Letter of credit: Documentation

and stamp duty

What is Letter of credit?
• A letter of credit, or "credit letter" is a letter from a bank
guaranteeing that a buyer's payment to a seller will be received on
time and for the correct amount. In the event that the buyer is unable
to make a payment on the purchase, the bank will be required to
cover the full or remaining amount of the purchase.
Documents required for letter of credit
Documents Most Frequently Used Under Letters of Credit Transactions:
• Transport Documents:
Transport Document Covering at Least Two Different Modes of Transport (multimodal or combined
transport document)
Negotiable FIATA Multimodal Transport Bill of Lading
Bill of Lading
Non-Negotiable Sea Waybill
Charter Party Bill of Lading
Air Transport Document
Road Transport Document, Rail Transport Documents or Inland Waterway Transport Documents
• Insurance Documents:
Insurance Policy
Insurance Certificate
Open Cover
• Financial Documents:
Bill of exchange (Draft) (Sample)
• Commercial Documents:
Proforma Invoice
International Sale Contract
Commercial Invoice
Packing List; Weight List
Inspection Certificate
Certificate of Analysis
Pre-Export Verification of Conformity (PVoC) Certificate
Fiata Documents which are not considered as a transport document: FCR, FCT, FWR, SDT
Shipment Advice
• Official Documents:
Certificate of Origin
Health Certificate
Consular Invoice, Legalized Invoice (Sample)
Stamp duty paid for letter of credit ?

• In case of bills of exchange drawn on the importer, stamp duty is

payable for usance period beyond 90 days. It is not payable on bills of
exchange with usance period of up to 90 days. Under a letter of
credit, the bill of exchange is drawn on the issuing bank and not on
the importer
• Stamp duty in this case is 2 rupees under indian stamp act 1899
In Maharashtra it is exempted
https://www.bcasonline.org/Referencer2015-
16/Other%20Laws/maharashtra_stamp_act.html
Thank You