products to be manufactured. (If possible figures showing past and expected development).

(13) Employment

(a) Present number of employees.

(b) Additional employment after completion of project.

(14) Source of raw material supplies. (15) Time-Table for the execution of the project,

ANNEXURE II

Request for Issue of Letter of Authority

To,

The Controller of Aid Accounts & Audits, Ministry of Finance, Department of Economic Affairs, U.C.O, Bank Building, Parliament Street, New Delhi-1.

SUBJECT.—Import of — from under West German Capital Goods Credit for 1974-75 (DM 15 Million Credit).

Sir,

In connection with the import of ^-- • • • from — -under the above mentioned West German Capital Goods Credit, We furnish tho following particulars to enable you to issue thc authority for opening a letter of credit through •——— on the Baverische Vereinsbank, Munich, or Commerzbank A.G., Frankfurt or Deutsche Bank, A.C., Hamburg or the Dresdner Bank A O.. Jungfernstief, Hamburg or the Frankfurter Bank, Frankfurt/AM Main:

(a) Name and Address of the Importer:

(i) Whether a public or private sector undertaking, (ii) Category of industry to which it belong¹!, (iii) The State in which it is located.

(b) Number, Date and Value of licence, (Photostat copy of tho licence should be attached).

(c) Value in foreign currency and date of the order placed and accepted by th: suppliers, indicating payment terms, viz. (c.i.f. or C&F). (In no case, letter of authority should be applied for f.o.b. value only),

(d) A certificate that firm orders (with suppliers order confirmation) have been placed within a period of 4 months from thc date of import licence. If orders have been placed after the stipulated period of 4 months, a copy of CCI&E's letter/Ministry of Finance's letter authorising extension of time for placing firm orders as the case may be, should be attached,

(e) A certificate that firm orders havc been placed after obtaining comparable bids from overseas suppliers and that the lowest technically suitable offer has been accepted. Tn case it is not possible lo obtain comparable bids. e.g. proprietory item, full justification therefore for should be furnished.

(f) Short description of the goods to be imported.

(g) Foreign currency amount for which Letter of Authority is required.

(h) Name and address of the suppliers and the foreien currency amount payable for such suprvlies (to be expressed in the currency of the country in which the supplier is located).

(i) In case the supplier happens to be located in a country other than West Germany, the name of the supplier's bank to whom the amount is to be remitted by the German designated bank should be indicated

0) Expected date of completion of delivery. (k) A schedule showing probable dates on which payments under the contract will fall due.

™~—" —— ~ — •=

-f~

The letter of credit will be opened through

(Namo and address of the Indian scheduled bank, authorised

to deal in foreign exchange)

"nd the Bank Guarantee No. .—• Dated for Rs furnished by the above mentioned bank and which has been duly adjudicated by the Collector of Stamps, in accordance with Section 31 of the Stamps Act, 1899 Is attached.

Yours faithfully,

(Licensee) Copy forwarded to — — —— Bank, for information.

ANNEXURE III

GUARANTEE BOND

President of Tndi'a,

In consideration of rne Pn-sidrnt of Tndla (hereinaft-r called the Government) having agreed to arranco for payment in (mention the appropriate amo'mt 'i foreign currencv) for the import of • -by (Hereinafter called th<- 'importer') apainst the Hcrnre No — _ _ D n t ed • Jssu-M under the terms '*nd conditions of West G"rrmn ranitel Good* Credit f1 the importer herebv undertRke to arrange to deposit th~ amount of the disbursement mnde >™ the • — — —

(Nam'" of the OftTTi-i HaiV* nominated bv file importer rrmvert^ 'at tbr nrevailintr rat* of PTchnf>"<- e"icnlp*nH ns tier inRtructions ,'sst^d hv th" novfrnm^nt in th- mMtfr from tyne In % £"" 1 " J l ^! thereon within 10 days of the rccHot of advice of oRyrnCntR. for credit to the Government account, in the manner and ncainit the appropriate Head? of Ao-ount as indicated bv Government of Tndia under the said credit toffether with vnter-st thereon M the rate * 6 per cent, per annum, from the d"* of pavmfnt to *e foremn mipp'-r to th" n"te of deposit of rupee equivalent for credit into the Gov-rnment accost J hr ^ " W -g of import documents received from the German Bank will be released to the Importer only after the rupee deposits contemplated above have been made.

1 We t h e— Bank also undertake to indemnifv and keep indemnified the Government against any default in payment bv the * ° ^ * ™ ^ * ^ J ^£ due and. payable from time to time by the importer to the G ~t •* ra* ^

Seirs.^^JL^ °rzeTherf,frt£m;-m: ^xzv^ijy

on us —— ——Bank.

, We Bank further aeree that in case of increase in the value of Imports or d-xrease in the value of unfulfilled deliveries under the contract as a result of change to the composite rate of exchange, the amount of this pi.arantee bond will be adjusted as on the date when the change takes place, in proportion to thn change.

A W (J Bank further agced that the guarantee heroin contained

Shall remain in full force fcnd effect during the period that would be taken for•fto * J L 2? of the said Agreement/contract and that it shall cont.nuc to be enforceable tff alTtte dues to the Government under, or by virtue of this guaranteed have been fully paid and its claims satisfied or discharged.

matter or thing whatsoever which under t'he law relating to sureties shall, but for this

illity.

nvision, have the effect of so releasing the Bank from its such 6. We Bank lastly undertake not to revoke this guarantee during iti currency, except with previous consent of the Government, in writing.

7. Our Ifability under this guarantee is restricted to Rs. (plus interest and other charges, not expected to exceed 1 per cent of ilae guarantee amount) and It will remain in force till the day of* (month) -—-197 . Unless claims under the guarantee are made in writing within 6 months of this date and unless a suit or action to enforce these claims is commenced within another six months there- after f.e. upto — • , all Government rights under this guarantee shall be forfeited and we shall be relieved and discharged from all liability thereunder.

Date the day of

for Bank.

^Accepted for and on behalf of the President of India,

hy Sfcri

(Name and designation).

Signature

Signature • This date shall be arrived at by adding one months to fne date upto which the Letter

of Authority is required to be kept valid.

NOTES:—(1) The value of the stamped paper in which this guarantee is to be adjudicated by the Collector of Stamps under Section 31 of the Indian Stamps Act.

(2) The value of the Bank Guarantee vide paras 2 and 7 above shall be the rupee equivalent of the C&F or CIF value of the contract, an the case may be plus 1 per cent thereon, converted at the prevailing rate of exchange (Customs).

ANNEXURE W

Letter of Authority

GOVERNMENT Of INDIA

MINISTRY OF COMMERCE

(Department of Economic Affairs)

New Delhi, the 197 .

To

(Name and Address of the German Bank).

Dear Sirs,

SUBJECT.—Procedure for payments to oversea!) suppliers through the Letter of Credit

Cover Deport Account with you Under CapHal Goods Credit for

1974-75 (AL-964) from thc Federal Republic of Germiny

to

In accordance with the t-rrns anri conditions of the above procedure, agreed upon tVoiiffh letter Nos. dnted the — • • •'ddrewri to vnnr T^nk by the Chief Accounts Officer, High Commission of India, London we herebv authorise you to spend such an amount in DM as may be found nec"sary to pay (the amount in foreign currency concerned) to (name of the supplier) (applicable in the case of third country suppliers) or to pay an amount of DM Oapplicable in the case of West German supplier), as the case may be, under tile letter of credit to be opened b y —— ———for covering the import of against contract entered into by

.

2. After each payment the shipping and other documents (negotiable) may bo and a payment advice alongwith one set forwarded direct to of documents (non-negotiable) sent to the undersigned for information.

3. Your banking ch'arges under the above letter of credit will be settled directly with you by the

by remittance from India.

4. This authority will rernain valid upto 197 .

Yours (faithfully, (Accounts Officer)

ANNEXURE V

SUBJECT.^—Import under West German Capital Goods Credit for 1974-75 Issue of Letter of Authority for opening Letter of Credit Import Licence No,———

—— date — ——

Dear Sirs,

With reference to letiter No. dated the

(from the————— — in which they have requested permission for opening a letter of credit through your bank under the West German Credit Capital Goods Credit for 1974-75, I am to enclose the Department of Economic Affairs Letter of Authority No.— —-—dated the- ——— —-authorising them to arrange payment (With one spare copy) upto • -— — to the foreign supplier. This Letter of Authority should be sent by you to the — ——alongwith the letter of credit opened hy you.

2. You are hereby authorised to open the letter of credit for an amount not exceed- ing within a period of thirty days from the date of this letter, under intimation to this Department. In terms of parti 10, Section VII of the Exchange Con- trol Manual, you arc require to ensure that the date of expiry of the Letter of Credit is not later than 45 days, after the final date for shipments stated in the relative import licence or the date indicated in the Letter of Authority whichever is earlier. Before opening the Letter of Credit it may please be ensured that the importer is in possession of a valid Import Licence..

3, You are requested to arrange to deposit the rupee equivalent of the amounts in Deutsche Marck spent by (name of the German Bank) to effect payments in D.M. to the suppliers in the Federal Republic of Germany including Land Berlin or in other foreign currency to the foreign supplier in other countries plus 1 per cent towards incidental and Commitment Charges in terms of the Guarantee furnished by you within 10 days of the receipt of documents from the— • The rupee equivalents of the amount disbursed to the foreign suppliers will have to be calculated by applying the prevailing rate of conversion as instructed in Public Notice No. 15-ITC(PN)/72, dated 28th January, 1972 and Public Notice No. 1081TC(PN)/72, dated 21st Inly, 1972 until further notice. This rate is subject to revision if and when the IMF parity rate of exchange undergoes change Interest at the rate of 6 per cent p.a. for the period between the date of payment to the suppliers and the date on which the rupee equivalents are deposited is also required to be deposited into Government account. It will he your responsibility to arrange for the deposit of these amount'!, before the shipping documents are handed over to the Importer.

4 These amounts should be deposited either with the Reserve Bank of India New Delhi or the State Bank of India, Tis Hazari, Delhi or remitted by means of a demand draft obtained by you from any branch of the State Bank of India or its "P*"**™ (Drawer) drawn on and mad- payable to the State Bank of Tndia, Tis Hazari, Bran*, Delhi-G (Drawee and Payee). In this connection, your attention is also invited to toe provisions of the Public Notice No. 233-TTC(PN)/74. dated 24th October 1974 a-* amended by Public Notices No. 74-ITC(PN)/74 dated list May 1974 and No 132- TTC(PN)/71. dated the 5th October. 1971. The head of account to be credited i<. "K-Deposits and Advances-bc-Deposits not bearinp interest—843-Civil Deposito-Dopo*H for purchases, etc.. abroad under Direct Payment Procedure DeDos.t' for cost of suonl.es and eauipment obtained under the West German Capital Goods Credit for 1974-75 (DM 15 million Credit)."

5 One copy of the chalian in oricinal. in cases where the rupee equivalent* are credited in cash at the Reserve Bank of India. New Delhi or the State Bank of Tndm, Delhi shield be sent by vou to the address given below. [" ' ? " ^h a forwarding letter giving full details of the Advice Notes received from the nominating German Bank.

The Controller of Aid Accounts &. Audit, Ministry of Finance Department of Economic Affairs, UCO Bank Building, Parliament Street, New Delhi.

Tn cases where the rupe- equivalents are remitted by means of demand ^afts las

6. A payment clause to the effect that the insurance claim, if any, received from the foreign Insurance Company and/or claims, if any, arising out of Bank Guarantee relative to performance guarantee should be remitted by the Insurance Company and/ or the Bank giving the guarantee in DM direct to KFW (Account No, 504:09100 with Deutsche Bundesbank, Fr"nkfurt/Main) under Advice to the Controller of Aid Account! 'and Audit, Ministry of Finance, Department of Economic Affairs, New Delhi, may be inserted in the Letter of Credit to be opened by you.

Yours faithfully, (Accounts Officer)

Copy forwarded to M/s. with a copy of the letter of Authority No. —-— for information, with reference to their letter quoted above.

Accounts Officer.

AMNEXORE VI

Proforma

1. Name and full address of the importer/licensee on whose behalf the Bank Guarantee was furnished.

2. The import licence number and date und Value. 3. Number, date and amount of the guarantee furnished. 4. Particulars of the Letter of Authority for opening Letter of Credit obtained from the Ministry of Finance.

(a) Number and date of the Letter of Authority. (b) Amount of the Letter of Authority (in foreign currency).

5. Particulars of Imports effected and rupee deposits made.

(a) Name of suppliers. (b) Amount (in foreign currency) actually paid la, the supplier^; mentioned a,t (a) above.

(c) Date of payment to the supplier by the nominated German Bank.

(d) Amount of rupee deposit:— tf) Rupee equivalent of foreign currency amount paid to the supplier (2> 1 °f foreign exchange=Rs.

(ii) Interest paid, (iii) Period for which thc interest has been calculated from •- ——

to--

(iv) Total deposit made. M Date and place of deposit. (vi) Number and date of the Treasury Challan (to bc enclosed). If the ! "" Challan has already been sent, reference to the letter number and date

with which it was sent may be quoted.Wi>"isjsjfsf =ssns % M \" as & i~ your letter with which it was sent to the Accountant General, Central Revenues, to be indicated.

6. Amount utilised and balance unutilised (in foreiBn currency) against each Letter "f ^A^clrtiflcate that the balance indicated in 6 above, Y.a" not been utilised and no shipmem ffbSf-SS thereof, and the same may be treated as lapsed.

(Authorised signatures.)

ANHESUEE VII

8 1 2

Proforma

Name of Company

No. date &

Address of Company

value of IL

Value of L.C. Category of industry

Value of contract (foreign

Amount of allocation Rs.

Rs,

Private- Sector/ Public Sector

currency)

Amount paid against the L.C. (foreign currency)

T H E

i

2

S

6

3

5

7

9

4

G A Z E T T E

O F

I

N D

I

A

E X T R A O R D

I NOTE.— In respect of allocation exceeding .the pip^e equivalent ofDMT million (if the rate oferctLange notified by the Deptt. of Revenue (Customs) the licensee will be requred in to submit in addtion half yearlyicport oruspcciaj event, if any3 on the progress of the project and on adherence to the tirae-scbedulefctfcompletioncfproject. ABTUBJ Reports fa CDpies)willbealso required for at least three year* until completion of the project. - - "

N A R Y

B. D. KUMAR,

[

Chief Controller of Imports and Exports. P A H T

I

—

S E C

.

1

]

PHINTED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI, 1 9 75