Bank Swift Code
Blocked Funds MT 760
MT760This is a Swift class 7: Bank Guarantee and Letter of Credit procedure, Procedure 60: Blocked Funds. The Course of Action When Your Bank Issues An MT-760: When an MT-760 is issued, the issuing bank puts a hold on the client's funds, blocking the client from using them. The funds are then at the disposal of the person the MT-760 was issued in favor of. For this reason it is not wise to issue an MT-760 before being absolutely certain as this can mean a large financial loss for absolutely no gain. In some cases, unscrupulous traders will use the MT-760 to open a line of credit, which they then default on, leaving the issuer of the MT-760 liable. What a MT-760 Looks Like: It is important to remember that an MT-760 is actually an interbank communication, so one never really sees an MT-760. You may need a special account to be able to use this procedure. The Cost of A MT-760: The cost of an MT-760 varies greatly from bank to bank. Be aware however, that due to the amount of risk involved for a bank in guaranteeing payment, a MT-760 is normally fairly expensive, with the usual bank fee for issuing a MT-760 being between 0.5% and 1.5% of the total value of the funds blocked. Potential of Negotiation Once a MT-760 is sent: Once a MT-760 has been issued, it is not negotiable. For this reason, many traders prefer a Letter of Credit, which is negotiable and can be amended in response to unforeseen changes in circumstances, such as a delayed shipping schedule, lower production than anticipated, and other such events. How You Get A MT-760: A MT-760 can be obtained from a bank on the international SWIFT bank network. However not all US banks are on this network, so you may have to change bank. A lawyer, private banker, equity funds cannot be on on Swift, only banks. So no broker or financial institution other than a bank can help you with blocking funds. The banks underwrite the blocked funds with the funds in the client's account, and if this is not fully funded, they will make other banks "confirm" their guarantee, spreading the risk.
Courtesy Wikipedia
High Seas Sales
HIGH SEA SALES
1. High Sea sales (HSS) is a sale carried out by the carrier document consignee to another buyer while the goods are yet on high seas or after their dispatch from the port/ airport of origin and before their arrival at the port / airport of destination.
2. HSS is accepted under the import trade control regulation. Refer para - of export import policy.
3. HSS contract/ agreement should be signed after dispatch of goods from origin & prior to their arrival at destination. The agreement should be on stamp paper.
4. On concluding the HSS agreement, the B/L should be endorsed in favour of the new buyer. In respect of air shipment, HSS seller should write to the airline / consol agent informing that a HSS agreement has been established with the HSS buyer and that the carrier document should therefore be considered as endorsed in favour of the HSS buyer and further the IGM should be filed by the carrier in the name of the HSS buyer.
5. If the EDI system allows name of HSS buyer to be entered in the system, then there may not be any need to amend the IGM. In this case the B/E is filed in the name of the original importer as the IGM is in this importer name. However , the B/E shows the name of HSS buyer under a separate head in the B/E format. If the system has no provision for showing the name of HSS buyer on the B/E ,then the IGM should be got amended and B/E filed in the name of the HSS buyer.
6. In the case of HSS , the CIF value for calculation of duty is taken to be the HSS value.
7. There is practice followed in customs that in case the HSS transfer takes place at import invoice value only , the custom would add 4% of CIF value as HSS loading factor . There have been cases where HSS sellers have sold at two percent more than import CIF but custom have added 4% of CIF as HSS value addition. Such practice of customs can be challenged at the customs duty is chargeable on genuine transaction value.
8. In HSS contracts the HSS seller may not like to disclose the import value to the HSS buyer. However, the customs can call for the original import invoice, in which case the HSS seller may have to part with this information. To overcome this, HSS seller should take on the responsibility of custom clearance and site delivery. After custom clearance, the HSS seller could withdraw import invoices and only hand over clearance documents with HSS agreement to the HSS buyer. The custom bill of entry does not indicate original import value and is prepared on HSS value.
9. There is no bar on same goods being sold more than once on high seas. In such cases, the last HSS value is taken by customs for purposes of duty levying. The last HSS agreement should give indication of previous title transfers. The last HSS buyer should also obtain copies of previous HSS agreement as such documents may be called upon by the customs.
10. HSS is considered as a sale carried out outside the territorial jurisdiction of India. Accordingly, no sales tax is levied in respect of HSS. The customs documents (B/E) is either filed in the name of HSS buyer or such B/E has an endorsement indicating HSS buyer's name.
11. The title of goods transfers to HSS buyer prior to entry of goods in territorial jurisdiction of India. The delivery from customs is therefore on account of HSS buyer. The CENVAT credit in respect of CVD paid on import is entitled to HSS buyer.
12. HSS goods are entitled to classification, rates of duty and all notification benefits as would be applicable to similar import goods on normal sale.
13. HSS is also applicable to goods imported by air. Sea appearing in HSS should not be constructed by its grammatical meaning. As long as the sale is formalized after dispatch from airport / port of origin and before arrival at the first port of discharge / airport at destination, such sale is considered as HSS.
14. Sometime HSS buyers buy goods after their arrival. Such sale are not HSS. The stamp paper on which the HSS agreement is executed must not bear the stamp paper purchase date as being post cargo arrival date. Such a case can easily be detected by customs as being a post arrival sale.
15. If the HSS does not mind disclosing original import values to HSS buyer, in such case it is better from custom clearance point of view for the seller to endorse the B/L, invoice , packing list in favour of the HSS buyer. The endorsement should read "Transferred on High Sea Sales basis to M/S -------- for a sales consideration of Rupees --------". Such endorsement should be stamped and signed by the HSS seller.
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BUDGET 2002-2003 HIGHLIGHTS DIRECT TAX PROPOSAL
Tax Proposal on Income Tax
6. Computation of Capital Gains and Real Estate Transaction
It is proposed to insert a new section 50C to make a special provision for determining the full vale of consideration in case of transfer of immovable property. It provides that where the consideration is less than the value adopted by any assessing authority of the State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted shall be deemed to be a value of the consideration and capital gains will be computed accordingly.
It is also proposed that where the assessee claims that the value assessed for stamp duty purpose exceeds the fair market value of the property, the Assessing Officer may refer the valuation of such property of the Valuation Officer.
If the market value determined by the Valuation Officer is less than the value adopted for stamp duty purpose, the such fair market value is to be full value of the consideration.
However, if the fair market value determined by the Valuation Officer is more than the value assessed for stamp duty purpose, the Assessing Officer shall adopt the value assessed for the stamp duty purpose.
This is effective from the assessment year 2003-04.
7. Long-term Capital Loss
Under the existing provision, capital loss, whether short term or long term, is allowed to be set off from capital gains irrespective of whether such gain is a short term or long term.
It is proposed that long term capital loss will be allowed to be set off against long term capital gain only and the balance, if any, will be allowed to be carried forward separately and will be allowed to be set off against long term capital gains only.
There is no change of existing provision in regard to the adjustment of short term capital loss, which will be allowed to be set off against all capital gains whether it is short term or long term.
This is effective from the assessment year 2003-04.
8. Investment in SIDBI & National Housing Bank Bonds exempted under Section 54EC
Under the existing provision, the long term capital gains invested in bonds issued by National Bank for Agriculture and Rural Development, National Highway Authority and Rural Electrification Corporation Limited are exempt from payment of tax.
Now, it is proposed that long term capital gains invested in SIDBI and National Housing Bank bonds will also be exempt from payemnt of capital gains tax.
9. Credit for Tax Deduction at Source
Under the existing provision, credit for tax deduction at source is given to the assessee on the basis of actual certificate produced by him before the assessment and it is given in the assessment year for which such income is assessable.
If it is not possible to obtain the original TDS certificate and produce the same before the assessing authority, no credit for TDS is given to the assessee for non production of TDS certificate.
With a view to mitigate this hardship, it is proposed that in case the assessee cannot produce the TDS certificate at the time of assessment, the credit for the same can be given at any time within 2 years from the end of the assessment year in which such income is assessable subject to the production of TDS certificate. This can be done by a petition filled under section 155 of the income Tax Act.
As a consequence, it is also proposed that the return of income shall not be regarded as defective if the TDS certificate is not furnished along with the return of income.
The proposed amendment will take effect from 1st June, 2002.
10. Individual and HUF to Deduct Tax
Under the existing provision individual and HUF is not required to deduct tax from any type of payment. It is proposed that individual and HUF families whose
sales or gross receipts from the business or the profession exceeds Rs. 40 lacs or
Rs. 10 lacs, as the case may be, are required to deduct tax at the time of making the specified payment, viz, payment to contractor, of rent, interest, commission, etc.
This is effective from 1st June, 2002.
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Inflation Indexed Bonds- (http://www.rbi.org.in/scripts/FAQView.aspx?Id=91)
1. Inflation Indexed Bonds (IIBs)
were issued in the name of Capital Indexed Bonds (CIBs) during 1997. How is the
new product of IIBs different from earlier CIBs?
- The CIBs issued in 1997 provided inflation protection only to principal and not to interest payment.
- New product of IIBs will provide inflation protection to both principal and interest payments.
2. How will inflation protection be
provided to both principal and interest rate? Whether inflation component will
be paid along with interest?
- Inflation component on principal will not be paid with interest but the same would be adjusted in the principal by multiplying principal with index ratio (IR). At the time of redemption, adjusted principal or the face, whichever is higher, would be paid.
- Interest rate will be provided protection against inflation by paying fixed coupon rate on the principal adjusted against inflation.
- An example of cash flows on IIBs is furnished below.
Example 1 (For illustration
purpose)
|
|||||||
Year
|
Period
|
Real
Coupon |
Inflation
Index |
Index Ratio
|
Inflation adjusted principal
|
Coupon
Payments |
Principal
Repayment |
I
|
II
|
III
|
IV
|
Vti=(IVti/IVt0)
|
VI=(FV*V)
|
VII=(VI*III)
|
VIII
|
0
|
28-May-13
|
1.50%
|
100
|
1.00
|
100.0
|
||
1
|
28-May-14
|
1.50%
|
106
|
1.06
|
106.0
|
1.59
|
|
2
|
28-May-15
|
1.50%
|
111.8
|
1.12
|
111.8
|
1.68
|
|
3
|
28-May-16
|
1.50%
|
117.4
|
1.17
|
117.4
|
1.76
|
|
4
|
28-May-17
|
1.50%
|
123.3
|
1.23
|
123.3
|
1.85
|
|
5
|
28-May-18
|
1.50%
|
128.2
|
1.28
|
128.2
|
1.92
|
|
6
|
28-May-19
|
1.50%
|
135
|
1.35
|
135.0
|
2.03
|
|
7
|
28-May-20
|
1.50%
|
138.5
|
1.39
|
138.5
|
2.08
|
|
8
|
28-May-21
|
1.50%
|
142.8
|
1.43
|
142.8
|
2.14
|
|
9
|
28-May-22
|
1.50%
|
150.3
|
1.50
|
150.3
|
2.25
|
|
10
|
28-May-23
|
1.50%
|
160.2
|
1.60
|
160.2
|
2.40
|
160.2
|
Example 2 (For illustration
purpose)
|
|||||||
0
|
28-May-13
|
1.50%
|
100.0
|
1.00
|
100
|
1.50
|
|
1
|
28-May-14
|
1.50%
|
106.0
|
1.06
|
106
|
1.59
|
|
2
|
28-May-15
|
1.50%
|
111.0
|
1.11
|
111
|
1.67
|
|
3
|
28-May-16
|
1.50%
|
104.0
|
1.04
|
104
|
1.56
|
|
4
|
28-May-17
|
1.50%
|
98.0
|
0.98
|
98
|
1.47
|
|
5
|
28-May-18
|
1.50%
|
99.0
|
0.99
|
99
|
1.49
|
|
6
|
28-May-19
|
1.50%
|
105.5
|
1.06
|
105.5
|
1.58
|
|
7
|
28-May-20
|
1.50%
|
110.2
|
1.10
|
110.2
|
1.65
|
|
8
|
28-May-21
|
1.50%
|
106.5
|
1.07
|
106.5
|
1.60
|
|
9
|
28-May-22
|
1.50%
|
104.2
|
1.04
|
104.2
|
1.56
|
|
10
|
28-May-23
|
1.50%
|
99.2
|
0.99
|
99.2
|
1.49
|
100
|
3. Whether capital protection will
be provided?
- Yes, capital protection will be provided by paying higher of the adjusted principal and face value (FV) at redemption.
- If adjusted principal goes below FV due to deflation, the FV would be paid at redemption and thus, capital will get protected.
4. Why will WPI
be used for inflation protection? Why CPI
has not considered for the same?
- The consumer price index (CPI) reflects the inflation people at large face and therefore, globally CPI or Retail Price Index (RPI) is used for inflation target by the Central Banks as well as for providing inflation protection in IIBs.
- In India, all India CPI is being released since January 2011 and it will take some time in stabilizing. Monetary policy has also been continuing to target WPI for its price stability objective. In view of above, it has been decided to consider WPI for inflation protection in IIBs.
5. What is the formula for
calculating index ratio?
- Index ratio (IR) will be calculated by dividing the reference WPI on the settlement date with the reference WPI on the issue date.
6. Why will final WPI be used with a lag of four months?
- Final monthly WPI will be used as reference WPI for 1st day of the calendar month. The reference WPI for intermittent days, i.e. dates between 1st days of the two consecutive months will be computed through interpolation.
- For interpolation, two months final WPI should be available throughout the month. As final WPI is available with a lag of about two and half months (e.g. final WPI February 2013 will be released in mid-May 2013), two months final WPI could be available only with a lag of four months.
- In view of above, the four months lag has been chosen for final WPI to be considered as reference WPI for 1st day of the calendar month. For example, December 2012 final WPI will be taken as reference WPI for 1st of May 2013 and January 2013 final WPI will be taken as reference WPI for 1st of June 2013.
7. What is the formula for
interpolation of daily reference WPI?
- For calculating the index ratio for a specific date, daily reference WPI values would be linearly interpolated using ‘Ref WPI’ for the first day of the calendar month and the first day of the following calendar month.
- The formula for computing the reference WPI for a particular day is as under:
[Ref WPIM
= Ref WPI for the first day of the
calendar month in which Date falls, Ref WPIM+1 = Ref WPI for the first day of the calendar month
following the settlement date, D = Number of days in month (e.g. 31 days in
August), and t= settlement date (e.g. August 6)]
- An example of daily reference WPI computed through interpolation is furnished below.
Date
|
Ref
WPI
(Given) |
T-1
|
D
|
Ref
WPI
(Interpolation) |
1-May-13
|
168.8
|
|||
2-May-13
|
1
|
31
|
168.85
|
|
3-May-13
|
2
|
31
|
168.90
|
|
4-May-13
|
3
|
31
|
168.95
|
|
5-May-13
|
4
|
31
|
168.99
|
|
6-May-13
|
5
|
31
|
169.04
|
|
7-May-13
|
6
|
31
|
169.09
|
|
8-May-13
|
7
|
31
|
169.14
|
|
9-May-13
|
8
|
31
|
169.19
|
|
10-May-13
|
9
|
31
|
169.24
|
|
11-May-13
|
10
|
31
|
169.28
|
|
12-May-13
|
11
|
31
|
169.33
|
|
13-May-13
|
12
|
31
|
169.38
|
|
14-May-13
|
13
|
31
|
169.43
|
|
15-May-13
|
14
|
31
|
169.48
|
|
16-May-13
|
15
|
31
|
169.53
|
|
17-May-13
|
16
|
31
|
169.57
|
|
18-May-13
|
17
|
31
|
169.62
|
|
19-May-13
|
18
|
31
|
169.67
|
|
20-May-13
|
19
|
31
|
169.72
|
|
21-May-13
|
20
|
31
|
169.77
|
|
22-May-13
|
21
|
31
|
169.82
|
|
23-May-13
|
22
|
31
|
169.86
|
|
24-May-13
|
23
|
31
|
169.91
|
|
25-May-13
|
24
|
31
|
169.96
|
|
26-May-13
|
25
|
31
|
170.01
|
|
27-May-13
|
26
|
31
|
170.06
|
|
28-May-13
|
27
|
31
|
170.11
|
|
29-May-13
|
28
|
31
|
170.15
|
|
30-May-13
|
29
|
31
|
170.20
|
|
31-May-13
|
30
|
31
|
170.25
|
|
1-June-13
| 170.30 |
|
|
8. If there is a revision in the
base year of WPI series, how will
the revised series be used for indexation?
- WPI series is being revised after every 10 or more years (e.g. base year revision in WPI series took place in 1981-82, 1993-94 and 2004-05).
- Any revision in the base year would be tackled by splicing the base years so that a consistent WPI series with the same base year is available for indexation purpose since the issue date of the bond.
9. What will be the tax treatment of
interest payment and capital gains accrual due to inflation?
- Extant tax provisions will be applicable on interest payment and capital gains on IIBs.
- There will be no special tax treatment for these bonds.
10. What is non-competitive bidding
and how will retail investors be able to participate in the same?
- A non-competitive scheme has been devised for participation of such investors in the auction. Under this scheme, investors are required to indicate the amount of their bids and not the price at which they want to subscribe. Allocation to such investors is made at the weighted average price emerged in the competitive bidding.
- Presently in auction, up to 5 per cent of the notified amount is reserved for non-competitive bidding, while up to 20 per cent of the notified amount will be earmarked for such bidding in case of IIBs to encourage retail participation.
- The retail investors will be able to participate in non-competitive bidding through primary dealers (PD) and banks. They can open a gilt account with PDs and banks or demat account for such participation.
11. Whether foreign institutional
investors (FIIs) will be allowed to invest in IIBs?
- IIBs would be Government securities (G-Sec) and the different classes of investors eligible to invest in G-Secs would also be eligible to invest in IIBs.
- FIIs would be eligible to invest in the forthcoming IIBs but subject to the overall cap for their investment in G-Secs (currently USD 25 billion).
12. Whether IIBs will be traded in
the secondary market?
- As IIBs are G-Sec, they can be tradable in the secondary market like other G-Secs. Investors will be able to trade them in NDS-OM, NDS-OM (web-based), OTC market, and stock exchanges.
13. Whether investors will be able
to participate in the primary auction of IIBs through web-based platform?
- Not as of now.
- The work on web-based platform for primary auction is, however, underway and as and when the same is completed, investors will be able use the same for participating in the primary auction of G-Secs including IIBs.
14. Whether IIBs will be eligible
for short-sale and repo transactions?
- IIBs would be a G-Sec and therefore, would be eligible for short-sale and repo transactions.
15. Whether IIBs will be eligible
for statutory liquidity ratio (SLR)?
- IIBs would be a G-Sec and issued as part of the approved Government market borrowing programme.
- Therefore, IIBs would automatically get SLR status.
16. What will be the settlement
cycle for IIBs?
- Settlement cycle of IIBs will be T+1, like fixed rate conventional bonds.
17. What will be the day count for
IIBs?
- Like other G-Secs, the day count for IIBs would 30/360.
18. Whether issuance of this
instrument will be within the Govt market borrowing programme?
- Yes, issuance of IIBs would be within the Govt market borrowing programme of about Rs. 579,000 crore for 2013-14.
19. What will be the maturity of
IIBs?
- To begin with, IIBs will be issued for 10 years.
- As it is advisable to issue IIBs at various maturity points to have benchmarks and cater to diverse market demands, more maturity points may be explored subsequently.
20. What will be the frequency of
coupon payment on IIBs?
- Like other G-Secs, coupon on IIBs would be paid on half yearly basis.
- Fixed coupon rate would be paid on the adjusted principal.
21. What will be the frequency of
issuance of IIBs?
- As indicated in the press release issued by Reserve Bank of India on May 15, 2013, IIBs would be launched on June 4, 2013 and the same would be issued on the last Tuesday of each month during 2013-14. This would also include the last Tuesday of June 2013.
22. Auction of IIBs would be yield
based or price based?
- As is the case with fixed rate conventional bonds, IIBs would be issued through yield based auction and subsequent reissues will be through price based auction.
- Investors would be required to bid for real yield in case of IIBs as against nominal yield in case of fixed rate G-Sec.
23. Whether IIBs will be
underwritten by primary dealers (PDs)?
- Like fixed rate G-Secs, IIBs would be underwritten by the primary dealers.
24. What is going to be the issuance
size of IIBs for each tranche?
- As indicated in our press release dated May 15, 2013, size of the each tranche would be Rs. 1,000-2,000 crore.
25. Will there be exclusive series
of IIBs for retail investors?
- Exclusive series for retail investors would be launched in the second half of the current fiscal year (around October 2013).
26. Whether product structure of the
retail series of IIBs would be same as series of IIBs of all investors?
- Product structure of the series of IIBs for retail investors is yet to be finalised. It will be finalised in the due course and accordingly, the same would put in the public domain.
27. What will be methodology for
valuation of these bonds?
- Fixed Income Money Market and Derivatives Association of India (FIMMDA) will come out with valuation guidelines shortly.
Courtesy-rbi.org.in
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