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Amrendra Kumar Saha
- Experienced Procurement And Contract Management Professional
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ChallengesWe want to change our inco term for import from Malaysia to ex-work basis from CIF basis What would be challenges Do we face any difficulty in getting form AI for claiming duty concession under ASEAN FTA from supplier in cas eof ex-factory inco term Suggestions/ Feedback----- Hi, Greetings As explained by Mr Prasad that for claiming duty concession under ASEAN FTA, there is no direct linkage of Incoterms 2000/2010. Any importer is free to select any Terms as covered in Incoterms- 2000/ 2010 depending upon agreed business model and terms of Price. Originally If you have opted/ agreed as CIF- Indian seaport/ airport then your pricing shall be accordingly, now if you want to select EX-works then 1 first important challenge will be Finalization of Price as EX-works basis instead of original agreed price as CIF- Indian port/ Airport. 2 the next challenge will be having contract with local transporter in the country of Manufacturing for transportation up to Freight forwarders warehouse. 3 Now you will have to finalize the rate for Transportation on FCA ndashDespatch port to CIF- Indian port 4 In some cases you can ask the freight forwarder/consolidator to pick the materials from Ex-Works and give delivery as CIF/ FIP- Indian port and this will help you in knowing the total expenditure from Ex-works to CIF. If it is less then fine otherwise you may talk to your supplier/ vendor for Price adjustment 5 you have to arrange Insurance Cover from Ex-works to your Warehouse and Validity should be sufficient so that within which your materials should be at your warehouse, otherwise you will carry big risk for any damages. 6 In case your Freight charges from Ex-works to CIF- Indian port is more than your CIF- Price of Product will be more and accordingly the applicable duty will be more, because applicable duty is linked with Assessable Value and Assessable value is linked with FIF- Price. 7 If you could not match your original CIF price with your modified Approach as EX-Works Price and Actual CIF transportation expenditure then your Landed Cost will be more and it is not good Situation. Please take all the above in consideration before taking your final decision otherwise your Product cost will be high. As regards availing the Duty Drawback you have to take the steps as suggested by Mr Prasad Or take help of your CHA. Regards, A.K.SAHA
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