If company plans to sell its production to its domestic region / market, then on what basis company will receive freight expenses reimbursement on urea? What are the term of freight expenses reimbursement?

If company plans to sell its production to its domestic region / market, then on what basis company will receive freight expenses reimbursement on urea? What are the term of freight expenses reimbursement?

Urea is covered under Uniform Freight Policy of Government of India, which reimburses freight incurred in movement of fertilisers as per following Freight Reimbursement Methodology:

  • Primary Freight (Rail) – 100% reimbursement from Plant to respective rail head of districts, based on RR copy.
  • Primary Freight (Road) – Road freight reimbursement for direct road movement of fertiliser from Plant ( upto 500 Kms radius) shall be paid at the lower of actual freight expenditure or freight amount calculated based on the approved district lead from plant and normative freight Per MT Per Km notified by DOF, based on m FMS data.
  • Secondary Freight (Road) – Road freight reimbursement for the road movement of fertiliser from district rail head to various destinations (retailers/ dealers/WHs) upto the block level shall be paid at the lower of actual freight expenditure or freight amount calculated based on the approved district lead and normative freight Per MT Per Km notified by DOF, based on m FMS data.
  • All above freight reimbursement bill is generated and duly certified bill by company statutory auditor is claimed on monthly basis.