RBI/2013-14/14
Master Circular No.14/2013-14
July 1, 2013
To,
All Category – I Authorised Dealer Banks
Madam / Sir,
Master Circular on Exports of Goods and Services
Export of Goods and Services from India is allowed in terms of clause (a) of
sub-section (1) and sub-section (3) of Section 7 of the Foreign Exchange
Management Act 1999 (42 of 1999), read with Notification No. G.S.R. 381(E) dated
May 3, 2000 viz. Foreign Exchange Management (Current Account) Rules, 2000, as
amended from time to time.
- This Master Circularconsolidates the existing instructions on the subject of
"Export of Goods and Services from India" at one place. The list of underlying
circulars/notifications consolidated in this Master Circular is furnished in
Appendix.
- This Master Circular is being issued with a sunset clause of one year. This
circular will stand withdrawn on July 01, 2014 and be replaced by an updated
Master Circular on the subject.
Yours faithfully,
(C.D.Srinivasan)
Chief General Manager
PART-1
A. Introduction
(i) Export trade is regulated by the Directorate General of Foreign Trade (DGFT)
and its regional offices, functioning under the Ministry of Commerce and
Industry, Department of Commerce, Government of India. Policies and procedures
required to be followed for exports from India are announced by the DGFT, from
time to time.
(ii) AD Category – I banks may conduct export transactions in conformity with
the Foreign Trade Policy in vogue and the Rules framed by the Government of
India and the Directions issued by Reserve Bank from time to time. In exercise
of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of
Section 7 and sub-section (2) of Section 47 of the Foreign Exchange Management
Act, 1999 (42 of 1999), the Reserve Bank has notified the Foreign Exchange
Management (Export of Goods and Services) Regulations, 2000 relating to export
of goods and services from India, hereinafter referred to as the ‘Export
Regulations’. These Regulations have been notified vide Notification No. FEMA
23/2000-RB dated May 3, 2000, as amended from time to time.
(iii) The Directions contained in this Circular should be read with the Rules
notified by the Government of India, Ministry of Finance, vide Notification
No.G.S.R.381 (E) dated May 3, 2000, (Annex - 1) as also Regulations notified by
Reserve Bank vide its
Notification No. FEMA 23/2000-RB dated May 3, 2000, as
amended from time to time (Annex - 2).
(iv) In terms of Regulation 4 of the Foreign Exchange Management (Guarantees)
Regulations, 2000, notified vide
Notification No. FEMA 8/2000-RB dated May 3,
2000, AD Category – I banks have been permitted to issue guarantees on behalf of
exporter clients on account of exports out of India subject to specified
conditions.
(v) There is no restriction on invoicing of export contracts in Indian Rupees in
terms of the Rules, Regulations, Notifications and Directions framed under the
Foreign Exchange Management Act 1999. Further, in terms of Para 2.40 of the
Foreign Trade Policy (August 27, 2009 - March 31, 2014), “All export contracts
and invoices shall be denominated either in freely convertible currency or in
Indian Rupees but export proceeds shall be realised in freely convertible
currency. However, export proceeds against specific exports may also be realised
in rupees provided it is through a freely convertible Vostro account of a
non-resident bank situated in any country, other than a member country of the
ACU or Nepal or Bhutan”. Indian Rupee is not a freely convertible currency, as
yet.
(vi) Any reference to the Reserve Bank should first be made to the Regional
Office of the Foreign Exchange Department situated in the jurisdiction where the
applicant person resides, or the firm / company functions, unless otherwise
indicated. If, for any particular reason, they desire to deal with a different
office of the Foreign Exchange Department, they may approach the Regional Office
of its jurisdiction for necessary approval.
(vii) “Financial Year” (April to March) is reckoned as the time base for all
transactions pertaining to trade related issues.
PART 2
B. General guidelines for Exports
B.1 Exemption from Declarations
GR Exemption
The requirement of declaration of export of goods and software in the prescribed
form will not apply to the cases indicated in Regulation 4 of Notification No.
FEMA 23/2000-RB dated May 3, 2000 (Annex 2). The exporters shall, however, be
liable to realise and repatriate export proceeds as per FEMA Regulations.
Grant of GR waiver
(i) AD Category – I banks may consider requests for grant of GR waiver from
exporters for export of goods free of cost, for export promotion up to 2 per
cent of the average annual exports of the applicant 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.
(ii) Export of goods not involving any foreign exchange transaction directly or
indirectly requires the waiver of GR/PP procedure from the Reserve Bank.
B.2 Manner of Receipt and Payment
The amount representing the full export value of the goods exported shall be
received through an AD Bank in the manner specified in the Foreign Exchange
Management (Manner of Receipt & Payment) Regulations, 2000 notified vide
Notification No. FEMA.14/2000-RB dated May 3, 2000 (Annex-3) in the following
manner:
a. Bank draft, pay order, banker's or personal cheques.
b. Foreign currency notes/foreign currency travellers’ 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 in this manner, GR/SDF (duplicate) should be released by the AD
Category – I banks only on receipt of funds in their Nostro account or if the AD
Category – I bank concerned is not the Credit Card servicing bank, on production
of a certificate by the exporter from the Credit Card servicing bank in India to
the effect that it has received the equivalent amount in foreign exchange, AD
Category – I banks may also receive payment for exports made out of India by
debit to the credit card of an importer where the reimbursement from the card
issuing bank/ organisation will be received in foreign exchange.
(ii) Trade transactions can also be settled in the following manner:
a. All transactions between a person resident in India and a person resident in
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. In precious metals i.e. Gold / Silver / Platinum by the Gem & Jewellery units
in SEZs and EOUs, equivalent to value of jewellery exported on the condition
that the sale contract provides for the same and the approximate value of the
precious metals is indicated in the relevant GR / SDF / PP Forms.*
(iii) Processing of export related receipts through Online Payment Gateway
Service Providers (OPGSPs)
Authorised Dealer Category – I (AD Category – I) banks have been allowed to
offer the facility of repatriation of export related remittances by entering
into standing arrangements with Online Payment Gateway Service Providers
(OPGSPs) subject to the following conditions –
a. The AD Category-I banks offering this facility shall carry out the due
diligence of the OPGSP.
b. This facility shall only be available for export of goods and services of
value not exceeding USD 10,000 (US Dollar ten thousand). (effective from June
11, 2013)
[Ref:
A.P. (DIR Series) Circular No.109 dtd 11-06-2013]
c. AD Category-I banks providing such facilities shall open a NOSTRO collection
account for receipt of the export related payments facilitated through such
arrangements. Where the exporters availing of this facility are required to open
notional accounts with the OPGSP, it shall be ensured that no funds are allowed
to be retained in such accounts and all receipts should be automatically swept
and pooled into the NOSTRO collection account opened by the AD Category-I bank.
d. A separate NOSTRO collection account may be maintained for each OPGSP or the
bank should be able to delineate the transactions in the NOSTRO account of each
OPGSP.
e. The following debits will only be permitted to the NOSTRO collection account
opened under this arrangement:
I. Repatriation of funds representing export proceeds to India for credit to the
exporters’ account;
II. Payment of fee/commission to the OPGSP as per the predetermined rates /
frequency/ arrangement; and
III. 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 and
credited to the respective exporter's account with a bank 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 Category -I banks shall satisfy themselves as to the bonafides of the
transactions and ensure that the purpose codes reported to the Reserve Bank in
the online payment gateways are appropriate.
h. AD Category -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. OPGSPs who are already providing such services as per the specific holding-on
approvals issued by the Reserve Bank shall open a liaison office in India within
three months from November 16, 2010, after duly finalizing their arrangement
with the AD-Category-I banks and obtaining approval from the Reserve Bank for
this purpose. In respect of all new arrangements, the OPGSP shall open a liaison
office with the approval of the Reserve Bank before operationalising the
arrangement. AD Category-I banks desirous of entering into such an arrangement/s
should approach the Reserve Bank for obtaining one time permission in this
regard and thereafter report the details of each such arrangement as and when
entered into.
(iv) Settlement system under ACU Mechanism
a) In order to facilitate transactions / settlements, effective January 01,
2009, participants in the Asian Clearing Union will have the option to settle
their transactions either in ACU Dollar or in ACU Euro. Accordingly, the Asian
Monetary Unit (AMU) shall be denominated as 'ACU Dollar' and 'ACU Euro' which
shall be equivalent in value to one US Dollar and one Euro, respectively.
b) Further, AD Category – I banks are allowed to open and maintain ACU Dollar
and ACU Euro accounts with their correspondent banks in other participating
countries. All eligible payments are required to be settled by the concerned
banks through these accounts.
c) Relaxation from ACU Mechanism- Indo-Myanmar Trade - Trade transactions with
Myanmar can be settled in any freely convertible currency in addition to the ACU
mechanism.
d) In view of the difficulties being experienced by importers/exporters in
payments to / receipts from Iran, it has been decided that with effect from
December 27, 2010, all eligible current account transactions including trade
transactions with Iran should be settled in any permitted currency outside the
ACU mechanism, until further notice.
B.3 Realisation and Repatriation of export proceeds
It is obligatory on the part of the exporter to realise and repatriate the full
value of goods or software to India within a stipulated period from the date of
export, as under :
i. Units located in SEZs shall realize and repatriate, full value of goods /
software / services, to India within a period of twelve months from the date of
export. Any extension of time beyond the above stipulated period may be granted
by Reserve Bank of India, on case to case basis.
[Ref:
A.P.(DIR Series) Circular No.108 dated 11-06-2013 ]
ii. By Status Holder Exporters as defined in the Foreign Trade Policy : Within a
period of twelve months from the date of export;
iii. By 100 % Export Oriented Units (EOUs) and units set up under Electronic
Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and
Biotechnology Parks (BTPs) schemes : Within a period of twelve months from the
date of export on or after September 1, 2004;
iv. Goods exported to a warehouse established outside India : As soon as it is
realised and in any case within fifteen months from the date of shipment of
goods; and
v. . In all other cases: With effect from May 20, 2013 this period of
realization and repatriation to India has been brought down to nine months from
the date of export, till September 30, 2013.
[Ref: . A.P.(DIR Series) Circular No.105 dtd 20-05-2013]
B.4 Foreign Currency Account
(i) Participants in international exhibition/trade fair have been granted
general permission vide Regulation 7(7) of the Foreign Exchange Management
(Foreign Currency Account by a Person Resident in India) Regulations, 2000
notified vide Notification No. FEMA 10/2000-RB dated May 3, 2000 for opening a
temporary foreign currency account abroad. Exporters may deposit the foreign
exchange obtained by sale of goods at the international exhibition/trade fair
and operate the account during their stay outside India provided that the
balance in the account is repatriated to India through normal banking channels
within a period of one month from the date of closure of the exhibition/trade
fair and full details are submitted to the AD Category – I banks concerned.
(ii) Reserve Bank may consider applications in Form EFC (Annex 6) 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. Applications
for opening the account with a branch of an AD Category – I bank in India may be
submitted through the branch at which the account is to be maintained. If the
account is to be maintained abroad the application should be made by the
exporter giving details of the bank with which the account will be maintained.
(iii) An Indian entity can also open, hold and maintain 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 or representative subject to conditions stipulated in Regulation 7
of
Notification No. FEMA 10/2000-RB dated May 3, 2000 and as amended from time
to time.
(iv) A unit located in a Special Economic Zone (SEZ) may open, hold and maintain
a Foreign Currency Account with an AD Category – I bank in India subject to
conditions stipulated in Regulation 6 (A) of Notification No. FEMA 10/2000-RB
dated May 3, 2000 and as amended from time to time.
(v) A person resident in India being a project / service exporter may open, hold
and maintain foreign currency account with a bank outside or in India, subject
to the standard terms and conditions in the Memorandum PEM.
B.5 Diamond Dollar Account (DDA)
(i) Under the scheme of Government of India, firms and companies dealing in
purchase / sale of rough or cut and polished diamonds / precious metal jewellery
plain, minakari and / or studded with / without diamond and / or other stones,
with a track record of at least 2 years in import / export of diamonds /
coloured gemstones / diamond and coloured gemstones studded jewellery / plain
gold jewellery and having an average annual turnover of Rs. 3 crores or above
during the preceding three licensing years (licensing year is from April to
March) are permitted to transact their business through Diamond Dollar Accounts.
(ii) They may be allowed to open not more than five Diamond Dollar Accounts with
their banks.
(iii) Eligible firms and companies may apply for permission to their AD Category
– I banks in the format prescribed.
(iv) AD Category-I banks are required to submit quarterly reports to the Foreign
Exchange Department, Reserve Bank of India, Central Office, Trade Division,
Mumbai, giving details of name and address of the firm / company in whose name
the Diamond Dollar Account is opened, along with the date of opening / closing
the Diamond Dollar Account, by the 10th of the month following the quarter to
which it relates.
(v) AD Category - 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 which it relates, to the Foreign Exchange Department,
Reserve Bank of India, Central Office, Trade Division, Mumbai.
(vi) Condition mentioned at Para B.6 (iv) shall also apply.
B.6 Exchange Earners’ Foreign Currency (EEFC) Account
(i) A person resident in India may open with, an AD Category – I bank in India,
an account in foreign currency called the Exchange Earners’ Foreign Currency
(EEFC) Account, in terms of Regulation 4 of the Foreign Exchange Management
(Foreign Currency Account by a Person Resident in India) Regulations, 2000
notified under Notification No. FEMA 10/2000-RB dated May 3, 2000 as amended
from time to time.
Resident individuals are permitted to include resident close relative(s) as
defined in the Companies Act 1956 as a joint holder(s) in their EEFC bank
accounts on former or survivor basis. However, such resident Indian close
relative, being made eligible to become joint account holder, shall not be
eligible to operate the account during the life time of the resident account
holder
(ii) This account shall be maintained only in the form of non-interest bearing
current account. No credit facilities, either fund-based or non-fund based,
shall be permitted against the security of balances held in EEFC accounts by the
AD Category – I banks.
(iii) 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 sum total of the accruals in the account during a calendar month should
be converted into Rupees on or before the last day of the succeeding calendar
month after adjusting for utilization of the balances for approved purposes or
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. This facility
is not intended to enable exchange earners to maintain assets in foreign
currency, as India is still not fully convertible on Capital Account.
(iv) It may be noted that the provisions at paragraph (iii) a) and (iii) b)
above will apply, mutatis mutandis, also to holder of either a Resident Foreign
Currency Account (Domestic) or a Diamond Dollar Account (DDA).
[ Ref: A.P. (DIR Series) Circular No.12 dated 31-07-2012
A.P. (DIR Series) Circular No.79 dtd 22-01-2013]
(v) The eligible credits represent –
a. inward remittance received through normal banking channel, other than the
remittance received pursuant to any undertaking given to the Reserve Bank or
which represents foreign currency loan raised or investment received from
outside India or those 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.
(vi) AD Category – 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 compliance of provisions of Notification No. FEMA
3/2000-RB dated May 3, 2000 as amended from time to time.
(vii) AD Category – I banks may permit exporters to repay packing credit
advances whether availed in Rupee or in foreign currency from balances in their
EEFC account and / or 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 Category – 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
for the purpose of normal business operations of the office (trading /
non-trading) / branch or representative office outside India subject to the
following terms and conditions:
- the overseas branch/office has been set up or representative is posted overseas
for conducting normal business activities of the Indian entity;
- the overseas branch/office/representative shall not enter into any contract or
agreement in contravention of the Act, Rules or Regulations made there under;
- the overseas office (trading / non-trading) / branch / representative should not
create any financial liabilities, contingent or otherwise, 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) AD Category – I banks may also allow remittances by a company incorporated
in India having overseas offices, within the above limits for initial and
recurring expenses, to acquire immovable property outside India for its business
and for residential purpose of its staff.
(v) The overseas office / 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 of such ‘on site’ contracts 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 Category – I banks.
B.8 Advance Payments against Exports
(1) In terms of Regulation 16 of Notification No. FEMA 23/2000-RB dated May 3,
2000, where an exporter receives advance payment (with or without interest),
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, payable on the advance payment does not exceed
London Inter-Bank Offered Rate (LIBOR) + 100 basis points; and
- the documents covering the shipment are routed through the AD Category – I bank
through whom the advance payment is received.
Provided that in the event of the exporter’s inability to make the shipment,
partly or fully, within one year from the date of receipt of advance payment, no
remittance towards refund of unutilized portion of advance payment or towards
payment of interest, shall be made after the expiry of the said period of one
year, without the prior approval of the Reserve Bank.
(2) ‘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 Category –I bank
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, partly or
fully, no remittance towards refund of unutilized portion of advance payment or
towards payment of interest should be made without the prior approval of the
Reserve Bank.’
(3) AD Category – 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.
Note: AD Category – I banks may also be guided by the Master Circular on
Guarantees and Co-acceptances issued by DBOD.
B.9 GR Approval for Trade Fair/Exhibitions abroad
Firms / Companies and other 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 Category – I banks may approve GR Form of export items for display or
display-cum-sale in trade fairs/exhibitions outside India subject to the
following:
- The exporter shall produce relative Bill of Entry within one month of re-import
into India of the unsold items.
- The sale proceeds of the items sold are repatriated to India in accordance with
the Foreign Exchange Management (Realisation, Repatriation, and Surrender of
Foreign Exchange) Regulations, 2000.
- The exporter shall report to the AD Category – I banks the method of disposal of
all items exported, as well as the repatriation of proceeds to India.
- Such transactions approved by the AD Category – I banks will be subject to 100
per cent audit by their internal inspectors/auditors.
B.10 GR approval for Export of Goods for re-imports
(i) AD Category – I banks may consider request from exporters for granting GR
approval in cases where goods are being exported 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
Category – 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 after adjustment due to differences in
weight, quality, etc., to be ascertained after arrival and inspection, weighment
or analysis of the goods. In such cases, AD Category – I banks may negotiate the
bills, provided:
- 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.
- An undertaking is obtained from the exporter on the duplicate of GR/SDF/PP forms
that he will surrender/account for the balance proceeds of the shipment within
the period prescribed for realization.
(ii) In cases where the exporter has not been able to arrange for repatriation
of the undrawn balance in spite of best efforts, AD Category – I banks, on being
satisfied with the bona fides of the case, should ensure that the exporter has
realised at least the value for which the bill was initially drawn (excluding
undrawn balances) or 90 per cent of the value declared on GR/PP/SDF form,
whichever is more and a period of one year has elapsed from the date of
shipment.
B.12 Consignment Exports
(i) When goods have been exported on consignment basis, the AD Category-I bank,
while forwarding shipping documents to his overseas branch/ correspondent,
should instruct the latter to deliver them only against trust
receipt/undertaking to deliver sale proceeds by a specified date within the
period prescribed for realization of proceeds of the export. This procedure
should be followed even if, according to the practice in certain trades, a bill
for part of the estimated value is drawn in advance against the exports.
(ii) The agents/consignees may deduct from sale proceeds of the goods expenses
normally incurred towards receipt, storage and sale of the goods, such as
landing charges, warehouse rent, handling charges, etc. and remit the net
proceeds to the exporter.
(iii) The account sales received from the Agent/Consignee should be verified by
the AD Category – I banks. 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 of goods exported on consignment basis, freight and marine
insurance must be arranged in India.
AD Category – I banks may allow the exporters to abandon the books, which remain
unsold at the expiry of the period of the sale contract. Accordingly, the
exporters may show the value of the unsold books as deduction from the export
proceeds in the Account Sales.
B.13 Opening / Hiring of Ware houses abroad
AD Category – I banks may consider the applications received from exporters and
grant permission for opening / hiring warehouses abroad subject to the following
conditions:
- Applicant’s export outstanding does not exceed 5 per cent of exports made during
the previous financial year.
- Applicant has a minimum export turnover of USD 100,000/- during the last
financial year.
- Period of realisation should be as applicable.
- All transactions should be routed through the designated branch of the AD Banks.
- 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.
- AD Category – I banks granting such permission/approvals should maintain a
proper record of the approvals granted.
B.14 Direct dispatch of documents by the exporter
(i) AD Category – I banks should normally dispatch shipping documents to their
overseas branches/correspondents expeditiously. However, they may dispatch
shipping documents direct to the consignees or their agents resident in the
country of final destination of goods in cases where:
- Advance payment or an irrevocable letter of credit has been received for the
full value of the export shipment and the underlying sale contract/letter of
credit provides for dispatch of documents direct to the consignee or his agent
resident in the country of final destination of goods.
- The AD Category – I banks may also accede to the request of the exporter
provided the exporter is a regular customer and the AD Category – I bank is
satisfied, on the basis of standing and track record of the exporter and
arrangements have been made for realisation of export proceeds.
- Documents in respect of goods or software are accompanied with a declaration by
the exporter that they are not more than Rs. 25,000/- in value and not declared
on GR/SDF/PP/SOFTEX form.
(ii) AD Category – I banks may also permit `Status Holder Exporters’ (as defined
in the Foreign Trade Policy), and units in Special Economic Zones (SEZ) to
dispatch the export documents to the consignees outside India subject to the
terms and conditions that:
- The export proceeds are repatriated through the AD banks named in the GR Form.
- The duplicate copy of the GR form is submitted to the AD banks for monitoring
purposes, by the exporters within 21 days from the date of shipment of export.
(iii) AD Category – I banks may regularize cases of dispatch of shipping
documents by the exporter direct to the consignee or his agent resident in the
country of the final destination of goods, up to USD 1 million or its
equivalent, per export shipment, subject to the following conditions:
a) The export proceeds have been realised in full.
b) The exporter is a regular customer of AD Category – I bank for a period of at
least six months.
c) The exporter’s account with the AD Category – I bank is fully compliant with
the Reserve Bank’s extant KYC / AML guidelines.
d) The AD Category – I bank is satisfied about the bonafides of the transaction.
In case of doubt, the AD Category – I bank may consider filing Suspicious
Transaction Report (STR) with FIU_IND (Financial Intelligence Unit in India).
B.15 Invoicing of Software Exports
(i) For long duration contracts involving series of transmissions, the exporters
should bill their overseas clients periodically, i.e., at least once a month or
on reaching the ‘milestone’ as provided in the contract entered into with the
overseas client and the last invoice / bill should be raised not later than 15
days from the date of completion of the contract. It would be in order for the
exporters to submit a combined SOFTEX form for all the invoices raised on a
particular overseas client, including advance remittances received in a month.
(ii) Contracts involving only ‘one-shot operation’, the invoice/bill should be
raised within 15 days from the date of transmission.
(iii) The exporter should submit declaration in Form SOFTEX in quadruplicate in
respect of export of computer software and audio / video / television software
to the designated official concerned of the Government of India at STPI / EPZ
/FTZ /SEZ for valuation / certification not later than 30 days from the date of
invoice / the date of last invoice raised in a month, as indicated above. The
designated officials may also certify the SOFTEX Forms of EOUs, which are
registered with them.
(iv) The invoices raised on overseas clients as at (i) and (ii) above will be
subject to valuation of export declared on SOFTEX form by the designated
official concerned of the Government of India and consequent amendment made in
the invoice value, if necessary.
B.16 Short Shipments and Shut out Shipments
(i) When part of a shipment covered by a GR form already filed with Customs is
short-shipped, the exporter must give notice of short-shipment to the Customs in
the form and manner prescribed. In case of delay in obtaining certified
short-shipment notice from the Customs, the exporter should give an undertaking
to the AD banks to the effect that he has filed the short-shipment notice with
the Customs and that he will furnish it 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 in the form and manner prescribed, attaching thereto the unused
duplicate copy of GR form and the shipping bill. The Customs will verify that
the shipment was actually shut out, certify the copy of the notice as correct
and forward it to the Reserve Bank together with unused duplicate copy of the GR
form. In this case, the original GR form received earlier from Customs will be
cancelled. If the shipment is made subsequently, a fresh set of GR form 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 in terms of an arrangement
voluntarily entered into between the Indian party and the overseas party 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 Foreign Trade Policy and Foreign Exchange
Management Act, 1999 and the Rules and Regulations made there under.
(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 (i.e., in a
block of 12 months) and the banks may pay interest at the applicable rate.
(iii) No fund based/or non-fund based facilities would be permitted against the
balances in the Escrow Account.
(iv) Application for permission for opening an Escrow Account may be made by the
overseas exporter / organisation through his / their AD Category – I bank to the
Regional Office concerned of the Reserve Bank.
B.18 Export of Goods on Lease, Hire, etc.
Prior approval of the Reserve Bank is required for export of machinery,
equipment, etc., on lease, hire basis under agreement with the overseas lessee
against collection of lease rentals/hire charges and ultimate re-import.
Exporters should apply for necessary permission, through an AD Category – I
banks, to the Regional Office concerned of the Reserve Bank, giving full
particulars of the goods to be exported.
B.19 Export on Elongated Credit Terms
Exporters intending to export goods on elongated credit terms may submit their
proposals giving full particulars through their banks for consideration to the
Regional Office concerned of the Reserve Bank.
B.20 Export of goods by Special Economic Zones (SEZs)
(A) Units in SEZs are permitted to undertake job work abroad and export goods
from that country itself subject to the conditions that:
i. Processing / manufacturing charges are suitably loaded in the export price
and are borne by the ultimate buyer.
ii. The exporter has made satisfactory arrangements for realisation of full
export proceeds subject to the usual GR procedure.
AD Category – I banks may permit units in DTAs to purchase foreign exchange for
making payment for goods supplied to them by units in SEZs.
(B) Export of Services by Special Economic Zones (SEZs) to DTA Unit
Authorised Dealer Banks are permitted to sell foreign exchange to a unit in the
DTA for making payment in foreign exchange to a unit in the SEZ for the services
rendered by it (i.e. a unit in SEZ) to a DTA unit. It must be ensured that in
the Letter of Approval (LoA) issued to the SEZ unit by the Development
Commissioner(DC) of the SEZ, the provisions pertaining to the goods / services
supplied by the SEZ unit to the DTA unit and for payment in foreign exchange for
the same should be mentioned.
[Ref: A. P. (DIR Series) Circular No.46 dated 23-10-2012]
B.21 Project Exports and Service Exports
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 exporters offering deferred payment terms to overseas
buyers and those participating in global tenders for undertaking turnkey/civil
construction contracts abroad are required to obtain the approval of the AD
Category – I banks/ EXIM Bank/ Working Group at post-award stage before
undertaking execution of such contracts. Regulations relating to ‘ Project
Exports’ and ‘Service Exports’ are laid down in the revised Memorandum of
Instructions on Project and Service Exports (PEM- October 2003 as amended from
time to time).
In order to provide greater flexibility to project exporters and exporters of
services in conducting their overseas transactions, the guidelines stipulated
vide paragraphs B.10 (i) (f),C 1(ii), D.1 (i), D.3 and D.4(iv) of the PEM have
been modified as set out below. Project/Service exporters have also been
extended the facility of deployment of temporary cash balance as set out here
under;
(i) Inter-Project Transfer of Machinery [B 10 (i) (f) & D 4 (iv)]
The stipulation regarding recovery of market value (not less than book value) of
the machinery, etc., from the transferee project has been withdrawn. Further,
exporters may use the machinery / equipment for performing any other contract
secured by them in any country subject to the satisfaction of the sponsoring AD
Category – I bank(s) / EXIM Bank / Working Group and also subject to the
reporting requirement and would be monitored by the AD Category – I bank(s) /
EXIM Bank / Working Group.
(ii) Inter-Project Transfer of Funds [D 1 (i) & D 3]
AD Category – I bank(s) / EXIM Bank / Working Group may permit exporters to
open, maintain and operate one or more foreign currency account/s in a
currency(ies) of their choice with inter-project transferability of funds in any
currency or country. The Inter-project transfer of funds will be monitored by
the AD Category – I bank(s) / EXIM Bank / Working Group.
(iii) Deployment of Temporary Cash Surpluses
Project / Service exporters may deploy their temporary cash surpluses, generated
outside India, in the following instruments / products, subject to monitoring by
the AD Category – I bank(s) / EXIM Bank / Working Group :
- investments in short-term paper abroad including treasury bills and other
monetary instruments 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. ,
- deposits with branches / subsidiaries outside India of AD Category – I banks in
India.
(iv) Repatriation of Funds in case of On-site Software Contracts [C 1 (ii)]
The requirement of repatriation of 30 per cent of contract value in respect of
on-site contracts by software exporter company / firm has been dispensed with.
They should, however, repatriate the profits of on-site contracts after
completion of the contracts as per para B.7 (vii), ibid.
B.22 Export of Currency
In terms of Foreign Exchange Management (Export and Import of Currency)
Regulations, 2000 notified vide Notification No. FEMA 6/ 2000-RB dated 3rd May
2000, as amended from time to time, any export of Indian currency of value
exceeding Rs.7,500/- except to the extent permitted under any general permission
granted under the Regulations, will require prior permission of the Reserve
Bank.
B.23 Forfaiting
Export-Import Bank of India (EXIM Bank) and AD Category – I banks have been
permitted to undertake forfaiting, for financing of export receivables.
Remittance of commitment fee / service charges, etc., payable by the exporter as
approved by the EXIM Bank / AD Category – I banks concerned may be done through
an AD bank. Such remittances may be made in advance in one lump sum or at
monthly intervals as approved by the authority concerned.
B.24 Exports to neighbouring countries by Road, Rail or River
The following procedure should be adopted by exporters for filing original
copies of GR/SDF forms where exports are made to neighboring countries by road,
rail or river transport:
(i) In case of exports by barges/country craft/road transport, the form should
be presented by exporter or his agent at the Customs station at the border
through which the vessel or vehicle has to pass before crossing over to the
foreign territory. For this purpose, exporter may arrange either to give the
form to the person in charge of the vessel or vehicle or forward it to his agent
at the border for submission to Customs.
(ii) As regards exports by rail, Customs staff has been posted at certain
designated railway stations for attending to Customs formalities. They will
collect the GR/SDF forms for goods loaded at these stations so that the goods
may move straight on to the foreign country without further formalities at the
border. The list of designated railway stations can be obtained from the
Railways. For goods loaded at stations other than the designated stations,
exporters must arrange to present GR/SDF forms to the Customs Officer at the
Border Land Customs Station where Customs formalities are completed.
B.25 Border Trade with Myanmar
This is governed by the Agreement on Border Trade between India and Myanmar.
People living along both sides of the India-Myanmar border are permitted to
exchange certain specified locally produced commodities (Annex 5) under the
barter trade arrangement. They can also trade in freely convertible currency. AD
banks should follow the guidelines stipulated in A.P.(DIR Series) Circular No.17
dated October 16, 2000.
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 extant directions issued by
the Reserve Bank, as amended from time to time.
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 from India against value
of imports made into India in terms of a voluntarily entered arrangement between
the concerned parties, subject to the condition, among others that the Indian
exporter should utilize the funds for import of goods from Romania into India
within six months from the date of credit to Escrow Accounts allowed to be
opened.
PART – 3
C. Operational Guidelines for AD Category – I banks
C.1 Citing of Specific Identification Numbers
(i) In all applications / correspondence with the Reserve Bank, the specific
identification number as available on the GR, PP and SOFTEX forms should
invariably be cited.
(ii) In the case of declarations made on SDF form, the port code number and
shipping bill number should be cited.
C.2 GR/SDF/PP/SOFTEX procedure
In terms of Regulation 6 of Foreign Exchange Management (Export of Goods and
Services) Regulations, 2000 notified vide Notification No. FEMA.23/2000-RB dated
3rd May 2000, as amended from time to time export declaration forms should be
disposed of as under:
C.3 (A) GR forms
- GR forms should be completed by the exporter in duplicate and both the copies
submitted to the Customs at the port of shipment along with the shipping bill.
- 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.
- Customs will certify the value declared by the exporter on both the copies of
the GR form at the space earmarked and will also record the assessed value.
- They will then return the duplicate copy of the form to the exporter and retain
the original for transmission to the Reserve Bank.
- Exporters should submit the duplicate copy of the GR form again to Customs along
with the cargo to be shipped.
- 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 Category – I banks for negotiation or collection of export bills.
- 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 Category – I banks named in the GR form.
- After the documents have been negotiated / sent for collection, the AD Category
– I banks should report the transaction to the Reserve Bank in statement ENC
under cover of appropriate R-Supplementary Return.
- The duplicate copy of the form together with a copy of invoice etc. shall be
retained by the AD Category – I banks and may not be submitted to the Reserve
Bank.
- 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/or number and date of the
relative RBI circular should be recorded at the appropriate place on the GR
form.
- Where Duplicate copy of GR form is misplaced or lost, AD Category – I banks may
accept another copy of duplicate GR form duly certified by Customs.
Note: At present, GR Forms [to be completed in duplicate for export otherwise
than by Post including export of software in physical form i.e. magnetic tapes /
discs and paper media] can be obtained by the exporters from the Regional
Offices of the Reserve Bank. As part of simplifying the procedures, GR Forms are
now made available on-line on the Reserve Bank’s website www.rbi.org.in.
(Link :- Notification → FEMA → Forms → For Printing of GR Form)
Accordingly, the exporters have the option to use the GR Forms available on-line
as well.
C.3 (B) Mid-Sea Trans-shipment of catch by Deep Sea Fishing Vessels (effective
from November 21, 2011).
Since deep sea fishing involves continuous sailing outside the territorial
limit, trans-shipment of catches takes place in the high sea leading to
procedural constraints in regulatory reporting requirement viz. the Declaration
of Export in terms of Notification No.FEMA.23/2000/RB dated May 3, 2000.
For mid-sea trans-shipment of catches by Indian owned vessels, as per the norms
prescribed by the Ministry of agriculture, Government of India, the GR
declaration procedure in this regard has been rationalized in consultation with
the Government of India as outlined below should be followed by the exporter in
conformity with Regulation 3 of Notification No.FEMA.23/2000-RB dated May 3,
2000.
(i) The exporters may submit the GR form, 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.
(ii) The date of transfer of catch may be indicated in the column for ‘Date of
Shipment’ with suitable remarks.
(iii) In SDF form, Bill of Lading No. and date shall be mentioned in lieu of the
Shipping Bill No. and date.
(iv) Bill of Lading / Receipt of Trans-shipment issued by the carrier vessel
should include the GR Form Number.
(v) The GR Forms should be duly supported by a certificate from an international
cargo surveyor.
(vi) The prescribed period of realization and repatriation should be reckoned
with reference to the date of transfer of catch as certified by the Master of
the Vessel or the date of the invoice, whichever is earlier.
(vii) The GR Form, both original and duplicate, should indicate the number and
date of Letter of Permit issued by Ministry of Agriculture for operation of the
vessel.
(viii) The exporter will complete the GR Form in duplicate and both the copies
may be submitted to the Customs at the registered port of the vessel or any
other port as approved by Ministry of Agriculture. GR (Original) will be
retained by the Customs for capturing of data in Customs’ Electronic Data
Interchange.
(ix) Customs will give their running serial number on both the copies of GR Form
and will return the duplicate copy to the exporter as the value certification of
the export has already been done as mentioned above.
(x) Rules, Regulations and Directions issued in respect of the procedure for
submission of the GR form by exporter to the AD Category-I banks, and the
disposal of these forms by these banks will be same as applicable to the other
exporters.
C.4 SDF
The following system may be followed in case of SDF:
(i) The SDF should be submitted in duplicate (to be annexed to the relative
shipping bill) to the Commissioner of Customs concerned.
(ii) After verifying and authenticating the declaration in SDF, the Commissioner
of Customs will hand over to the exporter, one copy of the shipping bill marked
‘Exchange Control Copy’ to which form SDF has been appended for being submitted
to the AD Category – I banks within 21 days from the date of export.
(iii) The AD Category – I banks should accept the Exchange Control (EC) copy of
the shipping bill and SDF appended thereto, submitted by the exporter for
collection/negotiation of shipping documents.
(iv) The manner of disposal of EC copy of Shipping Bill (and form SDF appended
thereto) is the same as that for GR forms. The duplicate copy of the form
together with a copy of invoice etc. shall be retained by the AD Category – I
banks and may not be submitted to the Reserve Bank.
In cases where ECGC and private insurance companies regulated by Insurance
Regulatory and Development Authority (IRDA) initially settles the claims of
exporters in respect of exports insured with them and subsequently receives the
export proceeds from the buyer/buyer’s country through the efforts made by them,
the share of exporters in the amount so received is disbursed through the bank
which had handled the shipping documents. In such cases, ECGC and private
insurance companies regulated by IRDA will issue a certificate to the bank,
which had handled the relevant shipping documents after full proceeds have been
received. The certificate will indicate the number of declaration form, name of
the exporter, name of the AD Category – I banks, date of negotiation, bill
number, invoice value and the amount actually received by ECGC and private
insurance companies regulated by IRDA.
C.5 PP Forms
The manner of disposal of PP forms is the same as that for GR forms. Postal
Authorities will allow export of goods by post only if the original copy of the
form has been countersigned by an AD Category – I bank. Therefore, PP forms
should be first presented by the exporter to an AD Category – I bank for
countersignature.
(i) The AD Category – 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.
(ii) The duplicate copy of the PP form will be retained by the AD banks to whom
the exporter should submit relevant documents together with an extra copy of
invoice for negotiation/collection, within the prescribed period of 21 days.
(iii) The concerned overseas branch or correspondent should be instructed to
deliver the parcel to consignee against payment or acceptance of relative bill.
(iv) AD Category – I banks may, however, countersign PP forms covering parcels
addressed direct to the consignees, provided:
- An irrevocable letter of credit for the full value of the export has been opened
in favour of the exporter and has been advised through the AD Category – I banks
concerned.
Or
- The full value of the shipment has been received in advance by the exporter
through an AD Category – I banks.
Or
- The AD Category – I bank is satisfied, on the basis of the standing and track
record of the exporter and the arrangements made for realization of the export
proceeds, that he could do so.
In such cases, particulars of advance payment/letter of credit / AD Category – I
bank’s certification of standing, etc., of the exporter should be furnished on
the form under proper authentication.
(v) Any alteration in the name and address of consignee on the PP form should
also be authenticated by the AD Category – I banks under his stamp and
signature.
C.6 SOFTEX Forms
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 as per Annexure A, giving all particulars alongwith
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 details.
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, at the request from the exporter. STPI will thus certify the
statement and SOFTEX forms in bulk on the “Top Sheet” regarding the values etc.
and will thereafter forward the first copy of the revised SOFTEX format to the
concerned Regional Office of RBI, the duplicate copy alongwith bulk statement in
excel format 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. [The revised procedure for
submission of the Softex form and other relevant documents are detailed in the
Annex 8 of the Master Circular]
[ Ref: A. P. (DIR Series) Circular No.46 dated 23-10-2012]
The new procedure has been made effective at all STPIs and SEZs / EPZs / 100%EOU
/ DTA since 1.1.2013.
[Ref: A.P. (DIR Series) Circular No.66 dtd 01-01-2013]
C.7 Random verification
In all the above procedures, AD Category – I bank should ensure, by random check
of the relevant duplicate forms by their internal / concurrent auditors, that
non-realization or short realization allowed, if any, is within the powers
delegated to them or has been duly approved by the Reserve Bank, wherever
necessary.
C.8 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 ….. per cent of the export realisation
credited to the EEFC account maintained by the exporter with……”
C.9 Consolidation of Air Cargo/Sea Cargo
(a) Consolidation of Air Cargo
- 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.
- AD Category – 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.
(b) Consolidation of Sea Cargo
- AD Category – 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, if the relative letter of credit specifically provides for negotiation
of this document, in lieu of bill of lading even if the relative sale contract
with the overseas buyer does not provide for acceptance of FCR as a shipping
document, in lieu of bill of lading
- Further, authorized dealers may, at their discretion, also accept FCR issued by
Shipping companies of repute/IATA approved agents (in lieu of bill of lading),
for purchase/discount/collection of shipping documents even in cases, where
export transactions are not backed by letters of credit, provided their
'relative sale contract' with overseas buyer provides for acceptance of FCR as a
shipping document in lieu of bill of lading. However, the acceptance of such FCR
for purchase/discount would purely be the credit decision of the bank concerned
who, among others, should satisfy itself about the bona fides of the transaction
and the track record of the overseas buyer and the Indian supplier since FCRs
are not negotiable documents. It would be advisable for the exporters to ensure
due diligence on the overseas buyer, in such cases.
C.10 Delay in submission of shipping documents by exporters
In cases where exporters present documents pertaining to exports after the
prescribed period of 21 days from date of export, AD Category – I banks may
handle them without prior approval of the Reserve Bank, provided they are
satisfied with the reasons for the delay.
C.11 Check-list for Scrutiny of Forms
AD Category – I banks may ensure:
- The number on the duplicate copy of a GR form presented to them is the same as
that of the original which is usually recorded on the Bill of Lading/Shipping
Bill and the duplicate has been duly verified and authenticated by appropriate
Customs authorities.
- The Shipping Bill No. on the SDF form should be the same as that appearing on
the Bill of Lading.
- In the case of c.i.f., c.& f. etc. contracts where the freight is sought to be
paid at destination, that the deduction made is only to the extent of freight
declared on GR/SDF form or the actual amount of freight indicated on the Bill of
Lading/Airway Bill, whichever is less.
- The documents submitted do not reveal any material inter se discrepancies in
regard to description of goods exported; export value or country of destination.
- Where the marine insurance is taken by the exporters on buyer’s account to
verify, that the actual amount paid is received from the buyer through invoice
and the bill.
- To accept the Bill of Lading/Airway Bill issued on ‘freight prepaid’ basis where
the sale contract is on f.o.b., f.a.s. etc. basis provided the amount of freight
has been included in the invoice and the bill.
- To negotiate the documents, in cases where the documents are being negotiated by
a person other than the exporter who has signed GR/PP/SDF /SOFTEX Form for the
export consignment concerned, after ensuring compliance with Regulation 12 of
Foreign Exchange Management (Export of Goods and Services) Regulations, 2000.
- To accept the variations in the value declared to the customs authorities and
that is reflected on the export documents which stem from the terms of contract,
on production of documentary evidence after verifying the arithmetical accuracy
of the calculations and on conforming the terms of underlying contracts. Some
such instances (where the values declared to the customs authorities and that
shown on the documents may differ) are enumerated hereunder:
- The export realizable value may be more than what was originally declared
to/accepted by the Customs on the GR/SDF form in certain circumstances such as
where in c.i.f. or c. & f. contracts, part or whole of any freight increase
taking place after the contract was concluded is agreed to be borne by buyers or
where as a result of subsequent devaluation of the currency of the contract,
buyers have agreed to an increase in price.
- In certain lines of export trade, the final settlement of price may be dependent
on the results of quality analysis of samples drawn at the time of shipment; but
the results of such analysis will become available only after the shipment has
been made. Sometimes, contracts may provide for payment of penalty for late
shipment of goods in conformity with trade practice concerning the commodity. In
these cases, while exporters declare to the Customs the full export value based
on the contract price, invoices submitted along with shipping documents for
negotiation/ collection may reflect a different value arrived at after taking
into account the results of analysis of samples or late shipment penalty, as the
case may be.
- To accept for negotiation or collection the bills for exports by sea or air
which fall short of the value declared on GR/SDF forms on account of trade, only
if the discount has been declared by the exporter on relative GR/SDF form at the
time of shipment and accepted by Customs.
C.12 Return of Documents to Exporters
The duplicate copies of GR/SDF/PP forms and shipping documents, once submitted
to the AD Category – I banks for negotiation, collection, etc., should not
ordinarily be returned to exporters, except for rectification of errors and
resubmission.
C.13 Handing Over Negotiable Copy of Bill of Lading to Master of Vessel/Trade
Representative
AD Category – 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 conform strictly to the terms of the Letter of Credit
which, inter alia, provides for such delivery.
C.14 Export Bills Register
(i) AD Category – I banks should maintain Export Bills Register, in physical or
electronic form. Details of GR /SDF /PP /SOFTEX form number, due date of
payment, the fortnightly period of R Supplementary Return with which the ENC
statement covering the transaction was sent to the Reserve Bank, should be
available.
(ii) AD Category – I banks should ensure that all types of export transactions
are entered in the Export Bills Register and are given bill numbers on a
financial year basis (i.e. April to March).
(iii) The bill numbers should be recorded in ENC statement and other relevant
returns submitted to the Reserve Bank.
C.15 Follow-up of Overdue Bills
(i) AD Category – I banks should closely watch realization of bills and in cases
where bills remain outstanding, beyond the due date for payment or 12 months
from the date of export, the matter should be promptly taken up with the
concerned exporter. If the exporter fails to arrange for delivery of the
proceeds within 12 months or seek extension of time beyond 12 months, the matter
should be reported to the Regional Office concerned of the Reserve Bank stating,
where possible, the reason for the delay in realizing the proceeds.
(ii) The duplicate copies of GR / SDF / PP / SOFTEX Forms should, continue to be
held by AD Category – I banks until the full proceeds are realised, except in
case of undrawn balances.
(iii) AD Category – I banks should follow up export outstandings with exporters
systematically and vigorously so that action against defaulting exporters does
not get delayed. Any laxity in the follow up of realization of export proceeds
by AD Category – I banks will be viewed seriously by the Reserve Bank, leading
to the invocation of the penal provision under FEMA, 1999.
(iv) The stipulation of twelve months or extended period thereof for realization
of export proceeds is not applicable for units located in Special Economic Zones
(SEZs). The units in SEZs will however continue to follow the GR/SDF/ PP /
SOFTEX export procedure outlined above.
(iv) AD Category – I banks should furnish to the Regional Office concerned of
the Reserve Bank, on a half-yearly basis, a consolidated statement in Form XOS
(Annex 7) giving details of all export bills outstanding beyond six months from
the date of export as at the end of June and December every year. The statement
should be submitted in triplicate within fifteen days from the close of the
relative half-year.
C.16 Reduction in Invoice Value on Account of Prepayment of Usance Bills
Occasionally, exporters may approach AD Category – I banks for reduction in
invoice value on account of cash discount to overseas buyers for prepayment of
the usance bills. AD Category – I banks may allow cash discount 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.
C.17 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 Category – I banks may approve such reduction,
if satisfied about genuineness of the request, provided:
- The reduction does not exceed 25 per cent of invoice value:
- It does not relate to export of commodities subject to floor price stipulations
- The exporter is not on the exporters’ caution list of the Reserve Bank, and
- The exporter is advised to surrender proportionate export incentives availed of,
if any.
(ii) In the case of exporters who have been in the export business for more than
three years, reduction in invoice value may be allowed, without any percentage
ceiling, subject to the above conditions as also subject to their track record
being satisfactory, i.e., the export outstandings 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 to
the average export realizations during the preceding three financial years,
outstanding of exports made to countries facing externalization problems may be
ignored provided the payments have been made by the buyers in the local
currency.
C.18 Export Claims
(i) AD Category – I banks may remit export claims on application, provided the
relative export proceeds have already been realised 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.19 Change of buyer/consignee
Prior approval of the Reserve Bank is not required if, after goods have been
shipped, they are to be transferred to a buyer other than the original buyer in
the event of default by the latter, provided the reduction in value, if any,
involved does not exceed 25 per cent of the invoice value and the realization of
export proceeds is not delayed beyond the period of 12 months from the date of
export.
C.20 Extension of time and Self write-off by the exporters
(i) For export proceeds due within the prescribed period during a financial year
all exporters (Including Status Holder exporters) have been allowed to write-off
(including reduction in invoice value) outstanding export dues and extend the
prescribed period of realization beyond 12 months or further period as
applicable, provided
(a) The aggregate value of such export bills written-off (including reduction in
invoice value) and bills extended for realization does not exceed 10 per cent of
the export proceeds due during the financial year; and
(b) such export bills are not a subject to investigation by Directorate of
Enforcement / Central Bureau of Investigation or any other Investigating
Agencies.
(ii) Exporters dealing with more than one AD Category – I banks can avail of
this facility through each AD Category – I bank, i.e., the limit of 10 per cent
for self write-off (including reduction in invoice value) and extension of time
for realization of export proceeds would be applicable for export bills lodged
for realization with that AD Category – I banks.
(iii) Exporters operating under a consortium of banks or with multiple banks
will also have the option of computing the 10 per cent limit on an aggregate
basis with all the banks, provided the lead bank of the consortium or in case of
multiple banking, a nodal bank, undertakes to verify the exporters’ annual
performance on behalf of all the banks.
(iv) Within a month from the close of the financial year, exporters should
submit a statement (Annex 4), giving details of export proceeds due, realised
and not realised to the AD Category – I banks concerned.
(v) The AD Category – I banks will be required to verify the statement with
their records and review the export performance of the exporter during the
financial year to ascertain that in cases where the 10 per cent limit of self
extension, write-off (including reduction in invoice value) and non-realization
has been breached, the exporter has sought necessary approval for write-off,
reduction in invoice value or extension of time, as the case may be, for the
excess over the 10 per cent limit before the end of the financial year. Export
bills due in the financial year for which the exporter has extended the period
of realization on his own (within the 10 per cent limit) or sought extension of
time from the AD Category – I banks but unrealised as at the end of financial
year will be computed for export proceeds due in the following financial year.
(vi) In cases where exporters have failed to comply with the above requirement,
AD Category – I banks may promptly advise the exporter concerned to seek
extension of time/reduction in invoice value/write-off in respect of
non-realization in excess of the 10 per cent limit, failing which, the AD
Category – I banks may inform the exporter about the withdrawal of this facility
of self write-off / extension of time, within a month, under advice to the
Regional Office concerned of the Reserve Bank.
C.21 Extension of Time
(i) The Reserve Bank of India has permitted the AD Category – I banks to extend
the period of realization of export proceeds beyond 12 months from the date of
export, up to a period of six months, at a time, irrespective of the invoice
value of the export subject to the following conditions:
- The export transactions covered by the invoices are not under investigation by
Directorate of Enforcement / Central Bureau of Investigation or other
investigating agencies,
- The AD Category – I bank is satisfied that the exporter has not been able to
realise export proceeds for reasons beyond his control,
- The exporter submits a declaration that the export proceeds will be realised
during the extended period,
- While considering extension beyond one year from the date of export, the total
outstanding of the exporter does not exceed USD one million or 10 per cent of
the average export realizations during the preceding three financial years,
whichever is higher.
- 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 Category – I banks, the date up to which extension has been granted
may be indicated in the ‘Remarks’ column.
- 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 realise proceeds of a
shipment made within the extended period for reasons beyond his control, but
expects to be able to realise proceeds if further extension of the period is
allowed to him, as well as in respect of cases not covered under Para (i) above
necessary application (in duplicate) should be made to the Regional Office
concerned of the Reserve Bank in form ETX through his AD Category – I bank with
appropriate documentary evidence.
C.22 Write off by AD Category – I banks
(i) An exporter who has not been able to realise the outstanding export dues
despite best efforts, may either self write off or approach the AD Category – I
banks, who had handled the relevant shipping documents, with appropriate
supporting documentary evidence with a request for write off of the unrealised
portion subject to the fulfilment of stipulations regarding surrender of
incentives prior to ”write-off” adduced in the A.P. (DIR Series) Circular No. 03
dated 22 July 2010. After liberalizing and simplifying the procedure, 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 of the export bill or where the exporter even after winning
the Court case against the overseas buyer could not execute the Court 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 amount has remained unrealized consequent on dishonour of the bills by
the overseas buyer and there are no prospects of realization.
iv) The exporter has surrendered proportionate export incentives (for the cases
not covered under A. P. (DIR. Series) Circular No.03 dated July 22, 2010), if
any, availed of in respect of the relative shipments. The AD Category – I banks
should obtain documents evidencing surrender of export incentives availed of
before permitting the relevant bills to be written off.
v) In case of self write-off, the exporter should submit to the concerned AD
bank, a Chartered Accountant’s certificate, indicating the export realization in
the preceding calendar year and also the amount of write-off already availed of
during the year, if any, the relevant GR / SDF Nos. to be written off, Bill No.,
invoice value, commodity exported, country of export. The CA certificate may
also indicate that the export benefits, if any, availed of by the exporter have
been surrendered.
vi) However, the following would not qualify for the “write off” facility :
- Exports made to countries with externalization problem i.e. 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.
- GR / SDF forms which are under investigation by agencies like, Enforcement
Directorate, Directorate of Revenue Intelligence, Central Bureau of
Investigation, etc. as also the outstanding bills which are subject matter of
civil / criminal suit.
vii) The respective AD banks may forward a statement in form EBW, in the
enclosed format, to the Regional Office of Reserve Bank under whose jurisdiction
they are functioning, indicating details of write-offs allowed under this
circular.
viii) AD banks are advised to put in place a system under which their internal
inspectors or auditors (including external auditors appointed by authorised
dealers) should carry out random sample check / percentage check of “write-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.
[Ref: A. P. (DIR Series) Circular No.88 dtd 12-03-2013]
C.23 Write off in cases of Payment of Claims by ECGC and private insurance
companies regulated by Insurance Regulatory and Development Authority (IRDA)
(i) AD Category – I banks shall, on an application received from the exporter
supported by documentary evidence from the ECGC and private insurance companies
regulated by IRDA confirming that the claim in respect of the outstanding bills
has been settled by them, write off the relative export bills and delete them
from the XOS statement.
(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
regulated by IRDAshould not be construed as export realization in foreign
exchange.
C.24 Write off in other cases
Cases which are not covered by the above instructions will require prior
approval from the Regional Office concerned of the Reserve Bank.
C.25 Write-off – Relaxation
As announced in the Foreign Trade Policy (FTP), 2009-14, realisation of export
proceeds shall not be insisted upon under any of the Export Promotion Schemes
under the said FTP, subject to the following conditions:
- the write off on the basis of merits is allowed by the Reserve Bank or by AD
Category – I bank on behalf of the Reserve Bank, as per extant guidelines;
- the exporter produces a certificate from the Foreign Mission of India concerned,
about the fact of non-recovery of export proceeds from the buyer; and
- this would not be applicable in self write off cases.
The above relaxation is applicable for the exports made with effect from August
27, 2009.
The AD Category – I banks are advised not to insist on the surrender of
proportionate export incentives, other than under the Duty Drawback Scheme, if
availed of, by the exporter under any of the Export Promotion Schemes under FTP
2009-14 , subject to fulfillment of conditions as stated above. The drawback
amount has to be recovered even if the claim is settled by the Export Credit
Guarantee Corporation of India Limited (ECGC) or the write –off is allowed by
the Reserve Bank.
C.26 Shipments Lost in Transit
When shipments from India for which payment has not been received either by
negotiation of bills under letters of credit or otherwise are lost in transit,
the AD Category – I banks must ensure that insurance claim is made as soon as
the loss is known.
In cases where the claim is payable abroad, the AD Category - banks must arrange
to collect the full amount of claim due on the lost shipment, through the medium
of their overseas branch/correspondent and release the duplicate copy of
GR/SDF/PP form only after the amount has been collected.
A certificate for the amount of claim received should be furnished on the
reverse of the duplicate copy.
AD Category – I banks should ensure that amounts of claims on shipments lost in
transit which are partially settled directly by shipping companies/airlines
under carrier’s liability abroad are also repatriated to India by exporters.
C.27 (A) ‘Netting off’ of export receivables against import payments – Units in
Special Economic Zones (SEZs)
AD Category - I banks may allow requests received from exporters for ‘netting
off’ of export receivables against import payments for units located in Special
Economic Zones subject to the following:
(i) The ‘netting off’ of export receivables against import payments is in
respect of the same Indian entity and the overseas buyer / supplier (bilateral
netting) 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 GR (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 GR / SDF forms will be treated as
complete by the designated AD Category – 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 Category – I
banks who should comply with all the regulatory requirements relating to the
transactions.
C.27 (B) – Set-off of export receivables against import payables : (effective
from November 17, 2011).
AD category –I banks may deal with the cases of set-off of export receivables
against import payables, subject to following terms and conditions:
- The import is as per the Foreign Trade Policy in force.
- 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.
- Payment for the import is still outstanding in the books of the importer.
- Both the transactions of sale and purchase may be reported separately in ‘R’
Returns.
- The relative GR forms will be released by the AD bank only after the entire
export proceeds are adjusted / received.
- The ” set-off” of export receivables against import payments should be in
respect of the same overseas buyer and supplier and that consent for ”set-off”
has been obtained from him.
- The export / import transactions with ACU countries should be kept outside the
arrangement.
- All the relevant documents are submitted to the concerned AD bank who should
comply with all the regulatory requirements relating to the transactions.
C.28 Agency Commission on Exports
(i) AD Category – I banks may allow payment of commission, either by remittance
or by deduction from invoice value, on application submitted by the exporter.
The remittance on agency commission may be allowed subject to the following
conditions:
- Amount of commission has been declared on GR/SDF/PP/SOFTEX form and accepted by
the Customs authorities or Ministry of Information Technology, Government of
India / EPZ authorities as the case may be. In cases where the commission has
not been declared on GR/SDF/PP/SOFTEX form, remittance may be allowed after
satisfying the reasons adduced by the exporter for not declaring commission on
Export Declaration Form, provided a valid agreement/written understanding
between the exporters and/or beneficiary for payment of commission exists.
- The relative shipment has already been made.
(ii) AD Category – 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 at (a) and (b)
stipulated in paragraph (i) 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 except commission up to 10
per cent of invoice value of exports of tea & tobacco.
C.29 Refund of Export Proceeds
AD Category – I banks, through whom the export proceeds were originally realised
may consider requests for refund of export proceeds of goods exported from India
and being re-imported into India on account of poor quality. While permitting
such transactions, AD Category – I banks are required to :
(i) exercise due diligence regarding the track record of the exporter
(ii) verify the bonafides of the transactions
(iii) obtain from the exporter a certificate issued by DGFT / Custom authorities
that no incentives have been availed by the exporter against the relevant export
or the proportionate incentives availed, if any, for the relevant export 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.30 Exporters’ Caution List
(i) AD Category – I banks will also be advised whenever exporters are cautioned
in terms of provisions contained in Regulation 17 of “Export Regulations” (Annex
2). They may approve GR/SDF/PP forms of exporters who have been placed on
caution list if the exporters concerned produce evidence of having received an
advance payment or an irrevocable letter of credit in their favour covering the
full value of the proposed exports.
(ii) Such approval may be given even in cases where usance bills are to be drawn
for the shipment provided the relative letter of credit covers the full export
value and also permits such drawings and the usance bill mature within twelve
months from the date of shipment.
(iii) AD Category – I banks should obtain prior approval of the Reserve Bank for
issuing guarantees for caution-listed exporters.
PART – 4
Annex-1
Foreign Exchange Management (Current Account Transactions) Rules,
2000
Notification No. G.S.R.381(E) dated 3rd May 2000 (as amended from time to time)*
: In exercise of the powers conferred by Section 5 and sub-section (1) and
clause (a) of sub-section (2) of Section 46 of the Foreign Exchange Management
Act, 1999, and in consultation with the Reserve Bank, the Central Government
having considered it necessary in the public interest, makes the following
rules, namely :--
1. Short title and commencement.---(1) These rules may be called the Foreign
Exchange Management (Current Account Transactions) Rules, 2000;
(2) They shall come into effect on the 1st day of June 2000.
2. Definitions. ---In these rules, unless the context otherwise requires :
(a) “Act” means the Foreign Exchange Management Act, 1999 (42 of 1999);
(b) “Drawal” means drawal of foreign exchange from an ealizatio person and
includes opening of Letter of Credit or use of International Credit Card or
International Debit Card or ATM Card or any other thing by whatever name called
which has the effect of creating foreign exchange liability;
I “Schedule” means a schedule appended to these rules;
(d) The words and expressions not defined in these rules but defined in the Act
shall have the same meanings respectively assigned to them in the Act.
3. Prohibition on drawal of Foreign Exchange.---Drawal of foreign exchange by
any person for the following purpose is prohibited, namely:
a. a transaction specified in the Schedule I; or
b. a travel to Nepal and/or Bhutan; or
c. a transaction with a person resident in Nepal or Bhutan.
Provided that the prohibition in clause I may be exempted by RBI subject to such
terms and conditions as it may consider necessary to stipulate by special or
general order.
4. Prior approval of Govt. of India.---No person shall draw foreign exchange for
a transaction included in the Schedule II without prior approval of the
Government of India;
Provided that this Rule shall not apply where the payment is made out of funds
held in Resident Foreign Currency (RFC) Account of the remitter.
5. Prior approval of Reserve Bank
No person shall draw foreign exchange for a transaction included in the Schedule
III without prior approval of the Reserve Bank;
Provided that this Rule shall not apply where the payment is made out of funds
held in Resident Foreign Currency (RFC) Account of the remitter.
6. (1) Nothing contained in Rule 4 or Rule 5 shall apply to drawal made out of
funds held in Exchange Earners’ Foreign Currency (EEFC) account of the remitter.
(2) Notwithstanding anything contained in sub-rule (1), restrictions imposed
under rule 4 or rule 5 shall continue to apply where the drawal of foreign
exchange from the Exchange Earners Foreign Currency (EEFC) Account is for the
purpose specified in items 10 and 11 of Schedule II, or item 3, 4, 11, 16 & 17
of Schedule III as the case may be.
7. Use of International Credit Card while outside India
Nothing contained in Rule 5 shall apply to the use of International Credit Card
for making payment by a person towards meeting expenses while such person is on
a visit outside India.
Schedule I
Transactions which are Prohibited (see rule 3)
1. Remittance out of lottery winnings.
2. Remittance of income from racing/riding etc. or any other hobby.
3. Remittance for purchase of lottery tickets, banned/proscribed magazines,
football pools, sweepstakes, etc.
4. Payment of commission on exports made towards equity investment in Joint
Ventures/ Wholly Owned Subsidiaries abroad of Indian companies.
5. Remittance of dividend by any company to which the requirement of dividend
balancing is applicable.
6. Payment of commission on exports under Rupee State Credit Route, except
commission upto 10% of invoice value of exports of tea and tobacco.
7. Payment related to “Call Back Services” of telephones.
8. Remittance of interest income on funds held in Non-Resident Special Rupee
(Account) Scheme.
Schedule II
Transactions which require prior approval of the Central Government
(see Rule 4)
Purpose of Remittance |
Ministry/Department of Govt. of India whose approval is required |
1. Cultural Tours |
Ministry of Human Resources Development, (Department of Education and Culture) |
2. Advertisement in foreign print media for the purposes other than promotion of
tourism, foreign investments and international bidding (exceeding USD 10,000) by
a State Government and its Public Sector Undertakings |
Ministry of Finance, (Department of Economic Affairs) |
3. Remittance of freight of vessel chartered by a PSU
|
Ministry of Surface Transport, (Chartering Wing) |
4. Payment of import through ocean transport by a Govt. Department or a PSU on
c.i.f. basis (i.e. other than f.o.b. and f.a.s. basis) |
Ministry of Surface Transport, (Chartering Wing) |
5. Multi-modal transport operators making remittance to their agents abroad
|
Registration Certificate from the Director General of Shipping |
6. Remittance of hiring charges of transponders by
(a) TV Channels
(b) Internet Service providers |
Ministry of Information and Broadcasting Ministry of Communication and Information Technology |
7. Remittance of container detention charges exceeding the rate prescribed by
Director General of Shipping |
Ministry of Surface Transport (Director General of Shipping) |
8. Remittances under technical collaboration agreements where payment of royalty
exceeds 5% on local sales and 8% on exports and lump-sum payment exceeds USD 2
million |
Ministry of Commerce and Industry |
9. Remittance of prize money/sponsorship of sports activity abroad by a person
other than International / National / State Level sports bodies, if the amount
involved exceeds USD 100,000. |
Ministry of Human Resources Development (Department of Youth Affairs and Sports) |
10. Omitted |
|
11. Remittance for membership of P& I Club |
Ministry of Finance, (Insurance Division) |
Schedule III
(See Rule 5)
1. Omitted
2. Release of exchange exceeding USD 10,000 or its equivalent in one calendar
year, for one or more private visits to any country (except Nepal and Bhutan).
3. Gift remittance exceeding USD 5,000 per remitter/donor per annum.
4. # Donation exceeding USD 5000 per remitter/donor per annum.
5. Exchange facilities exceeding USD 100,000 for persons going abroad for
employment.
6. Exchange facilities for emigration exceeding USD 100,000 or amount prescribed
by country of emigration.
7. Remittance for maintenance of close relatives abroad, @@
- exceeding net salary (after deduction of taxes, contribution to provident fund
and other deductions) of a person who is resident but not permanently resident
in India and –
(a) is a citizen of a foreign State other than Pakistan; or
(b) is a citizen of India, who is on deputation to the office or branch or
subsidiary or joint venture in India of such foreign company.
- exceeding USD 100,000 per year, per recipient, in all other cases.
Explanation: For the purpose of this item, a person resident in India on account
of his employment or deputation of a specified duration (irrespective of length
thereof) or for a specific job or assignment; the duration of which does not
exceed three years, is a resident but not permanently resident.
8. Release of foreign exchange, exceeding USD 25,000 to a person, irrespective
of period of stay, for business travel, or attending a conference or specialized
training or for maintenance expenses of a patient going abroad for medical
treatment or check-up abroad, or for accompanying as attendant to a patient
going abroad for medical treatment/check-up.
9. Release of exchange for meeting expenses for medical treatment abroad
exceeding the estimate from the doctor in India or hospital/doctor abroad.
10. Release of exchange for studies abroad exceeding the estimate from the
institution abroad or USD 100,000, per academic year, whichever is higher.
11. Commission, per transaction, to agents abroad for sale of residential flats
or commercial plots in India exceeding USD 25,000 or 5% of the inward remittance
whichever is more.
12. Omitted
13. Omitted
14. Omitted
15.Remittance exceeding USD 1,000,000 per project, for any consultancy service
procured from outside India.
Explanation:- For the purposes of this item number ‘infrastructure project’
Is those related to –
(i) Power,
(ii) Telecommunication,
(iii) Railways,
(iv) Roads including bridges,
(v) Sea port and air port,
(vi) Industrial parks, and
(vii) Urban Infrastructure (water supply, sanitation and sewage)
16. Omitted
17. Remittance exceeding USD 100,000 by an entity in India by way of
reimbursement of pre-incorporation expenses.
18. Omitted
(Amendments)
(Notification G.S.R..663 (E) dated August 17,2000,S.O.301(E) dated March 30,
2001, G.S.R..442 dated November 2,2002, G.S.R..831(E) dated December 20,2002,
G.S.R..33(E) dated January 16,2003,G.S.R..397(E) dated May 14,2003,
G.S.R..731(E) dated September 11,2003, G.S.R..849 (E) dated October 29,2003,
G.S.R..608(E) dated September 13,2004), G.S.R.511(E) and G.S.R.512(E) dated July
28,2005 , G.S.R.412(E) dated July 11,2006., G.S.R.349(E) dated July 28, 2006,
G.S.R.349 (E) dated May 22, 2009 and G.S.R.382(E) dated May 5, 2010.
Please Note:
@ @May be read with A.P.(DIR Series)Circular No.26 dated January 14,2010.
PART 5
Appendix
List of Circulars which have been consolidated in the
Master Circular on Export of Goods and Services
Sl. No. |
Circular No. |
Date |
1. |
A.D. (MA Series) Circular No.15 |
May 31, 1993 |
2. |
A.P. (DIR Series) Circular No.12 |
September 9, 2000 |
3. |
A.P. (DIR Series) Circular No.4 |
August 27, 2001 |
4. |
A.P. (DIR Series) Circular No.5 |
August 27, 2001 |
5. |
A.P. (DIR Series) Circular No.6 |
September 24, 2001 |
6. |
A.P. (DIR Series) Circular No.9 |
October 25, 2001 |
7. |
A.P. (DIR Series) Circular No.10 |
November 1, 2001 |
8. |
A.P. (DIR Series) Circular No.20 |
January 28, 2002 |
9. |
A.P. (DIR Series) Circular No.30 |
March 26, 2002 |
10. |
A.P. (DIR Series) Circular No.34 |
April 1, 2002 |
11. |
A.P. (DIR Series) Circular No.35 |
April 1, 2002 |
12. |
A.P. (DIR Series) Circular No.38 |
April 12, 2002 |
13. |
A.P. (DIR Series) Circular No.53 |
June 27, 2002 |
14. |
A.P. (DIR Series) Circular No.54 |
June 29, 2002 |
15. |
A.P. (DIR Series) Circular No.2 |
July 4, 2002 |
16. |
A.P. (DIR Series) Circular No.10 |
August 14, 2002 |
17. |
A.P. (DIR Series) Circular No.11 |
August 14, 2002 |
18. |
A.P. (DIR Series) Circular No.12 |
August 28, 2002 |
19. |
A.P. (DIR Series) Circular No.21 |
September 16, 2002 |
20. |
A.P. (DIR Series) Circular No.28 |
October 3, 2002 |
21. |
A.P. (DIR Series) Circular No.33 |
October 23, 2002 |
22. |
A.P. (DIR Series) Circular No.34 |
October 31, 2002 |
23. |
A.P. (DIR Series) Circular No.41 |
November 8, 2002 |
24. |
A.P. (DIR Series) Circular No.61 |
December 14, 2002 |
25. |
A.P. (DIR Series) Circular No.62 |
December 17, 2002 |
26. |
A.P. (DIR Series) Circular No.78 |
February 14, 2003 |
27. |
A.P. (DIR Series) Circular No.91 |
April 1, 2003 |
28. |
A.P. (DIR Series) Circular No.94 |
April 26, 2003 |
29. |
A.P. (DIR Series) Circular No.100 |
May 2, 2003 |
30. |
A.P. (DIR Series) Circular No.104 |
May 31, 2003 |
31. |
A.P. (DIR Series) Circular No.105 |
June 16, 2003 |
32. |
A.P. (DIR Series) Circular No.8 |
August 16, 2003 |
33. |
A.P. (DIR Series) Circular No.12 |
August 20, 2003 |
34. |
A.P. (DIR Series) Circular No.20 |
September 23, 2003 |
35. |
A.P. (DIR Series) Circular No.22 |
September 24, 2003 |
36. |
A.P. (DIR Series) Circular No.26 |
October 3, 2003 |
37. |
A.P. (DIR Series) Circular No.30 |
October 21, 2003 |
38. |
A.P. (DIR Series) Circular No.32 |
October 28, 2003 |
39. |
A.P. (DIR Series) Circular No.40 |
December 5, 2003 |
40. |
A.P. (DIR Series) Circular No.61 |
January 31, 2004 |
41. |
A.P. (DIR Series) Circular No.68 |
February 11, 2004 |
42. |
A.P. (DIR Series) Circular No.73 |
February 20, 2004 |
43. |
A.P. (DIR Series) Circular No.94 |
June 7, 2004 |
44. |
A.P. (DIR Series) Circular No.96 |
June 15, 2004 |
45. |
A.P. (DIR Series) Circular No.97 |
June 21, 2004 |
46. |
A.P. (DIR Series) Circular No.9 |
September 1, 2004 |
47. |
A.P. (DIR Series) Circular No.10 |
September 13, 2004 |
48. |
A.P. (DIR Series) Circular No.25 |
November 1, 2004 |
49. |
A,P. (DIR Series) Circular No.21 |
January 10, 2006 |
50. |
A.P. (DIR Series) Circular No.31 |
April 21, 2006 |
51. |
A.P. (DIR Series) Circular No.32 |
April 21, 2006 |
52. |
A.P. (DIR Series) Circular No.15 |
November 30, 2006 |
53. |
A.P. (DIR Series) Circular No.18 |
December 4, 2006 |
54. |
A.P. (DIR Series) Circular No.26 |
January 8, 2007 |
55. |
A.P. (DIR Series) Circular No.33 |
February 28, 2007 |
56. |
A.P. (DIR Series) Circular No.37 |
April 5, 2007 |
57. |
A.P. (DIR Series) Circular No.13 |
October 6, 2007 |
58. |
A.P. (DIR Series) Circular No.49 |
June 3, 2008 |
59. |
A.P. (DIR Series) Circular No.50 |
June 3, 2008 |
60. |
A.P (DIR Series) Circular No.4 |
August 4, 2008 |
61. |
A.P (DIR Series) Circular No.6 |
August 13, 2008 |
62. |
A.P (DIR Series) Circular No.43 |
December 26, 2008 |
63. |
A.P (DIR Series) Circular No.51 |
February 13, 2009 |
64. |
A.P. (DIR Series) Circular No.60 |
March 26, 2009 |
65. |
A.P. (DIR Series) Circular No.70 |
June 30, 2009 |
66. |
A.P (DIR Series) Circular No.13 |
October 29, 2009 |
67. |
A.P. (DIR Series) Circular No.14 |
October 30, 2009 |
68. |
A.P. (DIR Series) Circular No.03 |
July 22, 2010 |
69. |
A.P. (DIR Series) Circular No.17 |
November 16, 2010 |
70. |
A.P. (DIR Series) Circular No.30 |
December 23, 2010 |
71. |
A.P. (DIR Series) Circular No.31 |
December 27, 2010 |
72. |
A.P. (DIR Series) Circular No.47 |
March 31, 2011 |
73. |
A.P. (DIR Series) Circular No.15 |
September 15, 2011 |
74. |
A.P. (DIR Series) Circular No.35 |
October 14, 2011 |
75 |
A.P. (DIR Series) Circular No.40 |
November 01, 2011 |
76. |
A.P. (DIR Series) Circular No.47 |
November 17, 2011 |
77. |
A.P. (DIR Series) Circular No.48 |
November 21, 2011 |
78. |
A.P. (DIR Series) Circular No.65 |
January 12, 2012 |
79. |
A.P. (DIR Series) Circular No.73 |
January 31, 2012 |
80. |
A.P. (DIR Series) Circular No.80 |
February 15, 2012 |
81. |
A.P. (DIR Series) Circular No.81 |
February 21, 2012 |
82. |
A.P. (DIR Series) Circular No.92 |
March 13, 2012 |
83. |
A.P. (DIR Series) Circular No.124 |
May 10, 2012 |
84. |
A.P. (DIR Series) Circular No.128 |
May 16, 2012 |
85. |
A.P. (DIR Series) Circular No.08 |
July 18, 2012 |
86. |
A.P. (DIR Series) Circular No.12 |
July 31, 2012 |
87. |
A.P. (DIR Series) Circular No.46 |
October 23, 2012 |
88. |
A.P. (DIR Series) Circular No.47 |
October 23, 2012 |
89. |
A.P. (DIR Series) Circular No.52 |
November 20, 2012 |
90. |
A.P. (DIR Series) Circular No.66 |
January 01, 2013 |
91. |
A.P. (DIR Series) Circular No.79 |
January 22, 2013 |
92. |
A.P. (DIR Series) Circular No.88 |
March 12, 2013 |
93. |
A.P. (DIR Series) Circular No.105 |
May 20, 2013 |
94. |
A.P. (DIR Series) Circular No.108 |
June 13, 2013 |
95. |
A.P. (DIR Series) Circular No.109 |
June 13, 2013 |