'Unconfirmed LC binds only the issuing bank to pay'

Our bankers, SBI Kolkata, opened a LC on our behalf in favour of a German supplier. The LC says that it is without confirmation, available by payment and freely negotiable. In the reimbursement instructions, SBI says that payment will be effected after receipt of documents compliant with the terms and conditions of the LC. Can the supplier get payment immediately upon submission of documents to a bank in Germany?

In a LC that is not confirmed, it is the LC-issuing bank that undertakes to pay against documents compliant with the terms and conditions of the LC. In a freely negotiable LC, any bank can negotiate the LC compliant documents, pay the party and claim reimbursement in accordance with the instructions of the LC issuing bank. If the German supplier wants an irrevocable commitment of a German bank to pay against LC-compliant documents, he should ask for a confirmed LC.

In that case, at your request, the LC-issuing bank can ask its correspondent bank in Germany to add its confirmation to the LC. If the German bank does so, the supplier can take it as an irrevocable undertaking of the confirming bank to pay against presentation of documents compliant with the terms and conditions of the LC. 

In the case of exports by a manufacturer using his own Importer-Exporter Code (IEC) on behalf of the merchant exporter, who is required to receive the payment, the manufacturer or the merchant? Who should get the export benefit?

When a manufacturer exports the goods on behalf of the merchant-exporter, he should give the AD Code of the bank of the merchant-exporter through whom the payment must be realised in the account of the merchant exporter. The merchant and manufacturer should agree on who should get the benefits and find the most compliant way to take the benefit from the government, depending on the type of benefit eligible.

I am a doctor. For my clinic, I want to import two pieces of medical equipment.  One will be used for assessment of strength of patients. It will be a one-time buy, while the other requires electrodes (use and throw) which need to be imported periodically from the USA. Do I need to have an IEC number to import these items? Also, both pieces of equipment use Bluetooth technology and have chargeable batteries. Can we import them?

Since the goods you want to import are for commercial purposes, you must obtain an IEC from the DGFT. Generally speaking, you can import medical equipment without a licence, regardless of whether they are based on Bluetooth technology and have in-built chargeable batteries. 

Are we required to furnish a declaration that we have not passed on the tax incidence to the buyers, when we are claiming refund of unutilised credit on account of exports without IGST payment?

No. The provison to Rule 89(2)(l) of the CGST Rules, 2017, says that such a declaration is not required for such refund claims.