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Policy for sale of material through Merchant Exports

1.0 Introduction

1.1 In order to have a focused approach for exporting to the neighboring and other Countries and to further

channelize it’s products in the exports arena, RINL shall appoint ‘Merchant Exporter’. A Merchant Exporter

means a person or a firm engaged in trading activity and exporting or intending to export goods to any country

other than the banned countries. Merchant Exporter essentially procures the goods from RINL and export in

their name.

1.2 The Merchant Exporter shall be registered with an Export Promotion Council or a Commodity Board recognized

by the Department of Commerce.

1.3 International Trade Division (ITD), Marketing shall take necessary action for registration of the Merchant

Exporters.

1.4 Upon Registration the Merchant Exporter shall approach the identified Branch(es) of RINL to sign the

agreement and MOU if they desire to do so, with RINL for commencement of sales process.

2.0 Products Covered:

2.1 All Steel Items viz. TMT Rebars, WRCs, Rounds, Structurals, Cast Rounds and Billets & Blooms (except off grades

and commercial grades), as marketed by RINL. Any other product can be added at the discretion of RINL.

Merchant Exporter may choose one or more products to be purchased for export. Preference may be given

to sale of finished products rather than semis.

2.2 Merchant Exporter agrees to export and RINL agrees to offer products during the agreement period as per the

availability with RINL. The Merchant Exporter shall plan their exports and place the requirement with RINL so

that the material is made available to the Merchant Exporter to avoid stock out situation.

3.0 Period of Registration:

3.1 Registration shall be for a period of maximum one financial year or part thereof, or for such period as is felt

appropriate.

4.0 Method of Selection of Merchant Exporter :

4.1 International Trade Division (ITD), Marketing shall take necessary action for registration of Merchant Exporters.

4.2 The process of appointment of Merchant Exporters shall be done through website / open advertisement, once

in a year with the approval of D(C). Web/Open Advertisement for appointment of Merchant Exporters shall be

taken up once in a year at the beginning of the financial year, specifying the number of Merchant Exporters

proposed to be registered with the Branch.

4.3 The applicants having Registered with Export Promotion Council or a Commodity Board recognized by the

Department of Commerce, Government of India on the date of application, are eligible for Merchant

Exportership with RINL.

4.4 The detailed format for advertisement, format of application, instructions to the applicant are placed at

Annexures-I, II & III respectively. Evaluation criteria, Evaluation sheet, Process for Registration, Agreement

format are placed at Annexures-V, VI, VII & X respectively.

4.5 A committee comprising In-charge/ITD, Marketing, Regional Manager (Andhra) & Regional Finance Manager

(Andhra) shall evaluate the applications based on the declarations / documents submitted.

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4.6 Applications for Merchant Exporters shall be evaluated on a 10 point scale consisting of attributes like financial

capabilities as certified by the Banker, experience in the field of steel export etc. and any other criteria, which

RINL considers necessary to take into account while evaluation of the application. The minimum qualifying

score for all categories is brought out at Annexure-V.

4.7 The applicants in the order of the score (from higher to lower) obtained by them shall be considered for

registration as Merchant Exporter.

4.8 LOA shall be issued by ITD, Marketing as per the format at Annexure VIII, to the Merchant Exporter in duplicate.

A copy of the LOA shall be returned by the Merchant Exporter to the designated Branch of RINL duly endorsed

by the authorized signatory of the Merchant Exporter, as confirmation of receipt within 15 days from the date

of LOA along the applicable Security Deposit. RINL may, at its convenience, finalize the registration within a

period of 90 days.

4.9 The Merchant Exporter will be issued a Letter of Registration as per the format at Annexure IX by the concerned

Branch indicating the validity period of the Merchant Exportership. Upon Registration the Merchant Exporter

and RINL will enter into an agreement before commencement of operations.

4.10 The Merchant Exporter shall enter into MOU with RINL, if they desire so.

5.0 Security Deposit

5.1 Merchant Exporter is required to furnish Security Deposit of Rs.1.0 lakh before registration.

5.2 The SD is payable through DD/PO/RTGS/NEFT payable at the designated branch location. No interest shall be

paid by RINL on this Security Deposit. The Security Deposit shall be refunded on successful completion

of all contractual obligations.

5.3 The sales process shall commence after the Merchant Exporters submits Security Deposit, as mentioned above.

6.0 Prices

6.1 Material shall be offered on firm price for 30 days from the date of quotation issued by RINL to take care of

the entire process of moving the material from plant to the designated place of loading for export.

6.2 RINL shall fix prices of products for each shipment, based on the enquiry received from the Merchant Exporter

and material availability confirmation, by a Committee consisting of GM(Mktg), In-charge of Sales, respective

RM, I/c of Exports & respective Sr BM, with the approval of HOD, Marketing.

7.0 Payment Terms:

7.1 100% Payment shall be made in advance.

7.2 The Merchant Exporter shall remit in advance 100% of Sales Order value of the material for issue of Sales Order

within 07 working days from the date of Quotation.

7.3 In addition, Merchant Exporter shall submit Rs.500/- PMT of the total Sale Order Quantity at the time of SO

for each shipment. This will be kept as Security Deposit to Safeguard for actual export and liable for forfeiture

as per clause 8.2 & 13.4. RINL shall issue tax invoice in favor of the Merchant Exporter for such

recovery/forfeiture. This Security Deposit shall be refunded on successful fulfilment of contractual

obligations under clauses 8.2 and 13.4.

7.4 Further, Merchant Exporters shall also provide a Security Deposit at the time of issue of Sale Order equivalent

to the differential value between the prevailing applicable GST and GST applicable for export for the Sales

Order quantity along with penal interest chargeable as per GST provisions. Considering the maximum 30 days

allowed for lifting of material from the date of Quotation and 90 days allowed for exporting of goods by

Merchant Exporter from the date of issue of Tax Invoice, the penal interest for 120 days in the form of Security

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Deposit shall be collected. Quotation shall be issued for the quantity as per the request of the Merchant

Exporter. However, deliveries shall have to be completed within the Delivery schedule mentioned in the Sales

Order. All payments are payable through DD/PO/RTGS/NEFT payable at the designated branch location.

8.0 Delivery

8.1 Delivery shall be Ex- Plant or any identified RINL Stockyard in India. Merchant Exporter shall make

arrangements for movement of material. In case, the Merchant Exporter desires to lift the material by rail

from ex-plant, 100% Railway Freight shall be paid by them in advance.

8.2 Merchant Exporter is allowed to lift material with (-) 5 % variation of SO Quantity. In case of failure to do so,

the Security Deposit referred at clause 7.3 above shall be forfeited for the short lifted quantity of Sale Order

quantity.

8.3 The weight recorded on the Tax Invoice as per RINL weigh bridge or the Conversion Agents’ weigh bridge or

any other weigh bridge arranged by RINL shall be final unless otherwise specified in case of rail as well as road.

However, in case of rail dispatches, RR weight shall be considered for arriving at railway freight only. No

dispute regarding the same shall be entertained.

9.0 Quality and Test Certificate

9.1 RINL shall issue Test Certificate for the material supplied to the Merchant Exporter and the Test Certificate

issued by RINL is final. All quality related issues, if any, shall be raised/settled before shipment from India. The

Quality complaints, if any, shall be settled as per the Quality Complaint Procedure in vogue at RINL.

9.2 The Merchant Exporter shall take necessary care in respect of storage of materials in their premises in order

to avoid any damage, mix-up or loss of identity of materials. RINL is not liable for the damage, mix-up or loss

of identity occurred after delivery to Merchant Exporter.

10.0 Other terms and conditions

10.1 Merchant Exporter has to furnish the copy of purchase order or contract from foreign buyer for each shipment

along with an undertaking by them mentioning the discharge port / siding / destination before lifting material

from the plant or Branch for that particular shipment.

11.0 Taxation:

11.1 The transaction between a manufacturer (‘supplier’) and a merchant exporter (‘recipient’) is in the nature of

supply and the same is liable to GST as any other normal taxable supply.

11.2 However, vide Notification No.41/2017-Integrated Tax (rate) dt.23-10-2017 and notification No.40/2017-

Central Tax (Rate) dt.23-10-2017, the rate of tax applicable in respect of supplies made to a Merchant Exporter

for export, is reduced to a nominal GST of 0.1% (inter-state) / 0.05 % ( zero point zero five percent ) CGST +

0.05% ( zero point zero five percent ) SGST (intra-state) respectively. The following procedure guidelines are

to be adhered, while making supplies to Merchant Exporter at concessional GST rate.

i. The Merchant Exporter shall be registered with an Export Promotion Council or a Commodity Board recognized by the Department of Commerce, and in proof of the same, a copy of such registration certificate should be provided.

ii. The Merchant Exporter shall place an order on RINL for procuring goods at concessional tax rate and a copy of the same shall also be provided by him to the jurisdictional tax officer of RINL.

iii. The goods shall be supplied to Merchant Exporter on a tax invoice.

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iv. The Merchant Exporter shall move the said goods directly to the port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported.

v. If the Merchant Exporter intends to aggregate the supplies from RINL with that of other registered suppliers and then export, the goods from each registered supplier shall be moved to a registered warehouse, and after aggregation, the Merchant Exporter shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported. The Merchant Exporter shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgement of the warehouse operator shall be provided to RINL, as well as to the jurisdictional tax office of RINL.

vi. The Merchant Exporter shall indicate the Goods & Services Tax Identification number of RINL, and the tax invoice number issued by RINL in respect of the said goods in the Shipping Bill or Bill of Exports, as the case may be.

vii. The Merchant Exporter shall provide a copy of shipping bill or bill of export containing details of GSTIN and tax invoice of the RINL along with proof of export general manifest or export report having been filed to RINL as well as jurisdictional tax officer of RINL.

viii. The Merchant Exporter shall export the said goods within a period of 90 days from the date of issue of a tax invoice of RINL.

11.3 RINL shall not be eligible for the above mentioned concessional tax rate, if the Merchant Exporter fails to export

the said goods within a period of 90 days from the date of issue of tax invoice, or non-compliance of above

procedural requirements.

11.4 The Merchant Exporter should provide a Security Deposit equivalent differential value to the prevailing

applicable GST for the Sales Order quantity and applicable penal interest up to 120 day (30 days sales order

validity and maximum 90 days allowed for exports from the date of issue of tax invoice). The Security Deposit

is payable through DD/PO/RTGS/NEFT payable at the designated branch location.

11.5 In case the goods are not exported by the Merchant Exporter within 90 days from the date of issue of a Tax

Invoice by the supplier( i.e, RINL), GST amount at the differential rate of GST with applicable interest is to be

paid by RINL. Merchant Exporter shall submit the documents mentioned at 11.2 to RINL immediately after

export is fulfilled failing which the security deposit collected for this purpose at para 7.4 above, shall be

forfeited and deposited by RINL with GST authorities, on the 90th day.

11.6 In case of forfeiture, GST shall be applicable on Security Deposit (as mentioned at clause 7.3 above) and shall

be recovered from the Merchant Exporter. GST shall be charged by grossing the Security Deposit amount with

the applicable GST rate. RINL shall issue tax invoice in favor of the Merchant Exporter for such

recovery/forfeiture. This Security Deposit shall be refunded on fulfilment of statutory obligations on

the part of Merchant Exporter and submission of proof of exports as per clause 13.4.

11.7 In case, the statutory obligations in GST rules undergo changes/modification, the same shall be applied.

11.8 In case any penalties are levied by GST authorities for failure of Merchant Exporter to export goods within the

specified time the same shall be made good to RINL by Merchant Exporter.

12.0 Allocation of material and MOU:

12.1 In order to have consistent supplies to the Merchant Exporters, Merchant Exporters are allowed to enter into

MOUs in identified Branches.

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12.2 MOU is to be entered into for a maximum quantity of 5,000 MT, subject to availability, covering all Steel items

(all sizes and all grades, except off grades and commercial grades). No MOUs shall be signed for selective

products.

12.3 The materials shall be offered to the Merchant Exporters after submission of Security Deposit.

12.4 Quotation shall be issued for the quantity as per the request of the Merchant Exporter and the order size is to

be in the range of 100 tons to 2500 tons.

12.5 The materials can also be offered on spot sales basis to the Registered Merchant Exporters who have not

entered into MOU with RINL, subject to availability of material, with the same terms and conditions applicable

to Registered MOU Merchant Exporters, with regard to the sales process other than MOU benefits.

The maximum quantity allocated for Merchant Exports for FY DDMMYYYY is ________ tons.

13.0 General terms of MOU :

13.1 MOU shall be for a period of maximum one financial year or part thereof, upto the end of the financial year,

which is earlier.

13.2 MOUs can be signed for prime products in all sizes and all grades, except off grades and commercial grades.

13.3 The quantities under the MOU can be reduced once by the Merchant Exporter up to 90% of the original MOU

quantity. This option of reduction can be exercised by the Merchant Exporter at least 2 months prior to the

expiry of MOU. RINL has an option to reduce the quantity to 90% of the MOU quantity at any point of time

during the MOU period. In case, the option of reduction of quantity exercised by the Merchant Exporters, as

permitted under the policy, MOU quantity cannot be enhanced subsequently and the MOU incentive shall be

applicable for the reduced MOU quantity only.

13.4 For considering the exported quantity, Merchant Exporter shall provide proof of exports for a minimum of 98%

of total tax invoice quantity for each shipment. In case of failure to do so, Security Deposit of Rs.500/- pmt

submitted as per 7.3 clause above, shall be forfeited for differential quantity of Tax Invoice Quantity and

Exported Quantity. Further, in case the export quantity is between 98% but less than 100% of Tax Invoice

Quantity, differential GST along with penal interest for such quantity shall be recovered from the Merchant

Exporter.

14.0 MOU Fulfilment Criteria

14.1 Minimum exporting of 90 % of the MOU quantity during the MOU period and submission of proof of exports

will be considered as MOU fulfilled and eligible for incentive.

Incentive table for MOU for Merchant Exporters:

All Steel Products Incentive

Slab(MT) In Rs/MT

<500 0

=>500-1500 100

>1500-2500 150

> 2500-3500 200

>3500 300

14.2 The incentives are to be given in the form of credit note, the same shall be absolute and lump sum amount

without any adjustments towards any statutory levy like GST, Octroi etc.

14.3 Quantities lifted from the date of registration as Merchant Exporter of RINL shall be considered for Incentives.

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14.4 Merchant Exporter may be offered additional quantities over and above the MOU quantity. Incentive shall be

payable on the total exported quantities including the additional quantities offered and exported, subject to

the Merchant Exporter fulfilling all other MOU terms and conditions.

14.5 Merchant Exporters are eligible for MOU Incentive corresponding to the MOU quantity slab (Originally entered

or revised MOU slab, as the case may be) irrespective of actual quantity exported, after fulfilling MOU

obligations. However there shall be no cap on the lifting and incentive shall be payable on the actual exports,

except in case of reduction of MOU quantity exercised by the customer where the MOU incentive shall be

restricted to such reduced MOU quantity only.

14.6 For considering the quantity exported and MOU fulfillment, the Merchant Exporter shall provide proof of

exports viz., copy of shipping bill or bill of export containing details of GSTIN and tax invoice of the RINL along

with proof of export general manifest or export report having been filed to RINL as well as jurisdictional tax

officer of RINL

14.7 In case RINL fails to offer material, Merchant Exporter is entitled for MOU benefits up to lifted quantity as per

the corresponding MOU quantity slab (Original or revised MOU slab entered as case may be).

15.0 Cancellation Clause:

15.1 RINL may at its sole discretion, dissolve the registration and MOU, if signed, with the Merchant Exporter giving

a notice of 15 days, in the event of adverse and repeated customer feedback and any other aspect considered

detrimental to the interest of RINL, including diversion of export material to domestic sales and RINL also

reserves the right to forfeit the Security Deposit of Rs.1.0 lakh submitted at the time of registration.

16.0 Fore Closure

16.1 In case, the Merchant Exporter fails to perform as per the conditions stipulated in the agreement to be entered

into, the agreement shall be foreclosed. The decision of the RINL regarding this will be final and binding. The

amount available after adjusting the damages and other dues, if any, shall be returned to the Merchant

Exporter.

16.2 In case RINL wishes to foreclose the contract in the interest of the company at any point of time, during the

contract period, a notice of 15 days shall be given by the RINL to the Merchant Exporter and after the notice

period, the agreement shall be foreclosed. In that case, the amount available after adjusting the damages and

all other dues, if any, shall be returned to the Merchant Exporter. During the notice period, the Merchant

Exporter shall continue to perform all their obligations.

17.0 Other Information:

17.1 The applicant/ Merchant Exporters, whose application has been rejected/ registration has been cancelled as

per clause 15 above, shall not be allowed to participate in any of the selection process of RINL for Merchant

Exporters for a period of one year from the date of cancellation of application/registration

17.2 The Sr. BM shall review the performance of the Merchant Exporters, at the end of every quarter and submit a

consolidated report to RM. RM may further consolidate the report and submit the same to HOD-Marketing.

18.0 Arbitration Clause:

18.1 If at any time, any question, dispute or difference whatsoever arises between the RINL and the Merchant

Exporter upon or in relation to or in connection with the contract/agreement, either party may forthwith notify

the other in writing of the existence of such question, dispute or difference and the same shall be referred to

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the adjudication of sole arbitrator to be nominated by the Chairman-cum-Managing Director, RINL,

Visakhapatnam Steel Plant. In case designation of the Chairman-cum-Managing Director is changed or his

office is abolished, the officer who for the time being is entrusted with the functions of the Chairman-cum-

Managing Director, RINL, Visakhapatnam Steel Plant by whatsoever designation such officer is called, shall

nominate the sole arbitrator to adjudicate upon the disputes and there shall be no objection to any such

nomination / appointment on the ground that the sole arbitrator is an officer / employee of the Visakhapatnam

Steel Plant.

18.2 The decision of the sole Arbitrator shall be final and binding on both the parties to this Agreement. The

arbitration proceedings shall be governed by the Arbitration and Conciliation Act 1996 and rules framed there

under. The venue of Arbitration shall be Visakhapatnam only.

18.3 The Arbitrator’s fee, expenses and all other costs and other expenses relating to the holding of arbitration shall

be borne by both the parties equally. However, the fees and expenses of the Advocates and expenses relating

to the presentation of witness shall be borne by the respective parties. Should the Arbitrator give a specific

award in respect of costs then it would prevail.

18.4 All disputes or differences whatsoever arising between parties out of or relating to the construction, meaning

and operation or effect of this agreement or breach thereof shall be settled by arbitration in accordance with

the rules of arbitration of the Indian Council of Arbitration and the award made in pursuance thereof shall be

binding on the parties.

The place/venue of arbitration shall be at Visakhapatnam.

19.0 JURISDICTION CLAUSE:

It is hereby agreed between the parties that the courts at Visakhapatnam shall have the exclusive jurisdiction

in respect of all disputes arising under or out of this agreement

20.0 Delegation of Powers:

20.1 The delegation of powers for appointment of Merchant Exporter

Sl. No. Nature of Power Remarks Delegation

A Approval for total no. of Merchant Exporters

As per the recommendations of ITD, Marketing

D ( C )

B Approval for Registration As per the recommendations of ITD, Marketing

HOD, Mktg

C Cancellation of Registration As per Clause-15 above. HOD, Mktg

20.2 The delegation of powers for Merchant Export Policy for MOU shall be as follows:

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Sl. No. Nature of Power Remarks Delegation

A Concluding MOU within time specified in the circular.

Subject to Allocation of Material by HQ/RO

RM

B Signing of MOU on behalf of VSP

C Concluding MOU beyond time specified in the circular but not later than xx.xx.xxxx

Subject to Allocation of Material by HQ / RO

HOD, Mktg

D Reduction in MOU Quantity up to xx.xx.xxxx

Full Powers HOD, Mktg

E Short closure of the MOU and payment of MOU incentive in case of non-supply from VSP.

Full Powers D(C)

20.3 Delegation for Deviation, Changes / Amendments to Merchant Export Policy

Sl. No. Nature of Power Remarks Delegation

A Deviations to the Merchant Export Policy

Where Financial Implication is not involved

D ( C )

Where Financial Implication is involved with CFA

B Any changes / Amendments in the Merchant Export policy

CMD

20.4 Pricing, Scope of Pricing Committee and Delegation

Nature of Power Committee Approving Authority

Scope

Fixation of Price for Merchant Exports

Standing Committee consisting of In-charge of Home Sales, Respective RM, I/c of ITD & Respective Sr BM

HOD, Marketing

The prevailing global prices and as well as domestic prices should be the base for arriving at merchant export price and the Pricing Committee shall apply prudence while finalizing the price for Merchant Exports. Branch NSR + Rs.500 per ton as well prevailing global prices should be base for arriving the merchant export price and the price may not be lower than respective Branch NSR + Rs.500/- pmt. Material shall be offered on firm price for 30 days from the date of quotation issued by RINL to take care of the entire process of moving the material from plant to the designated place of loading for export

***

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Annexure–I

Format of Advertisement for Registering Merchant Exporters

RASHTRIYA ISPAT NIGAM LIMITED (A Government of India Enterprise)

VISAKHAPATNAM STEEL PLANT

International Trade Division Marketing Department

No._________ Date: dd/mm/yyyy

Registration as Merchant Exporters for Sale of Steel Products

1. RINL invites applications for Registration as Merchant Exporters for sale of Steel Products.

Location of Registration Name & Address

Visakhapatnam International Trade Division (ITD) Marketing Department, D Block, 1st Floor Administration Building Visakhapatnam Steel Plant Visakhapatnam – 530 031

2. In order to have a focused approach for exporting to the neighboring and other countries and to further

channelize its products in the exports arena, RINL shall register ‘Merchant Exporters’. The Merchant

Exporters are registered to service the small requirements of the neighboring and other countries (Not in the

Banned Countries list of Government of India). The product range includes WRCs, TMT Rebars of various

sizes and grades, Structurals, Rounds, Cast Rounds, Billets & Blooms etc, as marketed by RINL. Preference

will be given to sale of finished rather than semis.

3. Application format, instructions to applicant and terms and conditions can be downloaded from our website

(www.vizagsteel.com) or can be obtained free of cost from the above indicated address till 5.00PM of

dd/mm/yyyy.

4. Filled in application forms should be submitted in the Box provided at the location mentioned at Sl. No. 1

above, latest by 3.00 PM on dd/mm/yyyy, which shall be opened by 3.30PM on the same day.

Interested parties may contact In-charge, International Trade Division (ITD), Marketing Department for further details or visit our web site as mentioned above.

In-charge International Trade Division

RINL/VSP

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Annexure –II

RASHTRIYA ISPAT NIGAM LIMITED (A Government of India Enterprise) VISAKHAPATNAM STEEL PLANT

For use of ITD only

Application form for Merchant Exporter for Sale of Steel Materials

1 Name of the Applicant/Firm

2 Status of the applicant Proprietor/Partnership/Pvt.Ltd.Firm/Public Ltd. Firm / Co-operative

3 Address

4 Contact Details Telephone No

Fax No. email ID:

5 Contact Person Name

Designation

6 Details of Partners/Directors (in case of partnership firm) (along with name, status, address for communication & contact numbers) (Please enclose a copy of Partnership Deed/Memorandum and Articles of Association, Company Registration Details along with latest Balance Sheet and P&L Statement)

Details of Partners/Directors

7 Whether any of the applicant/proprietor/Partner/Directors are DLDs/CA/CSA/Handling Contractors for RINL Products (if yes, Please furnish the details there off)

Yes/No

8 Whether any of the applicant/ proprietor/Partner/Directors are related to Employees of RINL (if yes, Please furnish the details there off

Yes/No

9 GST No

10 Nature of the Business Manufacturing/Trading

Date & Time of Opening

No. of the application

Total applications Received

Location International Trade Division

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11 Type of Steel Products handled in the RINL range of Products

12 Turnover Details:

13 Registration No. with Export Promotion Council or Commodity Board

13 Total Equity Capital or Investment in Business

Rs. in Lakhs

14 Bankers Name & Address Please enclose Bankers Reference indicating the credit worthiness and solvency

15 Details of infrastructure Facilities: Office :

Own/leased/Consent to lease Office

Area in Sq.ft:

16 Warehouse/stockyard (Indicate whether existing yard or will be made immediately after selection of the applicant

Area in Sq.ft:

Address

17 Any other information the applicant wishes to provide

18 Countries to be covered in the proposed business (countries should be other than banned countries)

Declaration:

I/We have gone through the terms and conditions contained in Instructions to Applicants and Draft agreement of Registration as Merchant Exporter as well as all the enclosures to the same at all other related papers and accord my/our acceptance to the same

I/We declare that the information given above is true and correct. I/We am/are fully aware that if any information given above is found to be incorrect, I/We would be disqualified and/or our registration may be cancelled at any point of time.

Place: Date : Signature of Authorized signatory with Seal Note: This application form shall be attached to the covering letter in the applicant firms’ letterhead.

Details Last three Years Report

Total Sales Turnover

Turnover of Steel Products

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Annexure –III

Instructions to the Applicant

1. The applicant shall carefully go through the application format and Terms & Conditions and fully understand

the terms and conditions governing their registration as RINL’s Merchant Exporter.

2. The applicants should be registered with Export Promotion Council or a Commodity Board recognized by the

Department of Commerce, Government of India. The applications are evaluated on attributes viz., financial

capabilities as certified by the Banker, experience in the field of steel marketing etc. and any other criteria,

which the company considers necessary to take into account while evaluation of the application.

3. The applicant shall acquaint themselves about the operations to be done by meeting the Sr. Branch Manager

or his designated officer of HQ Sales Branch, Vizag. The applicant can also visit the stockyard and acquaint

themselves with the location and working of RINL stockyard from where materials will normally be delivered.

The Applicant by the very act of applying will be deemed to have fully understood the terms and conditions

governing their registration and also familiarized themselves with the location of Branch and stockyard at

the time of submission of their application.

4. The details shall be filled in as per the format and the documentary proof is to be attached wherever

applicable. The claim made in the application and the documents submitted along with the application shall

only be considered. No additional documents or claims shall be entertained later.

5. The application form shall be deposited in the box provided for in International Trade Division, Marketing

Department at Visakhapatnam within the indicated date & time. No application shall be accepted beyond

the specified date and time.

6. Incomplete applications, applications not accompanied by the required documents, and conditional

applications are summarily rejected. RINL may, at its convenience, finalize the registration within a period of

90 days.

7. RINL will not be responsible for any delay, loss or non-receipt of application by post etc. Applications received

by Fax, E-mail, Telegram/Telex etc., will not be considered.

8. Assessment made by RINL shall be final & binding. RINL reserves the right to accept or reject any and or all

applications without assigning any reason whatsoever.

9. No conditions, changes etc., are permitted.

10. Applicants may furnish any other relevant information on a separate sheet.

* * *

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Annexure-IV

FORM OF BANKERS CERTIFICATE FROM A SCHEDULED BANK

This is to certify that to the best of our knowledge and information M/s. ……………………

……………………………………………………………………………………… having their address at……………

……………………………………………………………………………………………………………………………………………………………………………………

……. a customer of our bank, are / is respectable and can be treated as good for any engagement up to a limit of

Rs……………>>>….. (Rupees………….………………………………………………………………).

This certificate is issued without any guarantee or responsibility on the bank or any of the Officers.

(Signature) For the Bank

[Seal]

Note :

1. Bankers’ certificate should be on letter head of the bank, sealed in cover addressed to International Trade Division, Marketing Department, Rashtriya Ispat Nigam Limited.

2. In case of partnership firm, certificate to include names of all partners as recorded with the certifying bank.

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Annexure V

Evaluation criteria of application for Merchant Exporter

The committee shall consider only the claims made in the application and the documents submitted along with the application. No additional documents or claims shall be entertained by the Committee at any stage of the evaluation.

1. The details at the top of the evaluation form, and the Name of the applicant shall be filled up with the relevant information.

2. The status of the applicant, shall be mentioned as claimed by the applicant, and shall be recorded in the evaluation sheet after verification of details and found to be correct.

3. Highest annual Sales turnover in the previous three financial years shall be considered. Points shall be allotted based on turnover slabs as follows.

Sl. No. Total Annual Sales Turnover Points to be

allotted

1. Up to Rs. 5 Crores 1

2. >Rs. 5 Crores-up to Rs.10 crores 2

3. >Rs.10 Crores-up to Rs. 15 crores 3

4. >Rs.15 Crores- up to Rs. 20 crores 4

5. >Rs.20 Crores 5

The volume of business can be read from the tax document or turnover documents submitted by the

applicant.

4. All applicants who submit the banker’s reference indicating credit worthiness and solvency shall be awarded the points under this category. Points can be allotted based on the solvency of the applicant in respective slabs. Bankers Certificate (other than cooperative banks) (should be generally in line with the prescribed format. It may be noted that the banker’s certificate should be submitted in Bank’s sealed Envelope

addressed directly to RINL. Points shall be allotted based on limits mentioned in Bankers Certificate as follows:

Sl.

No. Limit in Bankers Certificate

Points to be

allotted

1. Up to Rs. 2 Crores 1

2. >Rs. 2 Crores- up to Rs. 3 crores 2

3. >Rs. 3 Crores-up to Rs. 4 crores 3

4. >R 4 Crores-up to Rs. 6 Crores 4

5. >Rs. 6 Crores 5

5. Total Evaluation points are 10 (Ten) and a minimum 4 points to be scored for consideration for registration

6. In case of two or more applicants scoring identical marks, preference shall be highest score of Sales Turnover.

15

Annexure VI

Evaluation Sheet for Registration of Merchant Exporter

Controlling Branch: HQ Sales, Visakhapatnam

Date of Inspection/Evaluation: Application No. of

Remarks

Maximum

Points

Points

Allotted

1 Name of the Applicant/Firm

2 Status of the Applicant

3 Sales Turnover 5

4 Bankers Certificate for limit 5

Total 10

Observation of the Committee on the above

Names of the Committee Members & Designations Signatures

1.

2.

Note:

Please refer guidelines for evaluation of application before filling up.

16

Annexure VII

Procedure for Registration and MOU with Merchant Exporter

1. An open advertisement / through RINL website (www.vizagsteel.com) shall be issued announcing intention

of registration of Merchant Exports giving specific details.

2. The last date upto which application form shall be available for downloading from the web site and the last date for submission of completed application forms shall be prescribed in the advertisement. A copy of the advertisement shall be displayed in the Notice Board of the Regional Office, Branch Office and Stockyard concerned.

3. The prescribed format of application, Instructions to applicants and agreement format are at Annexure II, Annexure III and Annexure VIII respectively.

4. The applications for Merchant Exporter shall be evaluated as detailed per the evaluation criteria (Annexure V).

5. A Committee comprising In-charge/ITD, Marketing, Regional Manager and Regional Finance Manager shall evaluate the application based on the declarations / documents submitted.

6. On completion of evaluation and allocation of points, the Committee shall submit its recommendation to HOD (Mktg).

7. Based on the recommendation from the Committee, HOD, Mktg, shall approve the proposal, as per the Merchant Export Policy.

8. LOA shall be issued by ITD, Marketing as per format at Annexure X, to the Merchant Exporter in duplicate. A copy of the LOA shall be returned by the Merchant Exporter duly endorsed by the authorized signatory of the Merchant Exporter, as confirmation of the receipt within 15 days from the date of LOA along the applicable Security Deposit. RINL may, at its convenience, finalize the registration within a period of 90 days

9. The Merchant Exporter will be issued a letter of registration indicating the validity period of the Merchant Exportership.

10. Upon Registration the Merchant Exporter shall approach the identified Branch(s) of RINL to sign the agreement and MOU if they desires to do so, with RINL for commencement of sales process.

* * * * *

17

Annexure VIII

Format of LOA to the Merchant Exporter

LETTER OF APPOINTMENT AS MERCHANT EXPORTER

RINL/VSP/Mktg……………….. Dt:……………………

To

………………………….

………………………….

Dear Sirs,

Sub: Our Invitation for applications for appointment of Merchant Exporter, No……. & dtd………. Ref: Your application dtd. ……………in response to our invitation

RINL is pleased to inform you that your application read along with the other documents submitted by you, has

been accepted by RINL, subject to the terms and conditions of Policy for Sale of material through Merchant

Exports, in vogue.

You are advised to contact our _____________ (Branch Name) Address___________________________ for

further interface and deposit the requisite security deposit for registering as Merchant Exporter of RINL.

Yours faithfully,

For RASHTRIYA ISPAT NIGAM LTD.

18

Annexure IX

Format for Letter of Registration to Merchant Exporter

LETTER OF REGISTRATION AS MERCHANT EXPORTER

RINL/VSP/Mktg……………….. Dt:…………………… To …………………………. …………………………. Dear Sirs,

Sub: Our Invitation for applications for appointment of Merchant Exporter, No……. & dtd………. Ref: 1) Your application dtd. ……………in response to our invitation 2) Our letter of appointment No. ……….. dtd…………

RINL is pleased to inform that you are registered as Merchant Exporter for a period from _______ to

___________. You are invited for entering in to an agreement with RINL as per the terms and conditions of

Policy for Sale of material through Merchant Exports, in vogue.

Further, you may also enter in to MOU, if desire so, for commencement of sales process.

Yours faithfully,

For RASHTRIYA ISPAT NIGAM LTD.

19

Annexure –X

Format of Agreement with Registered Merchant Exporter

(To be executed on non-judicial Stamp paper of value as applicable in the concerned state)

This agreement No._____ made on this ________ day of _______ 20 between Rashtriya Ispat Nigam Limited,

Head Quarter Sales, Project Office Complex, Visakhapatnam Steel Plant, Visakhapatnam 530 031, a company

incorporated in India under the Companies Act’1956, CIN …………….. having its registered office at Main

Administration Building, Visakhapatnam Steel Plant, Visakhapatnam 530 031 represented by its Sr. Branch Manager

(herein after called RINL, which term or expression unless excluded by or repugnant to the context shall include its

successors and permitted assigns) of the First Part and M/s _____________________(Name & address of Merchant

Exporter) *having its registered office at _______________(*applicable in case of a registered company), hereinafter

called as “Merchant Exporter”, (which term or expression unless excluded by or repugnant to the context shall

include its successors and permitted assigns) of the Second Part.

WHEREAS RINL is desirous of registering Merchant Exporters at its Head Quarters and accordingly invited applications

from various eligible parties,

ANDWHEREAS the Merchant Exporter who has been dealing in Iron & Steel products, and who has been registered

with an Export Promotion Council or a Commodity Board recognized by the Department of Commerce, Government

of India, and has applied for registration as Merchant Exporter under HQ Sales, Visakhapatnam vide his application

dated ________ agreeing to accepting all the terms and conditions for registration.

AND WHEREAS RINL after scrutiny of application, has been pleased to register the merchant exporter

M/s____________________________________________________, for purchase and marketing of steel products of

RINL in the international market on the terms and conditions set out hereunder, for a period of ___________.

NOW THIS AGREEMENT WITNESSETH AS UNDER:

1.0 Products Covered:

All Steel Items viz. TMT Rebars, WRCs, Rounds, Structurals, Cast Rounds and Billets & Blooms (except off grades

and commercial grades), as produced/marketed by RINL. Any other product can be added at the discretion of

RINL.

The material will be offered and supplied subject to availability with RINL and the Merchant Exporter is

required to contact the concerned branch sales office for Merchant Exports.

The Merchant Exporter shall plan their exports and place the requirement with RINL so that the material is

made available to the Merchant Exporter to avoid stock out situation

2.0 Period of Registration:

2.1 Registration shall be for a period of maximum one financial year or part thereof, up to the end of _________.

3.0 Security Deposit:

3.1 Merchant Exporter shall provide a Security Deposit of Rs.1.0 lakh before registration.

3.2 The SD is payable through DD/PO/RTGS/NEFT payable at the designated branch location. No interest shall be

paid by RINL on this Security Deposit. The Security Deposit shall be refunded on successful completion of all

contractual obligations.

20

3.3 Merchant Exporters shall also provide a Security Deposit at the time issue of Sale Order, equivalent to the

differential value of the prevailing applicable GST for the Sales Order quantity, along with penal interest

chargeable as per GST provisions.

3.4 Considering the maximum 30 days allowed for lifting of material from the date of Quotation and 90 days

allowed for exporting of goods by Merchant Exporter from the date of issue of Tax Invoice, the penal interest

for 120 days in the form of Security Deposit shall be paid by Merchant Exporter.

3.5 Merchant Exporter shall also submit Rs.500/- PMT of the total Sale Order Quantity at the time SO for each

shipment. This shall be used as Security Deposit as Safeguard and liable for forfeiture as per clause 7.2 & 7.3.

RINL shall issue tax invoice in favor of the Merchant Exporter for such recovery/forfeiture. This Security

Deposit shall be refunded on successful fulfilment of contractual obligations under clauses 7.2 and

7.3.

3.6 The Security Deposit is payable through DD/PO/RTGS/NEFT payable at the designated branch location.

3.7 The sales process shall commence after the Merchant Exporters submits Security Deposit, as mentioned above.

4.0 Prices

4.1 Material shall be offered on firm price for 30 days from the date of quotation issued by RINL to take care of

the entire process of moving the material from plant to the designated place of loading for export.

5.0 Payment Terms:

5.1 The Merchant Exporter shall remit in advance, 100% of Sales Order value of the material for issue of sales order

within 07 working days from the date of Quotation.

5.2 Merchant Exporters shall also provide a Security Deposit at the time issue of Sale Order equivalent to the

differential value between the prevailing applicable GST and GST applicable for export for the Sales Order

quantity along with penal interest for 120 days as per 3.3 of the agreement.

5.3 Quotation shall be issued for the quantity as per the request of the Merchant Exporter. However, deliveries

shall have to be completed within the Delivery schedule mentioned in the Sales Order.

5.4 In case Goods are not exported by the Merchant Exporter within 90 days from the date of invoice, the

applicable interest on GST from the date of invoice till the date of actual export to be paid by Merchant

Exporter.

5.5 All payments are payable through DD/PO/RTGS/NEFT payable at the designated branch location.

6.0 Material Offer:

6.1 The Merchant Exporter can take the materials as per their requirement, subject to the availability and offer by

RINL. Quotation shall be issued for the quantity as per the request of the Merchant Exporter and the order

size is to be in the range of 100 tons to 2500 tons.

6.2 Merchant Exporter agrees to export and RINL agrees to offer products during the agreement period as per the

availability. The Merchant Exporter shall plan their exports and place the requirement with RINL so that the

material is made available to the Merchant Exporter to avoid stock out situation.

6.3 The terms and conditions of sale shall be as per the terms in the Quotation and the Sales Order issued by RINL.

7.0 Delivery of Material:

7.1 Delivery shall be Ex- Plant, RINL/VSP or any identified RINL Stockyard to be specified by RINL in India. Merchant

Exporter shall make arrangements for movement of material. In case, the Merchant Exporter desires to lift the

material by rail from ex-plant, 100% Railway Freight shall be paid by them in advance.

21

7.2 Merchant Exporter is allowed to lift material with (-) 5 % variation of SO Quantity. In case of failure to do so,

the Security Deposit referred at clause 3.5 above shall be forfeited for the short lifted quantity of Sale Order

quantity.

7.3 For considering the exported quantity, Merchant Exporter shall provide proof of exports for a minimum of 98%

of total tax invoice quantity for each shipment. In case of failure to do so, Security Deposit of Rs.500/- pmt

submitted as per 3.5 clause above, shall be forfeited for differential quantity between Tax Invoice Quantity

and Exported Quantity. Further, in case the export quantity is between 98% but less than 100% of Tax Invoice

Quantity, differential GST along with penal interest for such quantity shall be recovered from the Merchant

Exporter.

7.4 The weight recorded on the Tax Invoice as per RINL weigh bridge or the Conversion Agents’ weigh bridge or

any other weigh bridge arranged by RINL shall be final unless otherwise specified in case of rail as well as road.

However, in case of rail dispatches, RR weight shall be considered for arriving at railway freight only. No

dispute regarding the same shall be entertained.

7.5 During taking delivery, the Merchant Exporter will abide by all the relevant rules and regulations of RINL

including safety rules etc., safety and security of manpower, machinery, vehicles etc., engaged by the Merchant

Exporter. Further, Merchant Exporter will be solely responsible and RINL will not be liable for any claims,

including claims for compensation etc., whatsoever. Merchant Exporter will keep RINL indemnified regarding

this.

8.0 Quality and Test Certificate

8.1 RINL shall issue Test Certificate for the material supplied to the Merchant Exporter and the Test Certificate

issued by RINL will be final. All quality related issues, if any, shall be raised/settled before shipment from India.

The Quality complaints, if any, shall be settled as per the Quality Complaint Procedure in vogue at RINL.

8.2 The Merchant Exporter shall take necessary care in respect of storage of materials in their premises in order

to avoid any damage, mix-up or loss of identity of materials. RINL is not liable for the damage, mix-up or loss

of identity occurred during the process of storage at Merchant Exporter Premises.

9.0 Other terms and conditions

9.1 Merchant Exporter has to furnish the copy of purchase order or contract from foreign buyer for each shipment

along with an undertaking by them mentioning the discharge port / siding / destination before lifting material

from the plant for that particular shipment.

10.0 Entitlement for MOU

10.1 In order to have consistent supply, Merchant Exporter having registered with RINL, may choose to enter into

MOU for a maximum quantity of 5,000 tons with the terms and conditions as stipulated in the Merchant Policy

in vogue.

10.2 The materials can also be offered on spot sales basis to the Registered Merchant Exporters who have not

entered into MOU with RINL, subject to availability of material, with the same terms and conditions applicable

to Registered MOU Merchant Exporters, with regard to the sales process other than MOU benefits.

11.0 Taxation:

11.1 The transaction between a manufacturer (‘supplier’) and a merchant exporter (‘recipient’) is in the nature of

supply and the same is liable to GST as any other normal taxable supply.

22

11.2 However, vide Notification No.41/2017-Integrated Tax (rate) dt.23-10-2017 and notification No.40/2017-

Central Tax (Rate) dt.23-10-2017, the rate of tax applicable in respect of supplies made to a Merchant Exporter

for export, is reduced to a nominal GST of 0.1% (inter-state) / 0.05 % ( zero point zero five percent ) CGST +

0.05% ( zero point zero five percent ) SGST (intra-state) respectively. The following procedure guidelines are

to be adhered, while making supplies to Merchant Exporter at concessional GST rate.

i. The Merchant Exporter is registered with an Export Promotion Council or a Commodity Board recognized by the Department of Commerce, and in proof of the same, a copy of such registration certificate is provided.

ii. The Merchant Exporter shall place an order on RINL for procuring goods at concessional tax rate and a copy of the same shall also be provided by him to the jurisdictional tax officer of RINL.

iii. The goods shall be supplied to Merchant Exporter on a tax invoice.

iv. The Merchant Exporter shall move the said goods directly to the port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported.

v. If the Merchant Exporter intends to aggregate the supplies from RINL with that of other registered suppliers and then export, the goods from each registered supplier shall be moved to a registered warehouse, and after aggregation, the Merchant Exporter shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported. The Merchant Exporter shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgement of the warehouse operator shall be provided to RINL, as well as to the jurisdictional tax office of RINL.

vi. The Merchant Exporter shall indicate the Goods & Services Tax Identification number of RINL, and the tax invoice number issued by RINL in respect of the said goods in the Shipping Bill or Bill of Exports, as the case may be.

vii. The Merchant Exporter shall provide a copy of shipping bill or bill of export containing details of GSTIN and tax invoice of the RINL along with proof of export general manifest or export report having been filed to RINL as well as jurisdictional tax officer of RINL.

viii. The Merchant Exporter shall export the said goods within a period of 90 days from the date of issue of a tax invoice of RINL.

11.3 RINL shall not be eligible for the above mentioned concessional tax rate, if the Merchant Exporter fails to export

the said goods within a period of 90 days from the date of issue of tax invoice, or non-compliance of above

procedural requirements.

11.4 The Merchant Exporter should provide a Security Deposit equivalent differential value to the prevailing

applicable GST for the Sales Order quantity and applicable penal interest up to 120 day (30 days sales order

validity and maximum 90 days allowed for exports from the date of issue of tax invoice). The Security Deposit

is payable through DD/PO/RTGS/NEFT payable at the designated branch location.

11.5 In case the goods are not exported by the Merchant Exporter within 90 days from the date of issue of a Tax

Invoice by the supplier( i.e, RINL), GST amount at the differential rate of GST with applicable interest is to be

paid by RINL. Merchant Exporter shall submit the documents mentioned at 11.2 to RINL immediately after

export is fulfilled failing which the security deposit collected for this purpose at para 7.4 above, shall be

forfeited and deposited by RINL with GST authorities, on the 90th day.

23

11.6 In case of forfeiture, GST shall be applicable on Security Deposit ( as mentioned at clause 3.5 above) and shall

be recovered from the Merchant Exporter. GST shall be charged by grossing the Security Deposit amount with

the applicable GST rate. RINL shall issue tax invoice in favor of the Merchant Exporter for such

recovery/forfeiture. This Security Deposit shall be refunded on fulfilment of statutory obligations on

the part of Merchant Exporter and submission of proof of exports as per clause 7.3.

11.7 In case, the statutory obligations in GST rules undergo changes/modification, the same shall be applied.

11.8 In case any penalties are levied by GST authorities for failure of Merchant Exporter to export goods within the

specified time the same shall be made good to RINL by Merchant Exporter.

12.0 Cancellation

12.1 RINL may at its sole discretion, dissolve the registration with the Merchant Exporter giving a notice of 15 days,

in the event of adverse and repeated customer feedback and any other aspect considered detrimental to the

interest of RINL, including diversion of export material to domestic sales and RINL also reserves the right to

forfeit the Security Deposit of Rs.1.0 lakh submitted at the time of registration.

12.2 The applicant/ Merchant Exporters, whose application has been rejected / registration has been cancelled as

per clause 12.1, shall not be allowed to participate in any of the selection process of RINL for Merchant

Exporters for a period of One year from the date of cancellation of application/registration

13.0 Fore Closure

13.1 In case, the Merchant Exporter fails to perform as per the conditions stipulated in this agreement, the

agreement shall be foreclosed. The decision of the RINL regarding this will be final and binding. The amount

available after adjusting the damages and other dues, if any, shall be returned to the Merchant Exporter.

13.2 In case the RINL wishes to foreclose the contract in the interest of the company at any point of time, during

the contract period, a notice of 15 days shall be given by the RINL to the Merchant Exporter and after the

notice period, the agreement shall be foreclosed. In that case, the amount available after adjusting the

damages and all other dues, if any, shall be returned to the Merchant Exporter. During the notice period, the

Merchant Exporter shall continue to perform all their obligations

13.3 Amounts recoverable/due under this contract can be recovered/adjusted from any other contract with the

Merchant Exporter.

14.0 Force Measure Clause:

14.1 Notwithstanding anything contained in this agreement, the obligation of the RINL to supply and deliver and

the Merchant Exporter to purchase and take delivery shall remain suspended and neither of them shall be

entitled to claim compensation from the other for any loss or damage caused by such suspension, whether

total or partial, if and to the extent that either the RINL or the Merchant Exporter is rendered unable to

perform its obligations under this agreement by reasons of restraints by Govt., war, blockade, revolution,

insurrection, strikes, acts of God, plague or other epidemics, destruction of material by flood, fire or other

natural calamity interfering with the production, loading or discharge. Provided that the Operation of the

contract shall be resumed as soon as any such condition or circumstances are removed. Provided further that

at all times this clause shall not be construed as releasing the RINL and/or the Merchant Exporter from any

liability in respect of wilful refusal to effect or receive supplies or wilful default or neglect in doing so.

24

14.2 On the occurrence of Force Majeure as above, the affected party shall give to the other, notice in writing of

such occurrence with all details and supporting evidence thereof, within FIFTEEN days of such occurrence.

14.3 In case of Force Majeure conditions prevail for the period in excess of NINETY days; either party shall have the

option to cancel this agreement, by notice in writing to other party in respect of the undelivered quantity of

the materials without, however, any right against or being responsible to the other party for such cancellations.

Upon such cancellation, the RINL shall return the balance amount available after adjusting the outstanding

damages and all other dues, if any, till the date of such notice.

15.0 Arbitration Clause:

15.1 If at any time, any question, dispute or difference whatsoever arises between the RINL and the Merchant

Exporter upon or in relation to or in connection with the contract/agreement, either party may forthwith notify

the other in writing of the existence of such question, dispute or difference and the same shall be referred to

the adjudication of sole arbitrator to be nominated by RINL, Visakhapatnam Steel Plant and there shall be no

objection to any such nomination / appointment any ground.

15.2 The decision of the sole Arbitrator shall be final and binding on both the parties to this Agreement. The

arbitration proceedings shall be governed by the Arbitration and Conciliation Act 1996 and rules framed there

under. The seat or the venue of Arbitration shall be Visakhapatnam only.

15.3 The Arbitrator’s fee, expenses and all other costs and other expenses relating to the holding of arbitration shall

be borne by both the parties equally. However, the fees and expenses of the Advocates and expenses relating

to the presentation of witness shall be borne by the respective parties. Should the Arbitrator give a specific

award in respect of costs then it would prevail.

16.0 JURISDICTION CLAUSE:

It is hereby agreed between the parties that the courts at Visakhapatnam shall have the exclusive jurisdiction

in respect of this agreement.

IN WITNESS WHEREOF the parties hereto have set out their hands on the day, month and year above written.

Signed and Delivered on behalf of

Within the named

Visakhapatnam Steel Plant through

______________ in the presence of RINL

WITNESS:

1. Branch Finance Manager/BSO/RINL

2.

Signed and Delivered on behalf of the within

names ___________ ____ through ____________

in The presence of MERCHANT EXPORTER

25

WITNESS: 1.

2.

26

Annexure XI

MEMORANDUM OF UNDERSTANDING (MOU)

(To be executed on plain paper)

This Memorandum of Understanding (MOU) is entered into this ____ day of the month _____year ____between

Rashtriya Ispat Nigam Limited (RINL) and ____________ (herein after called as Merchant Exporter) with a view to

know the possible market requirement and decide production plan to enable RINL to make supply of steel materials

from time to time.

This MOU is valid for a period of ONE (1) year (or part thereof) with effect from _________ to ______and shall cover the following categories and quantities of materials.

Type of MOU Products Covered Quantity (MT)

Merchant Export All Steel Items viz. TMT Rebars, WRCs, Rounds, Structurals, Cast Rounds and Billets & Blooms (except off grades and commercial grades), as produced/marketed by RINL. Any other product can be added at the discretion of RINL.

1.0 The MOU is for all Steel Items (all sizes and all grades, other than off grades and commercial grades) and offer

and supply of material by RINL to Merchant Exporter is subject to availability.

2.0 Allocation of material and MOU:

2.1 In order to have consistent supply to the Merchant Exporters, this MOU is entered into at Branch Sales Office,

at __________.

2.2 This MOU is for a maximum quantity of 5,000 MT, subject to availability, covering all Steel Products

in prime grades (all sizes and all grades, except off grades and commercial grades).

2.2 The materials shall be offered to the Merchant Exporters after submission of Security Deposit.

2.3 Quotation shall be issued for the quantity as per the request of the Merchant Exporter and the order

size is to be in the range of 100 tons to 2500 tons.

3 General terms of MOU :

3.2 MOU shall be for a period from _____________ to ________________.

3.3 The quantities under the MOU can be reduced once by the Merchant Exporter up to 90% of the original MOU

quantity. This option of reduction can be exercised by the Merchant Exporter at least 2 months prior to the

expiry of MOU. RINL has an option to reduce the quantity to 90% of the MOU quantity at any point of time

during the MOU period. In case, the option of reduction of quantity exercised by the Merchant Exporters, as

permitted under the policy, MOU quantity cannot be enhanced subsequently and the MOU incentive shall be

applicable for the reduced MOU quantity only.

27

4 MOU Fulfilment Criteria

4.1 Minimum exporting of 90 % of the MOU quantity during the MOU period and submission of proof of exports

will be considered as MOU fulfilled and eligible for incentive.

Incentive table for MOU for Merchant Exporters:

All Steel Products Incentive

Slab(MT) In Rs/MT

<500

=>500-1500 100

>1500-2500 150

> 2500-3500 200

>3500 300

4.2 The incentives are to be given in the form of credit note, the same shall be absolute and lump sum amount

without any adjustments towards any statutory levy like GST, Octroi etc.

4.3 Quantities lifted from the date of registration as Merchant Exporter of RINL shall be considered for Incentives.

4.4 Merchant Exporter may be offered additional quantities over and above the MOU quantity. Incentive shall be

payable on the total exported quantities including the additional quantities offered and exported, subject to

the Merchant Exporter fulfilling all other MOU terms and conditions.

4.5 Merchant Exporters are eligible for MOU Incentive corresponding to the MOU quantity slab (Originally entered

or revised MOU slab, as the case may be) irrespective of actual quantity exported, after fulfilling MOU

obligations. However there shall be no cap on the lifting and incentive shall be payable on the actual exports,

except in case of reduction of MOU quantity exercised by the customer where the MOU incentive shall be

restricted to such reduced MOU quantity only.

4.6 For considering the quantity exported and MOU fulfillment, the Merchant Exporter shall provide proof of

exports viz., copy of shipping bill or bill of export containing details of GSTIN and tax invoice of the RINL along

with proof of export general manifest or export report having been filed to RINL as well as jurisdictional tax

officer of RINL

4.7 In case RINL fails to offer material, Merchant Exporter is entitled for MOU benefits up to lifted quantity as per

the corresponding MOU quantity slab (Original or revised MOU slab entered as case may be).

That it is clearly understood between RINL and the Merchant Exporter that this MOU is not an enforceable contract

and future contract(s) will be entered between the parties to the MOU at the Branch level for supply of Steel materials

through direct dispatch / stockyard delivery, as per availability.

The MOU shall be governed by the terms and conditions as detailed in the Policy for Sale of material through

Merchant Exports in vogue and Agreement signed between RINL and Merchant Exporter.

Name and designation of RINL Officer Name and designation of

Sr. Branch Manager Authorized signatory of Merchant Exporter