Post Shipment Advance
Let’s learn about Post Shipment Advance. Finance against receivables, in the form of shipping documents, is post-shipment finance. The exporter should have an IEC number and each shipment should be accompanied by a prescribed declaration (GR/SDF/PP/SOFTEX) form in which the value of the export will be declared and duly certified by the customs authority.
Shipping documents along with relative GR form must be submitted to the authorized dealer within 21 days from the date of shipment.
Post shipment credit means any loan or advance granted or any other credit provided by a bank to an exporter of goods or (and) services from India from the date of extending credit after shipment of goods or (and) rendering of services to the date of realization of export proceeds as per the period of realization prescribed by FED, and includes any loan or advance granted to an exporter, in consideration of, or on the security of any duty drawback allowed by the Government from time to time. Banks serves with low interest rate to exporters under post shipment credit based on the guidelines of Reserve Bank.
Since the current instructions of FED, the period prescribed for realization of export proceeds is 12 months from the date of shipment, and if amount has not been realized from overseas buyer within the stipulated period, bank can crystalize such export bills with commercial interest rate.
