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 FEMA regulations – Imports and Exports Feb’09 State Bank Staff College, Hyderabad 2

(For Internal Circulation Only)

HANDBOOK ON

FEMA REGULATIONS IMPORTS & EXPORTS

Compiled by: R. Narotham Reddy,

M.Com, CAIIB, CTF, Ce AML KYC, CDCS,

Member of Faculty, International Banking

STATE BANK STAFF COLLEGE

HYDERABAD

(An ISO 9001:2000 Certified Institution) FEBRUARY 2009


FOREWORD

It gives me immense pleasure in bringing out the fourth edition of ‘Handbook on FEMA Regulations Imports & Exports’. It is updated upto February 2009, 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


INDEX Introduction

Part I - Import of Goods

1. General

2. Form A-1

3. Import Licenses

i) General

ii) Endorsement on Import Licences

iii) Preservation of Import Licences

iv) Import Licences for C.I.F.Value

v) Imports on C.I.F.basis by Government Departments / Public Sector Undertakings

4. Manner of Rupee Payment

5. Letter of Authority holders / Agents of Importers

6. Obligation of Purchaser of Foreign Exchange

7. Time Limit for Settlement of Import Payments

8. Interest on Import Bills

9. RBI’s Instructions on Trade Credits for Imports into India

i) General

ii) Amount and Maturity

iii) All-in-cost Ceilings

iv) Guarantee

v) Reporting Arrangements

10. Advance Remittance

11. Advance Remittance for Import of Rough Diamonds

12. Advance Remittance for Import of aircrafts / helicopters / other aviation related purchases

13. Remittances for Import of Aircraft /Aircraft Engine/Helicopter on Lease basis

14. Remittances for Import of films on lease / rental basis

15. Advance Remittances for Import of Services


16. Remittances for War Risk Insurance / Bunker /Congestion Surcharge / Premium for extended Insurance

17. Remittances for Imports under Penalty

18. Remittances against Replacement Imports

19. Guarantees for Replacement Import

20. Evidence of Import

i) General

ii) Imports in non-physical form

iii) Imports on D/A basis

iv) Issuing acknowledgement

v) Verification by auditors

vi) Preservation of evidence of Import

vii) Certificate from CEO/Auditor of the Company as evidence of import

21. Follow up for Import Evidence

22. Follow up for Import Evidence – Bank’s instructions

23. Import of Equipments by BPO Companies in India for International Call Centre

24. Handling of Import Documents on collection basis

25. Direct Receipt of Import Bills / Documents

26. Direct receipt of Import Bills / Documents - Import of Rough Diamonds

27. Postal Imports

28. Import of Gold/Platinum/Silver by Nominated Banks/Agencies

i) Import of Gold on consignment basis

ii) Import of Gold on unfixed price basis

29. Direct Import of Gold

30. Import of Gold on Loan basis

31. Import of Gold, Silver and Jewellery by NRIs

32. Import factoring

33. Merchanting Trade

34. Issue of Bank Guarantee on behalf of service importers


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 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 Property for Overseas Offices

10. 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 in precious metals for EOUs and units in SEZs

iv. Netting off of export receivables against import payments

v. Issue of equity shares against import of capital goods

vi. Purchase of foreign 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


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


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


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.


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.


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


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


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.


(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


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 roll-

over/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.


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

years

200 basis points

* 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 all-

in-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.


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.


(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


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.


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


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.


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/


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


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


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 counter-

guarantee 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.


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.


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.


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.


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, or

c. 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 half-

yearly 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


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 follow-up 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:-


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/ fax : 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


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


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


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


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


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-Money-

Laundering 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.


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.


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.


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.


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;


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;


(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.


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.


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 -


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


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.


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


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.


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


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 re-

import 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


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


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:

i) The ‘netting off’ of export receivables against import payments is in

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.


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


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 R-

Supplementary 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


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 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.

(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


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


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


(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


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 India-

Myanmar 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.


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


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.


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


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;


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


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 non-

status holder exporters and 12 months for status holder exporters.

All transactions should be routed through the designated branch of the AD

Category - I bank.


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


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


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


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,


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:


(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


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.


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.


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.


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


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.


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.


(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)


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.


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/ Exporter Code No.

Name and address of the Importer

No.and date of import licences, if any

Brief description of goods

Date of remittance/ payment

Currency and amount

Rupee equiv-alent

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


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

Amount of remittance Sr.No. Name and address of the importer

Period of the BEF statement and serial No. of the transaction reported earlier in Part I of BEF statement

Date of receipt Currency &

Amount Rupee equivalent

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:


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

(USD million) (Rs. Crore)

EOU/SEZ Nom.Agency/ Bank

EOU/SEZ Nom.Agency/ Bank

EOU/SEZ Nom.Agency /Bank

Gold

(i) Delivery Against Payment Basis

(ii) Supp-liers’ Credit Basis

(iii) Consign-ment 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.


GR, SDF,PP and SOFTEX Forms Annex-3 EXCHANGE CONTROL DECLARATION (GR) FORM NO.

ORIGINAL

Exporter Invoice No. & Date SB No. & Date AR4/AR4A No. & Date Q/Cert. No. & Date Importer-Exporter Code No. Consignee Export Trade Control

fg

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

Custom House Agent

L/C. No.

Pre-Carriage by Type of shipment : Place of Receipt

by Pre-Carrier Outright Sale Consignment Export

Vessel/Flight No. Rotation No. Others (Specify) Port of Loading Nature of contract

CIF /C&F /FOB

Other (Specify)

Port of Discharge Country of Destination Exchange Rate u/s 14 of CA Currency of invoice S. No.

Marks & No.

Container Nos.

No. & Kind of Pkgs.

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 sale of goods.

FOB Value Freight Insurance Currency

Commission Rate

Discount Amount Other Deductions


EXCHANGE CONTROL DECLARATION (GR) FORM NO.

Is Export under L/C arrangements?

Yes No For customs

If yes, name of advising bank in India 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 of Shipment

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 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 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.

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 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



Duplicate Exporter Invoice No. & Date SB No. & Date AR4/AR4A No. & Date Q/Cert. No. & Date Importer-Exporter Code No. Consignee Export Trade Control

If export under: Deferred Credit Joint Venture Rupee Credit Others

RBI’s Approval/Cir. No. & Date Custom House Agent

L/C. No.

Pre-Carriage by Type of shipment : Place of Receipt

by Pre-Carrier Outright Sale Consignment

Export

Vessel/Flight No. Rotation No. Others (Specify) Port of Loading Nature of contract

CIF /C&F /FO

B

Other (Specify)

Port of Discharge Country of Destination Exchange Rate u/s 14 of CA Currency of invoice S. No.

Marks & No.

Container Nos.

No. & Kind of Pkgs.

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 sale of goods.

FOB Value Freight Insurance Currency Commission Rate

Discount Amount Other Deductions


Is Export under L/C arrangements?

Yes No For customs

If yes, name of advising bank in India Customs Assessable value Rs. (Rupees) Bank through which payment is to be received Export value Verified


Customs Appraiser

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

Date of Shipment

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 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 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. 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 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 Code Number

*Indicate (�) in the box applicable Date of *(i) negotiation (ii) receipt for

collection, Bill No

Type of Bill* (i) DA (ii) DP (iii) Others (Specify) Type of shipment : *(i) Firm Sale Contract

(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 (Currency) (amount) as under being the proceeds of exports declared on this form.

Credit to Nostro Account in Country

Debit to NR Rupee Account of a Bank in country

Date of receipt

Currency

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

(1) (2) (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


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 India. 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.


FOR AUTHORISED DEALER’S USE

Uniform Code Number

Date of (i) negotiation

(ii) receipt for collection

(iii) Bill No. .

*Type of Bill (i) DA (ii) DP (iii) Others (Specify)

*Types of shipment (i) Firm Sale Contract (ii) Consignment Basis (iii) Others (Specify) *Indicate (�) in the box applicable The SDF Form was included in the Statement sent to Reserve Bank with the 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

Currency

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

Debit to NR Rupee Account of a Bank

in................. country

Period of R Return with which the

realisation has been reported to RBI

In our name

In the name of**

Held with us

Held with**

(1) (2) (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 :



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 (for RBI use) 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

ascertainable value expected on sale of goods in the oversease market may be shown

Particulars Currency Amount

@Full Export value � F.O.B. Value

No application for permission for 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

Freight

Insurance �Discount (Rate. ....) �Agency Commission

(Rate. ..)

(For Customs Use) 13. Customs Assessable Value Export Value verified (Rupees) (Customs Appraiser)

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


15. If the export is made under L/C arrangements, name of advising bank in India

16. State if the payment is to be received through the

Asian Clearing Union: *Yes/No

17. 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 the 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:

Date :

Address :

Bank’s Uniform Code No.

Notes to Exporters

(1) This Form should not be pasted on the Parcel. (2) 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. (3) 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.

(4) 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.

(5) The amount representing the full export value of goods must be realised within six months from the date of shipment.

Note : 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.



FORM PP Exporter’s Declaration

DUPLICATE Form Number : 1. (a) Name of the Post Office

(b) Number and date of Parcel Receipt

2. Exporter’s Name (for RBI use) 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

ascertainable value expected on sale of goods in the oversease market may be shown

Particulars Currency Amount

@Full Export value � F.O.B. Value

No application for permission for 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

Freight

Insurance �Discount (Rate. ....) �Agency Commission

(Rate )

(For Customs Use) 13. Customs Assessable Value Export Value verified (Rupees) (Customs Appraiser)

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

15. If the export is made under L/C arrangements, name of advising bank in India


16. State if the payment is to be received through the Asian Clearing Union: *Yes/No

17. 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 the 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:

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 Bill No. * Strike out whichever is not applicable 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

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

Currency Credit to Nostro Account in (Country)

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

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

In our name In the name of†

Held with us

Held with†

1 2 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 : 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.


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 : STP/EHTP/EPZ/SEZ/100% EOU/DTA unit 5. Buyer’s name and address including country and their relationship with exporting unit (if any) 6. Date and Number of Invoice 7. a) Whether export contract/ purchase order already registered with STPI. Yes No (If ‘No’, please attach copy of the contract/purchase order) b) Does contract stipulate payment of royalty Yes No

SECTION - A (For exports through data communication link)

8. Name of Authorised datacom STPI/VSNL/DOT/Internet/Others service provider (Please specify) 9. Type of software exported (Please mark on the appropriate box on the left side). (a) Computer Software RBI Code

Data Entry jobs and Conversion Software Data Processing

Software Development Software Product, Packages Others (Please specify)

9 0 6

9 0 7

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(b) Other Software

Video/TV Software Others (Please specify)

10. Analysis of Export Value Currency Amount (a) Full export value of which :- i) Net value of exports without transmission charges ii) 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)] 11. 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 (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 Packages/Products exported)

12. 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) 13. How royalty value will be realised (as defined in Royalty agreement) ___________________________________ 14. Calculation of royalty amount ___________________________________

9 1 0

9 1 1


(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.

____________________________ Place: Signature of the Exporter

Name: ______________________________ 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 accepted by us. Place: _________________________________________ Date: (Signature of Designated Official of STPI/EPZ/SEZ

on behalf of Ministry of Information Technology) Name: _______________________________________

Designation: __________________________________

Stamp

Stamp




FORM NO: AB DUPLICATE _________________________________________________________________________________ 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 : STP/EHTP/EPZ/SEZ/100% EOU/DTA unit 5. Buyer’s name and address including country and their relationship with exporting unit (if any) 6. Date and Number of Invoice 7. a) Whether export contract/ purchase order already registered with STPI. Yes No (If ‘No’, please attach copy of the contract/purchase order) b) Does contract stipulate payment of royalty Yes No





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9 0 7

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(b) Other Software


10. Analysis of Export Value Currency Amount (a) Full export value Of which :- i) Net value of exports without transmission charges ii) 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)] 11. 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 (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 Packages/Products exported)

12. 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) 13. How royalty value will be realised (as defined in Royalty agreement) ___________________________________

9 1 0

9 1 1


14. Calculation of royalty amount ___________________________________ (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. _______________________________ Place: Signature of the Exporter Date: 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 the exporter has been found to be in order and accepted by us. Place: _________________________________________ Date: (Signature of Designated Official of STPI/EPZ/SEZ

on behalf of Ministry of Information Technology) Name: _________________________________

Designation: ____________________________

Stamp

Stamp


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.......................... ....... as under being the (Currency) (Amount) proceeds of exports declared on this form. Date of Currency Credit to Nostro Account Debit to Non-Resident Period of R-Return with Receipt in .................. Rupee Account of a which the realisation (Country) bank in ..................... has been reported to RBI (country) In our name In the name

of ** Held with us

Held with **

1 2 3 4 5 6 7

(** Write the name of the concerned branch of Authorised Dealer) Any other manner of receipt (Specify) ............................................................................................ Place:____________ Date:____________ ___________________________ (Signature of Authorised Official) Name: ____________________________________ Designation : _______________________________ Name & Address of__________________________ Authorised Dealer ___________________________

Stamp




FORM NO: AB TRIPLICATE _____________________________________________________________________________________ 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 : STP/EHTP/EPZ/SEZ/100% EOU/DTA unit 5. Buyer’s name and address including country and their relationship with exporting unit (if any) 6. Date and Number of Invoice 7. a) Whether export contract/ purchase order already registered with STPI. Yes No (If ‘No’, please attach copy of the contract/purchase order) b) Does contract stipulate payment of royalty Yes No





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(b) Other Software


10. Analysis of Export Value Currency Amount (a) Full export value Of which :- i) Net value of exports without transmission charges ii) 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)] 11. 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 (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 Packages/Products exported)

12. 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) 13. How royalty value will be realised (as defined in Royalty agreement) ___________________________________

9 1 0

9 1 1


14. Calculation of royalty amount ___________________________________ (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), specified in the Regulations made under the Foreign Exchange Management Act, 1999. _____________________________ Signature of the Exporter Place: Name: ________________________ 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 accepted by us. Place: ___________________________________ Date: (Signature of Designated Official of STPI/EPZ/SEZ

on behalf of Ministry of Information Technology) Name: _________________________________

Designation: ____________________________

Stamp

Stamp


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

Due date

of realisation

GR/PP/ SOFTE

X form No.

Port of Shipment

Shipping bill No.

and date

Name & address of the

overseas buyer

Commodity

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Invoice value

Amount Realised

Amount Outstanding

Rupee equivalent of outstanding amount (To be classified as)

Remarks

Currency and

Amount

Currency and

Amount

Currency and

Amount

Cash exports Exports on consignment

basis

Undrawn balances

12. 13. 14. 15. 16. 17. 18. ___________________________________________________________________ Total ___________________________________________________________________


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

Invoice value Sr. No.

Name & address of exporter

Exporter’s Code No./ IE Code No.

No. & date of RBI approval for deferred payment term

Date of export

GR Form No.

Port of Shipment

Shipping bill No. and date

Name & address of the overseas buyer

Commodity

Currency & Amount

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Value of goods covered under

deferred payment terms(including

interest)

Total Amount of deferred instalments (including interest) already received

Total Amount of instalments outstanding

(including interest) beyond due date

Rupee equivalent of outstanding

amount

Whether ECGC cover obtained

(Yes /No)

No. & date of bank

certificate issued

Remarks

Currency Amount Currency

Amount Currency Amount

12. 13. 14. 15. 16. 17. 18.

___________________________________________________________________ Total ___________________________________________________________________


Part III : Summary

Part I Part II

'Cash' exports Export on consignment basis

Undrawn balances

Total Exports on deferred payment basis

Rs. Rs. Rs. Rs. 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 period / due date of realisation of as at the end of half-year under report have been included in this statement.

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

Stamp


Annex- 5 (Self write-off and extension of time )

(PART A)

Annual statement to be furnished to Authorised Dealers by 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

Amount

No.of GR/SOFTEX/ SDF/PP forms

Amount

No.of GR/SOFTEX/ SDF/PP forms

Amount

Fully Realised

Partly Realised

(PART B)

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

Details of Extension / Reduction in invoice value/ Write off by the Exporter himself

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

GR/SOFTEX/ SDF/PP No.

Amount Amount Revised due date @

Amount Revised due date @

(1) (2) (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 PART 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 AD/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


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

Name of the Importer Entityand IEC No.

Amount of Advance Payment made without BG / StandbyLC

Whether document for evidence of import submitted

1.

Diamond Trading Company Pvt. Ltd., UK

2.

RIO TINTO, UK

3.

BHP Billiton, Australia

4.

ENDIAMA E. P. Angola

5.

ALROSA, Russia

6.

GOKHARAN, Russia

Signature of the authorised official of the bank :

Date :

Stamp :


Annexure 7

Form – TC 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)…………

Name of the AD : Contact Person:

Address : Tel :

Fax :

Sr. No

Date of Approval

Loan Identification No.

Category of Borrower

Name of Lender*

Country of Lender*

Currency Amount Equiv. Amt.inUSD

Rate of Interest

Other chages in USD

1 2 3 4 5 6 7 8 9 10 11

Total


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 Type of Crdit** Item of Import / proposed Import

All-in-cost

No. of Days/Mon./Yr

Unit of time period

SC / BC

STC / LTC

Description Category***

12 13 14 15 16 17 18

I. Supplier's Credit (SC) II. Buyer's Credit (BC) III. Short-term Trade Credit (STC) (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; STC 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: Public Sector, BKG: Banking, PVT:Private


Part II : Disbursement, Utilisation and Debt Servicing of Trade Credit during (month) / (year)

Repayments (USD)

Date of

Sr.No.

Loan Identification No.

Amount Approved (USD)

Disbursement (USD)

Utilisation (USD)

Principal

Interest Other charges

Total (6+7+8)

Outstanding (4-6)

Shipment Final Repayment

1 2 3 4 5 6 7 8 9 10 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 in 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]


Annexure 8

Statement on LCs/Guarantees/LOU/LOC issued by AD Category I Banks

As on quarter ended…………….

Name of the AD Contact person:

Address: Tel:

Email: Fax:

On behalf of Residents LCs/Guarantees/LOU/LOC issued

Trade Credits (Les than 3 years) Buyer’s Credit Supplier’s Credit

Up to one year

Above one year and les than three years**

** limited to import of capital goods

Place Signature of Authorised Dealer

Date [ Stamp]

HANDBOOK ON FEMA REGULATIONS

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