F.o.r destination terms indicate
anil kumr
(Querist) 26 April 2016
This query is : Resolved
Can anyone explains the exact meaning of F.O.R Destination price basis. Under this term who bear the freight charges? If it by the purchaser, can it be paid after receipt of material at the destination ? Or the buyer is supposed to pay it prior to dispatch?
Kindly advise appropriately.
Devajyoti Barman
(Expert) 26 April 2016
Give background details of the query and how are you related to this query?
P. Venu
(Expert) 27 April 2016
Please state the material facts.
Rajendra K Goyal
(Expert) 27 April 2016
State material facts of the problem if any.
Kumar Doab
(Expert) 27 April 2016
You are on which side;seller, buyer?
anil kumr
(Querist) 27 April 2016
I thank all of you for coming forward to share your indepth knowledge on my query. I am extremely sorry for not putting all the required details in place at the first place. however, for your immediate attention the pointwise replies are furnished below;
In this case I am (My organisation ) is the BUYER . we are located at Kochi, State Kerala, India. Recently we have got a quotation from a supplier who submitted his prices as given below;
Basic price : Rs.100000
Add Tax 12.5% without form C Rs. 12500
ADD Freight upto site Rs. 7500
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Total FOR Destination Price Rs.120000
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Accordingly we released the Order and made a payment of Rs. 112500/- as advance payment. The price basis was mentioned as FOR Destination basis inclusive of Basic price, Packing & Forwarding charges, Taxes & Duties.The freight charges will be paid by us immediately on delivery of the item at our site. The vendor delivered the item at our site and is now asking us to pay the freight charges.
However, now my finance people say that they will not release the freight charges as the price basis is FOR Destintion and as such the vendor should bear the Freight charges upto site.
even if the freight charges was in out scope we should have made the payment prior to dispatch only. as the price basis terms " FOR Destination means , once the item is despatched the purchaser will not make any payment to the supplier.
And as a justification we through an interoffice communication informed our Finance department that the delivery of the material is upto our site is the sole responsibility of the vendor and FOR Destination means only that. As regards the freight charges are concerned, we can pay it either prior to dispatch or immediately after receipt of the material. and FOR Destination does not mean that the purchaser will not make any payment after receipt of the material. Neverthless, due to some ego issues our Finance is not ready to issue the freight charges to the vendor. Under the above circumstance, i want to have a detailed information as to the validity of the statement of our finance department.
I once again thank all of you for trying to help me out immediately.
Kumar Doab
(Expert) 28 April 2016
Freight has been added in quotation.
Final amount is after addition of freight.
FOR (Freight on Receipt) is clear and is demanded on delivery.
Pay and close.
anil kumr
(Querist) 28 April 2016
Dear Mr Doab, Pl note My finance people are arguing with me that FOR Destination price is basis is one of the methods of delivering goods from source to party that defines the liability of transportation payment. If a particular item is delivered under the FOR terms, then the goods are delivered without any transportation charges. Hence they will not release the freight charges. Please advise appropriately.
Kumar Doab
(Expert) 28 April 2016
My response is same.
You may wait for the advise of other experts.
anil kumr
(Querist) 01 May 2016
I am waiting for the appropriate advice of other experts to process further on this issue. with thanks and regards anil
anil kumr
(Querist) 08 May 2016
I am waiting for the appropriate advice of other experts to process further on this issue. with thanks and regards anil
