Reduction in Invoice
Value on Account of Pre-payment of Usance Bill
Reduction in Invoice Value on Account of Pre-payment of Usance Bill :
Occasionally, exporters may approach authoriscd dealers for reduction in invoice value on account of cash discount to overseas buyers for prepayment of usance bills.
In such cases aurhoriscd dealers may agree to the exporter granting cash discount to the overseas buyer to the extent of amount of proportionate interest on the unexpired period of usance calculated at the rate of interest stipulated in the export contract or at the prime rate / LIBOR of the currency of invoice where rate of interest is not stipulated in the contract.