Master Circular - Export of Goods and Services
Master Circular No. 3/2003-04, dated 1-7-2003,
issued by
Exchange Control Department, RBI
As you are aware
Foreign Exchange Management Act, 1999 has been introduced with effect from June
1, 2000. In terms of section 5 of the Act, any person may sell or draw foreign
exchange to and from authorised person under current account transaction.
However, Central Government has been empowered to impose certain restrictions
for current account transactions in public interest and in consultation with
Reserve Bank. Accordingly, Government of India issued Notification No. G.S.R.
381(E), dated May 3, 2000 as amended vide its Notification No. S.O 301(E) dated
March 30, 2001.
2. In terms of section 7 of the Act, the
need for declaration of realisation of exports by the exporters has been
specified. Besides, Reserve Bank has also been empowered to issue necessary
directions for complying with the obligations of realisation of exports.
Accordingly, RBI has made the Foreign Exchange Management (Export of Goods and
Services) Regulations, 2000 and notified vide FEMA 23/2000-RB, dated the 3rd
May, 2000. Amendments to the above notification have also been made from time
to time. Reserve Bank had also issued various circulars containing directions
for authorised dealers for export of goods and services from India.
3. In order to enable the Authorised
Dealers (ADs) to have all the existing instructions on the subject of “Export
of Goods and Services” from India as on July 1, 2003, at one place, this Master
Circular has been suitably updated.
4. This Master Circular consolidates the
directions contained in the undernoted circulars, issued upto June 30, 2003.
(i) A.P. (DIR Series) Circular No. 4 August
27, 2001
(ii) A.P. (DIR Series) Circular No. 5 August
27, 2001
(iii) A.P. (DIR Series) Circular No. 6
September 24, 2001
(iv) A.P. (DIR Series) Circular No. 9 October
25, 2001
(v) A.P. (DIR Series) Circular No. 10
November 1, 2001
(vi) A.P. (DIR Series) Circular No. 20 January
28, 2002
(vii) A.P. (DIR Series) Circular No. 30 March
26, 2002
(viii) A.P. (DIR Series) Circular No. 34 April 1,
2002
(ix) A.P. (DIR Series) Circular No. 35 April
1, 2002
(x) A.P. (DIR Series) Circular No. 38 April
12, 2002
(xi) A.P. (DIR Series) Circular No. 53 June
27, 2002
(xii) A.P. (DIR Series) Circular No. 54 June 29,
2002
(xiii) A.P. (DIR Series) Circular No. 2 July 4,
2002
(xiv) A.P. (DIR Series) Circular No. 10 August
14, 2002
(xv) A.P. (DIR Series) Circular No. 11 August
14, 2002
(xvi) A.P. (DIR Series) Circular No. 12 August
28, 2002
(xvii) A.P. (DIR Series) Circular No. 21 September
16, 2002
(xviii) A.P. (DIR Series) Circular No. 28 October 3,
2002
(xix) A.P. (DIR Series) Circular No. 33 October
23, 2002
(xx) A.P. (DIR Series) Circular No. 34 October
31, 2002
(xxi) A.P. (DIR Series) Circular No. 41 November
8, 2002
(xxii) A.P. (DIR Series) Circular No. 61 December
14, 2002
(xxiii) A.P. (DIR Series) Circular No. 62 December
17, 2002
(xxiv) A.P. (DIR Series) Circular No. 78 February
14, 2003
(xxv) A.P. (DIR Series) Circular No. 91 April 1,
2003
(xxvi) A.P. (DIR Series) Circular No. 94 April 26,
2003
(xxvii) A.P. (DIR Series) Circular No. 100 May 2, 2003
(xxviii) A.P. (DIR Series) Circular No. 104 May 31, 2003
(xxix) A.P. (DIR Series) Circular No. 105 June 16,
2003
Part I : Introduction
1. Export trade is regulated by
the Directorate General of Foreign Trade (DGFT) and its regional offices,
functioning under the Ministry of Commerce and Industries, Department of
Commerce, Government of India. Policies and procedures required to be followed
for exports from India are announced by the DGFT. Authorised dealers may
conduct export transactions in conformity with the Export-Import Policy in
vogue and the Rules framed by the Government of India and the Directions issued
by Reserve Bank from time to time under the Act.
2. Attention of authorised dealers is
invited to the Government of India Notification No.G.S.R. 381(E), dated May 3,
2000, notifying the Foreign Exchange Management (Current Account Transactions)
Rules, 2000, in terms of which drawal of exchange for certain current account
transactions has been prohibited and restrictions have been placed on certain
other transactions. In terms of Rule 4 ibid., the transactions specified in
Schedule II to the said Notification require prior approval of the Government
of India and in terms of the Rule 5, the transactions specified in Schedule III
to the Notification require prior approval of the Reserve Bank. Authorised
dealers may follow directions contained in Part III while dealing with
applications relating to export of goods and services from India. It is further
clarified that the directions contained in this Circular should be read with
the Rules notified by the Government of India, Ministry of Finance, vide
Notification dated May 3, 2000, and annexed as Part II of this circular as also
Regulations notified by Reserve Bank vide its Notification No. FEMA 23/2000-RB,
dated 3rd May, 2000 as amended from time to time.
3. The Reserve Bank has made the Foreign
Exchange Management (Export and Import of Currency) Regulations, 2000 vide its
Notification No. FEMA 6/RB-2000, dated 3rd May, 2000 and subsequently modified
vide Notification No. FEMA 38/2001-RB, dated 27th February, 2001. Any export of
Indian currency of value exceeding Rs. 5,000 except to the extent permitted
under any general permission granted under the Regulations, will require prior
permission of Reserve Bank.
4. In terms of Regulation 4 of the Foreign
Exchange Management (Guarantees) Regulations, 2000, notified vide Reserve Bank
Notification No. FEMA 8/RB, dated 3rd May, 2000, authorised dealers have been
permitted to issue guarantees on behalf of exporter clients on account of
exports out of India.
5. Export of goods and services against
repayment of state credits granted by erstwhile Soviet Union will continue to
be governed by the extant directions issued by Reserve Bank, as amended from
time to time. Further, Reserve Bank will continue to consider as hitherto,
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 utilise
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
II :
See Foreign Exchange Management
(Current Account Transactions) Rules, 2000
PART III :
Export of Goods and services
General
A.1 Trade and Exchange Control
(i) In exercise of the
powers conferred by clause (a) of sub-section (1), 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 made 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 3rd
May, 2000, as amended from time to time.
(ii) Any reference to
Reserve Bank should be made to the office of Exchange Control Department within
whose jurisdiction the applicant person, firm or company resides or functions
unless otherwise indicated. If for any particular reason, a firm or company
desires to deal with a different office of the Exchange Control Department, it
may approach the office within whose jurisdiction it functions for necessary
approval.
A.2 Exemptions from Declarations
(i) The requirement of
declaration of export of goods and software in the prescribed form will not
apply to the cases indicated in Regulation No. 4, ibid. The requirement of
declaration also shall not apply to goods sent for testing abroad, subject to
re-import.
(ii) Gift
of goods exceeding rupees one lakh in value require approval of the Reserve
Bank.
(iii) Authorised Dealers may
consider requests for grant of GR waiver from exporters for export of goods
free of cost, for export promotion upto 2 per cent of average annual exports of
the applicant during the preceding three years subject to a ceiling of Rs. 5
lakhs.
(iv) Export of goods not
involving any foreign exchange transaction directly or indirectly, requires the
waiver of GR/PP procedure from Reserve Bank.
A.3 Numbering of forms
GR, PP and
SOFTEX forms will bear specific identification numbers. In all
applications/correspondence with the Reserve Bank, this identification number
should invariably be cited. In the case of declarations made on SDF form, the
port code number and shipping bill number should be cited.
A.4 Manner of Payment
(i) The amount representing
the full export value of the goods exported shall be received through an authorised
dealer in the manner specified in the Foreign Exchange Management (Manner of
Receipt & Payment) Regulations, 2000 notified vide Notification No. FEMA
14/2000-RB, dated 3rd May, 2000.
(ii) Payment
for export may also be received by the exporter in the following manner :
a. In the form of 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. Through International
Credit Cards. When payment, in respect of goods sold to overseas buyers during
their visits is received in this manner the GR/SDF (duplicate) should be
released by the authorised dealers only on receipt of funds in their Nostro
account or 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, if the authorised dealer concerned is not the
Credit Card servicing bank. ADs 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.
e. All transactions between
a person resident in India and a person resident in Nepal may be settled in
Rupees. However, in case of export of goods to Nepal, where an importer
resident in Nepal has been permitted by the Nepal Rashtra Bank to make payment
in free foreign exchange, such payments shall be routed through the ACU
mechanism.
f. Payment of export may
also be received by the Gem & Jewellery units in SEZs and EOUs in the form
of precious metals i.e. Gold/Silver/Platinum 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.
A.5 Guarantees against Exports
Prior approval
of Reserve Bank should be obtained by authorised dealers for issue of guarantees
in respect of caution-listed exporters.
A.6 (i) Foreign
Currency Accounts - Reserve Bank may consider applications in Form EFC from exporters having good track record
for opening foreign currency accounts with banks subject to certain terms and conditions. Applications for
opening such an account with a branch
of an authorised dealer in India may be submitted through the branch at which
the foreign currency account
is to be maintained. If the foreign currency 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. An Indian
entity has also been permitted to
open, hold and maintain in the name of its office/branch set up outside India,
a foreign currency account
with a bank outside by making remittance for the purpose of normal business operations of the said
office/branch or representative subject to certain conditions.
Indian
corporates who have set up overseas offices abroad have been permitted to
acquire immovable property outside India for their business as also staff
residential purposes with prior permission of RBI, until further notice.
A unit located
in a Special Economic Zone (SEZ) may be allowed to open, hold and maintain a
Foreign Currency Account with an authorised dealer in India subject to certain
specified conditions.
(ii) Diamond Dollar Account
- Under the scheme of Government of India, firms and companies dealing in
purchase/sale of rough or cut and polished diamonds/diamond studded jewellery,
with track record of at least three years in import or export of diamonds and
having an average annual turnover of Rs. 5 crores or above during preceding
three licensing years (licensing year is from April to March) are permitted to
transact their business through Diamond Dollar Accounts and may be allowed to
open not more than five Diamond Dollar Accounts with their banks. Accordingly,
eligible firms and companies may apply for permission to the Chief General
Manager, Exchange Control Department, Exports Division, Reserve Bank of India,
Central Office, Mumbai 400 001, through their authorised dealer.
(iii) Exchange Earners’
Foreign Currency (EEFC) Account - A person resident in India may open, hold and
maintain with an authorised dealer in India, a foreign currency account to be
known as Exchange Earners’ Foreign Currency (EEFC) Account. This account will
be maintained only in the form of non-interest bearing current account and no
credit facilities either fund-based or non-fund based, should be permitted
against the security of balances held in EEFC accounts, by the authorised
dealers. The limits of eligible credits to the EEFC accounts are 70% for Export
Oriented Units or units in (a) Export Processing Zone or (b) Software
Technology Park or (c) Electronic Hardware Technology Park and to 50% for other
persons resident in India in respect of 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.
Exporters who
have been certified as “Status Holder” in terms of the EXIM Policy are
permitted to credit amount upto 100% of their eligible receipts of foreign
exchange to their EEFC Account.
Payments
received in foreign exchange by a unit in Domestic Tariff Area (DTA) for supply
of goods to a unit in Special Economic Zones out of its foreign currency
account are to be treated as eligible foreign exchange earnings for the purpose
of credit to the EEFC Account. Authorised Dealers may credit such payments
received in foreign exchange by a unit in DTA to its EEFC Account.
Authorised
Dealers may till further notice, permit their exporter constituents to extend
trade related loans/advances to overseas importers out of their EEFC balances
without any ceiling.
Authorised
Dealers 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.
(iv) Supply of goods from
units in Special Economic Zones (SEZs) to units in Domestic Tariff Area (DTA) -
Authorised Dealers may permit units in DTAs to purchase foreign exchange for
making payment for goods supplied to them by units in SEZs.
A.7 Counter-trade Arrangement
(i) 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 U.S. dollar will be considered by the Reserve Bank. All
imports and exports under the arrangement should be at international prices in
conformity with the Exim Policy and Foreign Exchange Management Act, 1999 and
the Rules and Regulations made thereunder. 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. No fund based/or non-fund based facilities would
be permitted against the balances in the Escrow Account.
(ii) Application for
permission for opening an Escrow Account may be made by the overseas
exporter/organisation through the authorised dealer with whom the account is
proposed to be opened, to the office of Reserve Bank under whose jurisdiction
the authorised dealer is functioning.
A.8 Export of goods on lease, hire, etc.
Export of
machinery, equipment, etc., on lease, hire, etc., basis under agreement with
the overseas lessee against collection of lease rentals/hire charges and
ultimate re-import require prior approval of the Reserve Bank. Exporters should
apply for necessary permission, through an authorised dealer, to the concerned
Regional Office of the Reserve Bank, giving full particulars of the goods to be
exported.
A.9 Participation in Trade Fairs abroad
(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 under Notification No.
FEMA 10/2000-RB, dated 3rd May, 2000 for opening 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 within a period of one month from the date of closure of
the exhibition/trade fair and full details are submitted to the concerned
authorised dealer.
(ii) Firms/Companies and
other organisations participating in Trade Fair/Exhibition abroad are now
permitted to take/export goods for exhibition and sale outside India without
the prior approval of the Reserve Bank of India. Unsold exhibit items may be
sold outside the exhibition/trade fair in the same country or in another third
country. Such sales at discounted value are also permissible. It would also be
permissible to ‘gift’ unsold goods upto the value of US $ 5,000 per exporter,
per exhibition/trade fair.
Authorised
Dealers may approve GR Form of export items for display or display-cum-sale in
trade fairs/exhibitions outside India subject to the following :
i. The exporter shall
produce relative Bill of Entry within one month of re-import into India of the
unsold items.
ii. The sale proceeds of
the items sold are repatriated to India in accordance with Foreign Exchange
Management (Realisation, Repatriation and Surrender of Foreign Exchange)
Regulations, 2000.
iii. The exporter shall
report to the Authorised Dealer the method of disposal of all items exported,
as well as the repatriation of proceeds to India.
Such
transactions approved by the Authorised Dealers will be subject to 100% audit
by the internal inspectors/auditors of the Authorised Dealer concerned.
A. 10 Project Exports and Service Exports
(i) Export of engineering
goods on deferred payment terms and execution of turnkey projects and civil
construction contracts abroad are collectively referred to as ‘Project Exports’.
Indian 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 approval of Authorised Dealer/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 Memorandum on Project Exports (PEM).
(ii) Pure supply contracts
(contracts for export of goods) where at least 90 per cent of the export value
is realised within the prescribed period, i.e., six months from the date of
export and the balance amount within a maximum period of two years from the
date of export are not treated as deferred payment exports, provided the
exporter does not require/avail of any funded or non-funded facility/ies for
such exports from authorised dealers.
(iii) Exporters desiring to
submit bids for execution of projects abroad including service contract have
been allowed to issue Corporate Guarantee in lieu of Bid Bond Guarantee,
provided the amount of such guarantee shall not exceed 5% of the contract
value.
A.11 Export on Elongated Credit Terms
Exporters
intending to export goods on elongated credit terms may submit their proposals
giving full particulars through their banks to the concerned Regional Office of
Reserve Bank for consideration.
A.12 Export of goods by Special Economic Zone -
Job work abroad
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.
A.13 Forfeiting
Export-Import
Bank of India (Exim Bank) and authorised dealers have been permitted to
undertake forfeiting, for financing of export receivables. It would be in order
for authorised dealers to allow remittance of commitment fee/service charges,
etc., payable by the exporter as approved by the Exim Bank/the concerned
authorised dealer. Such remittance may be permitted in advance in one lump sum
or at monthly intervals as approved by the concerned agency.
GR/PP/SOFTEX PROCEDURE
B.1 Disposal of Copies of Export Declaration
Forms
(i) Copies
of export declaration forms should be disposed of as under :
(a) 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 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 authorised dealer for
negotiation or collection of export bills.
(b) Within twenty-one 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
authorised dealer named in the GR form. After the documents have been
negotiated/sent for collection, the authorised dealer should report the
transaction to Reserve Bank in statement ENC under cover of appropriate
R-Supplementary Return. However, the duplicate copy of the form together with a
copy of invoice etc. will henceforth be retained by the authorised dealer and
may not be submitted to Reserve Bank.
Note :
(i) 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
Reserve Bank approval and/or number and date of the relative RBI circular
should be recorded at the appropriate place on the GR form.
(ii) Where Duplicate copy of
GR form is misplaced or lost, authorised dealer may accept another copy of
duplicate GR form duly certified by Customs.
(c) On account of
introduction of Electronic Data Interchange (EDI) System at certain Customs
offices where shipping bills are processed electronically, the existing
declaration in GR form is replaced by a declaration in form SDF (Statutory
Declaration Form). The SDF form should be submitted in duplicate (to be annexed
to the relative shipping bill) to the concerned Commissioner of Customs. After
verifying and authenticating the declaration in form SDF, the Commissioner of
Customs will hand over to the exporter, one copy of the shipping bill marked ‘Exchange
Control Copy’ in which form SDF has been appended for being submitted to the
authorised dealer within 21 days from the date of export. The authorised dealer
should accept the Exchange Control (EC) copy of the shipping bill and form SDF
appended thereto, submitted by the exporter for collection/negotiation of
shipping documents. The manner of disposal of EC copy of shipping Bill (and
form SDF appended thereto) is same as that for GR forms.
(d) In cases where ECGC
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 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 authorised dealer, date of negotiation, bill number,
invoice value and the amount actually received by ECGC.
(e) The authorised dealer
should ensure by random check of the relevant duplicate forms by their
internal/concurrent auditors to confirm that non-realisation or
short-realization allowed, if any, is within the powers delegated to them or
has been duly approved by Reserve Bank, wherever necessary.
(f) Where a part of export
proceeds are credited to EEFC account, the Export Declaration (duplicate) Form
may be certified as under :
“Proceeds
amounting to....... representing......% of the export realisation credited to
EEFC account maintained by the exporter with......”
(ii) The manner of disposal
of PP forms is 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 authorised dealer. Therefore, PP forms should be first presented by the
exporter to an authorised dealer for countersignature. Authorised dealer will
countersign the forms in accordance with directions in paragraph B.2 and return
the original copy to the exporter, who should submit the form to the post
office with the parcel. The duplicate copy of the PP form will be retained by
the authorised dealer to whom the exporter should submit relevant documents
together with an extra copy of invoice for negotiation/collection, within the
prescribed period of twenty-one days.
B.2 Counter signature on PP Forms
PP forms will be
presented by the exporter to an authorised dealer for counter signature.
Authorised dealers should countersign the PP forms after ensuring that the
parcel is being addressed to their branch or correspondent bank in the country
of import. The concerned overseas branch or correspondent should be instructed
to deliver the parcel to consignee against payment or acceptance of relative
bill. Authorised dealers may, however, countersign PP forms covering parcels
addressed direct to the consignees, provided :—
a. an irrevocable letter of
credit for the full value of the export has been opened in favour of exporter
and has been advised through authorised dealer concerned;
or the full
value of the shipment has been received in advance by the exporter through an
authorised dealer; or
b. the authorised dealer is
satisfied, on the basis of the standing and track record of the exporter and
the arrangements made for realisation of the export proceeds, that he could do
so.
In such cases,
particulars of advance payment/letter of credit/authorised dealer’s
certification of standing, etc., of the exporter should be furnished on the
form under proper authentication. Any alteration in the name and address of
consignee on the PP form should also be authenticated by the authorised dealer
under his stamp and signature.
B.3.A. Terms of payment - Invoicing - (Software)
(i) In respect of 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) In respect of 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 triplicate in respect of export of
computer software and audio/video/television software to the concerned
designated official of 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 in respect of EOUs which are
registered with them.
(iv) The invoices raised on
overseas clients as at (i) to (iii) above will be subject to valuation of
export declared on SOFTEX form by the concerned designated official of
Government of India and consequent amendment made in the invoice value, if
necessary.
B.3.B. Disposal of SOFTEX forms
As for disposal
of SOFTEX forms the procedure indicated in Regulation 6 of Export Regulations
is to be observed. However, the duplicate copy of the form together with a copy
of invoice etc. will henceforth be retained by the authorised dealer and may
not be submitted to Reserve Bank.
B.4 Shut out Shipments and Short Shipments
(i) When part of a shipment
covered by a GR form already filed with Customs is short-shipped, exporter must
give notice of short-shipment to Customs in form and manner prescribed. In case
of delay in obtaining certified short-shipment notice from Customs, exporter
should give an undertaking to the authorised dealer 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,
exporter will give notice in duplicate to Customs in the manner and in form
prescribed for the purpose, attaching thereto the unused duplicate copy of GR
form and the shipping bill. Customs will verify that the shipment was actually
shut out, certify copy of the notice as correct and forward it to 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.5 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 who will in turn issue his own House
Airway Bills (HAWBs) to individual shippers. Authorised dealers 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. Authorised dealers may also accept Forwarder’s Cargo Receipts (FCR)
issued by steamship companies or their agents (instead of ‘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, only
if the relative letter of credit specifically provides for negotiation of this
document, in lieu of bill of lading. Further, relative sale contract with the overseas
buyer should also provide that FCR may be accepted in lieu of bill of lading as
a shipping document.
B.6 Exports by Barges/Country Craft/Road
Transport
Following
procedure should be adopted by exporters for filing original copies of GR/SDF
forms where exports are made to neighbouring countries by road, rail or river
transport :
a. 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.
b. As regards exports by
rail, Customs staff have been posted at certain designated railway stations for
attending to Customs formalities. They will collect the GR/SDF forms in respect
of 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 is obtainable from the Railways. In respect of
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.
c. In terms of an agreement
on Border Trade between India and Myanmar, exchange of certain specified
locally produced commodities, by people living along the India-Myanmar border
on both sides under barter trade arrangement as also trade in freely
convertible currency, has been permitted. Authorised dealers should follow
strictly the revised guidelines issued in terms of A.P.(DIR Series) Circular
No.17, dated 16-10-2000.
Authorised Dealer’s Obligation
C.1 Delay in submission of shipping documents
by exporters
In cases where
exporters present documents pertaining to exports after the prescribed period
of twenty-one days from date of export, authorised dealers may handle them
without prior approval of Reserve Bank, provided they are satisfied with the
reasons for the delay.
C.2 Check-list for Scrutiny of Forms
Authorised dealer/exporter should verify the following :
i. Authorised dealer
should ensure that 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. In the case of SDF form, the
Shipping Bill No. should be the same as that appearing on the Bill of Lading.
ii. Bill of Lading/Airway
Bill issued on ‘freight prepaid’ basis may be accepted 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. Conversely, in the case of c.i.f.,
c.& f. etc. contracts whose freight is sought to be paid at destination, it
should be ensured 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. Likewise, where the marine insurance
is taken by the exporters on buyer’s account, authorised dealer should verify
that the actual amount paid is received from the buyer through invoice and the
bill.
iii. The documents submitted
do not reveal any material inter se discrepancies in regard to description of
goods exported, export value or country of destination.
Note :
A. The export realisable
value may be more than what was originally declared to/accepted by 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.
B. In cases where the
documents are being negotiated by a person other than the exporter who has signed
GR/PP/SDF/SOFTEX Form in respect of the concerned consignment of export,
authorised dealers may negotiate the documents after ensuring compliance with
Regulation 12 of “Export Regulations”.
C. In certain lines of
export trade, 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 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.
As such
variations stem from the terms of contract, authorised dealers may accept them
on production of documentary evidence after verifying the arithmetical accuracy
of the calculations and on conforming the terms of underlying contracts.
C.3 Trade Discount
Bills in respect
of exports by sea or air which fall short of the value declared on GR/SDF forms
on account of trade discount may be accepted for negotiation or collection only
if the discount has been declared by exporter on relative GR/SDF form at the
time of shipment and accepted by Customs.
C.4 Advance Payments against Exports
Exporters may
receive advance payments (with or without interest) from their overseas buyers.
It should, however, be ensured that the shipments made against the advance
payments are monitored by the authorised dealer through whom the advance
payment is received. The appropriations made against every shipment must be
endorsed on the original copy of the inward remittance certificate issued for
advance remittance.
Note : Purchase of foreign
exchange from the market for refunding advance payment credited to EEFC account
may be allowed only after utilising the entire balances held in the exporter’s
EEFC accounts maintained at different branches/banks.
C.5 Part Drawings
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, authorised dealers may negotiate bills,
provided :
a. the amount of undrawn
balance is considered normal in the particular line of export trade, subject to
a maximum of 10 per cent of the full export value; and
b. an undertaking is
obtained from 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 realisation.
Note : In cases where exporter has
not been able to arrange for repatriation of the undrawn balance in spite of
best efforts, authorised dealers 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% 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.
C.6 Consignment Exports
(i) When goods have been
exported on consignment basis, authorised dealer, 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 realisation 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 authorised dealer.
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.
Notes :
A. In case of goods exported
on consignment basis, freight and marine insurance must be arranged in India.
B. Reserve Bank will permit,
on application, exporters with satisfactory track record a longer period up to
twelve months for realisation of export proceeds for exports on consignment
basis made to CIS countries and East European countries financed in any
permitted currency.
C. Authorised Dealers may
consider the applications received from exporters and grant permission for
opening/hiring warehouses abroad subject to the following conditions :
(a) Applicant’s export
outstanding does not exceed 5 per cent of exports made during the previous
year.
(b) Applicant has a minimum
export turnover of USD 1,00,000 during the last year.
(c) Period of realisation
should be as applicable i.e., 180 days for non-status holder exporters and 365
days for status holder exporters.
(d) All transactions should
be routed through the designated branch of the authorized dealer.
The above
permissions may be granted to the exporters initially for a period of one year
and the renewal thereof may be considered subject to the applicant satisfying
the requirement at (a) above. Authorised Dealers granting such
permission/approvals should maintain a proper record of the approvals granted.
C.7 Despatch of Shipping Documents
(i) While Authorised
dealers should normally despatch shipping documents to their overseas
branches/correspondents expeditiously, they may despatch 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 despatch of documents
direct to the consignee or his agent resident in the country of final
destination of goods.
(ii) In cases not covered by
(i) above also, authorised dealers may accede to the request of the exporter,
for despatch of documents for whatever reason, direct to the consignee/agent
provided the exporter is a regular customer and the authorised dealer is
satisfied, on the basis of standing and track record of the exporter and the
arrangements made for realisation of export proceeds, that the request can be
acceded to.
(iii) Documents in respect of
goods or software which are accompanied with a declaration by the exporter that
they are not more than rupees twenty five thousand in value and not declared on
GR/SDF/PP/SOFTEX form, in terms of paragraph A.2 may be directly sent by the
exporter to the consignee.
(iv) Documents in respect of
goods exported against 100% advance remittance, in terms of paragraph C.4 may
be directly sent by the exporter to the consignee.
(v) Authorised Dealers may
permit ‘Status Holder Exporters’ (as defined in the EXIM Policy), and units in
Special Economic Zones (SEZ) to despatch the export documents to the consignees
outside India subject to the terms and conditions that :
a. the export proceeds are
repatriated through the authorised dealer named in the GR Form and
b. the duplicate copy of
the GR form is submitted to the Authorised Dealer for monitoring purposes, by
the exporters within 21 days from the date of export.
C.8 Handing Over Negotiable
Copy of Bill of Lading to Master of Vessel/Trade Representative
Authorised
dealers may deliver one negotiable copy of the Bill of Lading to the Master of
the carrying vessel or trade representative, in respect of 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.9 Export Bills Register
i. Authorised dealers
should maintain Export Bills Register, in physical or electronic form. Details
of GR/SDF/PP form number, due date of payment, the fortnightly period of
R-Supplementary Return with which ENC statement covering the transaction was
sent to Reserve Bank and the period of R-Supplementary Return with which the
duplicate copy of GR/SDF/PP form is submitted to Reserve Bank should be
available.
ii. Authorised dealers
should ensure that all types of export transactions are entered in the Export
Bills Register and are given bill numbers on calendar year basis (i.e. January
to December). The bill numbers should be recorded in ENC statement and other
relevant returns submitted to Reserve Bank.
C.10 Follow-up of Overdue Bills
(i) Authorised dealers
should closely watch realisation of bills and in cases where bills remain
outstanding, beyond the due date for payment or six 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 six months
or seek extension of time beyond six months the matter should be reported to
Reserve Bank stating, where possible, the reason for the delay in realising the
proceeds. The duplicate copies of GR/SDF/PP Forms should, however, continue to
be held by authorised dealer until full proceeds are realised except in case of
undrawn balances covered by Note under paragraph C.5. Authorised dealers 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 realisation of export proceeds by authorised dealers will be
viewed seriously by Reserve Bank leading to the invocation of the penal
provision under FEMA, 1999.
(ii) Exporters who have been
certified as ‘Status Holder’ in terms of EXIM Policy are permitted to realise
and repatriate the full value of export proceeds within a period of 12 months
from the date of shipment.
(iii) The stipulation of
twelve months or extended period thereof for realisation of export proceeds is
no longer applicable for units located in Special Economic Zones (SEZs). The
units in SEZs will however continue to follow the GR/PP/Softex export procedure
outlined in Section B - Part III of this circular.
(iv) Authorised dealers
should furnish to Reserve Bank, on half-yearly basis, a consolidated statement
in Form XOS 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.11 Reduction in invoice value on account of
prepayment of usance bills
Occasionally,
exporters may approach authorised dealers for reduction in invoice value on
account of cash discount to overseas buyers for prepayment of the usance bills.
In such cases authorised dealers 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.12 Reduction in Value
If, after a bill
has been negotiated or sent for collection, the amount thereof is desired to be
reduced for any reason, authorised dealer may approve such reduction, if
satisfied about genuineness of the request, provided :
a. the
reduction does not exceed 10% of invoice value,
b. it
does not relate to export of commodities subject to floor price stipulations,
c. the exporter is not on the exporters’
caution list of Reserve Bank, and
d. the
exporter is advised to surrender proportionate export incentives availed of, if
any.
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% of the average
annual export realisation during preceding three calendar years. For the
purpose of reckoning the percentage of outstanding export bills to average
export realisations during the preceding three calendar years, outstandings in
respect of exports made to countries facing externalisation problems may be
ignored provided the payments have been made by the buyers in the local
currency.
C.13 Export Claims
Authorised
dealers 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 Reserve Bank. In all such cases of remittances,
the exporter should be advised to surrender proportionate export incentive, if
any, received by him.
C.14 Change of buyer/consignee
Prior approval of
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
10% and the realisation of export proceeds is not delayed beyond the period of
six months from the date of export. Where the reduction in value exceeds 10%,
all other relevant conditions stipulated in paragraph C.12 should also be
satisfied.
C.15 Extension of time limit
1. (i) In cases where an exporter has not been able to realise
proceeds of a shipment made
within the period prescribed (i.e., within six months from the date of export),
for reasons beyond his
control, but expects to be able to realise proceeds if extension of the period is allowed to him, necessary
application (in duplicate) should
be made to the concerned Regional Office of Reserve Bank in form ETX through his authorised dealer with
appropriate documentary evidence other than cases
referred to in item (ii) below.
(ii) Reserve Bank of India
have permitted authorised dealers to extend the period of realization of export
proceeds beyond 6 months from the date of export where the invoice value does
not exceed US $ 1,00,000 subject to following conditions :
a. The Authorised Dealer is
satisfied that the exporter has not been able to realise export proceeds for
reasons beyond his control
b. The exporter submits a
declaration that he will realise the export proceeds during the extended
period.
c. The extension may be
granted upto a period of 3 months at a time and while considering the extension
beyond one year from the date of export the total export outstandings of the
exporter should not be more than 10% of the average of export realisations
during the preceding 3 financial years.
2. The ceiling of US $ 1,00,000 would not
apply where the exporter has filed suits against the importer abroad. In such
cases extension may be granted upto six months at a time, irrespective of the
amount involved.
3. Cases which are not covered by the above
instructions and cases indicated below would require prior approval from the
Regional Office of the Reserve Bank.
I. Where the export
invoices are under investigation by Enforcement Directorate/Central Bureau of
Investigation or other investigating agencies.
II. Where invoice value
exceeds US $ 1,00,000 (except in cases covered under paragraph 2 above).
All the export
bills outstanding beyond six months from the date of export may be reported in
XOS statement as usual. However, where extension of time has been granted by
authorized dealer, the date upto which extension has been granted may be
indicated in the ‘Remarks’ column.
4. As a temporary measure for a period of
one year w.e.f. September 1, 2001, exporters were allowed a period of 360 days
from the date of shipment, for realisation and repatriation of full value of
goods/software for exports to certain specified countries. This relaxation has
been further extended upto August 31, 2003.
5. Manufacturers/exporters of certain
specified products and having export contracts of Rs. 100 crores and above in
value term in one year have been allowed w.e.f. 1st October, 2001, for a period
of 365 days from the date of shipment for realisation and repatriation of full
value of the exports of the products specified. This relaxation has been
further extended upto September 30, 2003.
C.16 Shipments Lost in Transit
When shipments
from India for which payment has not already been received either by
negotiation of bills under letters of credit or otherwise are lost in transit,
authorised dealer must ensure that insurance claim is made as soon as the loss
is known. The duplicate copy of GR/SDF/PP form should be forwarded to Reserve
Bank with following particulars :
a. Amount
for which shipment was insured.
b. Name and address of insurance company.
c. Place
where claim is payable.
In cases where
claim is payable abroad, authorised dealer must arrange to collect the full
amount of claim due on the lost shipment, through the medium of his overseas
branch/correspondent and forward the duplicate copy of GR/SDF/PP form to
Reserve Bank 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.
Note : Sometimes claims on
shipments lost in transit are also partially settled directly by shipping
companies/airlines under carrier’s liability. Authorised dealers should ensure
that amounts of such claims if settled abroad are also repatriated to India by
exporters.
C.17 Payment of Claims by ECGC
Where export has
been covered by a policy issued by ECGC, settlement of a claim by the
Corporation does not absolve the exporter of the statutory obligation
undertaken on the GR/SDF/PP form to realise proceeds of the export within
prescribed period. In such cases, exporter should, in consultation with ECGC,
take all necessary steps for realising the proceeds. Authorised dealers should
also continue to hold the duplicate copies of GR/SDF/PP forms in their custody
and initiate follow-up measures in the normal manner.
C.18.A“Write
off” of Unrealised Export Bills
(i) An exporter who has not
been able to realise the outstanding export dues despite best efforts, may
approach the authorised dealer, who had handled the relevant shipping
documents, with appropriate supporting documentary evidence with a request for
write off of the unrealised portion. Authorised dealers may accede to such
requests subject to the undernoted conditions :
a. The
relevant amount has remained outstanding for one year or more;
b. The aggregate amount of
write off allowed by the authorised dealer during a calendar year does not
exceed 10% of the total export proceeds realised by the concerned exporter
through the concerned authorised dealer during the previous calendar year;
c. Satisfactory documentary
evidence is furnished in support of the exporter having made all efforts to
realise the dues;
d. The
case falls under any of the undernoted categories :
i. 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
produced;
ii. The
overseas buyer is not traceable over a reasonably long period of time;
iii. The goods exported have
been auctioned or destroyed by the Port/Customs/Health authorities in the
importing country;
iv. The unrealised amount
represents the balance due in a case settled through the intervention of the
Indian Embassy, Foreign Chamber of Commerce or similar Organisation;
v. The unrealised amount
represents the undrawn balance of an export bill (not exceeding 10% of the
invoice value) remained outstanding and turned out to be unrealisable despite
all efforts made by the exporter;
vi. The cost of resorting to
legal action would be disproportionate to the unrealised 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;
vii. 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 unrealised consequent on dishonour of the bills by the overseas buyer
and there are no prospects of realisation.
e. The
case is not the subject-matter of any pending civil or criminal suit;
f. The exporter has not
come to the adverse notice of the Enforcement Directorate or the Central Bureau
of Investigation or any such other law enforcement agency;
g. The exporter has surrendered
proportionate export incentives, if any, availed of in respect of the relative
shipments. The authorised dealer should obtain documents evidencing surrender
of export incentives availed of before permitting the relevant bills to be
written off. Authorised dealers are to put in place a system under which their
internal inspectors or auditors carry out random sample check/percentage check
of outstanding export bills written off.
(ii) Where there is no
further amount to be realised against the GR/SDF/PP form covered by the write
off, authorised dealer should certify the duplicate form as under :
“Write off
of....................................................................................................
(Amount in words and figures)
permitted in terms of paragraph
C.18 of Directions to Authorised Dealers.”
Date..........................
Stamp & Signature of Authorised Dealer
(iii) Status holders
exporters (viz. Export Houses, Trading Houses, Star Trading Houses, Superstar
Trading Houses) and manufacturer exporters exporting more than 50% of their
production, and recognised as such by DGFT, may be permitted to “ write off”
outstanding export bills upto an annual limit of 5% of their average annual
realisations (not turnover) during the preceding three calendar years. The
limit of 5% will be cummulatively available in a year and subject to the
following conditions :
1. The exporter should
submit to the concerned authorised dealer a Chartered Accountant’s certificate
indicating—
a. the export realisation
in the preceding three calendar years and also the amount of “write off”
already availed of during the year, if any,
b. the relevant GR/SDF Nos.
to be written off, Bill No., invoice value, commodity exported, country of
export,
c. the
export benefits, if any, availed of by the exporter have been surrendered.
2. It
is clarified that the following do not qualify for the “write off” facility :—
a. Exports made to
countries with externalisation 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.
b. 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.
3. After the “write off”
has been permitted authorised dealer may certify the duplicate form as
under :—
“write off
of............................................................................
(Amount
in words and figures)
permitted
in terms of AP (DIR Series) Circular No. 30, dated April 4, 2001.”
Date..........................
Stamp & Signature of Authorised Dealer
4. Authorised dealers may
note to take into account the amount written off under this facility while
arriving at the eligible amount under paragraph C.18 of AP (DIR Series)
Circular No. 12 of September 9, 2000.
5. Authorised dealers may
forward a statement in form EBW to the Regional Office of Reserve Bank under
whose jurisdiction they are functioning, indicating details of write offs etc.
C.18B ‘Netting off’ of export
receivables against import payments - Units in Special Economic Zones (SEZs)
Authorised
dealers 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). The netting may be
done as on date of balance sheet of the unit in SEZ.
(ii) The details of export
of goods is documented in GR(O) forms/DTR as the case may be while details of
import of goods/services is recorded through A1/A2 form as the case may be. The
relative GR/SDF forms will be treated as complete by the designated authorized
dealer 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 authorised dealer who should comply
with all the regulatory requirements relating to the transactions.
C.19 Return of Documents to Exporters
The duplicate
copies of GR/SDF/PP forms and shipping documents, once submitted to authorised
dealers for negotiation, collection, etc., should not ordinarily be returned to
exporters, except for rectification of errors and resubmission
C.20 Exporters’ Caution List
Authorised
dealers will also be advised whenever exporters are cautioned in terms of
provisions contained in Regulation 17 of “Export Regulations”. Authorised
dealers should not accept for negotiation/collection shipping documents
covering exports declared on GR/SDF/PP forms completed by such exporters nor
countersign PP forms completed by them unless the GR/SDF/PP forms bear approval
of Reserve Bank.
REMITTANCES CONNECTED WITH EXPORT
D.1 Agency Commission on Exports
(i) Authorised dealers 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:
a. Amount of commission has
been declared on GR/SDF/PP/SOFTEX form and accepted by 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 thereof may be allowed after satisfying about
the reasons adduced by the exporter for not declaring commission on Export
Declaration Form, provided a valid agreement/written understanding between the
exporter and/or beneficiary for payment of commission subsists.
b. The
relative shipment has already been made.
(ii) Authorised dealers may
allow payment of commission by Indian exporters, in respect of their exports
covered under counter trade arrangement through Escrow Accounts designated in
U.S. dollar, subject to the following conditions :
a. The payment of
commission satisfies the conditions as at (a) and (b) stipulated in paragraph
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.
Note : 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.
D.2 Refund of Export Proceeds
Refund of export
proceeds may be allowed by authorised dealers through whom the proceeds were
originally received, provided such goods are re-imported into India on account
of poor quality etc. and evidence of re-import has been submitted. In all such
cases, exporters should be advised to surrender the proportionate incentives
availed of, if any, against the relevant export.
See Foreign Exchange Management (Export of Goods & Services)
Regulations, 2000.