RBI/2010-11/123
A.P. (DIR Series) Circular No.03
July 22, 2010
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Export of Goods and Services - Unrealised export
bills – Write-off - Surrender of export incentives
Attention of Authorised Dealer Category – I (AD Category –I) banks is invited
to
A.P. (DIR Series) Circular No. 12 dated September 09, 2000,
A.P. (DIR Series)
Circular No. 30 dated April 04, 2001,
A.P. (DIR Series) Circular No. 61 dated
December 14, 2002,
A.P. (DIR Series) Circular No. 40 dated December 05, 2003 and
A.P. (DIR Series) Circular No. 33 dated February 28, 2007, in terms of which the
AD Category –I banks have been permitted to accede to the requests for
"write-off" made by the exporters, subject to the conditions, inter alia, that
the exporter had to surrender proportionate export incentives, if availed of, in
respect of the relative shipments.
- It has since been announced in the Foreign Trade Policy (FTP) 2009-14 and
specified in Para. 2.25.4 of Handbook of Procedures – Vol. I (2009-2014)
(extracts annexed), issued by the Department of Commerce, Ministry of Commerce
and Industry that realisation of export proceeds shall not be insisted upon,
under any of the Export Promotion Schemes under the Foreign Trade Policy (FTP),
subject to the following conditions:-
- the write-off on the basis of merits is allowed by the Reserve Bank or
by the AD Category – I banks on behalf of the Reserve Bank, as per the
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.
- It is clarified that since the Drawback scheme is governed by the
provisions of the Customs Act, 1962 and the Rules made there under, the
provisions contained in para. 2.25.4 of the Handbook of Procedure – Vol. I.
of the Foreign Trade Policy (FTP) (2009-2014) would not be applicable to the
Duty Drawback scheme. Therefore, 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.
- Accordingly, the AD Category –I banks are advised not to insist on the
surrender of the proportionate export incentives, other than under the Duty
Drawback scheme, if availed of, by the exporter under any of the Export
Promotion Schemes under the FTP 2009-14, subject to the fulfilment of
conditions as stated in Para 2 above.
- AD – Category I banks may bring the contents of this circular to the
notice of their constituents and customers concerned.
- The directions contained in this Circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)
and is without prejudice to permissions / approvals, if any, required under
any other law.
Yours faithfully,
G. Jaganmohan Rao
Chief General Manager
Annex
[Annex to A.P. (DIR Series) Circular No.03 dated July 22, 2010]
Extract of Para. 2.25.4 of the Handbook of
Procedure – Vol. I –2009 – 2014 of Foreign Trade Policy (FTP)
''Realization of export proceeds shall not be insisted under any of the
Export Promotion Schemes under this Foreign Trade Policy (FTP), if the Reserve
Bank of India (RBI) writes off the requirement of realization of export proceeds
on merits and the exporter produces a certificate from the concerned Foreign
Mission of India about the fact of non-recovery of export proceeds from the
buyer. However, this would not be applicable in self-write off cases."