CHATROOM: Second beneficiary cannot transfer LC to another, says expert

We are the second beneficiary in a transferable LC. We are unable to execute the order from the first beneficiary. Can we transfer it to a third beneficiary who is known to us and is in a position to execute the order at the same price?
 

No. Article 38(d) of the Uniform Customs and Practices for Documentary Credits 2007 Revision (ICC Publication no. 600) says: ‘A transferred credit cannot be transferred at the request of a second beneficiary to any subsequent beneficiary. The first beneficiary is not considered to be a subsequent beneficiary’. This means that you can transfer the credit back to the first beneficiary and suggest to the first beneficiary the name of the party known to you who is in a position to execute the order and leave it to the first beneficiary on whether he wants to transfer the LC to him. However, you cannot transfer the LC to a third beneficiary.
 

We have a manufacturing unit in SEZ. We want to send our materials to one job-worker in DTA. From there we want the job-worked goods to go from the first job-worker to another job-worker. After the second job-work process is completed, the second job-worker will send the goods to us. We will use such goods in the manufacture of final products. Is this allowed under the SEZ and the GST laws?
 

Section 143 of the CGST Rules, 2017 allows sending any inputs or capital goods, without payment of tax, to a job-worker for job work and from there subsequently to another job-worker and likewise. However, Rules 41 and 42 of the SEZ Rules, 2006 are not explicit on such a facility. They deal with only a situation where the goods can be sent to a unit(s) in DTA. So, unless you seek the permission explicitly and get it, I don’t think you can send the goods to one job-worker and from there to another job-worker. Better that you represent the matter to the Commerce Ministry to amend the said SEZ Rules suitably to facilitate sending goods from one job-worker to another job-worker or issue a suitable clarification.  
 

We are a two-star export house. We refer to the DGFT Trade Notice no.14/2023-24 dated 12th July 2023 which gives the curriculum for skilling and mentorship obligation for the Status Holders. Is it mandatory for us to conduct training programmes as per the curriculum prescribed by the DGFT?
 

No. Para 1.30(a) of the FTP says that Status Holders will endeavor to provide skill upgradation/training in international trade. Para 1.30(c) says that the detailed eligibility requirements, selection criteria, training curriculum etc will be at the discretion of the Status Holder. So, there is no compulsion for you to provide the training or follow the schedule given by the DGFT but you must try. 

If you want, the Regional Authority of the DGFT will give you necessary guidance and support.  You may also consider partnering with other Status Holders in conducting such programmes.