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Trade credit can’t be equated with usance period on credit availed by Indian importer from Indian Bank

September 30, 2020[2020] 119 taxmann.com 484 (Calcutta)
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FEMA, BANKING & INSURANCE : Where petitioner-importers situated in India had availed credit facilities from respondent bank which was not an overseas bank but a bank situated in India and petitioner filed writ petition stating that petitioners were entitled to an extension of usance period of Letter of Credit Facility sanctioned to petitioners from 180 days to 270 day by seeking to equate Trade Credit with usance period, it was held that term "Trade Credit", referred to by petitioners, was related only to credit raised by importers from overseas banks and since importers and creditor bank were both situated in India, Trade Credit as used by petitioners, had no relevance and, therefore, usance period available to petitioner was governed by contract between parties was not altered by Trade Credit Policy – Revised Framework formulated by RBI and discretion exercised by bank against extension of usance period of 180 days for Trade Credit extended to petitioners/importers could not be challenged

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