HANDBOOK ON FEMA REGULATIONS

(For Internal Circulation Only)

HANDBOOK ON

FEMA REGULATIONS IMPORTS & EXPORTS

STATE BANK STAFF COLLEGE HYDERABAD (An ISO 9001:2000 Certified Institution) FEBRUARY 2009


HANDBOOK ON


Compiled by:

R. Narotham Reddy, M.Com, CAIIB, CTF, Ce AML KYC, CDCS,

Member of Faculty, International Banking


Handbook on FEMA regulations – Imports and Exports Feb’09

State Bank Staff College, Hyderabad

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HANDBOOK ON


Compiled by:

R. Narotham Reddy, M.Com, CAIIB, CTF, Ce AML KYC, CDCS,

Member of Faculty, International Banking




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FOREWORD

It gives me immense pleasure in bringing out the fourth edition of ‘ Handbook February 2009, on FEMA Regulations Imports & Exports’. It is updated upto February incorporating the instructions issued by Reserve Bank of India under FEMA during the last one year. 2. As part of the Government’s efforts to integrate India with the global economy and especially in the wake of the global financial crisis the regulatory framework in the area of foreign exchange is being reviewed frequently and some more liberalization has been brought out during the last quarter of 2008. To enable our staff dealing with Imports and Exports at authorised branches and TFCPCs, to handle their jobs more effectively, this book had been compiled to contain all the FEMA regulations in a handbook form. It was first brought out in January 2006 and based on the encouraging feedback, its second and third updated editions were brought out in January 2007, January 2008 and now the fourth and updated edition. 3. The Handbook details the important FEMA regulations concerning Imports and Exports and is designed to assist the staff in their day-to-day work. The users should, nevertheless, take into account any latest changes in the instructions and circulars issued by Govt., RBI and our Foreign Department. 3. I am sanguine that this volume, just as the earlier editions, will be well received by the Forex branches as a very useful reference book. I trust that the staff at our Forex branches will be benefited in handling day to day issues relating to Imports and Exports in an error free and customer friendly manner. I compliment Shri. Narotham Reddy, Faculty of the College for his efforts in compiling and periodically updating this book. Suggestions are welcome to further improve the quality and usefulness of the Handbook.

March 11, 2009

USHA R. NAIR General Manager and Vice Principal



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INDEX Introduction Part I - Import of Goods 1. General 2. Form A-1 3. Import Licenses i) General ii) Endorsement on Import Import Licences Licences iii) Preservation Preservation of Import Licences iv) Import Licences for C.I.F.Value v) Imports on C.I.F.basis C.I.F.basis by Government Government Departments Departments / Public Sector Undertakings 4. Manner of Rupee Payment 5. Letter of Authority holders / Agents of Importers 6. Obligation of Purchaser of Foreign Foreign Exchange 7. Time Limit Limit for Settlement Settlement of Import Payments Payments 8. Interest on Import Bills 9. RBI’s Instructions Instructions on Trade Credits for Imports into India i) General ii) Amount and Maturity iii) All-in-cost Ceilings iv) Guarantee v) Reporting Arrangements Arrangements 10. Advance Remittance 11. Advance Remittance Remittance for Import of Rough Diamonds 12. Advance Remittance Remittance for Import of aircrafts / helicopters / other aviation related purchases 13. Remittances for Import of Aircraft /Aircraft Engine/Helicopter on Lease basis 14. Remittances Remittances for Import of films on lease / rental basis 15. Advance Remittances for Import of Services Handbook on FEMA regulations – Imports and Exports Feb’09


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16. Remittances Remittances for War Risk Insurance / Bunker /Congestion Surcharge / Premium for extended Insurance 17. Remittances for Imports under Penalty Penalty 18. Remittances Remittances against Replacement Imports 19. Guarantees for Replacement Replacement Import 20. Evidence of Import Import i) General ii) Imports in non-physical non-physical form iii) Imports on D/A basis iv) Issuing acknowledgement acknowledgement v) Verification by auditors vi) Preservation Preservation of evidence of Import vii) Certificate from CEO/Auditor of the Company as evidence of import 21. Follow up for Import Evidence Evidence 22. Follow up for Import Evidence – Bank’s instructions instructions 23. Import of Equipments by BPO Companies in India for International Call Centre 24. Handling of Import Documents on collection collection basis 25. Direct Receipt Receipt of Import Bills / Documents 26. Direct receipt of Import Bills / Documents - Import Import of Rough Diamonds 27. Postal Imports 28. Import of Gold/Platinum/Silver by Nominated Banks/Agencies Banks/Agencies i) Import of Gold on consignment basis ii) Import of Gold on unfixed unfixed price basis 29. Direct Import of Gold 30. Import of Gold on Loan basis 31. Import of Gold, Silver and Jewellery by NRIs NRIs 32. Import factoring factoring 33. Merchanting Trade Trade 34. Issue of Bank Guarantee on behalf of service importers



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Part II – Export of Goods and Services 1. General 2. Exemptions from Declarations 3. GR Approval for Exports 4. Numbering of Forms 5. Manner of Payment 6. Payments in foreign currency currency to units in SEZ 7. Guarantees against Exports 8. Foreign Currency Accounts i) Opening of Foreign Currency Accounts ii) Diamond Dollar Account iii) Exchange Earners’ Foreign Currency (EEFC) Account 9. Acquisition of Immovable Immovable Property Property for Overseas Offices Offices 10. Counter-Trade Counter-Trade Agreement 11. Export of Goods on Lease, Hire etc. 12. Participation in Trade Fairs Abroad 13. Project Exports and Service Exports 14. Export on Elongated Credit Terms 15. Export of Goods and Services by Units in Special Economic Zones i. Realisation of Export Proceeds ii. Job Works Abroad iii. Receipts of payment payment in precious metals for EOUs and and units in SEZs iv. Netting off of export receivables against import payments payments v. Issue of equity shares against against import of capital goods vi. Purchase of foreign exchange exchange by units in DTAs 16. Forfaiting 17. Disposal of Copies of Export Declaration Forms (GR/PP/SOFTEX forms) 18. Counter Signature on PP forms 19. Terms of Payment – Invoicing (Software) 20. Disposal of SOFTEX Forms Handbook on FEMA regulations – Imports and Exports Feb’09


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21. Shut out Shipments and Short Shipments 22. Consolidation of Air Cargo 23. Exports by Barges/Country Craft/Road Transport 24. Barter Trade with Myanmar 25. Delay in submission of shipping documents by exporters 26. Scrutiny of Export Declaration Forms i.

Bill of Lading/Shipping Bill

ii. Freight Payment iii. Inter se discrepancies Notes A. Differences in Value due to Freight B. Transfer of Documents C. Differences in Value due to quality analysis / late shipment penalty 27. Trade Discount 28. Advance Payments against Exports 29. Part Drawings 30. Consignment Exports i.

Payment of Freight and marine Insurance

ii. Exports to CIS Countries and East European Countries iii. Opening / Hiring Warehouses Abroad 31. Direct Despatch of Shipping Documents 32. Handing Over Negotiation Copy of Bill of Lading to Master of Vessel/Trade Representative 33. Export Bills Register 34. Follow-up of Overdue Bills 35. Reduction of Invoice Value on Account of Prepayment of Usance Bills 36. Reduction in Value 37. Export Claims 38. Change of Buyer/Consignee 39. Self Write-off, Reduction in Invoice Value Handbook on FEMA regulations – Imports and Exports Feb’09


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40. Extension of Time Limit in Other Cases 41. Shipments Lost in Transit 42. Payment of Claims by ECGC/ insurance companies registered with IRDA 43. “Write off” of Unrealised Export Bills 44. Return of Documents to Exporters 45. Exporters’ Caution List 46. Remittance of Agency Commission on Exports 47. Refund of Export Proceeds Annexures Annex-1 BEF statement Annex-2 Monthly Statement of Gold Imported Annex-3 GR,SDF,PP,SOFTEX Forms Annex-4 XOS statement Annex-5 Self Write-off and Extension of time – Annual statement to be submitted by exporter Annex-6 Statement of Advance Remittance without bank guarantee or standby letter of credit where the amount of advance is equivalent to or more than USD 5 million for import of Rough Diamonds Annexure -7 Part I : Approvals of Trade Credit granted by all branches during the (Month / Year)………… Part I: Approvals of Trade Credit granted by all branches during the (Month / Year)………..(excel format) Part II : Disbursement, Utilisation and Debt Servicing of Trade Credit during (month) / (year)………. (excel format) Annexure-8 Trade Credits - Statement on LCs/Guarantees/LOU/LOC issued by AD Category I Banks



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Introduction Foreign Exchange Management (Current Account Transactions) Rules, 2000 were circulated by Government of India vide Notification No. G.S.R.381 (E) dated May 3, 2000, and amended vide Notification No. SO 301 (E) dated March 30, 2001. Reserve Bank of India under Foreign Exchange Management Act issues directions from time to time bringing out the changes and operational clarifications that are applicable to foreign trade and all AD Category - I banks in Foreign Exchange are required to strictly adhere to these regulations. 2. 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.5000/- except to the extent permitted under any general permission granted under the Regulations, will require prior permission of Reserve Bank. 3. 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, AD Category - I banks have been permitted to issue guarantees on behalf of exporter clients on account of exports out of India. 4. 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. 5. Import and Export of goods and services are regulated by the Directorate General of Foreign Trade (DGFT) and its regional offices, functioning under Ministry of Commerce & Industry, Department of Commerce, Government of India. Policies and procedures required to be followed for Imports to India and Exports from India are announced by the DGFT. AD Category - I banks, while undertaking import and export related transactions, are required to ensure that these are in conformity with the Foreign Trade Policy in force. Handbook on FEMA regulations – Imports and Exports Feb’09


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6. Further, AD Category - I banks should follow normal banking procedures and adhere to the provisions of Uniform Customs and Practices for Documentary Credits (UCPDC), etc. while opening letters of credit for import into India on behalf of their constituents. In respect of import of drawings and designs, compliance with the provisions of Research & Development Cess Act, 1986 may be ensured. AD Category - I banks may also advise importers and exporters to ensure compliance with the provisions of Income Tax Act, wherever applicable. 7. Banks are also expected to meticulously adhere to "Know Your Customer" (KYC) guidelines issued by Reserve Bank (Department of Banking Operations & Development) in all their dealings. 8. Financial year' (April to March) is to be reckoned as time base for all transactions pertaining to trade related issues. 9. In this Handbook, the rules and regulations from the foreign exchange angle under Foreign Exchange Management Act that are to be followed by Banks (AD Category I banks) while undertaking import and export related transactions on behalf of their clients are only discussed. Where specific regulations do not exist, AD Category - I banks may be governed by normal trade practices. The users of this Handbook are required to check for the updates of these regulations, which are brought out by Reserve Bank of India under ‘AP (DIR) Circulars’ series from time to time. These circulars are available on Reserve Bank’s website: rbi.org.in.



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PART I - IMPORT OF GOODS 1. General

Rupee accounts maintained in India by citizens of India, Nepal and Bhutan, residents in Nepal and Bhutan, as well as Indian, Nepalese and Bhutanese firms, companies or other organizations, including Banks functioning in these countries are regarded as resident accounts and rupee transfers to such accounts, for imports in to India may be made freely, without reference to the Reserve Bank of India. Sale of Foreign Exchange for current account transactions# with persons resident in Nepal and/or Bhutan, or against import into these countries made by residents in India, is prohibited. Directions contained hereunder are also applicable to imports which are financed in rupees and payment for which is made by crediting rupees to a non-resident account in India or to a rupee account maintained by a non-resident bank. #

Transactions relating to Imports are current account transactions

2. Form A-1

Applications by persons, firms and companies for making payments, exceeding USD 500 or its equivalent, towards imports into India must be made on Form A-1. Variants of this form have been devised in different colours to be used for – (a) remittance in foreign currency, (b) transfer of rupees to non-resident bank accounts, and (c) remittance through Asian Clearing Union. Appropriate A1 form should be obtained and retained by AD Category - I bank for verification by Concurrent Auditors/Internal Auditors and not to be forwarded to RBI. 3. Import Licenses i) General

AD Category - I banks may freely open letters of credit and allow remittances for import of goods unless they are included in the negative list requiring licence under the Foreign Trade Policy in force. In such cases, licences marked ‘For



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Exchange Control purposes’ should be called for and special conditions, if any, attached to such licences adhered to. ii) Endorsement on Import Licences

AD Category - I banks should note to endorse on the ‘Exchange Control Copy’ of import licences, under their stamp and signature, the details of letters of credit opened or forward contracts booked or remittances made in foreign currency as also the amount of insurance and freight paid by the importer locally in rupees, wherever licences have been obtained by importers. iii) Preservation of Import Licences

Exchange Control copy of the import licence submitted by importer for opening of Letter of Credit or making remittance, when fully utilised, should be retained by AD Category - I banks and may be preserved till its scrutiny by the internal auditors or inspectors is completed. iv) Import Licences for C.I.F. value

a. Import licences are normally issued for the C.I.F. value of the goods to be imported. When imports are made on F.O.B. terms the full amount of import licence (of C.I.F value) cannot be used, leaving insurance and freight to be settled by the supplier or his agent, as additional charges over and above the F.O.B. value are to be paid in rupees. b. Imports are sometimes made on F.O.B. terms and Indian importers agree to the suppliers paying for the freight to be reimbursed to them along with the cost of the goods. AD Category - I banks in such cases should before making the remittance of freight charges, ascertain the actual freight amount paid with reference to the original freight bill or memo issued by the shipping company or the amount stated on the relative bill of lading. v) Imports on C.I.F. basis by Government Departments/Public Sector Undertakings

In cases where imports are made on C.I.F. terms and through ocean transport by Government Departments/Public Sector Undertakings, they are required to obtain the approval of the Chartering Wing of Ministry of Shipping for payment of imports on C.I.F. basis. Such approvals will not be required by Public Sector



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Undertakings/Government Department, if the mode of transport is other than ocean transport. 4. Manner of Rupee Payment

Payments for retirement of bills drawn under letters of credit as well as bills received from abroad for collection against imports into India, must be received by AD Category - I banks, irrespective of amount, by debit to the account of the importer maintained with them or by means of a crossed cheque drawn by the importer on his other bankers. Payments against bills under no circumstances should be accepted in cash. 5. Letter of Authority holders / Agents of Importers

AD Category - I banks may open letters of credit or make remittances where the Exchange Control copy of the relative import licence has been issued in the name of a party other than the applicant, provided the applicant produces a letter of authority obtained from the import licence holder in his favour authorizing him/her, inter alia, to open letters of credit or make remittances for payment towards import under the licence (subject to the terms and conditions, if any, applicable in this regard as per Foreign Trade Policy in force).

AD Category - I banks may also open letters of

credit or make remittances towards imports permitted without licences on behalf of authorised agents of importers, after satisfying themselves to the Foreign Trade Policy in force that the importers are permitted to utilize services of agents for the imports in question.

In all such cases, the responsibility for production of the

Exchange control copy of the Bill of Entry, wherever required, will rest on the letter of authority holder or agent. 6. Obligation of Purchaser of Foreign Exchange

(a) In terms of Section 10(6) of the Foreign Exchange Management Act, 1999 (FEMA), any person acquiring foreign exchange is permitted to use it either for the purpose mentioned in the declaration made by him to an Authorised Dealer Category - I bank under Section 10(5) of the Act or to use it for any other purpose for which acquisition of exchange is permissible under the said Act, or Rules or Regulations framed there under .



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(b) Where foreign exchange acquired has been utilised for import of goods into India the AD Category - I bank should ensure that importer furnishes an evidence of import to his satisfaction, as laid down in paragraph 10. (c) In cases payment for import is made by way of credit to resident account of the overseas exporter maintained with a bank in India, AD Category - I banks should ensure compliance with the instructions contained in sub-paragraph (a) above. (d) In cases payment for import is made by way of credit to non-resident account of the overseas exporter maintained with a bank in India, AD

Category - I banks should ensure compliance with the instructions contained in sub-paragraphs (a) and (b) above. (e) The directions contained in this paragraph are also applicable to payments for imports in to India are made through ACU mechanism. 7. Time Limit for Settlement of Import Payments (i). In terms of the extant regulations, remittances against imports should be completed not later than six months from the date of shipment except in cases

where amounts are withheld towards guarantee of performance etc. Deferred payment arrangements including suppliers and buyers credit providing for payments beyond a period of six months from date of shipment upto a period of less than three years are treated as trade credits (Suppliers Credit and Buyers Credit) for which the instructions and procedural guidelines laid down for trade credits (given in para 9) may be followed. (ii). AD Category - I banks may permit settlement of import dues delayed due to

disputes, financial difficulties etc. Interest in respect of such delayed payments may be permitted in terms of the directions in Para 9. (iii). Time limit for import of books; Remittances against import of books may be

allowed without restriction as to time limit, provided, interest payment, if any, is as per the instructions in para 9 (iii). 8. Interest on Import Bills



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i) AD Category - I banks may allow payment of interest on usance bills or overdue interest for a period of less than three years from the date of shipment at the rates prescribed for trade credits mentioned in the Para 9 (iii). ii) In case of pre-payment of usance import bills, remittances may be made only after reducing the proportionate interest for the unexpired portion of usance at the rate at which interest has been claimed or LIBOR of the currency in which the goods have been invoiced, whichever is applicable.

Where interest is not

separately claimed or expressly indicated, remittances may be allowed after deducting the proportionate interest for the unexpired portion of usance at the prevailing LIBOR of the currency of invoice. 9. RBI’s instructions on Trade Credits for Imports into India i) General

‘Trade Credits’ (TC) refer to credits extended for imports directly by the overseas supplier, bank and financial institution for original maturity of less than three years. Depending on the source of finance, such trade credits include suppliers’ credit or buyers’ credit. Suppliers’ credit relates to credit for imports in to India extended by the overseas supplier, while buyers’ credit refers to loans for payment of imports in to India arranged by the importer from a bank or financial institution outside India for maturity of less than three years. It may be noted that buyers’ credit and suppliers’ credit for three years and above come under the category of External Commercial Borrowings (ECB) which are governed by ECB guidelines. ii) Amount and Maturity

AD Category - I banks are permitted to approve trade credits for imports into India up to USD 20 million per import transaction for import of all items (permissible under the Foreign Trade Policy in force) with a maturity period (from the date of shipment) up to one year. For import of capital goods, AD Category I banks may approve trade credits up to USD 20 million per import transaction with a maturity period of more than one year and less than three years. No rollover/extension will be permitted by the AD beyond the permissible period. AD Category - I banks have no powers to approve trade credit exceeding USD 20 million per import transaction. Handbook on FEMA regulations – Imports and Exports Feb’09


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iii) All-in-cost Ceilings

The all-in-cost ceilings are as under: Maturity period

All-in-cost ceilings over 6 months LIBOR*

Up to one year More than one year but less than three

200 basis points

years

* for the respective currency of credit or applicable benchmark .

(A. P. (DIR Series) Circular No. 27 dated October 27, 2008) The all-in-cost ceilings include arranger fee, upfront fee, management fee, handling / processing charges, out of pocket and legal expenses, if any. The allin-cost ceilings will be reviewed from time to time. iv) Guarantee

AD Category - I banks are permitted to issue guarantee/Letter of Undertaking (LoU) /Letter of Comfort (LoC) in favour of overseas supplier, bank and financial institution, up to USD 20 million per transaction for a period up to one year for import of all non-capital goods permissible under Foreign Trade Policy (except gold) and up to three years for import of capital goods, subject to prudential guidelines issued by Reserve Bank from time to time. The period of such guarantees/LoU/LoC has to be co-terminus with the period of credit, reckoned from the date of shipment. v) Reporting Arrangements

AD Category - I banks are required to furnish details of approvals, drawal, utilisation, and repayment of trade credit granted by all its branches, in a consolidated statement, during the month, in form TC (format in Annex 9) from April 2004 onwards to the Director, Division of International Finance, Department of Economic Analysis and Policy, Reserve Bank of India, Central Office Building, 8th floor, Fort, Mumbai – 400 001 (and in MS-Excel file through email to [email protected] ) so as to reach not later than 10th of the following month. Each trade credit may be given a unique identification number by the AD. Handbook on FEMA regulations – Imports and Exports Feb’09


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AD Category - I banks are required to furnish data on issuance of Letters of Credit/Guarantees/Letters of Undertaking/Letter of Comfort by all its branches, in a consolidated statement, at quarterly intervals (format in Annex 10) to the Chief General Manager, Foreign Exchange Department, ECB Division, Reserve Bank of India, Central Office Building, Fort, Mumbai – 400 001 (and in MS-Excel file through email to [email protected]) from December 2004 onwards so as to reach the department not later than 10th of the following month. 10. Advance Remittance

AD Category - I banks may allow advance remittance for import of goods without any ceiling subject to the following conditions: (a)

i). If the amount of advance remittance exceeds USD 100,000 or its equivalent, an unconditional, irrevocable standby Letter of Credit or a guarantee from an international bank of repute situated outside India or a guarantee of an Authorised Dealer in India, if such a guarantee is issued against the counter-guarantee of an international bank of repute situated outside India, is obtained. ii). In cases where the importer (other than a Public Sector Company or a Department/Undertaking of the Government of India/State Governments) is unable to obtain bank guarantee from overseas suppliers and the AD Category - I bank is satisfied about the track record and bonafides of the importer, the requirement of the bank guarantee/ standby Letter of Credit may not be insisted upon for advance remittances upto USD 5,000,000 (US dollar five million). AD Category - I banks may frame their own internal guidelines to deal with such cases as per a suitable policy framed by the bank's Board of Directors. iii). A Public Sector Company or a Department/Undertaking of the Central/State Government/s which is not in a position to obtain a guarantee from an international bank of repute against an advance payment, it is required to obtain a specific waiver for the bank guarantee from the Ministry of Finance, Government of India before making advance remittance exceeding USD 100,000.



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(b)

All payments towards advance remittance for imports shall be subject to the following conditions: i)

The importer is a customer of the AD Category – I bank.

ii)

The customer’s account is fully compliant with Reserve Bank’s extant

KYC / AML guidelines. KYC and due diligence exercise should be done by the AD Category – I bank for the Indian importer entity as well the overseas manufacturer / supplier. iii)

The AD Category - I banks should undertake the transactions based on

their commercial judgment and after being satisfied about the bonafides of the transactions. iv)

Advance payments should be made strictly as per the terms of the sale

contract and should be made directly to the account of the manufacturer / supplier concerned. v)

Physical import of goods into India should be made within six months

(three years in case of capital goods) from the date of remittance and the importer should give an undertaking to furnish documentary evidence of import, within fifteen days from the close of the relevant period. vi)

AD Category – I banks should follow up submission of documentary

evidence for import into India. vii)

In the event of non-import of goods, AD Category – I banks should

ensure that the amount of advance remittance is repatriated to India or is utilised for any other purposes for which release of exchange is permissible under the Act, Rules or Regulations made there under. 11. Advance Remittance for Import of Rough Diamonds

Based on the Recommendations of the Expert Committee on Gems and Jewellery Sector, constituted by the Ministry of Finance, Government of India, a representation was made by the Gems and Jewellery Export Promotion Council (GJEPC) for allowing advance remittances without insisting on bank guarantee in respect of import of rough diamonds from five select mining companies of rough diamonds in addition to the Diamond Trading Company Pvt. Ltd., UK. With a view to liberalising the procedure further and facilitate import of rough diamonds, AD Category - I banks are,permitted to allow advance remittance without any limit and without bank guarantee or standby letter of credit, by an importer (other Handbook on FEMA regulations – Imports and Exports Feb’09


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than a Public Sector Company or a Department / Undertaking of the Government of India / State Government/s), for import of rough diamonds into India from the undernoted mining companies, viz. i) De Beers UK Limited., UK, ii) RIO TINTO, UK iii) BHP Billiton, Australia iv) ENDIAMA, E. P. Angola, v) ALROSA, Russia, vi) GOKHARAN, Russia, vii) RIO TINTO, Belgium and viii) BHP Billiton, Belgium (A. P. (DIR Series) Circular No. 03 dated August 04, 2008 and A. P. (DIR Series) Circular No. 08 dated August 21, 2008)

While allowing the advance remittance, AD Category - I banks may ensure the following: (i)The importer should be a recognised processor of rough diamonds as per a list to be approved by GJEPC in this regard and should have a good track record of export realisation; (ii) AD Category - I banks should undertake the transaction based on their commercial judgment and after being satisfied about the bonafides of the transaction; (iii) Advance payments should be made strictly as per the terms of the sale contract and should be made directly to the account of the company concerned, that is, to the ultimate beneficiary and not through numbered accounts or otherwise. Further, due caution may be exercised to ensure that remittance is not permitted for import of conflict diamonds; (iv) KYC and due diligence exercise should be done by the AD Category - I banks for the Indian importer entity and the overseas company; and (v) AD Category - I banks should follow up submission of the Bill of Entry / documents evidencing import of rough diamonds into the country by the importer, in terms of the Act / Rules / Regulations / Directions issued in this regard.



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In case of an importer entity in the Public Sector or a Department / Undertaking of the Government of India / State Government/s, AD Category - I banks may permit advance remittance subject to the above conditions and a specific waiver of bank guarantee from the Ministry of Finance, Government of India where the advance payments is equivalent to or exceeds USD 100,000/- (USD one hundred thousand only). AD Category - I banks are required to submit a report of all such advance remittances made without a bank guarantee or standby letter of credit, where the amount of advance payment is equivalent to or exceeds USD 5,000,000/- (USD Five million only), to The Chief General Manager, Reserve Bank of India, Foreign Exchange Department, Trade Division, Central Office, Mumbai, on a half yearly basis, as at the end of September and March every year, in the format given in Annexure-8. The deadline for submission of the report would be 15 calendar days after the close of each half year. 12. Advance Remittance for Import of aircrafts / helicopters / other aviation related purchases

As a sector specific measure, airline companies which have been permitted by the Directorate General of Civil Aviation to operate as a schedule air transport service, can make advance remittance without bank guarantee, up to USD 50 million. Accordingly, AD Category – I banks may allow advance remittance, without obtaining a bank guarantee or an unconditional, irrevocable standby Letter of Credit, up to USD 50 million, for direct import of each aircraft, helicopter and other aviation related purchases. The remittances for the above transactions shall be subject to the following conditions: i. The AD Category - I banks should undertake the transactions based on their

commercial judgment and after being satisfied about the bonafide of the transactions. KYC and due diligence exercise should be done by the AD Category - I banks for the Indian importer entity and the overseas manufacturer company as well. ii. Advance payments should be made strictly as per the terms of the sale contract

and are made directly to the account of the manufacturer (supplier) concerned. iii. AD Category - I bank may frame their own internal guidelines to deal with such

cases, with the approval of their Board of Directors.



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iv. In the case of a Public Sector Company or a Department / Undertaking of Central

/ State Governments, the AD Category - I bank shall ensure that the requirement of bank guarantee has been specifically waived by the Ministry of Finance, Government of India for advance remittances exceeding USD100,000. v. Physical import of goods into India is made within six months (three years in case

of capital goods) from the date of remittance and the importer gives an undertaking to furnish documentary evidence of import within fifteen days from the close of the relevant period. It is clarified that where advance is paid as milestone payments, the date of last remittance made in terms of the contract will be reckoned for the purpose of submission of documentary evidence of import. vi. Prior to making the remittance, the AD Category – I bank may ensure that the

requisite approval of the Ministry of Civil Aviation / DGCA / other agencies in terms of the extant Foreign Trade Policy has been obtained by the company for import. vii. In the event of non-import of aircraft and aviation sector related products, AD

Category - I bank should ensure that the amount of advance remittance is immediately repatriated to India. Prior approval of the concerned Regional Office of the Reserve Bank will be required in case of any deviation from the above stipulations. 13. Remittances for Import of Aircraft /Aircraft Engine/Helicopter on Lease basis

a. Authorised dealers may allow remittance of payment of lease rentals, opening letter of credit towards security deposit etc., in respect of import of aircraft/aircraft engine/helicopter on operating lease basis, after verifying that the airline company has obtained necessary approval from the appropriate authorities like Ministry of Civil Aviation/Director General of Civil Aviation, Government of India. b. In cases where the lease transaction contains option to purchase the asset at the end of the lease period, it will require prior approval from the Reserve Bank of India. c. ADs may permit airline companies (other than a Public Sector company or a Department/Undertaking of the Government of India/State Government/s) to remit up to USD 1,000,000 (US Dollar one million only) per aircraft towards security deposit (for payment of lease rentals) with lessor for import of aircraft/ Handbook on FEMA regulations – Imports and Exports Feb’09


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aircraft engine / helicopter on operating lease without a standby letter of credit or a guarantee from a reputed international bank abroad or a guarantee of an AD in India against the counter-guarantee of a reputed international bank abroad subject to following conditions: i) The AD is satisfied about the bona fides of the transaction. ii) The airline company has obtained necessary approval from appropriate authority like Ministry of Civil Aviation/Director General of Civil Aviation, Government of India for importing the aircraft/helicopter on operating lease. iii) Remittance is permitted as per the Policy on Advance Remittances approved by the Board of Directors of the bank or with the specific approval of the Board of Directors of the bank. iv) The final maturity of the security deposit should not be beyond the date of the last instalment towards lease rental or date of return of the aircraft / helicopter to the lessor, whichever is later. If required, the deposit amount may be adjusted towards lease rentals. However, the balance security deposit, if any, should be repatriated before expiry of the lease period. d. In case of an airline company in the Public Sector or a Department/Undertaking of the Government of India/State Government/s, ADs may permit remittance of amount exceeding USD 1,00,000 (US Dollar one hundred thousand only) per aircraft towards security deposit (for payment of lease rentals) with lessor subject to conditions (i) to (iv) in paragraph (c) above and a specific waiver of bank guarantee from the Ministry of Finance, Government of India. 14. Remittances for Import of films on lease / rental basis

AD Category - I banks may allow remittance of rent, royalty, licence fee, profit etc., in connection with import of cinematograph feature films and video films subject to the following conditions: i) A ‘No Objection Certificate’ from Central Board of Film Certification, wherever required, has been submitted; ii) A Chartered Accountant’s certificate is produced indicating that the payment to overseas supplier is due and the amount sought to be remitted is in conformity with the terms of the contract; and Handbook on FEMA regulations – Imports and Exports Feb’09


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iii) An undertaking / certificate regarding payment of income-tax has been submitted. 15. Advance Remittances for Import of Services

With a view to liberalizing the procedure further, it has been decided by RBI to raise the limit of USD 100,000 for advance remittance for all admissible current account transactions for import of services without bank guarantee to USD 500,000 or its equivalent. AD Category – I banks may frame their own guidelines to deal with such cases as per the policy approved by the bank’s Board of Directors. Where the amount of advance exceeds USD 500,000 or its equivalent, a guarantee from a bank of international repute situated outside India, or a guarantee from an AD Category – I bank in India, if such a guarantee is issued against the counterguarantee of a bank of international repute situated outside India, should be obtained from the overseas beneficiary. AD Category – I banks should also follow-up to ensure that the beneficiary of the advance remittance fulfils his obligation under the contract or agreement with the remitter in India, failing which, the amount should be repatriated to India. The ECCB approved Bank’s policy guidelines for all admissible Current Account transactions for Import of Services, without insisting on Bank Guarantee for amounts above USD 100,000 and upto USD 500,000 or its equivalent are given below; i) The advance remittance will be effected on behalf of our customers only and all KYC, Anti Money Laundering (AML) guidelines shall be strictly adhered to. ii) Documentary evidence, such as agreement, proforma invoices etc. indicating the cost of the services to be provided /imported and specific demand of the overseas service provider shall be obtained and kept as branch record. iii) The overseas service provider shall also furnish an undertaking that the amount shall be repatriated immediately in case the obligations under the contract / agreement are not fulfilled /met. iv) Satisfactory Opinion Report on the overseas supplier / accredited agent shall be obtained beforehand, from an independent agency or from our Representative / Foreign Offices / Correspondents abroad.



23

v) Remittances shall be made by the Bank direct to the overseas suppliers, through banking channel. vi) Since such imports are in non-physical form, branches shall ensure to obtain an undertaking and or a certificate from the Chartered Accountant of the importer / remitter, after a reasonable time, indicating that the services have been procured / imported and taxes, wherever applicable, have been deducted / paid, as per the terms / format contained in Section X, Chapter 22 of the FD Codified Circular. vii) For non-borrower customers, the remittance shall be made subject to availability of funds in their accounts and Bank is satisfied about the bonafide of the importer and the purpose of the remittance. viii) So far as the borrower customers are concerned, the facility is to be extended to such borrowers with a satisfactory track record. ix) The branches shall follow up to satisfy themselves about the import of services. If however, the imports do not fructify as per the agreed terms and conditions / time lines, all efforts should be made to repatriate the funds in terms of the undertaking furnished by the overseas beneficiary. In the event of the repatriation not being made despite all efforts, the branch shall report the matter to the Regional Office concerned of RBI after a reasonable time, viz 3 months after the agreed / extended date for such import. x) Remittances exceeding USD 500,000 or its equivalent shall be effected only against a guarantee from a bank of international repute situated outside India or the guarantee issued by an AD Category-I bank in India against the counter-guarantee of a bank of international repute situated outside India, as per extant instructions of RBI. 16. Remittances for War Risk Insurance / Bunker / Congestion Surcharge / Premium for Extended Insurance

AD Category - I banks may make remittances towards War Risk insurance premium, Bunker / Congestion surcharge at foreign ports, and premia for extended insurance cover etc., which are incidental to imports. 17. Remittances for Imports under Penalty

AD Category - I banks may make remittances against goods imported without authority, but later allowed to be cleared by the Customs Authorities against payment of penalty, to the extent of C.I.F. value of the goods indicated on the relative Exchange Control copy of Bill of Entry evidencing import of goods in to India. Handbook on FEMA regulations – Imports and Exports Feb’09


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18. Remittances against Replacement Imports

Where goods are short-supplied, damaged, short-landed or lost in transit and the Exchange Control copy of the import licence has already been utilised to cover the opening of a letter of credit against the original goods which have been lost, the original endorsement to the extent of the value of the lost goods may be cancelled by AD Category - I banks and fresh remittance for replacement imports permitted without reference to Reserve Bank, provided the insurance claim relating to the lost goods has been settled in favour of the importer. It may be ensured that the consignment being replaced is shipped within the validity period of the licence. 19. Guarantees for Replacement Import

In case replacement goods for defective import are being sent by the overseas supplier before the defective goods imported earlier are reshipped out of India, AD Category - I banks may issue guarantees at the request of importer client for despatch/return of the defective goods, according to their commercial judgment. 20. Evidence of Import i.

General : In case of all imports, where value of foreign exchange

remitted/paid for import into India exceeds USD 100,000 or its equivalent, it is obligatory on the part of the AD Category - I banks through whom the relative remittance was made, to ensure that the importer submits :a. The Exchange Control copy of the Bill of Entry for home consumption, or b. The Exchange Control copy of the Bill of Entry for warehousing, in case of 100% Export Oriented Units or c. Customs Assessment Certificate or Postal Appraisal Form, as declared by the importer to the Customs Authorities, where import has been made by post, as evidence that the goods for which the payment was made have actually been imported into India. ii.

Imports in non-physical form: Where imports are made in non-physical

form, i.e., software or data through internet/datacom channels and drawings and designs through e-mail/fax, a certificate from a Chartered Accountant that the software/data/ drawing/ design has been received by the importer, may be obtained. Handbook on FEMA regulations – Imports and Exports Feb’09


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Note: AD Category - I banks should advise importers to keep Customs Authorities informed of the imports made by them under this clause. iii.

Imports on D/A basis: In respect of imports on D/A basis, AD Category - I

banks should insist on production of evidence of import at the time of effecting remittance of import bill. However, if importers fail to produce documentary evidence due to genuine reasons such as non-arrival of consignment, delay in delivery/customs clearance of consignment, etc., AD Category - I banks may, if satisfied with the genuiness of request, allow reasonable time, not exceeding three months from the date of remittance, to the importer to submit the evidence of import. iv.

Issuing acknowledgement: AD Category - I banks should acknowledge

receipt of evidence of import e.g. Exchange Control copy of the Bill of Entry, Postal Appraisal Form or Customs Assessment Certificate, etc., from importers by issuing acknowledgement slips containing all relevant particulars such as; a) Importer’s full name and address with code number; b) Import licence number and date (wherever applicable); c) Bank’s reference of letter of credit number, etc., if any; d) Number and date of Exchange Control copy of Bill of Entry/Postal Appraisal Form or Customs Assessment certificate and the amount of import; and e) Particulars of goods imported. v.

Verification by auditors: Internal inspectors or auditors (including external

auditors appointed by dealers) should carry out verification of the documents evidencing import, e.g. Exchange Control copies of Bills of Entry or Postal Appraisal Forms or Customs Assessment Certificates, etc., vi.

Preservation of evidence of import: Documents evidencing import into India

should be preserved by AD Category - I banks for a period of one year from the date of its verification. However, in respect of cases which are under investigation by investigating agencies, the documents may be destroyed only after obtaining clearance from the investigating agency concerned.



26

vii.

Certificate from CEO/Auditor of the company as evidence of import: AD

Category - I banks may accept either Exchange Control copy of Bill of Entry for home consumption or a certificate from the Chief Executive Officer (CEO) or auditor of the company that the goods for which remittance was made have actually been imported into India provided :a.

the amount of foreign exchange remitted is less than USD

1,000,000 (USD one million) or its equivalent, b.

the importer is a company listed on a stock exchange in India

and whose net worth is not less than Rs.100 crores as on the date of its last audited balance sheet, c.

or

the importer is a public sector company or an undertaking of the

Government of India or its departments. The above facility may also be extended to autonomous bodies, including scientific bodies/academic institutions, such as Indian Institute of Science / Indian Institute of Technology etc. whose accounts are audited by the Comptroller and Auditor General of India (CAG). AD Category - I banks may insist on a declaration from the auditor/CEO of such institutions that their accounts are audited by CAG. 21. Follow up for Import Evidence

i.

In case an importer does not furnish any documentary evidence of import, as required under paragraph 17 above, within 3 months from the date of remittance involving foreign exchange exceeding USD100,000, the AD Category - I banks should rigorously follow-up for the next 3 months, including issue of registered letters to the importer.

ii.

AD Category - I banks should forward to Reserve Bank a statement on halfyearly basis as at the end of June & December of every year, in form BEF (format as per annexure 1) furnishing details of import transactions, exceeding USD 100,000 in respect of which importers have defaulted in submission of appropriate document evidencing import within 6 months from the date of remittance. The said half-yearly statement should be submitted to the Regional Office of R.B.I. under whose jurisdiction the AD Category - I banks is



27

functioning, within 15 days from the close of the half-year to which the statement relates. AD Category-I banks need not follow up submission of evidence of import involving amount of USD 100,000 or less provided they are satisfied about the genuineness of the transaction and the bonafides of the remitter. A suitable policy may be framed by the bank's Board of Directors and the AD Category-I banks may set their own internal guidelines to deal with such cases. Accordingly, our internal policy guidelines (as per FD Circular No. 105/2005-06 dated 23.12.2005) on the followup of evidence of import of goods of value upto USD 100,000 have been framed

and approved by the Central Board as given in para 21 below : 22. Follow up for Import Evidence – Bank’s instructions a) Where Imports are on DP (Delivery against payment) basis: i). Customers having borrowing arrangements with us.

In case of customers having credit relationship with us, observance of KYC guidelines is ensured. Moreover, on account of regular transactional relationship with the borrower, the bonafides of the customer and genuineness of the transactions is also established. Therefore, for such category of customers, follow-up for submission of evidence of import need not be done in case of borrowers having Credit Rating up to SB-5. In case of borrowers having Credit Rating below SB-5, such waiver may be permitted on case to case basis by the sanctioning authority. ii). Customers not having any borrowing arrangements with us.

In such cases while the KYC requirements are fulfilled, there is no credit relationship which will enable the Bank to establish genuineness of transaction on an ongoing basis. Therefore, for customers under this category, a suitable self declaration, furnishing particulars like details of Bill of Entry, purpose of import etc. may be obtained. This will adequately address the issue of establishing the genuineness of the transaction. iii). Imports made by non-customers (i.e. customers of other Banks, customers who have received Bills direct from the overseas exporters).

In such cases since KYC guidelines will not be complied with, the following procedure is proposed:Handbook on FEMA regulations – Imports and Exports Feb’09


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a) The rupee equivalent of the remittance should be invariably received

through normal banking channels like Crossed Cheques/Drafts/Pay Orders etc. b) In order to ascertain the genuineness of the transaction, Branches

should obtain declarations giving details of the import, like particulars of Bill of Entry, purpose of import etc. as under: i) If the value of import is upto USD 25000, self declaration from the

importer. ii) Where the value of import falls between USD 25000 and USD

100,000 or its equivalent, Certificate from the Chartered Accountant of the importer. The cut-off limit for self-declaration has been proposed keeping in view the liberalization measures where remittances for all eligible purposes for an amount upto USD 25000 or equivalent has been permitted. b) Imports made on DA basis or Imports in Non-Physical form:

The existing / prescribed procedure of follow-up, as laid down in Section VI, Para 8 of Codified FD Circulars updated as on the 30th June, 2005, which briefly are as under, shall continue: i) Imports made on DA (Delivery Against Acceptance)

Production of evidence of import at the time of effecting remittance of import bill will be insisted upon. However, if the importer fails to produce documentary evidence due to genuine reasons, reasonable time, not exceeding three months from the date of remittance, will be allowed to the importer to submit the evidence of import. ii) Imports made on non-physical form i.e. in software or data through internet and drawings and designs through email/ f ax :

A certificate from a Chartered Accountant that the software / data / drawing / design have been received by the importer shall be obtained. 23. Import of Equipments by BPO Companies in India for International Call Centre

Business Process Outsourcing (BPO) companies in India make remittances towards import and installation of equipments at overseas sites in connection with setting up of their International Call Centres. In such cases, the equipments are installed at overseas sites without physical import taking place in India. As a result, the importers are unable to produce evidence of import, requiring specific permission from the Handbook on FEMA regulations – Imports and Exports Feb’09


29

Reserve Bank. Hence, it has been liberalised that AD category I banks may, allow BPO companies in India to make remittances towards the cost of equipment to be imported and installed at their overseas sites in connection with the setting up of their International Call Centres, subject to the following conditions: a. The BPO company should have obtained necessary approval from the Ministry of Communications and Information Technology, Government of India and other authorities concerned for setting up of the International Call Centre. b. The remittance should be allowed based on the AD Category – I banks’ commercial judgment, the bonafides of the transactions and strictly in terms of the contract. c. The remittance is made directly to the account of the overseas supplier. d. The AD Category – I banks should also obtain a certificate as evidence of import from the Chief Executive Officer (CEO) or auditor of the importer company that the goods for which remittance was made have actually been imported and installed at overseas sites. 24. Handling of Import Documents on collection basis

Due care should be exercised while handling import documents on collection basis on behalf of importer customers with reference to their line of business, financial standing, frequency of import etc., to establish the genuineness of the import. In case of bills involving large values, AD Category - I banks should satisfy themselves that the importer is known to be trading in items mentioned in the shipping documents or that the items are required for his actual use. In case of importers who are not their constituents, AD Category - I banks should, at the time of acceptance of the documents/making payment, call for detailed Certificate-cum-Report from their bankers in support of the genuineness of the imports. 25. Direct Receipt of import Bills/Documents

Import bills and documents should be received from the banker of the supplier by the banker of the importer in India. AD Category - I banks should not, therefore, make remittances where import bills have been received directly by the importers from the overseas supplier, except in the following cases: i) AD Category – I banks may make remittances for imports, where the import bills / documents have been received directly by the importer from the overseas



30

supplier and the value of import bill does not exceed USD 300,000, subject to the following conditions : a. The import would be subject to the prevailing Foreign Trade Policy. b. The transactions are based on their commercial judgment and they are satisfied about the bonafides of the transactions. c. The importer is a customer of AD Category – I bank and the customer's account is fully compliant with extant KYC / AML guidelines issued by the Reserve Bank. d. AD Category - I banks should do the due diligence exercise and should be fully satisfied about the financial standing / status and track record of the importer customer. e. It is customary in that trade to receive import documents directly from the overseas exporter. f. In case the AD Category – I bank has suspicions about the genuineness of the transaction, it should be reported through the Suspicious Transaction Report (STR) to FIU_IND (Financial Intelligence Unit in India). (A. P. (DIR Series) Circular No. 13 dated September 1, 2008) ii). Import bills received by wholly-owned Indian subsidiaries of foreign companies from their principals. iii). Import bills received by Status holder exporters as defined under the Foreign Trade Policy, 100% Export Oriented Units / Units in Free Trade Zones, Public Sector Undertakings and Limited Companies. iv). Import bills received by all limited companies viz. public limited, deemed public limited and private limited companies. v). At the request of importer clients, AD Category - I banks may receive bills direct from the overseas supplier as above, provided the AD Category - I bank is fully satisfied about bonafides of the transaction and the financial standing/status and track record of the importer customer. Before extending the facility, , AD Category - I bank should obtain a credit report on each individual overseas supplier from the overseas banker or reputed credit agency, where the invoice value exceeds USD 300,000. Credit report on the overseas supplier (where the import documents are received directly) need not be obtained in cases where the invoice value does not Handbook on FEMA regulations – Imports and Exports Feb’09


31

exceed USD 300,000, provided that the AD Category - I bank is satisfied about the bonafides of the transaction and track record of the importer constituent. 26. Direct receipt of import bills / documents - import of rough diamonds:

The Gems and Jewellery Export Promotion Council (GJEPC) has represented that the restrictions placed on non-status holder exporters for direct receipt of import bills / documents, where the value exceeds USD 100,000 adds to transaction costs for small importers and have requested the Reserve Bank to consider relaxing this condition for import of rough diamonds by non-status holders. It has, therefore, been decided by RBI, as a sector specific measure, to enhance the limit for direct receipt of import bills / documents from USD 100,000 to USD 300,000 in the case of import of rough diamonds. Accordingly, AD Category - I banks are permitted to allow remittance for imports up to USD 300,000 where the importer of rough diamonds has received the import bills / documents directly from the overseas supplier and the documentary evidence for import is submitted by the importer at the time of remittance. AD Category - I banks may undertake such transactions subject to the following conditions : (i) The import would be subject to the prevailing Foreign Trade Policy. (ii) The transactions are based on their commercial judgment and they are satisfied about the bonafides of the transactions. (iii) AD Category - I banks should do the KYC and due diligence exercise and should be fully satisfied about the financial standing / status and track record of the importer customer. Before extending the facility, they should also obtain a report on each individual overseas supplier from the overseas banker or reputed credit agency overseas. 27. Postal Imports

Remittances against bills received for collection in respect of imports by post parcel made by AD Category - I banks, provided the goods imported are such as are normally despatched by post parcel. In these cases, the relative parcel receipts must be produced as evidence of despatch through the post and an undertaking to submit Postal Appraisal Form or Customs Assessment Certificate as evidence of import within three months from the date of remittance should be furnished by importers. Where the remittance is sent subsequent to receipt of the parcel, the Handbook on FEMA regulations – Imports and Exports Feb’09


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Postal Appraisal Form or Customs Assessment Certificate should be produced by the importer. Where goods to be imported are not of a kind normally imported by post parcel or where AD Category - I bank is not satisfied about the bonafides of the application, the case may be referred to R.B.I. for prior approval with full particulars together with relative parcel receipts/and Postal Appraisal Form or Customs Assessment Certificate. Note: AD Category - I banks may make remittances towards import of books by post parcel by book sellers / publishers against bills received for collection, irrespective of the amounts involved, without prior approval of R.B.I.

They may also make

remittances even if import licences covering the imports have been issued subsequent to the date of import subject to endorsement on such import licences. 28. Import of Gold/Platinum/Silver by Nominated Banks/Agencies

Under the liberalised policy for import, Government of India has permitted import of gold by certain nominated agencies viz., MMTC, HHEC, STC, SBI and other agencies authorised by R.B.I. for sale to jewellery manufacturers, exporters, NRIs, holders of special import licences and domestic users.

These nominated

agencies/banks are permitted to to import gold under different arrangements, besides outright purchase on D/P basis as follows: i.

Import of gold on consignment basis

Gold may be imported by the nominated agencies/banks on consignment basis where the ownership will remain with the supplier and the importer (consignee) will be acting as an agent of the supplier (consignor). Remittances towards the cost of import shall be made as and when sales take place and in terms of the provisions of agreement entered into between the overseas supplier and nominated agency/bank. ii.

Import of gold on unfixed price basis

The nominated agency/bank may import gold on outright purchase basis subject to the condition that although ownership of the gold shall be passed on to the importer at the time of import itself, the price of gold shall be fixed later, as and when the importer sells the gold to the users. iii. Import of Platinum / Palladium / Rhodium / Silver



33

The present instructions have been reviewed in the context of recent developments and it has been decided by RBI that Suppliers’ and Buyers’ credit, including the usance period of Letters of Credit opened for import of Platinum, Palladium, Rhodium and Silver should not exceed 90 days from the date of shipment. AD Category – I banks should ensure that due diligence is undertaken and Know-Your-Customer (KYC) norms and Anti-Money Laundering (AML) guidelines, issued by the Reserve Bank are adhered to while undertaking import of these metals. Further, any large or abnormal increase in the volume of business should be closely examined to ensure that the transactions are bonafide and are not intended for interest / currency arbitrage. All other instructions relating to import of these metals shall continue. (A. P. (DIR Series) Circular No. 12 dated August 28, 2008) NOTE: Instructions contained in this paragraph would also apply to import of platinum and silver. 29. Direct Import of Gold

AD Category - I banks can open Letters of Credit and allow remittances on behalf of EOUs, units in SEZs in the Gem & Jewellery sector and nominated agencies, for direct import of gold, subject to the following-i.

The import of gold should be strictly in accordance with the Foreign Trade Policy.

ii.

Suppliers’ and Buyers’ Credit, including the usance period of LCs opened for direct import of gold, should not exceed 90 days.

iii.

Banker's prudence should be strictly exercised for all transactions pertaining to import of gold. AD Category - I banks should ensure that due diligence is undertaken and all Know-Your-Customer (KYC) norms and the Anti-MoneyLaundering guidelines, issued by R.B.I, are adhered to while undertaking such transactions. Any large or abnormal increase in the volume of business of the importer should be closely examined to ensure that the transactions are bonafide trade transactions.



34

iv.

AD Category - I banks should closely monitor such transactions in addition to carrying out the normal due diligence exercise. The credentials of the supplier should also be ascertained before opening of LCs. The financial standing, line of business and the net worth of the importer customer should be commensurate with the volume of business turnover. Apart from the above, in case of such transactions banks should also make discreet enquiries from other banks to assess the actual position. Further, in order to establish audit trail of import/export transactions, all documents pertaining to such transactions must be preserved for at least five years.

v.

AD Category - I banks should follow up submission of the evidence of import by the importers as mentioned in Para 18 above.

vi.

Head Offices/International Banking Divisions, of AD Category - I banks undertaking gold import transactions are required to submit as per the format (Annexure 2) a monthly statement thereof, to the Trade Division, Foreign Exchange Department, Amar Building, Central Office, Reserve Bank of India, Sir P.M. Road, Fort, Mumbai 400001.

30. Import of Gold on Loan basis (i). Nominated agencies / approved banks can import gold on loan basis for

on lending to exporters of jewellery under this scheme. On the other hand EOUs and units in SEZ who are in the Gem and Jewellery sector can import gold on loan basis for manufacturing and export of jewellery on their own account only. (ii). The maximum tenor of gold loan would be as per the Foreign Trade

Policy in force, or as notified by the Government of India from time to time in this regard. The same is 240 days at present, as per the Foreign Trade Policy and Public Notice No.28/ 2004-09 dated December 1, 2004. (iii). AD Category - I banks may open Standby Letters of Credit (SBLC), for

import of gold on loan basis, where ever required, as per FEDAI guidelines dated April 1, 2003. The tenor of the SBLC should be in line with the tenor of the gold loan. It may be noted that the SBLC can be opened only on behalf of entities permitted to import gold on loan basis, viz. nominated agencies and 100% EOUs/units in SEZ, which are in the Gem and Jewellery sector. Handbook on FEMA regulations – Imports and Exports Feb’09


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Further, the SBLC should be in favour of internationally renowned bullion banks only. AD Category - I banks can obtain a detailed list of internationally renowned bullion banks from the Gem & Jewellery Export Promotion Council. All other existing instructions on import of gold and opening of Letters of Credit, with usance period not exceeding 90 days, will continue to be applicable. (iv). AD Category - I banks must maintain adequate documentation with them

to uniquely link all imports with the Standby Letters of Credits issued for the import of gold on loan basis. 31. Import of Gold, Silver and Jewellery by NRIs

Gold bought by an NRI in accordance with the Foreign Trade Policy in force, is permitted to be sold to residents against payment in rupees.

The amounts so

received should only be credited to Non-Resident Ordinary accounts of the concerned NRI seller. 32. Import factoring

AD Category - I banks may enter into arrangements with international factoring companies of repute, preferably members of Factors Chain International, without prior approval of R.B.I.

However, AD Category - I banks will have to ensure

compliance with the extant exchange control directions relating to imports, Foreign Trade Policy in force and any other guidelines/directives issued by R.B.I. in this regard. 33. Merchanting Trade

AD Category - I banks may take necessary precautions in handling merchanting trade transactions or intermediary trade transactions to ensure that: a. goods involved in the transactions are permitted to be imported into India, b. such transactions do not involve foreign exchange outlay for a period exceeding three months, and c. all rules, regulations and directions applicable to export out of India (except Export Declaration Form) are complied with in respect of the export leg and all rules, regulations and directions applicable to import (except Bill of Entry) are complied with in respect of the import leg of merchanting trade transactions. Handbook on FEMA regulations – Imports and Exports Feb’09


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AD Category - I banks are also required to ensure timely receipt of payment for the export leg of such transactions. AD Category - I banks may note that short-term credit either by way of suppliers' credit or buyers' credit is not available for merchanting trade or intermediary trade transactions. While undertaking bonafide merchanting trade transactions on behalf of their trader clients, AD Category - I banks should ensure that the terms of payment for the import leg and the export leg of the transactions are such that: i.

the liability for the import leg of the transaction is extinguished by the payment received for the export leg of the transaction, without any delay; and

ii.

the entire merchant trade transaction is completed within a period of 6 months.

34. Issue of Bank Guarantee on behalf of service importers

AD Category-I banks are now permitted to issue guarantee on behalf of their customers importing services, provided: a. the guarantee amount does not exceed USD 100,000, b. the AD Category-I bank is satisfied about the bonafides of the transaction. c. the AD Category-I bank ensures submission of documentary evidence for import of services in the normal course, and d. the guarantee is to secure a direct contractual liability arising out of a contract between a resident and a non-resident. In case of invocation of the guarantee, the AD Category-I bank is required to submit to the Chief General Manager-in-Charge, Foreign Exchange Department, Foreign Investments Division (EPD), Reserve Bank of India, Central Office, Mumbai-400001 a report on the circumstances leading to the invocation of the guarantee.



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PART II - EXPORT OF GOODS AND SERVICES 1. General i.

Trade and Foreign Exchange Regulations

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 May 3, 2000, as amended from time to time. Any reference to Reserve Bank should be made to the regional office of the Foreign Exchange Department situated in the jurisdiction where 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 Foreign Exchange Department, it may approach the regional office of its jurisdiction for necessary approval. 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 below. a) Trade samples of goods and publicity material supplied free of payment; b) Personal effects of travellers, whether accompanied or unaccompanied; c) Ship’s stores, trans-shipment cargo and goods supplied under the orders of

Central Government or of such officers as may be appointed by the Central Government in this behalf or of the military, naval or air force authorities in India for military, naval or air force requirements; d) Goods or software accompanied by a declaration by the exporter that they are

not more than USD 25000 (U.S.Dollar twenty five thousand) in value or its equivalent. The exporters shall however, be liable to realise and repatriate export proceeds as per FEMA Regulations.

The AD Category - I banks

should not report all exports of value upto USD 25000 or its equivalent in the XOS half yearly statements falling due on 31st December 2004 and thereafter; Handbook on FEMA regulations – Imports and Exports Feb’09


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e) By way of gift of goods accompanied by a declaration by the exporter that

they are not more than five lakhs rupees in value. f) Aircrafts or aircraft engines and spare parts for overhauling and/or repairs

abroad subject to their re-import into India after overhauling /repairs, within a period of six months from the date of their export; g) Goods imported free of cost on re-export basis; h) Goods not exceeding U.S.$ 1000 or its equivalent in value per transaction

exported to Myanmar under the Barter Trade Agreement between the Central Government and the Government of Myanmar; i) The following goods which are permitted by the Development Commissioner

of the Export Processing Zones, Electronic Hardware Technology Parks, Electronic Software Technology Parks or Free Trade Zones to be re-exported,

namely: i) Imported goods found defective, for the purpose of their replacement

by the foreign suppliers/collaborators; ii) Goods imported from foreign suppliers/collaborators on loan basis; iii) Goods imported from foreign suppliers/collaborators free of cost,

found surplus after production operations. Goods listed at items (i), (ii) and (iii) of clause ( i ) to be re-exported by units in Special Economic Zones, under intimation to the Development Commissioner of Special Economic Zones/concerned Assistant Commissioner or Deputy Commissioner of Customs; j) Replacement goods exported free of charge in accordance with the provisions

of Exim Policy in force, for the time being. k) Goods sent outside India for testing subject to re-import into India; l) Defective goods sent outside India for repair and re-import provided the goods are accompanied by a certificate from an Authorised Dealer in India that the export is for repair and re-import and that the export does not involve any transaction in foreign exchange; Handbook on FEMA regulations – Imports and Exports Feb’09


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(ii) Exports permitted by the Reserve Bank, on application made to it, subject to the terms and conditions, if any, as stipulated in the permission. (iii) Gift of goods exceeding Rupees Five lakhs in value requires approval of the Reserve Bank. (iv) 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 percent of the average annual exports of the applicant during the preceding three 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 percent of the average annual export realisation during the preceding three licensing years (Apr-March), whichever is higher. (v) Export of goods not involving any foreign exchange transaction directly or indirectly requires the waiver of GR/PP procedure from the Reserve Bank. (vi) The importer-exporter code number allotted by the Director General of Foreign Trade under Section 7 of the Foreign Trade (Development & Regulation) Act, 1992 (22 of 1992) shall be indicated on all copies of the declaration forms submitted by the exporter to the specified authority and in all correspondence of the exporter with the AD Category - I bank or the Reserve Bank, as the case may be 3. GR Approval for export

With a view to further liberalise the facilities available to exporters and simplify the procedure for export, RBI has delegated powers to AD Category - I banks for grant of GR approval in cases where goods are being exported for re-import after repairs / maintenance / testing / calibration, etc. Accordingly, AD Category - I banks may, consider grant of GR approval, in cases where goods are being exported for repairs, maintenance, calibration, testing etc. and subsequently re-imported after necessary repairs / maintenance / calibration / testing, 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. It is clarified that in cases 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.



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4. 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. 5. Manner of Payment

(i) The amount representing the full export value of the goods exported shall be received through an AD Category - I 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. Re-import into India,

within the period specified for realisation of the export value, is deemed to be realisation of full export value of such goods. (ii) Payment

for export may also be received by the exporter 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. 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 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.



41

e. All transactions between a person resident in India and a person resident in Nepal 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. f. Precious metals i.e. Gold / Silver / Platinum by the Gem & Jewellery units in SEZs and EOUs in 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. 6. Payments in foreign currency to units in SEZ AD Category - I banks may permit units in Domestic Tariff Areas (DTA) to purchase foreign exchange for making payment for goods supplied to them by units in Special Economic Zones (SEZ).

7. Guarantees against Exports

AD Category - I banks should obtain prior approval of the Reserve Bank for issuing guarantees for caution-listed exporters. 8. Foreign Currency Accounts i) Opening of Foreign Currency Accounts

(a) 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 AD Category - I bank 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. (b) 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 conditions stipulated in Notification No. FEMA 47/2001-RB dated December 5, 2001. The AD Category Handbook on FEMA regulations – Imports and Exports Feb’09


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I banks may therefore allow remittances for the purpose of normal business operations of the office (trading/non-trading)/ branch or representative outside India as per the provisions of the Regulations in this regard subject to the following terms and conditions: i) The overseas office (trading/non-trading)/branch / representative should not create any financial liabilities contingent or otherwise for the head office in India. ii) The overseas office (trading/non-trading)/ branch representative should not invest surplus funds abroad without prior approval of Reserve Bank of India. Any funds rendered surplus should be repatriated to India. iii) The overseas office/branch of software exporter company/firm may repatriate to India 100% of the contract value of each ‘off-site’ contract as also at least 30% of the contract value of each ‘on-site’ contract and may utilize the balance amount (70%) of the contract value of ‘on-site’ contracts for contract related expenses including office/branch expenses abroad. A duly 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 bank. iv) The details of bank accounts opened in the overseas country should be promptly reported to the Authorised Dealer. (c) A unit located in a Special Economic Zone (SEZ) may be allowed to open,

hold and maintain a Foreign Currency Account with an AD Category - I bank in India subject to certain specified conditions. (d) 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. 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 / precious metal jewellery plain, minakari and / or studded with / without diamond and / or other stones, , with track record of at least three years in import or export of diamonds / coloured gemstones / diamond and coloured gemstones studded jewellery / plain gold



43

jewellery, and having an average annual turnover of Rs. 5 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 and may be allowed to open not more than five Diamond Dollar Accounts with their banks. With a view to liberalising the procedure, it has been decided by RBI to delegate powers to AD Category – I banks to permit such firms and companies to open and maintain DDA with AD Category – I banks, subject to the following terms and conditions: a. The exporter should comply with the eligibility criteria stipulated in the Foreign Trade Policy of the Government of India, issued from time to time. b. The DDA shall be opened in the name of the exporter and maintained in US Dollars only. c. The account shall only be in the form of current account and no interest should be paid on the balance held in the account. d. No intra-account transfer should be allowed between the DDAs maintained by the account holder. e. An exporter firm / company shall be permitted to open and maintain not more than 5 DDAs. f. The balances held in the accounts shall be subject to Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements. g. Exporter firms and companies maintaining foreign currency accounts, excluding EEFC accounts, with banks in India or abroad, are not eligible to open Diamond Dollar accounts. h. The transactions in the DDA would be as under: Permissible Credits

• Amount of pre-shipment and post-shipment finance availed in US Dollars . • Realisation of export proceeds from shipments of rough, cut, polished diamonds and diamond studded jewellery. • Realisation in US Dollars from local sale of rough, cut and polished diamonds. Permissible Debits

• Payment for import / purchase of rough diamonds from overseas / local sources. • Payment for purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery from local sources. • Payment for import/purchase of gold from overseas / nominated agencies and repayment of USD loans availed from the bank. • Transfer to rupee account of the exporter. Handbook on FEMA regulations – Imports and Exports Feb’09


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The above transactions are subject to the provisions of the Foreign Trade Policy of Government of India, issued from time to time. The exporter firm / company shall make an application in the format annexed to the AD Category – I bank for opening of the DDA. AD Category - I banks should assess the track record of the firm / company at the end of every licensing year (April-March). In case any firm / company fails to meet the eligibility criteria, the account may be closed immediately. (A. P. (DIR Series) Circular No. 51 dated February 13, 2009) iii)

Exchange Earners’ Foreign Currency (EEFC) Account

A person resident in India may open, hold and maintain with an AD Category - I bank in India, a foreign currency account to be known as the Exchange Earners’ Foreign Currency (EEFC) Account. EEFC accounts were hitherto permitted to be maintained in the form of non-interest bearing current accounts. As per A.P. (DIR Series) Circular No 13 dated October 6, 2007, it was possible for account holders to maintain outstanding balances to the extent of US $ 1 million in the form of term deposits up to one year, at a rate of interest determined by the banks themselves, maturing on or before 31st October 2008. . The measure of interest payment on EEFC accounts has since been reviewed in consultation with the Government of India and it has been decided by RBI to withdraw the facility from November 01, 2008. With effect from November 01, 2008, all EEFC accounts shall only be permitted to be opened and maintained in the form of non-interest bearing current accounts. (A. P. (DIR Series) Circular No. 04 dated August 4, 2008) No credit facilities either fund-based or non-fund based, should be permitted against the security of balances held in EEFC accounts, by the AD Category - I banks. The limits of eligible credits to the EEFC accounts are 100 per cent all categories of

exporters, Viz., a) Status Holder Exporter (as defined in Foreign Trade Policy in force); b) A resident in India for professional services rendered in his personal capacity; c) 100% Export Oriented Unit/s; d) Unit/s in Export Processing Zones (EPZs); e) Software Technology Parks (STPs); and Handbook on FEMA regulations – Imports and Exports Feb’09


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f) Electronic Hardware Technology Parks (EHTPs). g) All other exporters resident in India The eligible credits represent 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. 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 a/c. are to be treated as eligible foreign exchange earnings for the purpose of credit to the EEFC A/c 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 overseas borrower providing a guarantee from a bank of international repute situated outside India, if the amount exceeds USD 100,000. 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 A/c and / or rupee resources to the extent exports have actually taken place. 9. Setting Up Offices Abroad and Acquisition of Immovable Property for Overseas Offices a. Remittances for initial expenses: AD Category - I bank may allow remittances 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. b. Remittances for Recurring expenses: AD Category - I banks may allow remittance up to ten per cent of the average annual sales/income or turnover during the last two financial years for the purpose of normal business operations of the office (trading / nontrading) / branch or representative office outside India as per the provisions of the Regulations in this regard subject to the following terms and conditions that the overseas office (trading / non-trading) / branch / representative should not: i) Create any financial liabilities contingent or otherwise for the head office in India. ii) Invest surplus funds abroad without prior approval of Reserve Bank of India. 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 Category - I bank.



46

c. Repatriation of contract value by overseas office of software export company: In addition to the above, 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. It may utilize the entire amount of the contract value of ‘on-site’ contracts for contract related expenses including office/branch expenses abroad but at least repatriate the profits of ‘on-site’ contract after the completion of the said contract. A duly 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 bank. d. Acquitsition of immovable property:

AD Category - I banks may now 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. . 10. 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 Foreign Trade Policy and Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under. 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 his AD Category - I bank to the concerned regional office of the Reserve Bank. 11. 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 Handbook on FEMA regulations – Imports and Exports Feb’09


47

necessary permission, through an AD Category - I bank, to the concerned regional office concerned of the Reserve Bank, giving full particulars of the goods to be exported. 12. Participation in Trade Fairs Abroad

(a) 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. (b) 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. (c) It would also be permissible to `gift' unsold goods up to the value of US $ 5000 per exporter, per exhibition/trade fair. (d) 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; i.

The exporter shall produce relative Bill of Entry within one month of reimport into India of the unsold items.

ii.

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.

iii.

The exporter shall report to the AD Category - I bank 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% audit by their internal inspectors/auditors.

(e) Participants in international exhibition/trade fair have been granted general permission 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 Handbook on FEMA regulations – Imports and Exports Feb’09


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India 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 bank concerned. 13. Project Exports and Service Exports a)

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 bank /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) (furnished in Annexure 4). b)

Pure supply contacts (contracts for export of goods) where at least 90 percent

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 facilities for such exports from AD Category - I banks. c)

Exporters desiring to submit bids for execution of projects abroad including

service contracts have been allowed issue corporate guarantee in lieu of Bid Bond Guarantee, provided the amount of such guarantee shall not exceed 5 percent of the contract value. 14. 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. In the case of export of books on consignment basis, AD Category - I bank may approve such proposals allowing for realisation of export proceeds up to 360 days from the date of shipment. The exporters may be allowed to abandon the books which remain unsold at the expiry of the period of the sale contract. Accordingly, the



49

exporters may show the value of the unsold books as deduction from the export proceeds in the Account Sales. 15. Export of goods and services by Units in Special Economic Zones a. Realisation of Export Proceeds: At present, there is no prescription of any

time limit for realization of export proceeds by units in SEZs. However, they will continue to follow GR/PP/SOFTEX procedure. b. Job Works 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.

c) Receipts of payment in precious metals for EOUs and units in SEZs:

Payment of export may be received in the form of precious metals i.e. Gold / Silver / Platinum by the Gem & Jewellery units in SEZs and EOUs in 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. d) Netting off of export receivables against import payments: AD Category -

I banks may allow ‘netting off’ of export receivables against import payments for units located in SEZs subject to the following: The ‘netting off’ of export receivables against import payments is in

i)

respect of the same Indian entity and the overseas buyer/supplier. The netting may be done as on the date of balance sheet of the unit in SEZ. ii)

The relative GR/SDF forms will be treated as complete by the

designated AD Category - I bank only after the entire proceeds are adjusted/received. iii)

Both transactions of sale and purchase in ‘R’ Returns under FET-ERS

are reported separately.



50

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 bank who should comply with all the regulatory requirements relating to the transactions. e) Issue of equity shares against import of capital goods: Units in SEZs are

permitted to issue equity shares to non-residents against import of capital goods subject to the following: i) The valuation should be verified by a Committee consisting of

Development Commissioner and the appropriate Customs officials. ii) The SEZ units issuing equity in the above manner should report the

particulars of the shared issued in the form ‘FC-GPR’, to the concerned Regional Office under whose jurisdiction the SEZ falls, together with the copy of the valuation certificate. A copy of the report may be forwarded to Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India. f) 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 . 16. Forfaiting

Export-Import Bank of India (Exim Bank) and AD Category - I banks have been permitted to undertake forfaiting, for financing of export receivables. It would be in order for the AD Category - I banks to allow remittance of commitment fee/service charges, etc., payable by the exporter as approved by the Exim Bank/the AD Category - I bank concerned. Such remittance may be permitted in advance in one lump sum or at monthly intervals as approved by the agency concerned. 17. Disposal of Copies of Export Declaration Forms (GR / PP / SOFTEX 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 Handbook on FEMA regulations – Imports and Exports Feb’09


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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 AD Category - I bank 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 AD Category - I bank named in the GR form. After the documents have been negotiated / sent for collection, the AD Category - I bank should report the transaction to Reserve Bank in statement ENC under cover of appropriate RSupplementary Return. However, the duplicate copy of the form together with a copy of invoice etc. will henceforth be retained by the AD Category - I bank 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, AD Category - I bank 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 Commissioner of Customs concerned. After verifying and authenticating the declaration in form SDF, the Handbook on FEMA regulations – Imports and Exports Feb’09


52

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 AD Category - I bank within 21 days from the date of export. The AD Category - I bank 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 the 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 AD Category - I bank, date of negotiation, bill number, invoice value and the amount actually received by ECGC. (e) The AD Category - I bank should ensure by random check of the relevant duplicate forms by their internal / concurrent auditors to confirm that nonrealisation or short realisation 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 the export proceeds are credited to an EEFC account, the export declaration (duplicate) form may be certified as under: "Proceeds amounting to....... representing ......% of the export realisation credited to the EEFC account maintained by the exporter with......" (ii) 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. The AD Category - I bank will countersign the forms in accordance with the 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 Handbook on FEMA regulations – Imports and Exports Feb’09


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retained by the AD Category - I bank 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. 18. Counter Signature on PP Forms

PP forms will be presented by the exporter to an AD Category - I bank for counter signature. AD Category - I banks 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. AD Category - I banks 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 the exporter and has been advised through the AD Category - I bank concerned Or

The full value of the shipment has been received in advance by the exporter through an AD Category - I bank Or

b. The AD Category - I bank 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/AD Category - I bank’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 AD Category - I bank under his stamp and signature. 19. 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 Handbook on FEMA regulations – Imports and Exports Feb’09


54

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 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) to (iii) 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. 20. 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 AD Category - I bank and may not be submitted to Reserve Bank. Note:

(i) In all the above procedures AD Category - I bank banks should ensure, by random check of the relevant duplicate forms by their internal / concurrent auditors, that non-realisation or short realisation allowed, if any, is within the powers delegated to them or has been duly approved by Reserve Bank, wherever necessary. (ii) 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 ......% of the export realisation credited to the EEFC account maintained by the exporter with......" 21. Shut out Shipments and Short Shipments Handbook on FEMA regulations – Imports and Exports Feb’09


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(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 Category - I bank 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. 22. 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. 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. AD Category - I banks 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, 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. 23. 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 Handbook on FEMA regulations – Imports and Exports Feb’09


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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 has 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. 24. Barter trade with Myanmar

In terms of an agreement on Border Trade between India and Myanmar, exchange of certain specified locally produced commodities, by people living along the IndiaMyanmar border on both sides under barter trade arrangement as also trade in freely convertible currency, has been permitted. AD Category - I banks should follow strictly the revised guidelines issued in terms of A.P.(DIR Series) Circular No.17 dated 16th October 2000, main points of which are listed below: i)

Under the Border Trade Agreement between India and Myanmar, imports from Myanmar into India should precede exports from India to Myanmar.

ii) The barter trade shall be restricted to land route as per the Border Trade

Agreement between the two countries. Such barter trade transactions shall take place only by way of head load or non-motorised transport system. iii) Imports from Myanmar to India shall precede export from India to Myanmar. iv) The border trade will be restricted to items agreed to as per Border Trade

Agreement with Myanmar. v) There will be no monetary transaction under the barter trade trade agreement. vi) The consignment of imports and exports should be invoiced in USD.



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vii) The value of goods exported under barter trade should not exceed USD

20,000 per transaction. viii)

Exports from India to Myanmar under barter trade of the value not

exceeding USD 1000 per transaction are exempt from declaration on the prescribed form viz. GR form.

However, such transactions should be

completed in one or two days. Customs authorities at the Indo-Myanmar border will report import/export transactions of value not exceeding USD 1000 to the Foreign Exchange Department, R.B.I., Guwahati on monthly basis. ix) On import of goods the party should submit documentary evidence such as

Bill of Entry to the designated bank, where the value exceeds USD 5000. x) The designated branches of AD Category - I banks viz. (a) United Bank of

India, Moreh Branch, Manipur and (b) State Bank of India, Champai Branch should only handle proposals for barter trade and documents relating to imports and exports thereunder. xi) The exporters should approach the designated branches as per (x) above,

along with a copy of the contract for import and export with Myanmar parties, for countersignature on GR forms before submitting them to Customs authorities.

The bank branches will countersign GR forms original and

duplicate, submitted to them by the exporters, after satisfying themselves that the GR forms are supported by a Bill of Entry for import of goods from Myanmar to India. Both original and duplicate copies of the forms should be returned to the exporter which may be superscribed as under: “Exports under barter arrangement with Myanmar. The payments have been received in the form of goods/commodities of the equivalent value” xii) The designated banks should maintain a record of the transactions under the

barter trade arrangement on the basis of GR forms countersigned by them, in a register. They should also submit a monthly statement to Foreign Exchange Department, RBI, Guwahati, within 15 days from the close of the month. xiii)

On completion of export against receipt of payment in the form of

import of goods/commodities from Myanmar, the concerned designated bank



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should surrender the duplicate copy of GR form and evidence of import to the Foreign Exchange Department, RBI, Guwahati, along with monthly statement. xiv)

The transactions relating to barter trade should not be reported in R

Returns. 25. 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, AD Category - I banks may handle them without prior approval of Reserve Bank, provided they are satisfied with the reasons for the delay. 26. Scrutiny of export declaration Forms

AD Category - I bank Category – I Banks may ensure the following while accepting the export declaration forms (GR/SDF): i.

Bill of Lading/Shipping Bill: 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.

Freight Payment: AD Category - I banks may 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. Conversely, in the case of C.I.F., C.& F. etc. contracts where the 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, AD Category - I banks should verify that the actual amount paid is received from the buyer through invoice and the bill. iii.

Inter se discrepancies: AD Category - I banks to ensure that the documents

submitted do not reveal any material inter se discrepancies in regard to description of goods exported, export value or country of destination. Handbook on FEMA regulations – Imports and Exports Feb’09


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Notes : A.

Differences in Value due to Freight : The export realisable 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.

B.

Transfer of Documents: AD Category - I bank may accept, for negotiation or collection, shipping documents including invoice and bill of exchange covering exports, from his constituent who is not a person who has signed the declaration (GR/PP/SDF/SOFTEX), Provided that before accepting such documents for negotiation or collection, the Authorised Dealer shall a)

Where the value declared in the declaration does not differ from the

value shown in the documents being negotiated or sent for collection, or b)

Where the value declared in the declaration is less than the value

shown in the documents being negotiated or sent for collection, require the constituent concerned also to sign such declaration and thereupon such constituent shall be bound to comply with such requisition and such constituent signing the declaration shall be considered to be the exporter for the purposes of these Regulations to the extent of the full value shown in the documents being negotiated or sent for collection and shall be governed by these Regulations.. C.

Differences in Value due to quality analysis / late shipment penalty: 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



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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 these variations stem from the terms of contract, AD Category - I banks may accept them on production of documentary evidence after verifying the arithmetical accuracy of the calculations and on conforming the terms of underlying contracts. 27. Trade Discount

Bills for 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 the exporter on relative GR/SDF form at the time of shipment and accepted by Customs. 28. 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 AD Category - I bank 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. Exporter receiving advance payment (with or without interest), from a buyer outside India, shall be under an obligation to ensure that – (1). the shipment of goods is made within one year from the date of receipt of advance payment; (2). the rate of interest, if any, payable on the advance payment does not exceed London Inter-Bank Offered Rate (LIBOR) + 100 basis points, and (3). the documents covering the shipment are routed through the AD Category - I bank through whom the advance payment is received;



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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 unutilised 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. Notwithstanding anything contained in clause (1) above, where the export agreement provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment, the exporter shall require the prior approval of the Reserve Bank. 29. 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 for inspection, or analysis of the goods. In such cases, AD Category - I banks may negotiate the bills, provided: a. The amount of undrawn balance is considered normal in the particular line of export trade, subject to a maximum of 10 per cent of the full export value b. An undertaking is obtained from the exporter on the duplicate of 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 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% 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. 30. Consignment Exports

(i) When goods have been exported on consignment basis, 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 realisation of proceeds Handbook on FEMA regulations – Imports and Exports Feb’09


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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 bank. 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. Payment of Freight and Marine Insurance: In case of goods exported on

consignment basis, freight and marine insurance must be arranged in India. B. Exports to CIS Countries and East European Countries: 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. Opening / Hiring Warehouses 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: 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 nonstatus holder exporters and 12 months for status holder exporters. All transactions should be routed through the designated branch of the AD Category - I bank.



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The above permissions may be granted to the exporters initially for a period of one year and their renewals may be considered subject to the applicant satisfying the requirement at (a) above. AD Category - I banks granting such permission / approvals should maintain a proper record of the approvals granted. 31. Direct Despatch of Shipping Documents

(i) While AD Category - I banks should normally despatch shipping documents to their overseas branches/correspondents expeditiously.

They may also despatch

shipping documents direct to the consignees or their agents resident in the country of final destination of goods in the following cases: (a) Where advance payment has been received for the full value of the export shipment and the underlying sale contract provides for despatch of documents direct to the consignee or his agent resident in the country of final destination of goods.

Or

(b) Where an irrevocable letter of credit has been received for the full value of the export shipment and the underlying 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, AD Category - I banks 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 AD Category I bank 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 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 26, may be directly sent by the exporter to the consignee. (v) AD Category - I banks may permit `Status Holder Exporters' (as defined in the Foreign Trade Policy), and units in Special Economic Zones (SEZ) to despatch the Handbook on FEMA regulations – Imports and Exports Feb’09


64

export documents to the consignees outside India subject to the terms and conditions that: a. The export proceeds are repatriated through the AD Category - I bank named in the GR Form. b. The duplicate copy of the GR form is submitted to the AD Category - I bank for monitoring purposes, by the exporters within 21 days from the date of export. (vi) With view to further liberalise the facilities available to the exporters and to simplify the procedure, it has been decided by RBI to allow AD Category - I banks, to 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 realized 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 Reserve Bank’s extant KYC / AML guidelines. d) The AD Category – I bank is satisfied about the bonafides of the transaction. e) In case of doubt, the AD Category – I bank may consider filing Suspicious Transaction Report (STR) with FIU_IND (Financial Intelligence Unit in India). (A. P. (DIR Series) Circular No. 06 dated August 13, 2008)

32. 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. 33. Export Bills Register Handbook on FEMA regulations – Imports and Exports Feb’09


65

i.

AD Category - I banks 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 the ENC statement covering the transaction was sent to R.B.I, 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 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.

34. Follow-up of Overdue Bills

Reserve Bank has been receiving representations from Exporters / Trade bodies to extend the period of realisation of export proceeds in view of the external environment. It has, therefore, been, in consultation with Government of India, announced in the Annual Policy Statement for the Year 2008-09 (para 134) to enhance the present period of realization and repatriation to India of the amount representing the full export value of goods or software exported, from six months to twelve months from the date of export, subject to review after one

year . The provisions in regard to period of realization and repatriation to India of the full export value of goods or software exported by a unit situated in Special Economic Zone (SEZ) as well as exports made to warehouses established outside India with the permission of Reserve Bank remain unchanged. (A. P. (DIR Series) Circular No. 50 dated 03.06.2008) (i) AD Category - I banks should closely watch realisation of bills and in cases where bills remain outstanding, beyond the due date for payment or twelve 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 twelve months or seek extension of time beyond twelve 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 AD Category - I bank until the full proceeds are realised, except in case of undrawn balances covered by Note under paragraph 27. (ii) 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 realisation of export proceeds by Handbook on FEMA regulations – Imports and Exports Feb’09


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AD Category - I banks will be viewed seriously by R.B.I. leading to the invocation of the penal provisions under FEMA 1999. (iii) Exporters who have been certified as `Status Holder' in terms of Foreign Trade Policy are permitted to realise and repatriate the full value of export proceeds within a period of 12 months from the date of shipment. (iv) 100% Export Oriented Units (EOUs) and units set up under Electronic Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Bio–Technology Parks (BTPs) Schemes are permitted to realise and repatriate the full value of export proceeds within a period of 12 months from the date of export in respect of export made on or after September 1, 2004. (v) 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 this Handbook. (vi) AD Category - I banks 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. 35. 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. In such cases 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. 36. Reduction in Value

If, after a bill has been negotiated or sent for collection, its amount thereof is desired to be reduced for any reason, AD Category - I bank may approve such reduction, if satisfied about genuineness of the request, provided: a. The reduction does not exceed 25% of invoice value,



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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 the preceding three calendar years. For the purpose of reckoning the percentage of export bills outstanding to the average export realisations during the preceding three calendar years, outstanding of exports made to countries facing externalisation problems may be ignored provided the payments have been made by the buyers in the local currency. 37. Export Claims

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 Reserve Bank. In all such cases of remittances, the exporter should be advised to surrender proportionate export incentive, if any, received by him.

38. 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 34 should also be satisfied. 39. Self write-off, Reduction in Invoice Value and Extension of Time

All exporters (including Status Holder) have been allowed to: Handbook on FEMA regulations – Imports and Exports Feb’09


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(a) Write off (including reduction in invoice value) outstanding export dues and, (b) Extend the prescribed period of realisation beyond 180 days or further period as applicable, provided the aggregate value of such export bills written-off (including reduction in invoice value) and bills extended for realisation does not exceed 10 per cent of the export proceeds due during the calendar year

and such export bills are not a subject of investigation by Enforcement Directorate / Central Bureau of Investigation or any other Investigating Agencies. (c) Exporters dealing with more than one AD Category - I bank can avail of this facility through each AD, i.e., the limit of 10 per cent for self write-off (including reduction in invoice value) and extension of time for realisation of export proceeds would be applicable for export bills lodged for realisation with that AD Category - I bank. However, 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. (d) Within a month from the close of the calendar year, exporters should submit a statement as per prescribed format, giving details of export proceeds due, realised and not realised to the AD Category - I bank concerned. Export bills due in the year for which the exporter has extended the period of realisation on his own (within the 10 per cent limit) or sought extension of time from the AD Category - I bank but unrealised as at the end of calendar year will be computed for export proceeds due in the following year. The AD Category - I bank will be required to verify the statement with his records and review the export performance of the exporter during the calendar year to ascertain that in cases where the 10 per cent limit of self extension, write-off (including reduction in invoice value) and non-realisation 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 calendar year. (e) 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-realisation in excess of the 10 per cent limit, failing which, the AD Category - I banks may inform the exporter



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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. 40. Extension of Time Limit in Other Cases

1. (i) In cases where an exporter has not been able to realise proceeds of a shipment made within the period prescribed, 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 Regional Office concerned of Reserve Bank in form ETX through his AD Category - I bank with appropriate documentary evidence in respect of cases not falling under para (ii) below. (ii) Reserve Bank of India has

permitted the AD Category - I banks to extend the

period of realisation of export proceeds beyond 6 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 : a. The AD Category - I bank 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 export transactions covered by the invoices are not under investigation by Enforcement Directorate / Central Bureau of Investigation or other investigating agencies, d. 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 realisations during the preceding three financial years, whichever is higher, e. The date up to which extension has been granted is indicated in the `Remarks’ column of the XOS statement f. In cases where the exporter has filed suits abroad against the buyer, extension may be granted irrespective of the amount involved / outstanding.



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g. Cases which are not covered by the above instructions would require prior approval from the Regional Office of the Reserve Bank. 41. 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, the AD Category - I bank 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 the insurance company. c. Place where the claim is payable. In cases where the claim is payable abroad, the AD Category - I bank must arrange to collect the full amount of claim due on the lost shipment, through the medium of his 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. Note:

Sometimes claims on shipments lost in transit are also partially settled directly

by shipping companies/airlines under carrier’s liability. AD Category - I banks should ensure that amounts of such claims if settled abroad are also repatriated to India by exporters. 42. Payment of Claims by ECGC / insurance companies registered with IRDA

AD Category - I banks shall, on an application received from the exporter supported by documentary evidence from the ECGC / insurance companies registered with 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. Such write-off will not be restricted to the limit of 10 per cent indicated in paragraph 43 below. Surrender of incentives, if any, in such cases will be as provided in the Foreign Trade Policy.



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It is clarified that the claims settled in rupees by ECGC / insurance companies should

not

be

construed

as

export

realisation

in

foreign

exchange.

(A.P. (DIR Series) Circular No. 49 dated June 03, 2008) 43. "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 AD Category - I bank, who had handled the relevant shipping documents, with appropriate supporting documentary evidence with a request for write off of the unrealised portion. AD Category - I banks may accede to such requests subject to the under noted conditions: a. The relevant amount has remained outstanding for one year or more; b. The aggregate amount of write off allowed by the AD Category - I bank during a calendar year does not exceed 10% of the total export proceeds realised by the concerned exporter through the concerned AD Category - I bank 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 under noted 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.



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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. viii. The case is not the subject matter of any pending civil or criminal suit. ix. 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. x. The exporter has surrendered proportionate export incentives, if any, availed of in respect of the relative shipments. The AD Category - I bank should obtain documents evidencing surrender of export incentives availed of before permitting the relevant bills to be written off. AD Category - I banks 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, AD Category - I bank 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." Stamp & Signature of Date …………………………..

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 up to extent of (i) 5 per cent of their average annual realisation during the preceding three financial years or (ii) 10 per cent of the Handbook on FEMA regulations – Imports and Exports Feb’09


73

export proceeds due during the financial year, whichever is higher. The limit will be cumulatively available in a year and subject to the following conditions. 1. The exporter should submit to the concerned AD Category - I bank 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. AD Category - I banks may note to take into account the amount written off under this facility while arriving at the eligible amount.



74

5. AD Category - I banks 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. 44. 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. 45. Exporters’ Caution List

AD Category - I banks will also be advised whenever exporters are cautioned in terms of provisions contained in Regulation 17 of "Export Regulations". 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.

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 six months from the date of shipment. 46. Remittance of 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: a. 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

exporter

and/or

beneficiary for payment of commission exists. b. The relative shipment has already been made.



75

(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 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 except for tea & tobacco. In case of export of tea and tobacco to Russia under Rupee Credit Route AD Category - I banks may permit payment of commission in free foreign exchange upto 10 percent of invoice value. 47. 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.

Annex-1 BEF

(Statement showing the details of remittances effected towards import in respect of which documentary evidence has not been received despite reminders)



76

Name and address of AD branch……………………. Name of Controlling Office of AD branch …………….. Statement for the half-year ended ………………… NOTES: i.

The statement should be submitted in duplicate, to the Regional Office of Reserve Bank under whose jurisdiction the A.D. branch is functioning.

ii.

Details of transactions where the amount of remittance exceeds USD 100,000 or its equivalent should only be included in the statement.

iii.

In cases where, at the time of advance remittance, purpose of remittance was as import and subsequently the exchange has been used for other purpose for which sale of exchange is permissible, and a document to the satisfaction of Authorised Dealer has been produced, such cases should not be treated as default and hence be excluded from the BEF statement.

iv.

AD Category - I banks may accept ‘Into Bond Bill of Entry’ as a provisional evidence of import into India. However, they may ensure submission of Exchange Control copy of the Bill of Entry for Home consumption within a reasonable period of time. Where EDI system has been implemented by customs and the importer receives only one copy of the "ex-Bond Bill of Entry" from the customs, AD Category - I banks may advise importer to submit a photocopy of the "ex-Bond Bill of Entry" for home consumption after clearance of the goods from the warehouse / bond, which may be duly verified by the AD Category - I bank and accepted as final evidence of import. Cases where ‘Into Bond Bill of Entry’ has been submitted need not be reported in BEF statement.

v.

The statement should include details of all remittances, exceeding USD 100,000 from India or payments from abroad in connection with imports, including advance payments, delayed payments, etc. irrespective of the source of funding (i.e. EEFC accounts/foreign currency accounts maintained in India and abroad, payments out of external commercial borrowings, foreign investments in the shares of importers etc.)

vi.

The cases reported in Part I of statement for the previous half-year should not be reported again in Part I of the statement for the current half-year.

vii.

In case no transaction is required to be reported, ‘NIL’ statement should be submitted.



77

viii.

Statement should be submitted within 15 days from the close of the half-year to which it relates.

Part I

Information regarding importers who have defaulted in submission of the documentary evidence of import Sr.No.

Importer/ Name Exporter and Code No. address of the Importer

No.and Brief Date of Currency Rupee date of description remittance/ and equivimport of goods payment amount alent licences, if any

Remarks

1 2 3 4 5 6 7 8 9 A. Import by parties other than Public Sector Undertakings/Government Departments 1 2 3 4 Etc B. Import by Public Sector Undertakings/Government Departments 1 2 3 4 5 Etc



78

Part II

Information regarding subsequent receipt of documentary evidence of Import from importers whose names were reported in Part I of earlier BEF statement/s Sr.No.

Name and Period of the Date of Amount of remittance address of BEF statement receipt Currency & Rupee the importer and serial No. Amount equivalent of the transaction reported earlier in Part I of BEF statement

Remarks

1 2 3 4 5 6 A. Import by parties other than Public Sector Undertakings/Government Departments 1 2 3 4 Etc B. Import by Public Sector Undertakings/Government Departments

Note: The transactions reported in Part II of BEF statement of earlier half-year should not be repeated in Part II of the current half-year. CERTIFICATE

i.

We certify that the particulars furnished above are true and correct as per our records.

ii.

We further certify that the statement includes all cases which are required to be reported under the prescribed procedure.

iii.

We undertake to continue to pursue the cases with the importers reported in Part I of the statement.

(Signature of the Official) Name: Designation :

:

Place: Date: Handbook on FEMA regulations – Imports and Exports Feb’09


79

Annex-2

[A.P.(DIR Series) Circular No.2 dated July 9, 2004] Statement of Gold Imported during the month ended ……….

Name of the Bank : Date of Statement : Number of Transactions

Value of Gold Imported

EOU/SEZ

(USD million)

Nom.Agency/ Bank

EOU/SEZ

(Rs. Crore) Nom.Agency/ Bank

EOU/SEZ

Nom.Agency /Bank

Gold

(i) Delivery Against Payment Basis (ii) Suppliers’ Credit Basis (iii) Consignment Basis (iv) Unfixed Price Basis Note: 1. Full details of transactions may be provided in cases where the number of transactions in respect of a single importer exceeds ten transactions in a month or the aggregate value of imports exceeds US Dollar 50 million. 2. Details of EOUs/Units in SEZ and Nominated Agencies should be given separately.



80

GR, SDF,PP and SOFTEX Forms

Annex-3

EXCHANGE CONTROL DECLARATION (GR) FORM NO. ORIGINAL

Exporter

Consignee

Invoice No. & Date

SB No. & Date

AR4/AR4A No. & Date Q/Cert. No. & Date

Importer-Exporter Code No.

Export Trade Control

fg

If export under: Deferred Credit Joint Venture Rupee Credit Others RBI’s Approval/Cir. No. & Date Custom House Agent Pre-Carriage by

L/C. No.

Place of Receipt by Pre-Carrier

Type of shipment : Outright Sale Consignment Export

Vessel/Flight No.

Rotation No.

Others (Specify)

Port of Loading

Nature CIF

of

contract

/C&F

/FOB

Other (Specify)

S. No.

Port of Discharge

Country of Destination

Marks & No.

No. & Kind of Pkgs.

Container Nos.

Exchange Rate u/s 14 of CA Currency of invoice

Statistical Code & Description of Goods

Quantity

Value FOB

Net Weight Gross Weight Total FOB value (in words) Analysis of Export value

Currency

Amount

Full export value or where not ascertainable, the value which exporter expects to receive on the s ale of goods.

FOB Value Freight Insurance

Currency

Commission Rate Discount

Amount

Other Deductions



81

EXCHANGE CONTROL DECLARATION (GR) FORM NO. Is Export under L/C arrangements?

Yes

No

If yes, name of advising bank in India

For customs Customs Assessable value Rs. (Rupees)

Bank through which payment is to be received Export value Verified Customs Appraiser Whether payment is to be received through the ACU Yes/No

Date Shipment

of

Customs Appraiser

Declaration under Foreign Exchange Management Act, 1999: I/We hereby declare that I/we am/are the Seller/Consignor of the goods in respect of which this declaration is made and that the particulars given above are true and that ( a) *the value as contracted with the buyer is the same as the full export value declared overleaf/ ( b) *the full export value of the goods is not ascertainable at the time of export and that the value declared is that which I/we, having regard to the prevailing market conditions, expect to receive on the sale of goods in t he overseas market. I/We undertake that I/we will deliver to the bank named herein the foreign exchange representing the full export value of the goods on or before @. in the manner specified in the Regulations under the Act, I/we further declare that I/we am/are resident in India and I /we have a place of business in India. I/We* am/are OR am/are not in Caution List of the Reserve Bank of India. Dat e (Signature of Exporter) @ State appropriate date of delivery which must be within six months from the date of shipment, but for exports to warehouses established outside India with the permission of the Reserve Bank, the date of delivery must be within fifteen months. *Strike out whichever is not applicable SPACE FOR USE BY RESERVE BANK OF INDIA



82

EXCHANGE CONTROL DECLARATION (GR) FORM NO. Duplicate Exporter

Consignee

Invoice No. & Date

SB No. & Date

AR4/AR4A No. & Date Q/Cert. No. & Date

Importer-Exporter Code No.

Export Trade Control If export under: Deferred Credit Joint Venture Rupee Credit Others RBI’s Approval/Cir. No. & Date

Custom Agent

House

Pre-Carriage by

L/C. No.

Place of Receipt by Pre-Carrier

Type of shipment : Outright Sale Consignment Export

Vessel/Flight No.

Rotation No.

Others (Specify)

Port of Loading

Nature CIF

of

contract

/C&F

/FO B

Other (Specify) Port of Discharge S. No.

Marks & No.

Country of Destination Container Nos.

No. & Kind of Pkgs.

Exchange Rate u/s 14 of CA Currency of invoice

Statistical Code & Description of Goods

Quantity

Value FOB

Net Weight Gross Weight Total FOB value (in words) Analysis of Export value

Currenc y

Amount

Full export value or where not ascertainable, the value which exporter expects to receive on the sale of goods.

FOB Value Freight Insurance

Currency

Commission Rate Discount

Amount

Other Deductions EXCHANGE CONTROL DECLARATION (GR) FORM NO. For customs

Is Export under L/C arrangements?

Yes

No

If yes, name of advising bank in India

Customs Assessable value Rs. (Rupees)

Bank through which payment is to be received Export value Verified Handbook on FEMA regulations – Imports and Exports Feb’09


83

Customs Appraiser Cargo shipped in full/part Quantity Value Whether payment is to be received through the ACU Yes/No

Date Shipment

of

Customs Appraiser

Declaration under Foreign Exchange Management Act, 1999: I/We hereby declare that I/we am/are the Seller/Consignor of the goods in respect of which this declaration is made and that the particulars given above are true and that ( a) *the value as contracted with the buyer is the same as the full export value declared overleaf/ ( b) *the full export value of the goods is not ascertainable at the time of export and that the value declared is that which I/we, having regard to the prevailing market conditions, expect to receive on the sale of goods in t he overseas market. I/We undertake that I/we will deliver to the bank named herein the foreign exchange representing the full export value of the goods on or before @. in the manner specified in the Regulations made under the Act, I/we further declare that I/we am/are resident in India and I/we have a place of business in India. I/We* am/are OR am/are not in C aution List of the Reserve Bank of India. Dat e (Signature of Exporter) @ State appropriate date of delivery which must be within six months from the date of shipment, but for exports to warehouses established outside India with the permission of the Reserve Bank, the date of delivery must be within fifteen months. *Strike out whichever is not applicable FOR AUTHORISED DEALER’S USE

Uniform Number

Code

*Indicate ( ) in the box applicable Date of *(i) negotiation Type of Bill* (i) DA

(ii) receipt collection, (ii) DP

Type of shipment : *(i) Firm Sale Contract

for

Bill No

(iii) Others (Specify) (ii) Consignment Basis

(iii) Others (Specify) The GR Form was included in the statement sent to the Reserve Bank with the R Return for the fortnight ending .. sent on … We certify and confirm that we have received the total amount of under being the proceeds of exports declared on this form. Date of receipt

(1)

Currency

(2)

Credit to Nostro Account in Country

(Currency)

(amount) as

Debit to NR Rupee Account of a Bank in country

In our name

In the name of*

Held with us

Held with*

Period of R Return with which the realisation has been reported to RBI

(3)

(4)

(5)

(6)

(7)

*(Write the name of the concerned Indian Authorised Dealer Branch) Any other manner of receipt (Specify) (Stamp & Signature of Authorised Dealer) Date :

Address : SPACE FOR USE BY RESERVE BANK OF INDIA



84

SDF [In duplicate ] Shipping Bill No.

Date :

Declaration under Foreign Exchange Management, Act, 1999 : I/We hereby declare that I/We am/are the *Seller/Consignor of the goods in respect of which this declaration is made and that the particulars given in the Shipping Bill No. dated are true and that ( a) *the value as contracted with the buyer is the same as the full export value declared in the above shipping bill ( b) *the full export value of the goods is not ascertainable at the time of export and that the value declared is that which I/We, having regard to the prevailing market conditions, expect to receive on the sale of goods in the overseas market. I/We undertake that I/We will deliver to the bank named herein . The foreign exchange representing the full export value of the goods on or before @ in the manner specified in the Regulations made under the Foreign Exchange Management Act, 1999. I/We further declare that I/We am/are resident in India and I/We have a place of business in I ndia. I/We* am/are OR am/are not in Caution List of the Reserve Bank of India. Date: (Signature of Exporter)

@ State appropriate date of delivery which must be within six months from the date of shipment but for exports to warehouses established outside India with permission of the Reserve Bank, the date of delivery must be within fifteen months. *Strike out whichever is not applicable.



85

FOR AUTHORISED DEALER’S USE

Uniform Code Number Date of

(i)

negotiation

(ii)

receipt for collection

(iii)

Bill No.

.

*Type of Bill

(i) DA

*Types of shipment

(ii) DP

(iii) Others

(i) Firm Sale Contract

(Specify)

(ii) Consignment Basis

(iii) Others

(Specify)

*Indicate ( ) in the box applicable The SDF Form was included in the Statement sent to Reserve Bank with t he R Return for the fortnight ending …. .. sent on ….. We certify and confirm that we have received the total amount of (Currency amount) as under being the proceeds of exports declared on this form. Date of receipt

(1)

Currenc y

(2)

Credit to Nostro Account in...............Country

Debit to NR Rupee Account of a Bank in................. country

In our name

In the name of**

Held with us

Held with**

(3)

(4)

(5)

(6)


(7)

**(Write the name of the concerned Indian Authorised Dealer Branch) Any other manner of receipt (Specify)

(Stamp & Signature of Authorised Dealer) Date : Address :

SPACE FOR USE BY RESERVE BANK OF INDIA



86

FORM PP Exporter’s Declaration

ORIGINAL Form Number : (Please see ‘Notes to Exporters’) 1. (a) Name of the Post Office (b) Number and date of Parcel Receipt 2. Exporter’s Name 3. Importer/Exporter Code No. 4. Buyer’s/Consignee’s Name and address: 5. Country of destination 6. Nature of contract*(i ) CIF/(ii ) C&F/(iii )FOB/ (iv ) Others (Specify): ..... 7. Date of despatch . 8. Type of Shipment*(i ) Outright Sale/(ii ) Consignment export/( iii ) Others (Specify) ..... 9. Description of goods : 10. Quantity of goods : Unit† .....Quantity 11. Currency of Invoice [†Ton/Kilogram/Litre/Cubic Metre/ Sq. Metre/Metre/Number/Others (Specify)] ..... @



Where the full export 12. Analysis of export value : value is not Particulars Currency ascertainable value expected on sale of goods in the oversease market may be shown @Full Export value No application for F.O.B. Value permission for Freight remittance/deduction from the declared value on account of agency commission and/or discount will be entertained by the Reserve Bank or Authorised Dealer unless these have been declared on this form Insurance Discount (Rate. ....) Agency Commission (Rate. ..) (For Customs Use) Export Value verified (Customs Appraiser)

14.

(for RBI use)

Amount

13. Customs Assessable Value (Rupees)

If the export is made under general permission of the Reserve Bank of India, Number and date of its approval



87

15. 16. 17.

If the export is made under L/C arrangements, name of advising bank in India State if the payment is to be received through the Asian Clearing Union: *Yes/No Name & address of bank through whom payment is to be received

I/We hereby declare that I/we am/are the *SELLER/CONSIGNOR of the goods in respect of which the declaration is made and that the particulars given above are true and that *( a) the export value as contracted with the buyer is the same as the full export value declared above/*( b) the full export value of goods is not ascertainable at the time of export and that the value declared is that which I/we, having regard to the prevailing market conditions, expect to receive on the sale of goods in the overseas market. I/We undertake that I/we will deliver to the bank named above the foreign exchange representing the full export value of the goods on or before† in the manner prescribed in the Regulations made under Foreign Exchange Management Act 1999. I/We further declare that I/we am/are resident in India and I/we have a place of business in India. I/We* am/are not in the Caution List of t he Reserve Bank of India. †State approximate date of delivery which must be within six months from the date of shipment . *Strike out whichever is not applicable.

(For A.D.’s use) (Signature of Exporter) Stamp & Signature of Authorised Dealer Date : Bank’s Uniform Code No.

Date:

Address :

Notes to Exporters

(1) (2 ) (3)

(4)

(5 ) Note :

This Form should not be pasted on the Parcel. The PP Form procedure applies to postal exports to all territories outside India excluding Nepal and Bhutan. The PP Form should be completed in duplicate in all cases. The Original should be submitted by the exporter to the Post Office after having it countersigned by an Authorised Dealer in foreign exchange. The Post Office through which the goods have been despatched will forward the Original to the nearest office of Reserve Bank of India. All documents relating to export of goods from India must be passed through the medium of an Authorised Dealer in foreign exchange in India within 21 days of the date of shipment of the goods. The amount representing the full export value of goods must be realised within six months from the date of shipment. Government of India/Indian Financial institutions may conclude from time to time Special Trade Agreements with other countries providing for settlement of certain payments from the countries in a specified manner or for exports to be financed from Government to Government Credits. Reserve Bank will advise Authorised Dealers of such arrangements by issue of circulars. Methods of payment specified in the individual arrangements will have to be followed in such cases. SPACE FOR USE BY RESERVE BANK OF INDIA



88

FORM PP Exporter’s Declaration

DUPLICATE Form Number : 1. (a) Name of the Post Office (b) Number and date of Parcel Receipt 2. 3. 4. 5. 6. 7. 8.

9. 10. 11.

@



Exporter’s Name Importer/Exporter Code No. Buyer’s/Consignee’s Name and address: Country of destination Nature of contract*(i ) CIF/(ii ) C&F/(iii )FOB/ (iv ) Others (Specify): ..... Date of despatch . Type of Shipment*(i ) Outright Sale/(ii ) Consignment export/( iii ) Others (Specify) ..... Description of goods : Quantity of goods : Unit† .....Quantity Currency of Invoice [†Ton/Kilogram/Litre/Cubic Metre/ Sq. Metre/Metre/Number/Others (Specify)] ..... Where the full export 12. Analysis of export value : value is not Particulars Currency ascertainable value expected on sale of goods in the oversease market may be shown @Full Export value No application for F.O.B. Value permission for Freight remittance/deduction from the declared value on account of agency commission and/or discount will be entertained by the Reserve Bank or Authorised Dealer unless these have been declared on this form Insurance Discount (Rate. ....) Agency Commission (Rate ) (For Customs Use) Export Value verified (Customs Appraiser)

14.

15.

(for RBI use)

Amount

13. Customs Assessable Value (Rupees)

If the export is made under general permission of the Reserve Bank of India, Number and date of its approval If the export is made under L/C arrangements, name of advising bank in India



89

16. 17.

State if the payment is to be received through the Asian Clearing Union: *Yes/No Name & address of bank through whom payment is to be received

I/We hereby declare that I/we am/are the *SELLER/CONSIGNOR of the goods in respect of which the declaration is made and that the particulars given above are true and that *( a) the export value as contracted with the buyer is the same as the full export value declared above/*( b) the full export value of goods is not ascertainable at the time of export and that the value declared is that which I/we, having regard to the prevailing market conditions, expect to receive on the sale of goods in the overseas market. I/We undertake that I/we will deliver to the bank named above the foreign exchange representing the full export value of the goods on or before† in the manner specified in Regulations made under the Foreign Exchange Management Act 1999. I/We further declare that I/we am/are resident in India and I/we have a place of business in India. I/We* am/are not in the Caution List of t he Reserve Bank of India.

†State approximate date of delivery which must be within six months from the date of shipment. *Strike out whichever is not applicable. (For A.D.’s use) (Signature of Exporter) Stamp & Signature Date: of Authorised Dealer Date Address : : Bank’s Uniform Code No. Note : All documents relating to export of goods from India must be passed through the medium of an Authorised Dealer in foreign exchange in India within 21 days of the date of shipment of the goods.

FOR AUTHORISED DEALER’S USE

Uniform Code Number :

Date of *(i) negotiation/(ii) receipt for collection * Strike out whichever is not applicable

.

Bill No.

Type of Bill *DA/(ii)DP/ (iii) Others Type of shipment : *(i) Firm Sale Contract/ (ii) Consignment Basis/ (iii) Others (Specify) The PP Form was included in the Statement sent to the Reserve Bank with the R Return for the fortnight ending sent on

(Currency) We certify and confirm that we have received the total amount of (Amount) as under being the proceeds of exports declared on this form.



90

Date of Receipt

1

Currency

2

Credit to Nostro Account in (Country)

Debit to NR Rupee Account of a bank in (country)

In our name

Held with us 5

3

In the name of† 4


Held with† 6

7

(† Write the name of the concerned Indian Authorised Dealer branch). Any other manner of receipt (specify)

.

(Stamp & Signature of Authorised Dealer) Date : Address :

Notes to Authorised Dealer : 1. Please ensure that the columns on the face of the PP Form have been completed by the exporter and that they have been duly authenticated by the Postal authorities wherever necessary. . 2. In case the net amount received falls short of the full export value declared on the Form for reasons other than deduction of bank charges, please indicate the authority conferred on the Authorised Dealers by or under the Exchange Control Manual or the Authorised Dealer’s Circular or Circulars, as the case may be, or the Reserve Bank of India’s approval number and date for reduction.



91

SOFTWARE EXPORT DECLARATION (SOFTEX) FORM

(For declaration of Software Exports through data-communication links and receipt of Royalty on the Software Packages/Products exported) FORM NO: AB ORIGINAL ___________________________________________________________________ 1.

Name and address of the exporter

2.

STPI Centre within whose jurisdiction the unit is situated

3.

Import-Export Code Number

4.

Category of exporter

5.

Buyer’s name and address including country and their relationship with exporting unit (if any)

6.

Date and Number of Invoice

7.

a)

b)

: STP/EHTP/EPZ/SEZ/100% EOU/DTA unit

Whether export contract/ purchase order already registered with STPI. (If ‘No’, please attach copy of the contract/purchase order)

Yes

No

Yes

No

Does contract stipulate payment of royalty SECTION - A (For exports through data communication link)

8.

Name of Authorised datacom service provider

9.

Type of software exported (Please mark on the appropriate box on the left side). (a) Computer Software

STPI/VSNL/DOT/Internet/Others (Please specify)

RBI Code

Data Entry jobs and Conversion Software Data Processing

9

0

6

Software Development

9

0

7

Software Product, Packages

9

0

8

Others (Please specify)

9

0

9



92

(b)

10.

Other Software Video/TV Software

9

1

0


9

1

1

Analysis of Export Value (a)

Amount

Full export value of which :i) Net value of exports without transmission charges ii)

11.

Currency

Transmission charges included in invoice

(b)

Transmission charges (if payable separately by the overseas client)

(c)

Deduct: Agency commission, at the rate of .......%

(d)

Any other deductions as permitted by RBI (please specify)

(e)

Amount to be realised [(a+b) - (c+d)]

How export value will be realised (mode of realisation) (Please mark on the appropriate box) (a) Under L/C

(a) Name and address of ________________ Authorised Dealer (b) Authorised Dealer Code No. __________

(b) Bank Guarantee


(c) Any other arrangement e.g. advance payment, etc. including transfer/remittance to bank account maintained overseas (Please specify)


SECTION - B (For receipt of Royalty on Software Pack ages/Products exported)

12.

13. 14.

Details of Software Package(s)/ Product(s) exported (a) Date of export

___________________________________

(b)

GR/SDF/PP/SOFTEX Form No. on which exports were declared

___________________________________

(c)

Royalty agreement details %age and amount of royalty

__________________________________

Period of royalty agreement (Enclose copy of Royalty agreement, if not already registered)

___________________________________

How royalty value will be realised (as defined in Royalty agreement) Calculation of royalty amount


___________________________________ ___________________________________ State Bank Staff College, Hyderabad

93

(Enclose copy of communication from the foreign customer)

15.

Name and address of designated Authorised ___________________________________ Dealer in India through whom payment has been received/to be received

A.D. Code No. _______________________

SECTION -C

16.

Declaration by exporter

I/We hereby declare that I/we am/are the seller of the software in respect of which this declaration is made and that the particulars given above are true and that the value to be received from the buyer represents the export value contracted and declared above. I/we also declare that the software has been developed and exported by using authorised and legitimate datacom links. I/We undertake that I/we will deliver to the bank named above the foreign exchange representing the full value of the software exported as above on or before ......................... (i.e. within six months from the date of invoice/date of last invoice raised during a month), in the manner specified in the Regulations made under the Foreign Exchange Management Act, 1999.

____________________________ Signature of the Exporter Name: ______________________________

Place: Stamp Date:

Designation: _________________________ ================================================================================== Enclosure: (1) Copy of Export Contract [7(a)] (2) Copy of Royalty Agreement [12(c)] (3) Copy of communication from foreign customer [14] ================================================================================== Space for use of the competent authority (i.e. STPI/EPZ/SEZ) on behalf of

Ministry of Information Technology Certified that the software described above was actually transmitted and the export/royalty value declared by the exporter has been found to be in order and acc epted by us. Place: Date: Stamp

_________________________________________ (Signature of Designated Official of STPI/EPZ/SEZ on behalf of Ministry of Information Technology) Name: _______________________________________ Designation: __________________________________



94

SOFTWARE EXPORT DECLARATION (SOFTEX) FORM (For declaration of Software Exports through data-communication links and receipt of Royalty on the Software Packages/Products exported) FORM NO: AB DUPLICATE _________________________________________________________________________________

1.


2.


3.


4.


5.


6.


7.

a)

b)



Yes

No

Does contract stipulate payment of royalty Yes

No

SECTION - A (For exports through data communication link)

8.


9.



RBI Code


9

0

6


9

0

7


9

0

8


9

0

9



95

(b)

10.


9

1

0


9

1

1

Analysis of Export Value (a) Full export value Of which :i) Net value of exports without transmission charges ii)

11.

Currency

Amount


(b)


(c)


(d)


(e)



(a) Name and address of ______________________ Authorised Dealer _______________________ (b) Authorised Dealer Code No. ________________

(b) Bank Guarantee

(a) Name and address of ______________________ Authorised Dealer ______________________ (b) Authorised Dealer Code No. ________________

(c) Any other arrangement (a) Name and address of ______________________ e.g. advance payment, etc. Authorised Dealer ______________________ including transfer/remittance to bank account maintained (b) Authorised Dealer Code No. ________________ overseas (Please specify) SECTION - B (For receipt of Royalty on Software Pack ages/Products exported)

12.

13.

Details of Software Package(s)/ Product(s) exported (a)

Date of export

___________________________________

(b)


___________________________________

(c)


___________________________________


___________________________________

How royalty value will be realised (as defined in Royalty agreement)


___________________________________


96

14.

Calculation of royalty amount (Enclose copy of communication from the foreign customer)

___________________________________

15.


A.D. Code No. _______________________

SECTION -C

16.


I/We hereby declare that I/we am/are the seller of the software in respect of which this declaration is made and that the particulars given above are true and that the value to be received from the buyer represents the export value contracted and declared above. I/we also declare that the software has been developed and exported by using authorised and legitimate datacom links. I/We undertake that I/we will deliver to the bank named above the foreign exchange representing the full value of the software exported as above on or before ......................... (i.e. within six months from the date of invoice/date of last invoice raised during a month), in the manner specified in the Regulations made under the Foreign Exchange Management Act, 1999. Place: Date:

Stamp

_______________________________ Signature of the Exporter Name: ________________________________ Designation: ___________________________

========================================================================== Enclosure: (1) Copy of Export Contract [7(a)] (2) Copy of Royalty Agreement [12(c)] (3) Copy of communication from foreign customer [14] =========================================================================== Space for use of the competent authority (i.e. STPI/EPZ/SEZ) on behalf of Ministry of Information Technology Certified that the software described above was actually transmitted and the export/royalty value declared by t he exporter has been found to be in order and acc epted by us. Place: _________________________________________ Date: (Signature of Designated Official of STPI/EPZ/SEZ on behalf of Ministry of Information Technology) Name: _________________________________ Stamp Designation: ____________________________



97

For Authorised Dealer’s use only Certificate by Authorised dealer AD’s Uniform Code No.......................................

The SOFTEX Form included in the ENC statement sent to the Reserve Bank with the ‘R’ Return (NOSTRO/VOSTRO) ....................................... for the period ending ................................... sent on (Currency name) We certify and confirm that we have received the total amount of.......................... ....... (Currency) (Amount) proceeds of exports declared on this form. Date of Receipt

Currency

Credit to Nostro Account in .................. (Country) In our name

1

2

3

In the name of ** 4

as under being the

Debit to Non-Resident Rupee Account of a bank in .................. ... (country) Held with Held with us ** 5 6

Period of R-Return with which the realisation has been reported to RBI

7

(** Write the name of the concerned branch of Authorised Dealer) Any other manner of receipt (Specify) ............................................................................................ Place:____________ Date:____________

Stamp

___________________________ (Signature of Authorised Official) Name: ____________________________________ Designation : _______________________________ Name & Address of__________________________ Authorised Dealer ___________________________



98

SOFTWARE EXPORT DECLARATION (SOFTEX) FORM (For declaration of Software Exports through data-communication links and receipt of Royalty on the Software Packages/Products exported) FORM NO: AB TRIPLICATE _____________________________________________________________________________________

1.


2.


3.


4.


5.


6.


7.

a)

b)



Yes

No

Does contract stipulate payment of royalty Yes

No

SECTION - A (For exports through data communication link)

8.


9.



RBI Code


9

0

6


9

0

7


9

0

8


9

0

9



99

(b)

10.


9

1

0


9

1

1

Analysis of Export Value (a) Full export value Of which :i) Net value of exports without transmission charges ii)

11.

Currency

Amount


(b)


(c)


(d)


(e)




(b) Bank Guarantee


(c) Any other arrangement e.g. advance payment, etc. including transfer/remittance to bank account maintained overseas (Please specify)

(a) Name and address of ___ ___________________ Authorised Dealer ______________________ (b) Authorised Dealer Code No. ________________

SECTION - B (For receipt of Royalty on Software Pack ages/Products exported)

12.

13.

Details of Software Package(s)/ Product(s) exported (a) Date of export

___________________________________

(b)


___________________________________

(c)


___________________________________


___________________________________

How royalty value will be realised (as defined in Royalty agreement)


___________________________________


100

14.

Calculation of royalty amount (Enclose copy of communication from the foreign customer)

___________________________________

15.


A.D. Code No. _______________________

SECTION -C

16.


I/We hereby declare that I/we am/are the seller of the software in respect of which this declaration is made and that the particulars given above are true and that the value to be received from the buyer represents the export value contracted and declared above. I/we also declare that the software has been developed and exported by using authorised and legitimate datacom links. I/We undertake that I/we will deliver to the bank named above the foreign exchange representing the full value of the software exported as above on or before ......................... (i.e. within six months from the date of invoice/date of last invoice raised during a month), specified in the Regulations made under the Foreign Exchange Management Act, 1999.

Place: Date:

_____________________________ Signature of the Exporter Name: ________________________

Stamp

Designation: ___________________ =========================================================================== Enclosure: (1) Copy of Export Contract [7(a)] (2) Copy of Royalty Agreement [12(c)] (3) Copy of communication from foreign customer [14] ========================================================================== Space for use of the competent authority (i.e. STPI/EPZ/SEZ) on behalf of Ministry of Information Technology Certified that the software described above was actually transmitted and the export/royalty value declared by the exporter has been found to be in order and acc epted by us. Place: Date: STPI/EPZ/SEZ

___________________________________ (Signature of Designated Official of

Stamp

on behalf of Ministry of Information Technology) Name: _________________________________ Designation: ____________________________



101

Annex-4 XOS A. D. Code No…………… Statement of particulars of export bills outstanding beyond prescribed period/ due date of realisation as at 30th June/ 31st December Part I – Outstanding export bills other than those on deferred payment terms Sr. No .

Bill No. and date

Name & Address of exporter

Exporter’s Code No./ IE Code No.

Date of export

1.

2.

3.

4.

5.

Invoice value Currency and Amount 12.

Amount Realised Currency and Amount 13.

Amount Outstanding Currency and Amount 14.

Due date of realisation 6.

GR/PP/ SOFTE X form No. 7.

Port of Shipment

Shipping bill No. and date

8.

9.

Name & address of the overseas buyer 10.

Rupee equivalent of outstanding amount (To be classified as) Cash exports Exports on Undrawn balances consignment basis 15. 16. 17.

Commodit y

11.

Remarks

18.

___________________________________________________________________ Total

___________________________________________________________________



102

Part II – Exports on deferred payment terms where instalments (including interest) are outstanding beyond due date

Sr. No.

1.

Name & address of exporter

Exporter’s Code No./ IE Code No.

2.

3.

Value of goods covered under deferred payment terms(including interest) Currency Amount 12.

No. & date of RBI approval for deferred payment term 4.

Total Amount of deferred instalments (including interest) already received Currency

Amount 13.

Date of export

GR Form No.

5.

Port of Shipment

6.

7.

Total Amount of instalments outstanding (including interest) beyond due date Currency

Shipping bill No. and date

8.

Name & address of the overseas buyer

Commodity

9.

10.

Invoice value

Currency & Amount 11.

Rupee equivalent of outstanding amount

Whether ECGC cover obtained (Yes /No)

No. & date of bank certificate issued

Remarks

15.

16.

17.

18.

Amount 14.

___________________________________________________________________ Total

___________________________________________________________________



103

Part III

:

Summary

Part I 'Cash' exports Rs.

Export on consignment basis Rs.

Part II

Undrawn balances Rs.

Total Rs.

Exports on deferred payment basis Rs.

Outstandings as on _______________ (End of previous half-year) Add: Addition during the half- year under report Less: Deletion during the half-year

Net position of outstanding as on ______________ (End of half-year under report)

We certify that all export bills i.e. export bills purchased, negotiated and sent for collection, outstanding beyond the prescribed prescribed period / due date of realisation of as at the end of half-year under report have been included in this statement.

Place: __________________ ___________________ _ Stamp

Date : __________________ ___________________ _


(Signature of Authorised Official) Name: ___________________ ______________________ ___ Designation: _________________


104

Annex- 5 (Self write-off write-off and extension extension of time ) (PART A) Annual statement to be furnished furnished to Authorised Dealers by exporters exporters giving details of export performance during a calendar year as on 31 Dec…..

(Amount in Rs 000s) Total Export Proceeds Due within the Prescribed period of 180 days or higher period as applicable

Total Export Proceeds realised within the prescribed period of 180 days or higher period as applicable

Export proceeds not realised within the Prescribed period of 180 days or higher period as applicable

No.of GR/SOFTEX/ SDF/PP forms due

No.of GR/SOFTEX/ SDF/PP forms

No.of GR/SOFTEX/ SDF/PP forms

Amount

Amount

Amount

Fully Realised Partly Realised (PART B) (Amount in Rs 000s) Details of Export Bills not Realised (partly or fully) within the prescsribed period

GR/SOFTEX/ SDF/PP No.

Amount (1)

Details of Extension / Reduction in invoice value/ Write off by the Exporter himself Amount Revised due date @ (2)

Extension/ Reduction in invoice value / Write off sought from AD Amount

Revised due date @ (3)

Total NOTE : 1) The exporter should approach AD/RBI for extension of time in respect of bills in Column (3) in PART B. 2) Total of Bills in Column (2) in Part B should not exceed 10% of those in Column 1 of P ART A 3) From 2005 onwards Bills in Column 1 of PART A will include those which have been extended for realisation by the exporter himself or with the approval of A D/RBI. 4) In respect of export bills written off (including reduction in invoice value) evidence for surrender of export incentives to be enclosed. @ For cases of extension

Exporters Signature :


Verified by Authorised Dealer


105

Annex - 6 Statement of Advance Remittance without bank guarantee or standby letter of credit where the amount of advance is equivalent to or more than USD 5 million for import of Rough Diamonds for the period ended ……………………..

Name of the AD Category – I Bank : AD Code (12 digit) : Sl. No. Name of the Company

1.

Name of the Amount of Advance Whether document for Importer Entity Payment made evidence of import and IEC No. without BG / Standby submitted LC

Diamond Trading Company Pvt. Ltd., UK RIO TINTO, UK

2.

3.

BHP Billiton, Australia

4.

ENDIAMA E. P. Angola

ALROSA, Russia

5.

6.

GOKHARAN, Russia

Signature of the authorised official of the bank : Date : Stamp :



106

Annexure 7 Annex to A.P. (DIR Series) Circular No. 87 dated April 17, 2004

Form – TC

Part I : Approvals of Trade Credit granted by all branches during the (Month / Year)………… Name of the AD :

Contact Person:

Address :

Tel : Fax :

Sr. No

1

Date of Loan Category of Name of Country Approv Identificatio Borrower Lender* of al n No. Lender* 2

3

4

5

6

Currency

7

Rate of Other Amount Equiv. Amt.inUS Interest chages D in USD 8

9

10

Tota l



107

11

Form – TC

Excel format

Annex to A.P. (DIR Series) Circular No. 87 dated April 17, 2004

Part I: Approvals of Trade Credit granted by all branches during the (Month / Year)…………

e-mail: Period of credit

All-incost 12

No. of Days/Mon./Yr 13

Type of Crdit**

Unit of time period 14

SC / BC 15

STC / LTC 16

Item of Import / proposed Import Description

17

Category***

18

I. Supplier's Credit (SC) II. Buyer's Credit (BC) III. Short-term Trade Credit (S TC) (maturity period up to one year) IV. Long-term Trade Credit (LTC) (maturity period more than one year & less than three years) V. Total Trade Credit (TC) (I+II) *: or Supplier **: Please type respective code such as SC or BC; ST C or LTC. ***: Petroleum Oil Lubricants (POL), Capital Goods (CG), Others (OT) Note 1: The format of the loan identification number is : TC/(Name of the Bank/branch)/(Identification No.) Note 2: Information in column nos. 8 to 13 should be numeric only. No alphabets should be entered in those columns. Note 3:Date format in col. No 2 is YYYY/MM/DD. For example, December 31, 2003 should be entered as 2003/12/31 Note 4:Data on rate of interest (col. No 10) & all-in-cost(col no 12) should be entered as follows: 3 per cent per annum is to be typed as '3.00' without any % sign. Note 5:In the Col. No 13, no.of days/month/year under period of credit may be entered as follows: '90' for 90 days. Note 6:In the case of unit of time period(Col. No 14), only unit of time period such as days(DD), months(MM), year(YY) to be entered. Note 7: Codes for Category of Borrower (in Col. 4) may be entered as follows: PUB: P ublic Sector, BKG: Banking, PVT:Private



108

Part II : Disbursement, Utilisation and Debt Servicing of Trade Credit during (month) / (year) Repayments (USD) Sr.N Loan Amount Disburse o. Ident Approv ment ificat ed (USD) ion (USD) No.

1

2

3

4

Utilisat Princip Interest ion al (USD)

5

6

Date of

Other Total Outstan Shipment charges (6+7+8) ding (46)

7

8

9

10

Final Repaymen t

11

12

Note 1: Information in column nos.1, 3 to 10 should be numeric only. No alphabets should be entered in those columns. Note 2: Date format in col. No 11, 12 is YYYY/MM/DD. For example, December 31, 2003 should be entered as 2003/12/31

Certificate by the Authorised Dealer 1. All trade credits for imports approved by all our branches during the month------------------ have been included in this statement. 2. Related import documents (including EC copy of Bill of Entry) towards utilisation of such trade credits have been verified and found i n order. 3. The drawal, utilisation and repayment of all trade credits approved by our branches have been scrutinised and it is cerified that such drawal, utilisation and repayments of trade credits Place:----------------------Date: -----------------------Signature of Authorised Dealer [ Stamp]



109

HANDBOOK ON FEMA REGULATIONS

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