Remittance of Charter Hire in respect of foreign ships chartered on Time Charter basis
(i) Firms/companies desirous of engaging foreign flag vessels on `time charter basis should approach the office of Reserve Bank under whose jurisdiction their Head office/registered office is situated for approval of the arrangement through their bankers along with the following documents.
a) Purpose of engaging the vessel with details of estimated expenses, earnings, etc.
b) Approval in original (with a copy thereof) granted by DGS or TRANSCHART [i.e. Chartering Wing of Ministry of Surface Transport in respect of Public Sector Undertakings (PSUs)] for engagement of the vessel.
c) Charter party agreement in original with a copy thereof.
d) Delivery certificate in original with a copy thereof, and
e) Survey report for bunkers on board the vessel for bunker adjustment, if any.
After obtaining the approval of Reserve Bank, the authorised dealer concerned may allow the remittance of the instalments of charter hire on submission of (a) Form A2 in duplicate,(b) copy of the charter party agreement, (c) the invoice from the ship owner duly certified for payment by the charterer as per charter party agreement and (d) undertaking/accountants certificate for payment of income-tax.
Remittances of last such instalment wherein the adjustments towards bunkers, other eligible dues, if any, are involved, will be allowed by the authorised dealer on production of redelivery certificate supported by survey report, final accounts etc. by the charterer with details of adjustment(s).
(ii) The details of charter hire remitted, freight earned and the expenses incurred on the vessel should be incorporated by the Indian Shipping Company engaging the vessel on time charter basis in the Statement SPG 4 which should be submitted to Reserve Bank through the authorised dealer through whom the remittance of charter hire is made.
(iii) Sometimes Indian exporters/importers may engage foreign flag vessels on `time charter basis for one time export/import of the goods. In such cases, authorised dealers may allow remittance of the charter hire after obtaining the following documents and scrutiny thereof in accordance with the terms of charter party agreement.
a) Approval in original, with a copy thereof, obtained from the Director General of Shipping or from TRANSCHART (i.e. chartering wing of Ministry of Surface Transport in respect of Public Sector Undertakings).
b) Charter party agreement in original duly signed by both the owner of the vessel and charterer with a copy thereof.
c) Freight Invoice.
d) Non-negotiable copy of Bill of Lading.
e) Undertaking/Accountants certificate regarding payment of Income-tax (cf.paragraph 3B.10).
f) Delivery certificate with survey report for bunker.
The delivery of the vessel concerned should be in conformity with the approval granted by DGS/TRANSCHART.
(iv) The remittance of bunker charges and other cargo related expenses at foreign ports in respect of the vessel engaged on time charter basis may be allowed in accordance with the provisions of paragraph 8B.9 by the authorised dealer through whom the remittance of charter hire of the vessel is made. Other expenses such as normal wages of crew and expenses for spare parts, insurance (other than cargo insurance) which are required to be borne by the owner of the vessel shall not be allowed by the authorised dealer unless there is a specific clause in the Charter Party Agreement for deduction of such payments from the charter hire.
NOTE: Applications in respect of aircraft chartered on time charter basis should be referred to Reserve Bank.