|
RBI/2014-15/580
A.P.(DIR Series) Circular No. 97
April 30, 2015
To
All Category – I Authorised Dealer Banks
Madam / Sir,
Merchanting Trade to Nepal and Bhutan
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to
A.P. (DIR Series) Circular No. 115 dated March 28, 2014. In terms of the revised merchanting trade guidelines stipulated therein, for a trade to be classified as
merchanting trade, goods acquired should not enter the Domestic Tariff Area and
the state of the goods should not undergo any transformation. Further, the goods
involved in the merchanting trade transaction would be the ones that are
permitted for exports / imports under the prevailing Foreign Trade Policy (FTP)
of India, as on the date of shipment and all the rules, regulations and
directions applicable to exports (except Export Declaration Form) and imports
(except Bill of Entry), should be complied with for the export leg and the
import leg respectively.
2. As Nepal and Bhutan are landlocked countries, there is a facility of
transit trade whereby goods are imported from third countries by Nepal and
Bhutan through India under the cover of Customs Transit Declarations in terms of
the Government of India Treaty of Transit with these two countries. In
consultation with Government of India, it is clarified herein that goods
consigned to the importers of Nepal and Bhutan from third countries under
merchanting trade from India would qualify as traffic-in-transit, if the goods
are otherwise compliant with the provisions of the India-Nepal Treaty of Transit
and Indo-Bhutan Treaty of Transit respectively.
3. AD Category-I banks may bring the contents of this circular to the notice
of their constituents concerned.
4. The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999)
and are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(A. K. Pandey)
Chief General Manager
|