Exemption from
Declarations
(i) EDF Exemption
The requirement of declaration of
export of goods and software will not apply to the List referred below. The
exporters shall, however, be liable to realize and repatriate export proceeds
as per FEMA Regulations.
a)
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trade samples of goods and publicity material
supplied free of payment;
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b)
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personal effects of travellers, whether
accompanied or unaccompanied;
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c)
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ship's stores, trans-shipment cargo and goods
supplied under the orders of Central Government or of such officers as may be
appointed by the Central Government in this behalf or of the military, naval
or air force authorities in India for military, naval or air force
requirements;
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d)
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goods or software accompanied by a declaration
by the exporter that they are not more than twenty five thousand rupees in
value;
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e)
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by way of gift of goods accompanied by a
declaration by the exporter that they are not more than one lakh rupees in
value;
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f)
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aircrafts or aircraft engines and spare parts
for overhauling and/or repairs abroad subject to their reimport into India
after overhauling /repairs, within a period of six months from the date of
their export;
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g)
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goods imported free of cost on re-export
basis;
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h)
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goods not exceeding U.S.$ 1000 or its
equivalent in value per transaction exported to Myanmar under the Barter
Trade Agreement between the Central Government and the Government of Myanmar;
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i)
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the following goods which are permitted by the
Development Commissioner of the Export Processing Zones or Free Trade Zones
to be re-exported, namely:
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1) imported goods found defective, for the
purpose of their replacement by the foreign suppliers/collaborators;
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2) goods imported from foreign suppliers/collaborators
on loan basis;
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3) goods imported from foreign
suppliers/collaborators free of cost, found surplus after production
operations.
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j)
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replacement goods exported free of charge in
accordance with the provisions of Exim Policy in force, for the time being.
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(ii) Grant of EDF waiver
AD–I Banks may consider requests for
grant of EDF waiver for export of goods free of cost for the purpose of export
promotion.
- For general exporters it is up to
2 per cent of the average annual exports during the preceding three
financial years subject to a ceiling of Rs.5 lakhs.
- For status holder exporters, the
limit as per the present Foreign Trade Policy is Rs.10 lakhs or 2 per cent
of the average annual export realization during the preceding three licensing
years (April-March), whichever is higher.
Exports of goods not involving any
foreign exchange transaction directly or indirectly requires the waiver of EDF
procedure from the Reserve Bank.
B.2 Manner of
Receipt and Payment
(i)
The amount representing the full export value of the goods exported shall be
received through an AD in the following manner:
a. Bank draft, pay order, banker's or
personal cheques.
b.
Foreign currency notes/foreign currency travelers’ cheques from the buyer
during his visit to India.
c. Payment out of funds held in the
FCNR/NRE account maintained by the buyer
d. International Credit Cards of the
buyer.
Note: When payment for goods sold to
overseas buyers during their visits is received, EDF (duplicate) should be
released by the AD–I Banks only on receipt of funds in their Nostro account or proof
of receipt by the credit card servicing Bank in India.
(ii) Trade transactions can also be
settled in the following manner:
a.
All transactions between a person resident in India, Nepal or Bhutan may be
settled in Indian Rupees. However, in case of export of goods to Nepal, where
the importer has been permitted by the Nepal Rashtra Bank to make payment in
free foreign exchange, such payments shall be routed through the ACU mechanism.
b.
Gem & Jewellery units in SEZs and EOUs can settle the transactions in
precious metals, subject to the condition that the sale contract provides for
the same and the approximate value of the precious metals is indicated in the
relevant EDF Forms.
(iii) Processing of export related
receipts through Online Payment Gateway Service Providers
AD–I Banks have been allowed make
remittances through Online Payment Gateway Service Providers (OPGSPs) subject
to the following conditions:
a. The AD–I Banks offering this facility
shall carry out the due diligence of the OPGSP.
b. This facility shall only be
available for export value not exceeding USD 10,000.
c. AD–I
Banks shall open a NOSTRO collection account for receipt of the export related
payments. Where the exporters are required to open notional accounts with the OPGSP,
it shall be ensured that all receipts should be automatically be swept and
pooled into the NOSTRO collection account.
d. Bank
should be able to delineate the transactions in the NOSTRO account of each
OPGSP.
e. The
permissible debits to the NOSTRO collection account are for repatriation of
funds representing export proceeds to India, payment of fee/commission to the
OPGSP; and charge back to the importer where the exporter has failed in
discharging his obligations under the sale contract.
f. The balances held in the NOSTRO
collection account shall be repatriated to the exporter's account in India
immediately on receipt of the confirmation from the importer and, in no case,
later than seven days from the date of credit to the NOSTRO collection account.
g. AD-I Banks shall ensure that the
purpose codes reported to the Reserve Bank in the online payment gateways are
appropriate.
h. AD-I Banks shall submit all the
relevant information relating to any transaction under this arrangement to the
Reserve Bank, as and when advised to do so.
i. Each NOSTRO collection account
should be subject to reconciliation and audit on a quarterly basis.
j. Resolution of all payment related
complaints of exporters in India shall remain the responsibility of the OPGSP
concerned.
k. In respect of new arrangements, the
OPGSP shall open a liaison office with the approval of the Reserve Bank before
operationalising the arrangement. AD–I Banks desirous of entering into such an
arrangement/s should approach the Reserve Bank for obtaining one time
permission and thereafter report the details of each such arrangement as and
when entered into.
(iv) Settlement System under ACU
Mechanism
a) Participants in the Asian Clearing
Union will have the option to settle their transactions either in ACU Dollar or
in ACU Euro which shall be equivalent in value to one US Dollar and one Euro,
respectively.
b) Further, AD–I Banks are allowed to
open and maintain ACU Dollar and ACU Euro accounts with their correspondent
banks. All eligible payments are required to be settled through these accounts.
c) Trade transactions with Myanmar can
be settled in any freely convertible currency in addition to the ACU mechanism.
d) All eligible current account
transactions including trade transactions with Iran should be settled in any
permitted currency outside the ACU mechanism, until further notice.
(v) Third party payments for export /
import transactions can be made subject to:
a) Firm irrevocable order backed by a
tripartite agreement should be in place. It may not be insisted upon, where the
name of the third party is mentioned in the irrevocable order subject to:
(i)
AD bank should be satisfied with the bona-fides of the transaction.
(ii) AD bank
should consider the FATF statements while handling such transaction.
b. Third party payment should be
routed through the banking channel only;
c. The exporter should declare the
third party remittance in the Export Declaration Form;
d. It would be the responsibility of
the Exporter to realize and repatriate the export proceeds from such third
party named in the EDF;
e. Reporting of outstanding in the XOS
would continue against the exporter. However, instead of the name of the
overseas buyer, the name of the declared third party should appear in the XOS;
f. In case of shipments being made to
a country in Group II of Restricted Cover Countries, (e.g. Sudan, Somalia,
etc.), payments may be received from an Open Cover Country; and
g. In case of imports, the Invoice and
the Bill of Entry should contain a narration that the related payment has to be
made to the (named) third party. The importer should comply with the related
instructions relating to imports.
B.3 Realization
and Repatriation of proceeds of export of goods / software / services
It is obligatory on the part of the
exporter to realize and repatriate the full value of exports to India within a
stipulated period from the date of export, as under:
(i) The period of realization and
repatriation of export proceeds shall be nine months from the date of export
for all exporters.
(ii) Goods exported to a warehouse
established outside India: As soon as it is realized and in any case within
fifteen months from the date of shipment of goods.
B.4 Foreign
Currency Account
(i) Participants in international
exhibition/trade fair have been granted general permission for opening a
temporary foreign currency account abroad for deposit of sale proceeds.
Exporters can operate the account during their stay there and repatriate the
balance to India through normal banking channels within a period of one month
from the date of closure of the exhibition/trade fair and submit full details
to the concerned AD–I Bank.
(ii) Reserve Bank may consider
applications in Form EFC from exporters having good track record for opening a
foreign currency account with banks in India and outside India subject to
certain terms and conditions.
(iii) An Indian entity can also have a
foreign currency account with a bank outside India, in the name of its overseas
office/branch, by making remittance for the purpose of normal business
operations of the said office/branch subject to FEMA guidelines.
(iv) A unit located in a Special
Economic Zone (SEZ) may open, hold and maintain a Foreign Currency Account with
an AD–I Banks in India subject to FEMA guidelines.
(v) A resident project / service
exporter may open, hold and maintain foreign currency account outside or within
India, subject to the standard terms and conditions in the Memorandum PEM.
B.5 Diamond Dollar
Account (DDA)
(i) Under the DDA scheme, firms and companies
dealing in diamond and precious metal jewellery, with a track record of at
least 2 years in such import / export and having an average annual turnover of
Rs. 3 crores and above during the preceding three licensing years are permitted
to transact their business through Diamond Dollar Accounts.
(ii) They may be allowed to open not more
than five Diamond Dollar Accounts.
(iii) Eligible firms and companies may apply
for permission to their AD–I Banks in the prescribed format.
(iv) AD–I Banks are required to submit a quarterly
report to Reserve Bank of India, giving name and address of the firm / company
in whose name the Diamond Dollar Account is opened/ closed, along with the date
of opening / closing of such accounts, by the 10th of next month.
(v) AD–I Banks are required to submit a
statement giving the data on the DDA balances maintained by them on a
fortnightly basis within seven days of close of the fortnight to Reserve Bank
of India.
B.6 Exchange Earners’
Foreign Currency (EEFC) Account
(i) A resident may open an account in foreign
currency called the Exchange Earners’ Foreign Currency (EEFC) Account with an
AD–I Banks in India, as per FEMA regulations.
(ii) Resident individuals are permitted to
include resident close relative(s) in their EEFC bank accounts on former or
survivor basis. However, such relative, shall not be eligible to operate the
account during the life time of the resident account holder.
(iii) This account shall be maintained only
in the form of non-interest bearing current account. No credit facilities,
shall be permitted against the security of balances held in EEFC accounts.
(iv) All categories of foreign exchange
earners are allowed to credit 100% of their foreign exchange earnings to their
EEFC Accounts subject to the condition that
a)
The
accruals during the calendar month are converted to rupees after adjusting
approved payments and forward commitments. Further, in case of requirements,
EEFC account holders are permitted to access the forex market for purchasing
foreign exchange.
b)
The
facility of EEFC scheme is intended to enable exchange earners to save on
conversion/transaction costs while undertaking forex transactions and not
intended to enable exchange earners to maintain assets in foreign currency.
(v) The provisions at paragraph (iv) a) and
(iv) b) will also apply to Resident Foreign Currency Account (Domestic) and
Diamond Dollar Account (DDA).
(vi) The eligible credits represent:
a. inward remittance received through normal
banking channel. It will not include remittance received pursuant to any
undertaking given to the Reserve Bank, foreign currency loan raised and investment
received for meeting specific obligations by the account holder.
b. Payments received in foreign exchange by a
unit in Domestic Tariff Area (DTA) for supplying goods to a unit in Special
Economic Zone out of its foreign currency account.
(vii) AD–I Banks may permit their exporter
constituents to extend trade related loans / advances to overseas importers out
of their EEFC balances without any ceiling subject to FEMA guidelines.
(viii) AD–I Banks may permit exporters to
repay packing credit advances from balances in their EEFC account and Rupee
resources to the extent exports have actually taken place.
B.7 Setting up of
Offices Abroad and Acquisition of Immovable Property for Overseas Offices
(i) At the time of setting up of the office, AD–I
Banks may allow remittances towards initial expenses up to fifteen per cent of
the average annual sales/income or turnover during the last two financial years
or up to twenty-five per cent of the net worth, whichever is higher.
(ii) For recurring expenses, remittances up
to ten per cent of the average annual sales/income or turnover during the last
two financial years may be sent subject to the following terms and conditions:
a. The overseas branch has been set up or
representative is posted overseas for conducting normal business activities of
the Indian entity;
b. The overseas branch shall not enter into
any contract or agreement in contravention of the Act, Rules or Regulations
made there under;
c. The overseas branch should not create any
financial liabilities for the head office in India and also not invest surplus
funds abroad without prior approval of the Reserve Bank. Any funds rendered
surplus should be repatriated to India.
(iii) The details of bank accounts opened in
the overseas country should be promptly reported to the AD Bank.
(iv) Indian company having overseas offices may
acquire immovable property outside India for its business and for residential
purpose of its staff within the limits referred above.
(v) The overseas branch of software exporter
company/firm may repatriate to India 100 per cent of the contract value of each
‘off-site’ contract.
(vi) In case of companies taking up ‘on site’
contracts, they should repatriate the profits after the completion of the said
contracts.
(vii) An audited yearly statement showing
receipts under ‘off-site’ and ‘on-site’ contracts undertaken by the overseas
office, expenses and repatriation thereon may be sent to the AD–I Banks.
B.8 Advance Payments
against Exports
(1) Where an exporter receives advance
payment from a buyer outside India, the exporter shall be under an obligation
to ensure that the shipment of goods is made within one year from the date of
receipt of advance payment. The rate of interest, if any, should not exceed
LIBOR + 100 basis points and the documents covering the shipment are to be routed
through the AD–I Banks through whom the advance payment is received.
In case the exporter is unable to make the
shipment within one year, no remittance towards refund shall be made without
the prior approval of the Reserve Bank.
(2) Exporters having a minimum of three
years’ satisfactory track record can receive long term export advance up to a
maximum tenor of 10 years for execution of long term supply contracts subject
to the conditions as under:
(i) Firm irrevocable supply orders and
contracts should be in place. Product pricing should be in consonance with
prevailing international prices.
(ii) Company should have capacity, systems
and processes in place to ensure that the orders can actually be executed.
(iii) The facility is to be provided only to
those entities, which have not come under the adverse notice of the regulatory
agencies or have not been caution listed.
(iv) Such advances should be adjusted through
future exports.
(v) The rate of interest payable, if any,
should not exceed LlBOR plus 200 basis points.
(vi) The documents should be routed through
one Authorized Dealer bank only.
(vii) Authorised Dealer bank should ensure
compliance with AML / KYC guidelines
(viii) Such export advances shall not be
permitted to be used to liquidate NPA Rupee loans.
(ix) Double financing for working capital for
execution of export orders should be avoided.
(x) Receipt of such advance of USD 100
million or more should be immediately reported to the Trade Division, Foreign
Exchange Department, Reserve Bank of India.
(xi) The issuance of bank guarantee (BG) /
Stand by Letter of Credit (SBLC)should be rigorously evaluated as any other
credit proposal.
a. BG / SBLC may be issued for a period up to
two years. Further rollover should also be allowed for a period up to two years
only subject to satisfactory export performance as per the contract.
b. BG / SBLC should cover only the advance on
reducing balance basis.
c. BG / SBLC issued from India in favor of
overseas buyer should not be discounted by the overseas branch / subsidiary of
bank in India.
(xii) AD–I Banks may allow the purchase of
foreign exchange from the market for refunding advance payment credited to EEFC
account only after utilizing the entire balances held in the exporter’s EEFC
accounts maintained at different branches/banks.
(3) ‘AD Category- I banks may allow exporters to
receive advance payment for export of goods which would take more than one year
to manufacture and ship and where the
‘export agreement’ provides for shipment of goods extending beyond the period
of one year from the date of receipt of advance payment subject to the
following conditions:-
(i) The KYC and due diligence exercise has
been done by the AD–I Banks for the overseas buyer;
(ii) Compliance with the Anti-Money
Laundering standards has been ensured;
(iii) The AD Category-I bank should ensure
that export advance received by the exporter should be utilized to execute
export and not for any other purpose i.e., the transaction is a bona-fide
transaction;
(iv) Progress payment, if any, should be
received directly from the overseas buyer strictly in terms of the contract;
(v) The rate of interest, if any, payable on
the advance payment shall not exceed London Inter-Bank Offered Rate (LIBOR) +
100 basis points;
(vi) There should be no instance of refund
exceeding 10% of the advance payment received in the last three years;
(vii) The documents covering the shipment
should be routed through the same authorised dealer bank; and
(viii) In the event of the exporter's
inability to make the shipment, no remittance towards refund should be made
without the prior approval of the Reserve Bank.’
(4) (i) AD–I banks are advised to efficiently
follow up with the concerned exporters in order to ensure that export
performance are completed within the stipulated time period.
(ii) AD–I banks should exercise proper due
diligence and ensure compliance with KYC and AML guidelines so that only
bonafide export advances flow into India. Doubtful cases and chronic defaulters
may be referred to Directorate of Enforcement (DoE) for further investigation.
A quarterly statement indicating details of such cases may be forwarded to the
concerned Regional Offices of RBI within 21 days from the end of each quarter.
B.9 EDF Approval for
Trade Fair/Exhibitions abroad
1. Organizations participating in Trade
Fair/Exhibition abroad can take/export goods for exhibition and sale outside
India without the prior approval of the Reserve Bank. Unsold exhibit items may
be sold outside the exhibition/trade fair in the same country or in a third
country. Such sales at discounted value are also permissible. It would also be
permissible to 'gift’ unsold goods up to the value of USD 5000 per exporter,
per exhibition/trade fair. AD–I Banks may approve EDF of export items for
display or display-cum-sale in trade fairs/exhibitions outside India subject to
the following:
(i) The exporter shall produce relative Bill
of Entry within one month of re-import into India of the unsold items.
(ii) The sale proceeds of the items sold are
repatriated to India in accordance with the FEMA regulations.
(iii) The exporter shall report to the AD–I
Banks the method of disposal of all items exported, as well as the repatriation
of proceeds to India.
(iv) Such transactions approved by the AD–I
Banks will be subject to 100 per cent audit by their internal
inspectors/auditors.
B.10 EDF approval for
Export of Goods for re-imports
(i) Exporters may be granted EDF approval for
exporting the goods for re-import after repairs / maintenance / testing /
calibration, etc., subject to the condition that the exporter shall produce
relative Bill of Entry within one month of re-import of the exported item from
India.
(ii) Where the goods being exported for
testing are destroyed during testing, AD–I Banks may obtain a certificate
issued by the testing agency that the goods have been destroyed during testing,
in lieu of Bill of Entry for import.
B.11 Part Drawings
/Undrawn Balances
(i) In certain lines of export trade, it is
the practice to leave a small part of the invoice value undrawn for payment.
The difference is ascertained after inspection, weighing and analysis of the
goods once received. In such cases, AD–I Banks may negotiate the bills,
provided:
a. The amount of undrawn balance is
considered normal in the particular line of export trade, subject to a maximum
of 10 per cent of the full export value.
b. An undertaking is obtained from the
exporter on the duplicate of EDF forms that he will surrender the balance
proceeds within the period prescribed for realization.
(ii) Where the exporter has not been able to
arrange for repatriation of the undrawn balance in spite of best efforts, AD–I
Banks should ensure that the exporter has realized at least the value for which
the bill was initially drawn or 90 per cent of the value declared on EDF form,
whichever is more and a period of one year has elapsed from the date of
shipment.
(i) When goods are exported on consignment
basis, the AD-I bank should instruct his overseas correspondent to deliver documents
only against an undertaking to deposit the proceeds within the prescribed
period.
(ii) The agents/consignees may deduct
expenses incurred towards receipt, storage and sale of the goods, from the sale
proceeds of the goods and remit the net proceeds to the exporter.
(iii) Deductions in Account Sales should be
supported by bills/receipts in original except in case of petty items like
postage/cable charges, stamp duty, etc.
(iv) In case the goods are exported on
consignment basis, freight and marine insurance must be arranged in India.
(v) AD–I Banks may allow the exporters to
abandon the books, which remain unsold at the expiry of the period of the sale
contract. This should be shown as deduction from the export proceeds in the
Account Sales.
B.13 Opening / Hiring
of Ware houses abroad
AD–I Banks may permit exporters to open / hire
warehouses abroad subject to following conditions:
(i) Applicant’s export outstanding does not
exceed 5 per cent of exports made during the previous financial year.
(ii) Applicant has a minimum export turnover
of USD 100,000/- during the last financial year.
(iii) Period of realization should be as
applicable.
(iv) All transactions should be routed
through the designated branch of the AD Banks.
(v) The above permission may be granted to
the exporters initially for a period of one year and renewal may be considered
subject to the applicant satisfying the requirement above.
(vi) AD–I Banks granting such
permission/approvals should maintain a proper record of the approvals granted.
B.14 Direct dispatch
of documents by the exporter
1. AD–I may dispatch shipping documents directly
to the consignees or their agents instead of their overseas correspondents in
cases where:
(i) Advance payment or an irrevocable letter
of credit has been received for the full value of the export shipment and the
underlying sale contract provides for the direct despatch.
(ii) Where the exporter is a regular customer
and the AD–I Bank is satisfied with his track record and arrangements have been
made for realization of export proceeds.
2. AD–I Banks may also permit 'Status Holder
Exporters’, and units in Special Economic Zones (SEZ) to dispatch the export
documents to the consignees outside India subject to the terms and conditions
that:
(i) The export proceeds are repatriated
through the AD banks named in the EDF.
(ii) The duplicate copy of the EDF is
submitted to the AD banks within 21 days of the date of shipment.
3. AD–I Banks may regularize cases of direct dispatch
of shipping documents up to USD 1 million or its equivalent, per export
shipment, subject to the following conditions:
(i) The export proceeds have been realized in
full.
(ii) The exporter is a regular customer of AD–I
Banks for a period of at least six months.
(iii) The exporter’s account with the AD–I
Banks is fully compliant with the Reserve Bank’s extant KYC / AML guidelines.
(iv) The AD–I Banks is satisfied about the
bona-fides of the transaction.
(v) In case of doubt, the AD–I Banks may
consider filing Suspicious Transaction Report with FIU_IND.
B.15 Invoicing of
Software Exports
(i) For long duration contracts involving
series of transmissions, the exporters should bill their overseas clients
periodically. The exporter may submit a combined SOFTEX form for all the
invoices raised on a particular overseas client, including advance remittances
received in a month.
(ii) Where contracts involve ‘one-shot
operation’, the invoice should be raised within 15 days of transmission.
(iii) The exporter should submit SOFTEX form in
quadruplicate, to the designated official at STPI / EPZ /FTZ /SEZ, for
valuation and certification within 30 days of the date of invoice or the date
of last invoice raised in a month.
(iv) The invoices raised on overseas clients
as at (i) and (ii) above will be subject to valuation by the designated
official and consequent amendment will be made, if necessary.
B.16 Short Shipments
and Shut out Shipments
(i) When part of a shipment covered by an EDF
is short-shipped, the exporter must inform the Customs. The exporter should
give an undertaking to the AD banks that he has filed the short-shipment notice
with the Customs and that he will furnish the certificate as soon as it is
obtained.
(ii) Where a shipment has been entirely shut
out and there is delay in making arrangements to re-ship, the exporter will
give notice in duplicate to the Customs, attaching thereto the unused duplicate
copy of EDF and the shipping bill. The Customs will certify the copy of the
notice upon verification and forward it to the Reserve Bank together with
unused duplicate copy of the EDF. In this case, the original EDF received
earlier from Customs will be cancelled. If the shipment is made subsequently, a
fresh set of EDF should be completed
B.17 Counter-Trade
Arrangement
Counter trade proposals involving adjustment
of value of goods imported into India against value of goods exported from
India through an Escrow Account opened in India in US Dollar will be considered
by the Reserve Bank subject to following conditions:
(i) All imports and exports under the
arrangement should be at international prices in conformity with the FEMA.
(ii) No interest will be payable on balances
standing to the credit of the Escrow Account but the funds temporarily rendered
surplus may be held in a short-term deposit up to a total period of three
months in a year and the banks may pay interest at the applicable rate.
(iii) No facilities would be permitted
against the balances in the Escrow Account.
(iv) Permission for opening an Escrow Account
may be sought by the overseas exporter through his AD–I Banks to the Regional
Office concerned of the Reserve Bank.
B.18 Export of Goods
on Lease, Hire, etc.
Exporters may export machinery, equipment,
etc., on lease and hire basis against collection of rentals/charges and
ultimate re-import. Prior approval of the Reserve Bank is to be acquired for
such activities.
B.19 Export on Elongated
Credit Terms
Exporters intending to export goods on
elongated credit terms need to seek permission of RBI for doing so.
B.20 Export of goods
by Special Economic Zones (SEZs)
(i) Units in SEZs are permitted to undertake
job work abroad and export goods from that country itself subject to the
conditions that:
a. Processing / manufacturing charges are
suitably loaded in the export price and are borne by the ultimate buyer.
b. The exporter has made satisfactory
arrangements for realization of full export proceeds subject to the usual EDF
procedure.
AD–I Banks may permit units in DTAs to
purchase foreign exchange for making payment for goods supplied to them by
units in SEZs.
(ii) AD Banks are permitted to sell foreign
exchange to a unit in the DTA for making payment in to a unit in the SEZ for
the services rendered by it, as per the terms and conditions mentioned in the Letter
of Approval (LoA) issued to the SEZ.
B.21 Project Exports
and Service Exports
(i) Export of engineering goods on deferred
payment terms and execution of turnkey projects and civil construction
contracts abroad are collectively referred to as ‘Project Exports’. Indian Project
Exporters are required to obtain the approval of the AD–I Banks/ Exim Bank at
post-award stage before undertaking execution of such contracts.
(ii) AD banks / Exim Bank may consider
post-award approvals without any monetary limit and permit subsequent changes
in the terms within the relevant FEMA guidelines. The respective AD bank / Exim
Bank should monitor such projects.
(iii) The stipulation of time limit of 30
days to submit form DPX1/ PEX-1 /TCS-1 to the Approving Authority (AA) for
seeking post award approval will not apply henceforth.
(iv) In order to provide greater flexibility
to project & service exporters in conducting their overseas transactions,
facilities have been provided as under:
(a) Inter-Project Transfer of Machinery
Exporters may use the machinery / equipment
for performing any other contract secured by them in any country subject to the
satisfaction of the sponsoring Bank and also subject to the reporting
requirement and monitoring by the concerned bank.
(b) Inter-Project Transfer of Funds
Banks may permit exporters to open, maintain
and operate one or more foreign currency account/s in a currency of their
choice with inter-project transferability of funds in any currency or country
subject to monitoring by such banks.
(c) Deployment of Temporary Cash Surpluses
Temporary cash surpluses generated outside
India can be investmented in short-term paper abroad with a maturity or
remaining maturity of one year or less and the rating of which should be at
least A-1/AAA by Standard & Poor or P-1/Aaa by Moody’s or F1/AAA by Fitch
IBCA etc. and as deposits with branches / subsidiaries of AD–I Banks in India.
(d) Repatriation of Funds in case of On-site
Software Contracts
Software exporters should repatriate the
profits of on-site contracts after completion of the contracts.
In terms of FEMA regulations, permission of
Reserve Bank is required for any export of Indian currency except :
(i) Any resident Indian can take currency
notes upto Rs. 25000.00 outside India other than to Nepal and Bhutan.
(ii) Any non-resident (except citizen of
Pakistan and Bangladesh and travelers coming from or going to these countries) may
take outside India currency notes upto Rs.25000.00 while exiting only through
an airport.
EXIM Bank and AD–I Banks have been permitted
to undertake forfaiting, for financing of export receivables. Remittance of
commitment fee / service charges, etc., payable by the exporter may be done
through an AD bank in one lump sum or at monthly intervals as approved.
B.24 Exports to
neighboring countries by Road, Rail or River
The procedure for filing original copies of EDF
for such exports is as follows:
(i) In case of exports by barges/country
craft/road transport, the exporter or his agent should present the form at the
Customs station at the border before crossing over to the foreign territory.
(ii) In case of exports by rail, Customs
staff at designated railway stations will collect the EDF for goods loaded at
these stations. For goods loaded at stations other than the designated
stations, exporters must arrange to present EDF to the Customs Officer at the
Border Land Customs Station where Customs formalities are completed.
B.25 Border Trade
with Myanmar
People living along both sides of the
India-Myanmar border are permitted to exchange certain specified locally
produced commodities under the barter trade arrangement. They can also trade in
freely convertible currency.
B.26 Repayment of
State Credits
Export of goods and services against
repayment of state credits granted by erstwhile USSR will continue to be
governed by the Reserve Bank.
B.27 Counter –Trade
Arrangements with Romania
The Reserve Bank will consider counter trade
proposals from Indian exporters with Romania involving adjustment of value of
exports against value of imports, subject to the condition, that the exporter
should utilize the funds within six months from the date of credit to Escrow
Accounts.
PART – 3
C. Operational
Guidelines for AD–I Banks
C.1 Citing of
Specific Identification Numbers
In all correspondence with the Reserve
Bank, the specific identification number available on the EDF and SOFTEX forms
should invariably be cited.
Export declaration forms should be
disposed of as under:
i) The
procedure relating to the exports of goods through EDI ports will remain the
same.
ii) The EDF
will be used for declaration of export of Goods at Non-EDI ports. It should be submitted
in duplicate along with the shipping bill to the Customs at the port of
shipment.
(iii) Customs will give their running
serial number on both the copies after admitting the corresponding shipping
bill. The Customs serial number will have ten numerals denoting the code number
of the port of shipment, the calendar year and a six- digit running serial
number.
(iv) Customs will certify the value
declared by the exporter on both the copies of the EDF form at the space
earmarked and will also record the assessed value.
(v) They will then return the
duplicate copy of the form to the exporter and retain the original for
transmission to the Reserve Bank.
(vi) Exporters should submit the
duplicate copy of the EDF form again to Customs along with the cargo to be
shipped.
(vii) After examination of the goods
and certifying the quantity passed for shipment on the duplicate copy, Customs
will return it to the exporter for submission to the AD–I Banks for negotiation
or collection of export bills.
(viii) Within 21 days from the date of
export, exporter should lodge the duplicate copy together with relative
shipping documents and an extra copy of the invoice with the AD–I Banks named
in the EDF form.
(ix) After the documents have been
negotiated / sent for collection, the AD–I Banks should report the transaction
through Export Data Processing and Monitoring System (EDPMS) to the Reserve
Bank.
(x) The duplicate copy of the form together
with a copy of invoice etc. shall be retained by the AD–I Banks and may not be
submitted to the Reserve Bank.
(xi) In the case of exports made under
deferred credit arrangement or to joint ventures abroad against equity
participation or under rupee credit agreement, the number and date of the
Reserve Bank approval and the relative RBI circular should be recorded on the
EDF form.
(xii) Where Duplicate copy of EDF form
is misplaced or lost, AD–I Banks may accept another copy of duplicate EDF form
duly certified by Customs.
Note: EDF Form numbers are now made
available on-line on the Reserve Bank’s website www.rbi.org.in.
(Link: - Notification → FEMA → Forms →
Foreign Exchange Management Act Forms → for Printing of EDF/Softex Form No)
(xiii)
Postal Authorities will allow export of goods by post only if the original copy
of the form has been countersigned by an AD–I Banks. The procedure is as under:
(a) The AD–I Banks will countersign
the forms after ensuring that the parcel is being addressed to their branch or
correspondent bank in the country of import and return the original copy to the
exporter, who should submit the form to the post office with the parcel.
(b) The duplicate copy of the EDF form
will be retained by the AD banks. The exporter should submit to the AD bank, relevant
documents together with an extra copy of invoice for negotiation/collection,
within 21 days.
(c) The correspondent bank should be
instructed to deliver the parcel to consignee against payment or acceptance of
relative bill.
(d) AD–I Banks may, however,
countersign EDF forms covering parcels addressed direct to the consignees,
provided:
(e) An irrevocable letter of credit
for the full value of the export has been opened in favor of the exporter and
has been advised through the AD–I Banks concerned.
Or
The full value of the shipment has
been received in advance by the exporter through an AD–I Banks.
Or
The AD–I Bank is satisfied about the
arrangements made for the realization of the export proceeds.
(f) In such cases, particulars of
advance payment/letter of credit / AD–I Banks’s certification etc., should be
furnished under proper authentication.
(g) Any alteration in the name and
address of consignee on the EDF form should be authenticated by the AD–I Banks.
C.3.2. Mid-Sea Trans-shipment of catch
by Deep Sea Fishing Vessels
(i) Trans-shipment of catches takes
place in the high sea leading to procedural constraints in regulatory reporting
requirement as per FEMA regulations.
(ii) For mid-sea trans-shipment of
catches by Indian owned vessels, the EDF declaration procedure has been
rationalized as below:
(a) The exporters may submit the EDF,
duly signed by the Master of the Vessel in lieu of Custom Certification,
indicating the composition of the catch, quantity, export value, date of
transfer of catch, etc.
(b) The date of transfer of catch may
be indicated in the column for ‘Date of Shipment’ with suitable remarks.
(c) Bill of Lading / Receipt of
Trans-shipment issued by the carrier vessel should include the EDF Number.
(d) The EDF should be duly supported
by a certificate from an international cargo surveyor.
(e) The prescribed period of
realization and repatriation should be reckoned from the date of transfer of
catch or the date of the invoice, whichever is earlier.
(f) The EDF should indicate the number
and date of Letter of Permit issued by Ministry of Agriculture for operation of
the vessel.
(g) The exporter will submit the EDF
in duplicate to the Customs at the registered port of the vessel or any other
port as approved by Ministry of Agriculture. EDF (Original) will be retained by
the Customs.
(h) Customs will give their running
serial number on both the copies of EDF and will return the duplicate copy to
the exporter.
(i) Rules, Regulations and Directions
issued for submission of the EDF by exporter to the AD–I Banks, and their
disposal will be same as applicable to the other exporters.
C.4 In case of
export of goods / software done through EDI ports
(i) The relative shipping bill should
be submitted in duplicate to the Commissioner of Customs concerned.
(ii) After verifying and
authenticating, the Commissioner of Customs will hand over, one copy of the
shipping bill marked ‘Exchange Control Copy’ to the exporter for being
submitted to the AD–I Banks within 21 days from the date of export.
(iii) The AD–I Banks should accept the
Exchange Control (EC) copy of the shipping bill for collection/negotiation of
shipping documents.
(iv) The manner of disposal of EC copy
of Shipping Bill is the same as that for EDF.
(v) ECGC and IRDA approved private insurance
companies may initially settle the claims of exporters in respect of exports
insured with them. They may subsequently receive the proceeds from the buyer
through their own efforts. In such cases, the share of exporters in the amount
so received is disbursed through the bank which had handled the shipping
documents. They will also issue a certificate to the bank, after full proceeds
have been received by them, indicating the number of declaration form, name of
the exporter, name of the AD–I Banks, date of negotiation, bill number, invoice
value and the amount actually received.
(i) A software exporter, whose annual
turnover is at least Rs. 1000 crore or who files at least 600 SOFTEX forms
annually, will be eligible to submit a statement in excel format, giving all
particulars along with quadruplicate set of SOFTEX form to the nearest STPI. STPI
will then verify the details and decide on a percentage sample check of the
documents in detail. Software companies will submit all the documents on demand
to STPI within 30 days of their advice or any reasonable/extended time at the
discretion of the Director, STPI. STPI will thus certify the statement and
SOFTEX forms in bulk on the “Top Sheet” regarding the values etc. They will
then forward the first copy of the revised SOFTEX format to the concerned
Regional Office of RBI, the duplicate copy along with bulk statement to
Authorised Dealers for negotiation / collection / settlement, the third copy to
the exporter and the last copy will be retained by STPI for its own record.
Under the revised procedure, the exporters, however, will have to provide information
about all the invoices including the ones lesser than US$25000, in the bulk
statement in excel format.
(ii) A common “SOFTEX Form” has been
devised to declare single as well as bulk software exports.
(iii) Reserve Bank of India has
extended the facility for online generation of the EDF Form Number and the
SOFTEX Form Number.
(iv) In all the above procedures, AD–I
Banks should ensure that non-realization or short realization is allowed within
the powers delegated to them or has been duly approved by the Reserve Bank.
C.7
Certification for EEFC Credits
Where a part of the export proceeds
are credited to an EEFC account, the export declaration (duplicate) form may be
certified as under:
“Proceeds amounting to …… representing
….. percent of the export realization credited to the EEFC account maintained
by the exporter with……”
C.8
Consolidation of Air Cargo/Sea Cargo
(i) Consolidation of Air Cargo
(a) Where air cargo is shipped under
consolidation, the airline company’s Master Airway Bill will be issued to the
Consolidating Cargo Agent. The Cargo agent in turn will issue his own House
Airway Bills (HAWBs) to individual shippers.
(b) AD–I Banks may negotiate HAWBs
only if the relative letter of credit specifically provides for negotiation of
these documents in lieu of Airway Bills issued by the airline company.
(ii) Consolidation of Sea Cargo
(a) AD–I Banks may accept Forwarder’s
Cargo Receipts (FCR) issued by IATA approved agents, in lieu of bills of
lading, for negotiation / collection of shipping documents, in respect of
export transactions backed by letters of credit. Such LC must specifically
provide for negotiation of this document even if the relative sale contract does
not provide for it.
(b) Authorized Dealers may also accept
such FCR in lieu of bill of lading even in cases, where export transactions are
not backed by letters of credit. In such cases the 'relative sale contract'
with overseas buyer should provide for such acceptance. However, the acceptance
of such FCR would purely be the credit decision of the bank concerned who,
should satisfy itself about the bona fides of the transaction and the track
record of both the buyer and the supplier since FCRs are not negotiable
documents. In such case, it would be advisable for the exporters too, to ensure
due diligence on the overseas buyer.
C.9 Delay in
submission of shipping documents by exporters
In cases where exporters’ present
documents after 21 days from date of export, AD–I Banks may handle them without
prior approval of the Reserve Bank, provided they are satisfied with the
reasons for the delay.
C.10
Return of Documents to Exporters
The duplicate copies of EDF and
shipping documents, once submitted to the AD–I Banks, should not ordinarily be
returned to exporters, except for rectification of errors and resubmission.
C.11 Handing
Over Negotiable Copy of Bill of Lading to Master of Vessel/Trade Representative
AD–I Banks may deliver one negotiable
copy of the Bill of Lading to the Master of the carrying vessel or trade representative
for exports to certain landlocked countries if the shipment is covered by an
irrevocable letter of credit and the documents provide for such delivery.
C.12 Export
Bills Register
AD–I Banks should maintain Export
Bills Register aligned with Export Data Processing and Monitoring System
(EDPMS). The bill number should be given to all type of export transactions on
a financial year basis (i.e. April to March) and same should be reported in
EDPMS.
C.13 Follow-up
of Overdue Bills
(i) In cases where bills remain outstanding,
beyond the due date, AD–I Banks should promptly take it up with the concerned
exporter. If the exporter fails to arrange for delivery of the proceeds or seek
extension within the stipulated period, the matter should be reported to the
Regional Office concerned of the RBI stating, where possible, the reason for
the delay.
(ii) The duplicate copies of
EDF/SOFTEX Forms should, continue to be held by AD–I Banks until the full
proceeds are realized, except in case of undrawn balances.
(iii) AD–I Banks should follow up
export outstanding systematically and vigorously so that action against
defaulting exporters does not get delayed. Any laxity will be viewed seriously
by the Reserve Bank, leading to the invocation of the penal provision under
FEMA, 1999.
(iv)
Realization of all export transaction for shipping documents after February 28,
2014 should be reported in EDPMS and old outstanding shipping bills prior to
March 01, 2014 should continue to be reported in XOS till completion of the
cycle.
C.14 Reduction
in Invoice Value on Account of Prepayment of Usance Bills
AD–I Banks may allow cash discount by
way of reduction in invoice value 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. Where rate of interest is not stipulated it
should be at prime rate/LIBOR of the
currency of invoice.
C.15 Reduction
in Invoice Value in other cases
(i) If, after a bill has been
negotiated or sent for collection, its amount is to be reduced for any reason, AD–I
Banks may approve such reduction, if satisfied about genuineness of the
request, provided:
(a) The reduction does not exceed 25
per cent of invoice value:
(b) It does not relate to export of
commodities subject to floor price stipulations
(c) The exporter is not on the
exporters’ caution list of the Reserve Bank, and
(d) The exporter is advised to
surrender proportionate export incentives availed of, if any.
(ii) In the case of exporters who have
been in such business for more than three years, reduction in invoice value may
be allowed, without any percentage ceiling. This relaxation is subject to the above conditions and ensuring
that the export outstanding do not exceed 5 per cent of the average annual
export realization during the preceding three financial years.
(iii) For the purpose of reckoning the
percentage of export bills outstanding, exports made to countries facing
externalization problems may be ignored provided the payments have been made by
the buyers in the local currency.
(i) AD–I Banks may remit export claims
on application, provided the relative export proceeds have already been
realized and repatriated to India and the exporter is not on the caution list
of the Reserve Bank.
(ii) In all such cases of remittances,
the exporter should be advised to surrender proportionate export incentives, if
any, received by him.
C.17 Change of
buyer/consignee
Prior approval of the Reserve Bank is
not required in case of change of buyer or consignee provided the reduction in
value, if any, does not exceed 25 per cent of the invoice value and the
realization of proceeds is not delayed beyond 12 months from the date of
export.
(i) The Reserve Bank of India has
permitted the AD–I Banks to extend the period of realization of export
proceeds, up to a period of six months, at a time, irrespective of the invoice
value of the export subject to the following conditions:
(a) The export transactions covered by
the invoices are not under investigation by Directorate of Enforcement /
Central Bureau of Investigation or other investigating agencies,
(b) The AD–I Banks is satisfied that
the exporter has not been able to realize export proceeds for reasons beyond
his control,
(c) The exporter submits a declaration
that the export proceeds will be realized during the extended period,
(d) While considering extension beyond
one year from the date of export, the total outstanding of the exporter should
not exceed USD one million or 10 per cent of the average export realizations
during the preceding three financial years, whichever is higher.
(e) All the export bills outstanding
beyond six months from the date of export may be reported in XOS statement.
However, where extension of time has been granted by the AD–I Banks, the date
up to which extension has been granted may be indicated in the ‘Remarks’
column.
(f) In cases where the exporter has
filed suits abroad against the buyer, extension may be granted irrespective of
the amount involved / outstanding.
(ii) In cases where an exporter has
not been able to realize proceeds of a shipment made within the extended period
for reasons beyond his control, but expects to be able to realize proceeds if
further extension is allowed to him, necessary application (in duplicate)
should be made to the Regional Office concerned of the Reserve Bank in form ETX
through his AD–I Banks with appropriate documentary evidence.
C.19 Write off
of export bills
(i) An exporter who has not been able
to realize the outstanding export dues despite best efforts, may either
self-write off or approach the AD–I Banks, who had handled the relevant
shipping documents with a request to write off the unrealized portion. He
should apply with appropriate supporting documentary evidence and surrender
incentives received prior to the write off. After liberalizing and simplifying
the procedure, the limits prescribed for “write-offs” of unrealized export
bills are as under:
Self “write-off” by an exporter
(Other than Status Holder Exporter)
5%*
Self “write-off” by Status Holder
Exporters 10%*
‘Write-off” by Authorized Dealer Bank-
10%*
*of the total export proceeds realized
during the previous calendar year.
(ii) The above limits will be related
to total export proceeds realized during the previous calendar year and will be
cumulatively available in a year.
(iii) The above “write-off” will be
subject to conditions that the relevant amount has remained outstanding for
more than one year, satisfactory documentary evidence is furnished in support
of the exporter having made all efforts to realize the dues, and the case falls
under any of the undernoted categories:
(a) The overseas buyer has been
declared insolvent and a certificate from the official liquidator indicating
that there is no possibility of recovery of export proceeds has been produced.
(b) The overseas buyer is not
traceable over a reasonably long period of time.
(c) The goods exported have been
auctioned or destroyed by the Port / Customs / Health authorities in the
importing country.
(d) The unrealized amount represents
the balance due in a case settled through the intervention of the Indian
Embassy, Foreign Chamber of Commerce or similar Organization;
(e) The unrealized amount represents
the undrawn balance of an export bill (not exceeding 10% of the invoice value)
remaining outstanding and turned out to be unrealizable despite all efforts made
by the exporter;
(f) The cost of resorting to legal
action would be disproportionate to the unrealized amount or where the exporter
even after winning the Court case could not execute the decree due to reasons
beyond his control;
(g) Bills were drawn for the
difference between the letter of credit value and actual export value or
between the provisional and the actual freight charges but the amounts have
remained unrealized consequent on dishonor of the bills by the overseas buyer
and there are no prospects of realization.
(iv) The exporter has surrendered
proportionate export incentives, availed of in respect of the relative
shipments.
(v) In case of self-write-off, the
exporter should submit the following documents to the AD bank,
- CA’s certificate, indicating
export realization and benefits availed and surrendered in the preceding
calendar year.
- Amount of write-off already
availed of during the year.
- Relevant EDF to be written off,
- Bill No. and Invoice value,
- Commodity exported,
- Country of export.
(vi) However, the following would not
qualify for the “write off” facility:
(a) Where the overseas buyer has
deposited the value of export in local currency but the amount has not been
allowed to be repatriated by the central banking authorities of the country.
(b) EDF which are under investigation
by agencies like, Enforcement Directorate, Directorate of Revenue Intelligence,
Central Bureau of Investigation, etc. or are a matter of civil / criminal suit.
vii) AD banks should report write off
of export bills through EDPMS to the Reserve Bank.
viii) AD banks are advised to put in
place a system under which their internal inspectors or auditors should carry
out random sample check of “written-off” outstanding export bills.
ix) Cases not covered by the above
instructions / beyond the above limits, may be referred to the concerned
Regional Office of Reserve Bank of India.
C.20 Write off
in cases of Payment of Claims by ECGC and private insurance companies regulated
by Insurance Regulatory and Development Authority (IRDA)
(i) AD–I Banks shall write off the
relative export bills and delete them from the XOS statement, upon receipt of an
application from the exporter that the claim in respect of the outstanding
bills has been settled by ECGC/ insurance company along with supporting
documents.
(ii) Such write-off will not be
restricted to the limit of 10 per cent indicated above.
(iii) Surrender of incentives, if any,
in such cases will be as provided in the Foreign Trade Policy.
(iv) The claims settled in rupees by
ECGC and private insurance companies should not be construed as export
realization in foreign exchange.
C.21 Write-off
– Relaxation
Realization of export proceeds shall
not be insisted upon under any of the Export Promotion Schemes, subject to the
following conditions:
(a) The write off is allowed by the RBI
or by AD–I Banks on behalf of the RBI.
(b) The exporter produces a
certificate from the concerned Foreign Mission of India, about the fact of
non-recovery of export proceeds; and
(c) This would not be applicable in
self write off cases.
C.22 Shipments
Lost in Transit
(i) When shipments from India for
which payment has not been received are lost in transit, the AD–I Banks must
ensure that insurance claim is made as soon as the loss is known.
(ii) Where the claim is payable
abroad, the AD-banks must arrange to collect the full amount of claim, through
the medium of their overseas correspondent and release the duplicate copy of
EDF only after the amount has been collected.
(iii) A certificate for the amount of
claim received should be furnished on the reverse of the duplicate copy.
(iv) AD–I Banks should ensure that
amount of claim on shipments lost in transit which are partially settled
directly by shipping companies/airlines are also repatriated to India.
C.23 ‘Netting
off’ of export receivables against import payments – Units in Special Economic
Zones (SEZs)
AD Category - I banks may allow
‘netting off’ of export receivables against import payments for units located
in SEZ subject to the following:
(i) The ‘netting off’ is in respect of
the same Indian entity and the overseas buyer / supplier and the netting may be done as on the date of
balance sheet of the unit in SEZ.
(ii) The details of export of goods
are documented in EDF (O) forms / DTR as the case may be while details of
import of goods / services are recorded through A1 / A2 form as the case may
be. The relative EDF will be treated as complete by the designated AD–I Banks
only after the entire proceeds are adjusted / received.
(iii) Both the transactions of sale
and purchase in ‘R’ - Returns under FET-ERS are reported separately.
(iv) The export / import transactions
with ACU countries are kept outside the arrangement.
(v) All the relevant documents are
submitted to the concerned AD–I Banks who should comply with all the regulatory
requirements relating to the transactions.
C.24 – Set-off
of export receivables against import payables
AD–I banks may deal with the cases of
set-off of export receivables against import payables, subject to following
terms and conditions:
(i) The import is as per the Foreign
Trade Policy in force.
(ii) Invoices/Bills of Lading/Airway
Bills and Exchange Control copies of Bills of Entry for home consumption have
been submitted by the importer to the Authorized Dealer bank.
(iii) Payment for the import is still
outstanding in the books of the importer.
(iv) Both the transactions of sale and
purchase may be reported separately in ‘R’ Returns.
(v) The relative EDF will be released
by the AD bank only after the entire export proceeds are adjusted / received.
(vi) The ” set-off” should be in
respect of the same overseas buyer and supplier and that consent for ”set-off”
has been obtained from him.
(vii) The export / import transactions
with ACU countries should be kept outside the arrangement.
(viii) All the relevant documents are
submitted to the concerned AD bank who should comply with all the regulatory
requirements relating to the transactions.
C.25 Agency Commission on Exports
(i) AD–I Banks may allow payment of
commission, either by remittance or by deduction from invoice value. The
remittance on agency commission may be allowed subject to :
(a) Amount of commission has been
declared on EDF/SOFTEX form and accepted by the concerned authorities. In cases
where the commission has not been declared, there should be a valid agreement between
the exporters and the beneficiary for payment of commission. The reasons for
not declaring the commission should also be justified.
(b) The relative shipment has already
been made.
(ii) AD–I Banks may allow payment of
commission by Indian exporters, in respect of their exports covered under
counter trade arrangement through Escrow Accounts designated in US Dollar,
subject to the following conditions:
(a) The payment of commission
satisfies the conditions as above.
(b) The commission is not payable to
Escrow Account holders themselves.
(c) The commission should not be
allowed by deduction from the invoice value.
(iii) Payment of commission is
prohibited on exports made by Indian Partners towards equity participation in
an overseas joint venture / wholly owned subsidiary as also exports under Rupee
Credit Route. Exception being commission up to 10 per cent of invoice value of
exports of tea & tobacco.
C.26 Refund of
Export Proceeds
AD–I Banks, may consider requests for
refund of export proceeds of goods exported from India and being re-imported on
account of poor quality subject to:
(i) Exercise due diligence regarding
the track record of the exporter
(ii) Verify the bona-fides of the
transactions
(iii) Obtain a certificate issued by
DGFT / Custom authorities that no incentives have been availed against the
relevant export or the proportionate incentives availed, if any, have been
surrendered
(iv) Obtain an undertaking from the
exporter that the goods will be re-imported within three months from the date
of remittance and
(v) Ensure that all procedures as
applicable to normal imports are adhered to.
C.27 Exporters’
Caution List
(i) EDF of exporters who have been
placed on caution may be approved subject to the exporter having received an
advance payment or an irrevocable letter of credit in their favor covering the
full value of the proposed exports.
(ii) Such approval may also be given
in cases of usance bills on condition that the letter of credit covers the full
export value and the bill matures within 12 months from the date of shipment.
(iii)
AD–I Banks should obtain prior approval of the Reserve Bank for issuing
guarantees for caution-listed exporters.
Based
on RBI master circulars dated 1/7/15.
Please
refer www.rbi.org
for further clarification if required…………………. Poppy
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