Author: admin_gst

E-Commerce – GST and Indirect Tax Issues
By: – pranav deshpande
Goods and Services Tax – GST
Dated:- 14-7-2015

E-Commerce, in itself, is a taxation quagmire. The roots lie in the classic sale vs service controversy, in which the respective e-tailers could treat the transaction as a service, whereas States want to treat it as a transaction subject to State VAT. Amazon is a classic example, in which Karnataka took the lead.
Even within the sales tax controversy, the next question is that of a level playing field. If the State, in which these e-tailers have set up shop, should get the State VAT, should the States, where the end subscribers are actually based, be deprived? If an e-tailer adopts the VAT model, he can always open

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ng is not happening, are not going to simply allow stock transfers, without something going in their kitty.
From a social perspective, Governments, doubtless have to lend voice to pleas of local retailers and traditional selling outlets, whose business faces stiff competition from such e-tailers. It is likely that lobbying by a plethora of such traders will move the State Governments to enact strict laws on e-commerce.
Will GST address this? To an extent, Yes. If the State of consumption gets the tax, all issues being raised by such States, will go away. Of course, the State which was demanding or getting full tax, will lose its revenue, under GST, as other States will share it. Well, as they say, 'you win some, you lose some'
CA. Pranav

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

d he will enjoy VAT credits. It does not work in a service model scenario. In this scenario, even if the transactions are cross border, across States, the respective litigating authority will demand full VAT, in absence of a C Form. Therein lies the additional difficulty. And let us not forget the interest and penalty part.
The situation can get further complicated if States amend their respective VAT laws, to provide for taxing such transactions. Even if the taxing entry gets challenged in Courts, another front that will be opened with this, is that of jurisdiction. States, in which offices are not located or from which billing is not happening, are not going to simply allow stock transfers, without something going in their kitty.
From a

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST: WAY FORWARD
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 6-7-2015

Goods and services tax is a tax levied on goods and services imposed at each point of sale or rendering of service. Such GST could be on entire goods and services or there could be some exempted class of goods or services or a negative list of goods and services on which GST is not levied. GST is an indirect tax in lieu of tax on goods (excise) and tax on service (service tax). The GST is just like State level VAT which is levied as tax on sale of goods. GST will be a national level value added tax applicable on goods and services.
A major change in administering GST will be that the tax incidence is at the point of sale as against the present system of point of origin. According to the Task Force under the 13th Finance Commission, GST, as a well designed value added tax on all goods and services, is the most elegant method to eliminate distortions and to tax consumption.
The basi

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

as growth and reforms are concerned.
The Government has already introduced the Bill to amend Constitution of India for Goods and Services Tax (GST) in December, 2014 in Parliament. GST is expected to play a transformative role in the way our economy functions GST will add buoyancy to economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. The Budget speech reaffirms the commitment to have GST in place from next year.
The Budget speech states –
"I have already introduced the Bill to amend the Constitution of India for Goods and Services Tax (GST) in the last Session of this august House. GST is expected to play a transformative role in the way our economy functions. It will add buoyancy to our economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. We are moving in various fronts to implement GST from the next year.
Introduction of GST is eagerly awaited by Tra

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ds GST, education cess and secondary & higher education cess have been subsumed in excise duty and Service Tax in the present Budget. Further, the general rate of excise duty will be rounded off from 12.36% (including cesses) to 12.5%. In case of Service Tax, it will go up from 12.36% (including cesses) to 14%.
The Union Budget focuses on Goods & Services Tax (GST) covering following aspects:
* State of the art GST regime to be introduced
* GST likely to be introduced from 1st April, 2016
* GST will enable leakage proof tax regime
* GST to play a transformative role
* However, no clear cut road map on GST as to how GST will be introduced from 1st April 2016 and preparedness there for.
Going by the present mood, the Government of the day feels that it may be able to introduce GST in India w.e.f. 01.04.2016, replacing a host of indirect taxes presently levied by the Centre , State and Local Bodies. It hopes for the parliamentary nod (two-third majority) in the forthcoming mo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

assessee-friendly – not like the present tax system.
Not only GST is expected to change the complexion of indirect taxation in India, it will also bring down the prices of goods and services across the board. The consensus among the states (29) and between the Centre and states hold the key. Once consensus is reached, GST may see the light of the day in a year's time, even during any time of the year, it being a transaction based tax.
While there is no doubt that GST will come, the sooner the better, it should also address the problems in present day taxation i.e., it should seek to achieve rationalization, boost transparency, offer flexibility to Union and states and broaden the much needed tax base. If GST comes into operation, it would achieve the status of integrated and most comprehensive set off tax structure in India leading to enhanced economic activities and tax buoyancy. GST would offer a complete set off and there will be no tax cascading effect as there will be no tax on

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

SOME GLOBAL GOODS & SERVICE TAX MODELS
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 4-7-2015

Some of the popular GST models being practiced in various countries are as follows –
United Kingdom model
Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the national government. It was introduced in 1st January, 1973 and is the third largest source of government revenue after income tax and National Insurance. Before 1973 the UK had a consumption tax called Purchase Tax, which was levied at different rates depending on the goods' luxuriousness. The general rate is 20% and reduced rate is 5%.
United States of America model
The United States does not impose a national-level sales

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ation resembles to that of Canadian model.
Australian model
Australia follows a single GST which is a federal tax collected by Centre and distributed to States. GST was introduced in July 2010 and rate of tax is 10%. Indian situation is similar but States may not like to lose their autonomy.
Malaysian model
Goods and services tax (GST) in Malaysia, a value added tax, was scheduled to be implemented by the Government during the third quarter of 2011, but has not yet been implemented. The Government is still studying the possible impact of the tax. During the Government reading of the 2014 budget, Malaysian Prime Minister announced that GST @ 6% shall be imposed starting on April 1, 2015.
Singapore model
On the recommendation of the

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Master Circular on Import of Goods and Services(Updated as on September 24, 2015)
13/2015-16 Dated:- 1-7-2015 Master Circular
FEMA
RBI/2015-16/82
Master Circular No. 13/2015-16
July 01, 2015
To,
All Category – I Authorised Dealer Banks
Madam / Sir,
Master Circular on Import of Goods and Services
Import of Goods and Services into India is being allowed in terms of Section 5 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R. 381(E) dated May 3, 2000 viz. Foreign Exchange Management (Current Account Transaction) Rules, 2000 as amended from time to time.
2. This Master Circular consolidates the existing instructions on the subject of "Import of Goods and Services" at one place. The list of underlying circulars consolidated in this Master Circular is furnished in Appendix.
3. This Master Circular is being updated from time to time as and when the fresh instructions are issued. The date up to which the Master Circular has b

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

mport Bills/Documents by the Importer Directly from Overseas Suppliers
C.7.
Evidence of Import
C.8.
Issue of acknowledgement
C.9.
Verification and Preservation
C.10.
Follow up for Import Evidence
C.11.
Issue of Bank Guarantee
C.12.
Import of Gold
C.13.
Import of Other Precious Metals
C.14.
Import Factoring
C.15.
Merchanting Trade
C.16.
Import Payments through Online Payment Gateway Service Providers
Annex-1
Annex-2
Annex -3
Appendix
Consolidated List of Circulars in the Master Circular
Section I – Introduction
(i) Import trade is regulated by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry, Department of Commerce, Government of India. Authorised Dealer Category – I (AD Category – I) banks should ensure that the imports into India are in conformity with the Foreign Trade Policy in force and Foreign Exchange Management (Current Account Transactions) Rules, 2000 framed by the Government of India vide Notification No. G.S

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

artment, they may approach the Regional Office of its jurisdiction for necessary approval.
Section II – General Guidelines for Imports
B.1. General Guidelines
Rules and regulations to be followed by the AD Category – I banks from the foreign exchange angle while undertaking import payment transactions on behalf of their clients are set out in the following paragraphs. Where specific regulations do not exist, AD Category – I banks may be governed by normal trade practices. AD Category – I banks may particularly note to adhere to "Know Your Customer" (KYC) guidelines issued by Reserve Bank (Department of Banking Regulation) in all their dealings.
B.2. Remittances for Import Payments
AD Category I Banks may allow remittance for making payments for imports into India, the after ensuring that all the requisite details are made available by the importer and the remittance is for bona fide trade transactions as per applicable laws in force.
B.3. Import Licences
Except for goo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Rules or Regulations framed there under.
(ii) Where foreign exchange acquired has been utilised for import of goods into India, the AD Category – I bank should ensure that the importer furnishes evidence of import viz., Exchange Control Copy of the Bill of Entry, Postal Appraisal Form or Customs Assessment Certificate, etc., and satisfy himself that goods equivalent to the value of remittance have been imported.
(iii) In addition to the permitted methods of payment for imports laid down in Notification No. FEMA14/2000-RB dated 3rd May 2000, payment for import can also be made by way of credit to non-resident account of the overseas exporter maintained with a bank in India. In such cases also AD Category – I banks should ensure compliance with the instructions contained in sub-paragraphs (i) and (ii) above.
B.5. Time Limit for Settlement of Import Payments
B.5.1. Time limit for Normal Imports
(i) In terms of the extant regulations, remittances against imports should be completed

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ctions in para C.2 of Section III of this Circular.
B.6. Import of Foreign Exchange / Indian Rupees
(i) Except as otherwise provided in the Regulations, no person shall, without the general or special permission of the Reserve Bank, import or bring into India, any foreign currency. Import of foreign currency, including cheques, is governed by clause (g) of sub-section (3) of Section 6 of the Foreign Exchange Management Act, 1999, and the Foreign Exchange Management (Export and Import of Currency) Regulations 2000, issued by Reserve Bank vide Notification No.FEMA 6/2000-RB dated May 3, 2000, as amended from time to time.
(ii) Reserve Bank may allow a person to bring into India currency notes of Government of India and / or of Reserve Bank subject to such terms and conditions as the Reserve Bank may stipulate.
B.6.1. Import of Foreign Exchange into India
A person may-
(i) Send into India, without limit, foreign exchange in any form other than currency notes, bank notes and trave

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

any place outside India (other than from Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding ₹ 25,000 (Rupees twenty five thousand only).
(ii) A person may bring into India from Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India for any amount in denominations up to ₹ 100/-.
B.7. Third Party Payment for Import Transactions
AD category I banks are allowed to make payments to a third party for import of goods, subject to conditions as under:
a. Firm irrevocable purchase order / tripartite agreement should be in place. However this requirement may not be insisted upon in case where documentary evidence for circumstances leading to third party payments / name of the third party being mentioned in the irrevocable order / invoice has been produced.
b. AD bank should be satisfied with the bonafides of the transactions and should consider the Financial Action Task Force (FATF) S

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

d against the counter-guarantee of an international bank of repute situated outside India, is obtained.
(b) In cases where the importer (other than a Public Sector Company or a Department/Undertaking of the Government of India/State Government/s) 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 up to 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.
(c) A Public Sector Company or a Department/Undertaking of the Government of India / State Government/s which is not in a position to obtain a guarantee from an international bank of repute against an advance payment, is required to obtain a specific waiver for the bank guarant

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

r 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.
v. Further, due caution may be exercised to ensure that remittance is not permitted for import of conflict diamonds (Kimberly Certification).
vi. KYC and due diligence exercise should be done by the AD Category – I banks as per the existing guidelines.
vii. 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.
b) 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 the advance remittance subject to the above conditions and a specific waiver of bank guarantee from the Ministry of Finance, Government of India, where

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ions:
i The AD Category – I banks should undertake the transactions based on their commercial judgment and after being satisfied about the bonafides 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 directly to the account of the manufacturer (supplier) concerned.
iii. AD Category – I banks 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 USD 100,000.
v. Physical import of goods into India is made within six months (three

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Regional Office of the Reserve Bank will be required in case of any deviation from the above stipulations.
C.1.4. Advance Remittance for the Import of Services
AD Category – I bank may allow advance remittance for import of services without any ceiling subject to the following conditions:
(a) 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.
(b) In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for advance remittance for import of services without bank guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would be re

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ailing LIBOR of the currency of invoice.
C.3. 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 the AD Category – I bank and fresh remittance for replacement imports may be 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 license.
C.4. Guarantee 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 r

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

te 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.
C.6. Receipt of Import Bills/Documents
C.6.1.1 Receipt of import documents by the importer directly from overseas suppliers
Import bills and documents should be received from the banker of the supplier by the banker of the importer in India. AD Category – I bank 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) Where the value of import bill does not exceed USD 300,000.
(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 in the Foreign Trade Policy, 100% Export Oriented Units / Units in Special Economic Zones, Public Sector Undertakings and L

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ject 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 overseas credit rating agency.
C.6.1.3. Receipt of import documents by the AD Category – I bank directly from overseas suppliers
(i) At the request of importer clients, AD Category – I bank may receive bills directly from the overseas supplier as above, provided the AD Category – I bank is fully satisfied about the financial standing/status and track record of the importer customer.
(ii) Before extending the facility, the AD Category – I bank should obtain a report on each individual overseas supp

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

post, as evidence that the goods for which the payment was made have actually been imported into India.
(ii) In respect of imports on Delivery against acceptance basis, AD Category – I bank 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 bank may, if satisfied with the genuineness of request, allow reasonable time, not exceeding three months from the date of remittance, to the importer to submit the evidence of import.
C.7.2. Evidence of Import in Lieu of Bill of Entry
(i) AD Category – I bank may accept, in lieu of Exchange Control Copy of Bill of Entry for home consumption, 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 :-
(

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ountant that the software / data / drawing/ design has been received by the importer, may be obtained.
(ii) AD Category – I bank should advise importers to keep Customs Authorities informed of the imports made by them under this clause.
C.8. Issue of Acknowledgement
AD Category – I bank 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 relating to the import transactions.
C.9. Verification and Preservation
(i) Internal inspectors or auditors (including external auditors appointed by AD Category – I bank) 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.
(ii) Documents evidencing import into India should be preserved by AD Category – I bank for a period of one

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ble Business Reporting Language (XBRL) system on a Bank-wide basis instead of the present system of branch-wise submission, to the respective Regional Offices of the RBI. The Statement should be submitted within 15 days from the close of the half-year to which the statement relates.
(iii) AD Category – I bank 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 AD Category – I bank may set their own internal guidelines to deal with such cases.
C.11. Issue of Bank Guarantee
AD Category – I banks are permitted to issue guarantee on behalf of their importer customers in terms of Notification No. FEMA 8/2000-RB dated May 3, 2000, as amended from time to time.
C.12 Import of Gold
C.12.1 Import of Gold.
1. The 20:80 scheme of import of gold was withdrawn on November 28, 201

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

/ SEZs in Gem & Jewellery Sector, mode of payment-wise.(b) Statement on monthly basis showing the quantity and value of gold imports by the nominated agencies (other than the nominated banks)/ EOUs/ SEZs in Gem & Jewellery sector during the month under report as well as the cumulative position as at the end of the said month beginning from the 1st month of the Financial YearBoth the statements shall be submitted, even if there is 'Nil' position, by the 10th of the following month / half year, to which it relates.
C.12.2. Import of Gold Jewellery Including Jewellery Made of Precious Metals or/and Studded With Diamonds / Precious Stones /Semi-precious.
Suppliers' and Buyers' credit (trade credit) including the usance period of Letters of Credit opened for import of gold in any form, including jewellery made of gold/precious metals or/and studded with diamonds/semi- precious/precious stones, should not exceed 90 days from the date of shipment.
C.13. Import of Other Precious Met

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

while undertaking import of the precious metals and rough, cut and polished diamonds. 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.
C.13.2. Import of Platinum / Silver on Unfixed Price Basis
The nominated agency/bank may allow import of platinum and silver, on outright purchase basis subject to the condition that although ownership of the same shall be passed on to the importers at the time of import itself, the price shall be fixed later as and when the importer sells to the user.
C.14. Import Factoring
(i) AD Category – I bank may enter into arrangements with international factoring companies of repute, preferably members of Factors Chain International, without the approval of Reserve Bank.
(ii) They will have to ensure compliance with the extant foreign exchange directions relating to imports, Foreign Trade Policy in force and any

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

re not available, non-negotiable copies duly authenticated by the bank handling documents may be taken) and satisfy itself about the genuineness of the trade.
(c) The entire Merchanting Trade Transactions should be completed within an overall period of nine months and there should not be any outlay of foreign exchange beyond four months.
(d) The commencement of Merchanting Trade would be the date of shipment / export leg receipt or import leg payment, whichever is first. The completion date would be the date of shipment / export leg receipt or import leg payment, whichever is the last;
(e) Short-term credit either by way of suppliers' credit or buyers' credit will be available for Merchanting Trade Transactions, to the extent not backed by advance remittance for the export leg, including the discounting of export leg LC by an AD bank, as in the case of import transactions ;
(f) In case advance against the export leg is received by the Merchanting Trader, AD bank should

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

(i) Payment for import leg may also be allowed to be made out of the balances in Exchange Earners Foreign Currency Account (EEFC) of the Merchant Trader.
(j) AD bank should ensure one-to-one matching in case of each Merchanting Trade transaction and report defaults in any leg by the traders to the concerned Regional Office of RBI, on half yearly basis in the format as given in Annex 1, within 15 days from the close of each half year, i.e. June and December.
(k) Defaulting Merchanting Traders, whose outstandings reach 5% of their annual export earnings, would be caution-listed.
(l) The KYC and AML guidelines should be observed by the AD bank while handling such transactions.
Merchanting Traders have to be genuine traders of goods and not mere financial intermediaries. Confirmed orders have to be received by them from the overseas buyers. AD banks should satisfy themselves about the capabilities of the Merchanting Trader to perform the obligations under the order. The overall Me

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ceeding USD 2,000 by entering into standing arrangements with the OPGSPs subject to the following:-
(a) The balances held in the Import Collection account shall be remitted to the respective overseas exporter's account immediately on receipt of funds from the importer and, in no case, later than two days from the date of credit to the collection account.
(b) The AD Category -I bank will obtain a copy of invoice and airway bill from the OPGSP containing the name and address of the beneficiary as evidence of import and report the transaction in R-Return under the foreign currency payment head.
(c) The permitted credits in the OPGSP Import Collection account will be:
a. collection from Indian importers for online purchases from overseas exporters electronically through credit card, debit card and net banking and
b. charge back from the overseas exporters.
(d) The permitted debits in the OPGSP Import Collection account will be:
1. payment to overseas exporters in permitte

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Import of Goods into India – Evidence of Import
February 20, 2004
8
AP(DIR Series) Circular No. 2
Import of Gold by (i) Export Oriented Units (EOUs), (ii) Units in SEZ/EPZ, and (iii) Nominated Agencies
July 9, 2004
9
AP(DIR Series) Circular No. 34
Import of Gold on Loan Basis – Tenor of Loan and Opening of Stand-By Letter of Credit
February 18, 2005
10
AP(DIR Series) Circular No. 1
Import of Goods of Value USD 100,000 and Less -Clarification on Follow up for Evidence of Import
July 12, 2005
11
AP(DIR Series) Circular No. 33
Liberalisation of Export and Import procedures
February 28, 2007
12
AP(DIR Series) Circular No. 34
Import of Goods of Value USD 100,000 and Less -Clarification on Follow up for Evidence of Import
March 2, 2007
13
AP(DIR Series) Circular No. 63
Import of Equipments by BPO Companies in India for International Call Centre
May 25, 2007
14
AP(DIR Series) Circular No. 77
Advance Remittance for Import of aircrafts / helicopters / other aviation

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ances for Import of Services
September 8, 2008
23
AP(DIR Series) Circular No.21
Advance Remittance for Import of Rough Diamonds
December 29, 2009
24
AP(DIR Series) Circular No.56
Advance Remittance for Import of Goods – Liberalisation
April 29, 2011
25
AP(DIR Series) Circular No. 59
Import of rough, cut and polished diamonds
May 06, 2011
26
AP(DIR Series) Circular No. 82
Release of Foreign Exchange for Imports – Further Liberalisation
February 21, 2012
27
AP(DIR Series) Circular No. 83
Import of Gold on Loan Basis – Tenor of Loan and Opening of Stand – By Letter of Credit
February 27, 2012
28
AP(DIR Series) Circular No. 103
Data on import of Gold – Statements – Modification
April 03, 2012
29
AP(DIR Series) Circular No.83
Import of precious and semi precious stones- Clarification
February 20, 2013
30
AP(DIR Series) Circular No.103
Import of Gold by Nominated Banks/Agencies
May 13, 2013
31
AP(DIR Series) Circular No.107
Import of Gold by Nominated Bank

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

s
January 17, 2014
41
AP(DIR Series) Circular No.100
Third party payments for export / import transactions
February 04, 2014
42
AP(DIR Series) Circular No.103
Import of Gold / Gold Dore by Nominated Banks /Agencies /Entities – Clarifications
February 14, 2014
43
AP(DIR Series) Circular No.115
Merchanting Trade Transactions – Revised guidelines
March 28, 2014
44
A P (DIR Series) Circular No.116
Advance Remittance for Import of Rough Diamonds
April 01, 2014
45
AP(DIR Series) Circular No.122
Trade Credits for Imports into India – Review of all-in-cost ceiling
April 10, 2014
46
AP(DIR Series) Circular No.133
Import of Gold by Nominated Banks / Agencies / Entities
May 21, 2014
47
AP(DIR Series) Circular No.146
Export & Import of Currency- Enhanced Facilities
June 19, 2014
48
AP(DIR Series) Circular No. 2
Import of Rough, Cut and Polished Diamonds – credit relaxation
July 07, 2014
49
A. P. (DIR Series) Circular No.42
Import of Gold by Nominated Banks/Agenc

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Master Circular on Export of Goods and Services ((Updated on August 28, 2015)
14/2015-16 Dated:- 1-7-2015 Master Circular
FEMA
RBI/2015-16/83
Master Circular No. 14/2015-16
July 01, 2015
To,
All Category – I Authorised Dealer Banks
Madam / Sir,
Master Circular on Export of Goods and Services
Export of Goods and Services from India is allowed in terms of clause (a) of sub-section (1) and sub-section (3) of Section 7 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R. 381(E) dated May 3, 2000 viz. Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time.
2. This Master Circular consolidates the existing instructions on the subject of "Export of Goods and Services from India" at one place. The list of underlying circulars/notifications consolidated in this Master Circular is furnished in Appendix.
3. This Master Circular is being updated from time to time as and when the fresh

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ort of unsold rough diamonds from Special Notified Zone of Customs without Export Declaration Form (EDF) formality
B.12
Part Drawings /Undrawn Balances
B.13
Consignment Exports
B.14
Opening / Hiring of Ware houses abroad
B.15
Direct dispatch of documents by the exporter
B.16
Invoicing of Software Exports
B.17
Short Shipments and Shut out Shipments
B.18
Counter-Trade Arrangement
B.19
Export of Goods on Lease, Hire, etc.
B.20
Export on Elongated Credit Terms
B.21
Export of goods by Special Economic Zones (SEZs)
B.22
Project Exports and Service Exports
B.23
Export of Currency
B.24
Forfaiting
B.25
Export factoring on non-recourse basis
B.26
Exports to neighboring countries by Road, Rail or River
B.27
Border Trade with Myanmar
B.28
Repayment of State Credits
B.29
Counter -Trade Arrangements with Romania
PART – 3
C.
Operational Guidelines for AD Category – I banks
C.1
Citing of Specific Identification Numbers
C.2
EDF/SOFTEX procedure
C.3.1.
EDF Fo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

t in Transit
C.23
'Netting off' of export receivables against import payments – Units in Special Economic Zones (SEZs)
C.24
Set-off of export receivables against import payables
C.25
Agency Commission on Exports
C.26
Refund of Export Proceeds
C.27
Exporters' Caution List
PART – 4
Annex-1 – Current Account Transaction Rules
Annex-2 – Form EFC
Annex- 3 – Common SOFTEX Form
Annex- 4 – Revised SOFTEX Procedure
Annex -5 – Delay in Utilization of Advance Received for Exports
Appendix
PART-1
A. Introduction
(i) Export trade is regulated by the Directorate General of Foreign Trade (DGFT) and its regional offices, functioning under the Ministry of Commerce and Industry, Department of Commerce, Government of India. Policies and procedures required to be followed for exports from India are announced by the DGFT, from time to time.
(ii) AD Category – I banks may conduct export transactions in conformity with the Foreign Trade Policy in vogue and the Rules framed by the Gov

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

change Management (Guarantees) Regulations, 2000, notified vide Notification No. FEMA 8/2000-RB dated May 3, 2000, AD Category – I banks have been permitted to issue guarantees on behalf of exporter clients on account of exports out of India subject to specified conditions.
(v) There is no restriction on invoicing of export contracts in Indian Rupees in terms of the Rules, Regulations, Notifications and Directions framed under the Foreign Exchange Management Act 1999. Further, in terms of Para 2.52 of the Foreign Trade Policy (2015-2020) – “All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency. However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan.” India

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

FEMA Regulations.
(ii) Grant of EDF waiver
AD Category – I banks may consider requests for grant of EDF waiver from exporters for export of goods free of cost, for export promotion up to 2 per cent of the average annual exports of the applicant during the preceding three financial years subject to a ceiling of ₹ 5 lakhs. For status holder exporters, the limit as per the present Foreign Trade Policy is ₹ 10 lakhs or 2 per cent of the average annual export realization during the preceding three licensing years (April-March), whichever is higher.
Exports of goods not involving any foreign exchange transaction directly or indirectly requires the waiver of EDF procedure from the Reserve Bank.
B.2 Manner of Receipt and Payment
(i) The amount representing the full export value of the goods exported shall be received through an AD Bank in the manner specified in the Foreign Exchange Management (Manner of Receipt & Payment) Regulations, 2000 notified vide Notification No. FEMA

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

e received in foreign exchange.
(ii) Trade transactions can also be settled in the following manner:
a. All transactions between a person resident in India and a person resident in Nepal or Bhutan 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.
b. In precious metals i.e. Gold / Silver / Platinum by the Gem & Jewellery units in SEZs and EOUs, 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 EDF Forms.
(iii) Processing of export related receipts through Online Payment Gateway Service Providers (OPGSPs)
Authorised Dealer Category – I (AD Category – I) banks have been allowed to offer the facility of repatriation of export related remittances by entering into stan

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

this arrangement, the permissible debits to the NOSTRO collection account are for repatriation of funds representing export proceeds to India for credit to the exporters' account, payment of fee/commission to the OPGSP as per the predetermined rates / frequency/ arrangement; and charge back to the importer where the exporter has failed in discharging his obligations under the sale contract.
f. The balances held in the NOSTRO collection account shall be repatriated and credited to the respective exporter's account with a bank in India immediately on receipt of the confirmation from the importer and, in no case, later than seven days from the date of credit to the NOSTRO collection account.
g. AD Category -I banks shall satisfy themselves as to the bona-fides of the transactions and ensure that the purpose codes reported to the Reserve Bank in the online payment gateways are appropriate.
h. AD Category -I banks shall submit all the relevant information relating to any transaction

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

and when entered into.
(iv) Settlement System under ACU Mechanism
a) In order to facilitate transactions / settlements, effective January 01, 2009, participants in the Asian Clearing Union will have the option to settle their transactions either in ACU Dollar or in ACU Euro. Accordingly, the Asian Monetary Unit (AMU) shall be denominated as 'ACU Dollar' and 'ACU Euro' which shall be equivalent in value to one US Dollar and one Euro, respectively.
b) Further, AD Category – I banks are allowed to open and maintain ACU Dollar and ACU Euro accounts with their correspondent banks in other participating countries. All eligible payments are required to be settled by the concerned banks through these accounts.
c) Relaxation from ACU Mechanism- Indo-Myanmar Trade – Trade transactions with Myanmar can be settled in any freely convertible currency in addition to the ACU mechanism.
d) In view of the difficulties being experienced by importers/exporters in payments to / receip

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ransaction.
b. Third party payment should be routed through the banking channel only;
c. The exporter should declare the third party remittance in the Export Declaration Form and it would be responsibility of the Exporter to realize and repatriate the export proceeds from such third party named in the EDF;
d. It would be responsibility of the Exporter to realize and repatriate the export proceeds from such third party named in the EDF;
e. Reporting of outstanding, if any, in the XOS would continue to be shown against the name of the exporter. However, instead of the name of the overseas buyer from where the proceeds have to be realized, the name of the declared third party should appear in the XOS;
f. In case of shipments being made to a country in Group II of Restricted Cover Countries, (e.g. Sudan, Somalia, etc.), payments for the same may be received from an Open Cover Country; and
g. In case of imports, the Invoice should contain a narration that the related payment has to be

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

lized and in any case within fifteen months from the date of shipment of goods.
B.4 Foreign Currency Account
(i) Participants in international exhibition/trade fair have been granted general permission vide Regulation 7(7) of the Foreign Exchange Management (Foreign Currency Account by a Person Resident in India) Regulations, 2000 notified vide Notification No. FEMA 10/2000-RB dated May 3, 2000 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 through normal banking channels 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 banks concerned.
(ii) Reserve Bank may consider applications in Form EFC (Annex 2) from exporters having good track record for opening a for

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ulated in Regulation 6 (A) of Notification No. FEMA 10/2000-RB dated May 3, 2000 and as amended from time to time.
(v) 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.
B.5 Diamond Dollar Account (DDA)
(i) 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 a track record of at least 2 years in import / export of diamonds / colored gemstones / diamond and colored gemstones studded jewellery / plain gold jewellery and having an average annual turnover of ₹ 3 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.
(ii)

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

arners' Foreign Currency (EEFC) Account
(i) A person resident in India may open with, an AD Category – I bank in India, an account in foreign currency called the Exchange Earners' Foreign Currency (EEFC) Account, in terms of Regulation 4 of the Foreign Exchange Management (Foreign Currency Account by a Person Resident in India) Regulations, 2000 notified under Notification No. FEMA 10/2000-RB dated May 3, 2000 as amended from time to time.
(ii) Resident individuals are permitted to include resident close relative(s) as defined in the Companies Act 1956 as a joint holder(s) in their EEFC bank accounts on former or survivor basis.
(iii) This account shall be maintained only in the form of non-interest bearing current account. No credit facilities, either fund-based or non-fund based, shall be permitted against the security of balances held in EEFC accounts by the AD Category – I banks.
(iv) All categories of foreign exchange earners are allowed to credit 100% of their foreign exchang

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

dertaking 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.
b. 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 account.
(vii) 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 compliance of provisions of Notification No. FEMA 3/2000-RB dated May 3, 2000 as amended from time to time.
(viii) 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 account and / or Rupee resources to the extent exports have actually taken place.
B.7 Setting up of Offices Abroad and Acquisition of Immovable Property for Overseas O

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

esentative should not create any financial liabilities, contingent or otherwise, for the head office in India and also not invest surplus funds abroad without prior approval of the Reserve Bank. 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 Bank.
(iv) AD Category – I banks may also 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.
(v) 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.
(vi) In case of companies taking up 'on site' contracts, they should repatriate the profits of such 'on site' contracts after the completion of the said contracts.
(vii) An audited yearly statement s

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

zed 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.
(2) AD Category- I banks can also allow exporters having a minimum of three years' satisfactory track record to receive long term export advance up to a maximum tenor of 10 years to be utilized for execution of long term supply contracts for export of goods subject to the conditions as under:
(i) Firm irrevocable supply orders and contracts should be in place. Product pricing should be in consonance with prevailing international prices.
(ii) Company should have capacity, systems and processes in place to ensure that the orders over the duration of the said tenure can actually be executed.
(iii) The facility is to be provided only to those entities, which have not come under the adverse notice of Enforcement Directorate or any such regulatory agency or have not been caution listed.
(iv) Such advances should be

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

for a term not exceeding two years at a time and further rollover of not more than two years at a time may be allowed subject to satisfaction with relative export performance as per the contract.
b. BG / SBLC should cover only the advance on reducing balance basis.
c. BG / SBLC issued from India in favor of overseas buyer should not be discounted by the overseas branch / subsidiary of bank in India.
Note: AD Category – I banks may also be guided by the Master Circular on Guarantees and Co-acceptances issued by DBR.
(xii) AD Category – I banks may allow the purchase of foreign exchange from the market for refunding advance payment credited to EEFC account only after utilizing the entire balances held in the exporter's EEFC accounts maintained at different branches/banks.
(3) 'AD Category- I banks may allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship and where the 'export agreement' provides for shipment of goo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

) In the event of the exporter's inability to make the shipment, partly or fully, no remittance towards refund of unutilized portion of advance payment or towards payment of interest should be made without the prior approval of the Reserve Bank.'
(4) (i) As it has been observed that there is substantial increase in the number and amount of advances received for exports remaining outstanding beyond the stipulated period on account of non-performance of such exports (shipments in case of export of goods), AD Category -I banks are advised to efficiently follow up with the concerned exporters in order to ensure that export performance (shipments in case of export of goods) are completed within the stipulated time period.
(ii) It is further reiterated that AD category -I banks should exercise proper due diligence and ensure compliance with KYC and AML guidelines so that only bonafide export advances flow into India. Doubtful cases as also instances of chronic defaulters may be referre

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

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 (Realization, Repatriation, and Surrender of Foreign Exchange) Regulations, 2000.
(iii) The exporter shall report to the AD Category – I banks the method of disposal of all items exported, as well as the repatriation of proceeds to India.
(iv) Such transactions approved by the AD Category – I banks will be subject to 100 per cent audit by their internal inspectors/auditors.
B.10 EDF approval for Export of Goods for re-imports
(i) AD Category – I banks may consider request from exporters for granting EDF approval in cases where goods are being exported for re-import after repairs / maintenance / testing / calibration, 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.
(ii) Where the goods being exported for testing are

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

re, Mumbai, Bill of Entry shall be filed by the buyer. AD bank may permit such import payments after being satisfied with the bona-fides of the transaction. Further, AD bank shall also maintain a record of such transactions.
B.12 Part Drawings /Undrawn Balances
(i) In certain lines of export trade, it is the practice to leave a small part of the invoice value undrawn for payment after adjustment due to differences in weight, quality, etc., to be ascertained after arrival and inspection, weighment or analysis of the goods. In such cases, 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 EDF forms that he will surrender/account for the balance proceeds of the shipment within the period prescribed for realization.
(ii) In cases where the exporter has not be

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

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 banks. 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.
(iv) In case the goods are exported on consignment basis, freight and marine insurance must be arranged in India.
(v) AD Category – I banks may allow the exporters 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.
B.14 Opening / Hiring of Ware houses abroad
AD Category – I banks may consider the applications received from exporters and gr

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ir agents resident in the country of final destination of goods in cases where:
(i) Advance payment or an irrevocable letter of credit has been received for the full value of the export shipment and the underlying sale contract/letter of credit provides for dispatch of documents direct to the consignee or his agent resident in the country of final destination of goods.
(ii) The AD Category – I banks may also accede to the request of the exporter 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 arrangements have been made for realization of export proceeds.
2. AD Category – I banks may also permit 'Status Holder Exporters' (as defined in the Foreign Trade Policy), and units in Special Economic Zones (SEZ) to dispatch the export documents to the consignees outside India subject to the terms and conditions that:
(i) The export proceeds are repatriated through the AD banks named in t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

g of Software Exports
(i) For 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) 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 quadruplicate 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

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

irely 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 EDF 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 EDF. In this case, the original EDF received earlier from Customs will be cancelled. If the shipment is made subsequently, a fresh set of EDF should be completed
B.18 Counter-Trade Arrangement
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 US Dollar will be considered by the Reserve Bank subject to following conditions:
(i) All imports and exports un

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

as lessee against collection of lease rentals/hire charges and ultimate re-import. Exporters should apply for necessary permission, through an AD Category – I banks, to the Regional Office concerned of the Reserve Bank, giving full particulars of the goods to be exported.
B.20 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.
B.21 Export of goods by Special Economic Zones (SEZs)
(i) Units in SEZs are permitted to undertake job work abroad and export goods from that country itself subject to the conditions that:
a. Processing / manufacturing charges are suitably loaded in the export price and are borne by the ultimate buyer.
b. The exporter has made satisfactory arrangements for realization of full export proceeds subject to the usual EDF procedure.
AD Category – I banks may permit units in DTAs

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

for undertaking turnkey/civil construction contracts abroad are required to obtain the approval of the AD Category – I banks/ Exim Bank at post-award stage before undertaking execution of such contracts. Regulations relating to ' Project Exports' and 'Service Exports' are laid down in the revised Memorandum of Instructions on Project and Service Exports (PEM-July 2014).
(ii) Accordingly, AD banks / Exim Bank may consider awarding post-award approvals without any monetary limit and permit subsequent changes in the terms of post award approval within the relevant FEMA guidelines / regulations. Project and service exporters may approach AD banks / Exim Bank based on their commercial judgment. The respective AD bank / Exim Bank should monitor the projects for which post-award approval has been granted by them.
(iii) The stipulation of time limit of 30 days for the exporter undertaking Project Exports and Service contracts abroad to submit form DPX1/ PEX-1 /TCS-1 to the Approving Authori

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ry. The Inter-project transfer of funds will be monitored by the AD Category – I bank(s) / Exim Bank.
(c) Deployment of Temporary Cash Surpluses
Subject to monitoring by the AD Category – I bank(s) / Exim Bank, Project / Service exporters may deploy their temporary cash surpluses, generated outside India investments in short-term paper abroad including treasury bills and other monetary instruments with a maturity or remaining maturity of one year or less and the rating of which should be at least A-1/AAA by Standard & Poor or P-1/Aaa by Moody's or F1/AAA by Fitch IBCA etc., ,and as deposits with branches / subsidiaries outside India of AD Category – I banks in India.
(d) Repatriation of Funds in case of On-site Software Contracts
The requirement of repatriation of 30 per cent of contract value in respect of on-site contracts by software Exporter Company / firm has been dispensed with. They should, however, repatriate the profits of on-site contracts after completion of the contract

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

g only through an airport.
B.24 Forfaiting
Export-Import Bank of India (EXIM Bank) and AD Category – I banks have been permitted to undertake forfaiting, for financing of export receivables. Remittance of commitment fee / service charges, etc., payable by the exporter as approved by the EXIM Bank / AD Category – I banks concerned may be done through an AD bank. Such remittances may be made in advance in one lump sum or at monthly intervals as approved by the authority concerned.
B.25 Export factoring on non-recourse basis
Taking into account the recommendation made by the Technical Committee on Facilities and Services to the Exporters (Chairman: Shri G. Padmanabhan), it has been decided to permit AD banks to factor the export receivables on a non-recourse basis, so as to enable the exporters to improve their cash flow and meet their working capital requirements subject to conditions as under:
* AD banks may take their own business decision to enter into export factoring arrangeme

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

dit evaluation details from the correspondent bank abroad.
* KYC and due diligence on the exporter shall be ensured by the Export Factor.
B.26 Exports to neighboring countries by Road, Rail or River
The following procedure should be adopted by exporters for filing original copies of EDF where exports are made to neighboring countries by road, rail or river transport:
(i) 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.
(ii) As regards exports by rail, Customs staff has been posted at certain designated railway stations for attending to Customs formalities. They will collect the EDF for goods loaded at these sta

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

nt directions issued by the Reserve Bank, as amended from time to time.
B.29 Counter -Trade Arrangements with Romania
The Reserve Bank will consider 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 utilize the funds for import of goods from Romania into India within six months from the date of credit to Escrow Accounts allowed to be opened.
PART – 3
C. Operational Guidelines for AD Category – I banks
C.1 Citing of Specific Identification Numbers
In all applications / correspondence with the Reserve Bank, the specific identification number as available on the EDF and SOFTEX forms should invariably be cited.
C.2 EDF/SOFTEX procedure
In terms of Regulation 6 of Foreign Exchange Management (Export of Goods and Services) Regulations, 20

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

he calendar year and a six- digit running serial number.
(iv) Customs will certify the value declared by the exporter on both the copies of the EDF form at the space earmarked and will also record the assessed value.
(v) They will then return the duplicate copy of the form to the exporter and retain the original for transmission to the Reserve Bank.
(vi) Exporters should submit the duplicate copy of the EDF form again to Customs along with the cargo to be shipped.
(vii) 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 banks for negotiation or collection of export bills.
(viii) Within 21 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 banks named in the EDF form.
(ix) After the documents have been negotiated / sent for collection, t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

/Softex Form No)
(xiii) 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, EDF forms which involve sending goods by post should be first presented by the exporter to an AD Category – I bank for countersignature. The procedure is as under:
(a) The AD Category – I banks will countersign the forms after ensuring that the parcel is being addressed to their branch or correspondent bank in the country of import and return the original copy to the exporter, who should submit the form to the post office with the parcel.
(b) The duplicate copy of the EDF form will be retained by the AD banks to whom the exporter should submit relevant documents together with an extra copy of invoice for negotiation/collection, within the prescribed period of 21 days.
(c) The concerned overseas branch or correspondent should be instructed to deliver the parcel to consignee against payment or acceptance of r

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

d-Sea Trans-shipment of catch by Deep Sea Fishing Vessels
(i) Since deep sea fishing involves continuous sailing outside the territorial limit, trans-shipment of catches takes place in the high sea leading to procedural constraints in regulatory reporting requirement viz. the Declaration of Export in terms of Notification No.FEMA.23/2000/RB dated May 3, 2000.
(ii) For mid-sea trans-shipment of catches by Indian owned vessels, as per the norms prescribed by the Ministry of agriculture, Government of India, the EDF declaration procedure in this regard has been rationalized in consultation with the Government of India as outlined below should be followed by the exporter in conformity with Regulation 3 of Notification No.FEMA.23/2000-RB dated May 3, 2000.
(a) The exporters may submit the EDF, duly signed by the Master of the Vessel in lieu of Custom Certification, indicating the composition of the catch, quantity, export value, date of transfer of catch, etc.
(b) The date of transfer o

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

eir running serial number on both the copies of EDF and will return the duplicate copy to the exporter as the value certification of the export has already been done as mentioned above.
(i) Rules, Regulations and Directions issued in respect of the procedure for submission of the EDF by exporter to the AD Category-I banks, and the disposal of these forms by these banks will be same as applicable to the other exporters.
C.4 In case of export of goods / software done through EDI ports
(i) The relative shipping bill should be submitted in duplicate to the Commissioner of Customs concerned.
(ii) After verifying and authenticating, the Commissioner of Customs will hand over to the exporter, one copy of the shipping bill marked 'Exchange Control Copy' for being submitted to the AD Category – I banks within 21 days from the date of export.
(iii) The AD Category – I banks should accept the Exchange Control (EC) copy of the shipping bill submitted by the exporter for collection/negotiation

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

he AD Category – I banks, date of negotiation, bill number, invoice value and the amount actually received by ECGC and private insurance companies regulated by IRDA.
C.5 SOFTEX Forms
(i) A software exporter, whose annual turnover is at least ₹ 1000 crore or who files at least 600 SOFTEX forms annually, will be eligible to submit a statement in excel format as per Annexure A, giving all particulars along with quadruplicate set of SOFTEX form to the nearest STPI. STPI will then verify the details and decide on a percentage sample check of the documents in details. Software companies will submit all the documents on demand to STPI within 30 days of their advice or any reasonable/extended time at the discretion of the Director, STPI, at the request from the exporter. STPI will thus certify the statement and SOFTEX forms in bulk on the “Top Sheet” regarding the values etc. and will thereafter forward the first copy of the revised SOFTEX format to the concerned Regional Office of RBI

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ional Offices of RBI has been dispensed with accordingly.
C.6 Random verification
(iv) In all the above procedures, AD Category – I bank should ensure, by random check of the relevant duplicate forms by their internal / concurrent auditors, that non-realization or short realization allowed, if any, is within the powers delegated to them or has been duly approved by the Reserve Bank, wherever necessary.
C.7 Certification for EEFC Credits
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 ….. percent of the export realization credited to the EEFC account maintained by the exporter with……”
C.8 Consolidation of Air Cargo/Sea Cargo
(i) Consolidation of Air Cargo
(a) Where air cargo is shipped under consolidation, the airline company's Master Airway Bill will be issued to the Consolidating Cargo Agent. The Cargo agent in turn w

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

tion of shipping documents even in cases, where export transactions are not backed by letters of credit, provided their 'relative sale contract' with overseas buyer provides for acceptance of FCR as a shipping document in lieu of bill of lading. However, the acceptance of such FCR for purchase/discount would purely be the credit decision of the bank concerned who, among others, should satisfy itself about the bona fides of the transaction and the track record of the overseas buyer and the Indian supplier since FCRs are not negotiable documents. It would be advisable for the exporters to ensure due diligence on the overseas buyer, in such cases.
C.9 Delay in submission of shipping documents by exporters
In cases where exporters' present documents pertaining to exports after the prescribed period of 21 days from date of export, AD Category – I banks may handle them without prior approval of the Reserve Bank, provided they are satisfied with the reasons for the delay.
C.10 Retu

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

(i.e. April to March) and same should be reported in EDPMS.
C.13 Follow-up of Overdue Bills
(i) AD Category – I banks should closely watch realization of bills and in cases where bills remain outstanding, beyond the due date for payment 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 the stipulated period or seek extension of time beyond the stipulated period, the matter should be reported to the Regional Office concerned of the Reserve Bank stating, where possible, the reason for the delay in realizing the proceeds.
(ii) The duplicate copies of EDF/SOFTEX Forms should, continue to be held by AD Category – I banks until the full proceeds are realized, except in case of undrawn balances.
(iii) AD Category – I banks should follow up export outstanding with exporters systematically and vigorously so that action against defaulting exporters does not get delayed. Any laxity

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

of interest is not stipulated in the contract.
C.15 Reduction in Invoice Value in other cases
(i) If, after a bill has been negotiated or sent for collection, its amount is to be reduced for any reason, AD Category – I banks may approve such reduction, if satisfied about genuineness of the request, provided:
(a) The reduction does not exceed 25 per cent of invoice value:
(b) It does not relate to export of commodities subject to floor price stipulations
The exporter is not on the exporters' caution list of the Reserve Bank, and
(c) The exporter is advised to surrender proportionate export incentives availed of, if any.
(ii) 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 outstanding do not exceed 5 per cent of the average annual export realization during the p

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

y, involved does not exceed 25 per cent of the invoice value and the realization of export proceeds is not delayed beyond the period of 12 months from the date of export.
C.18 Extension of Time
(i) The Reserve Bank of India has permitted the AD Category – I banks to extend the period of realization of export proceeds beyond stipulated period of realization 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 export transactions covered by the invoices are not under investigation by Directorate of Enforcement / Central Bureau of Investigation or other investigating agencies,
(b) The AD Category – I bank is satisfied that the exporter has not been able to realize export proceeds for reasons beyond his control,
(c) The exporter submits a declaration that the export proceeds will be realized during the extended period,
(d) While considering extension beyond one year from the date

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Regional Office concerned of the Reserve Bank in form ETX through his AD Category – I bank with appropriate documentary evidence.
C.19 Write off of export bills
(i) An exporter who has not been able to realize the outstanding export dues despite best efforts, may either self-write off or approach the AD Category – I banks, who had handled the relevant shipping documents, with appropriate supporting documentary evidence with a request for write off of the unrealized portion subject to the fulfillment of stipulations regarding surrender of incentives prior to” write-off” adduced in the A.P. (DIR Series) Circular No. 03 dated 22 July 2010. After liberalizing and simplifying the procedure, the limits prescribed for “write-offs” of unrealized export bills are as under:
Self “write-off” by an exporter
(Other than Status Holder Exporter)
5%*
Self “write-off” by Status Holder Exporters
10%*
'Write-off” by Authorized Dealer Bank-
10%*
*of the total export proceeds realized during th

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ssy, Foreign Chamber of Commerce or similar Organization;
(e) The unrealized amount represents the undrawn balance of an export bill (not exceeding 10% of the invoice value) remaining outstanding and turned out to be unrealizable despite all efforts made by the exporter;
(f) The cost of resorting to legal action would be disproportionate to the unrealized 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;
(g) 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 amounts have remained unrealized consequent on dishonor of the bills by the overseas buyer and there are no prospects of realization.
(iv) The exporter has surrendered proportionate export incentives (for the cases not covered under A. P. (DIR. Series) Circular No.03 dated July 22, 2010), if a

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ities of the country.
(b) EDF 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.
vii) AD banks should report write off of export bills through EDPMS to the Reserve Bank.
viii) AD banks are advised to put in place a system under which their internal inspectors or auditors (including external auditors appointed by authorised dealers) should carry out random sample check / percentage check of “write-off” outstanding export bills.
ix) Cases not covered by the above instructions / beyond the above limits, may be referred to the concerned Regional Office of Reserve Bank of India.
C.20 Write off in cases of Payment of Claims by ECGC and private insurance companies regulated by Insurance Regulatory and Development Authority (IRDA)
(i) AD Category – I banks shall, on an application received from the exporter suppo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

idelines;
(b) The exporter produces a certificate from the Foreign Mission of India concerned, about the fact of non-recovery of export proceeds from the buyer; and
(c) This would not be applicable in self write off cases.
C.22 Shipments Lost in Transit
(i) When shipments from India for which payment has not been received either by negotiation of bills under letters of credit or otherwise are lost in transit, the AD Category – I banks must ensure that insurance claim is made as soon as the loss is known.
(ii) In cases where the claim is payable abroad, the AD Category – banks must arrange to collect the full amount of claim due on the lost shipment, through the medium of their overseas branch/correspondent and release the duplicate copy of EDF only after the amount has been collected.
(iii) A certificate for the amount of claim received should be furnished on the reverse of the duplicate copy.
(iv) AD Category – I banks should ensure that amounts of claims on shipments lost in t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

proceeds are adjusted / received.
(iii) Both the transactions of sale and purchase in 'R' – Returns under FET-ERS are reported separately.
(iv) The export / import transactions with ACU countries are kept outside the arrangement.
(v) All the relevant documents are submitted to the concerned AD Category – I banks who should comply with all the regulatory requirements relating to the transactions.
C.24 – Set-off of export receivables against import payables
AD category -I banks may deal with the cases of set-off of export receivables against import payables, subject to following terms and conditions:
(i) The import is as per the Foreign Trade Policy in force.
(ii) Invoices/Bills of Lading/Airway Bills and Exchange Control copies of Bills of Entry for home consumption have been submitted by the importer to the Authorized Dealer bank.
(iii) Payment for the import is still outstanding in the books of the importer.
(iv) Both the transactions of sale and purchase may be reported sep

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ogy, Government of India / EPZ authorities as the case may be. In cases where the commission has not been declared on EDF/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 exporters 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 US Dollar, subject to the following conditions:
(a) The payment of commission satisfies the conditions as at (a) and (b) stipulated in paragraph (i) 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.
(iii) Payment of commission is prohibited on exports made

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

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.
C.27 Exporters' Caution List
(i) AD Category – I banks will also be advised whenever exporters are cautioned in terms of provisions contained in Regulation 17 of “Export Regulations” (Annex 2). They may approve EDF 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 favor covering the full value of the proposed exports.
(ii) 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 twelve months from the date of shipment.
(iii) AD Category – I banks should obtain prior approval of the Reserve Bank for issuing guarantees for caution-listed exporters.

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

turns and Statements
December 30, 2000
7
A.P.(DIR Series) Circular No.27
Foreign Exchange Management Act, 1999 – Export of Goods and Services – Forwarder's Cargo Receipt
March 2, 2001
8
A.P. (DIR Series) Circular No.28
Foreign Exchange Management Act, 1999
March 30, 2001
9
A.P.(DIR Series) Circular No. 30
'Write off' of Unrealized Export Bills – Simplification of Procedure
April 4, 2001
10
A.P.(DIR Series) Circular No.35
Foreign Exchange Management Act, 1999 – Export of Goods and Services
June 11, 2001
11
A.P. (DIR Series) Circular No.4
Counter-Trade Arrangements with Romania
August 27, 2001
12
A.P. (DIR Series) Circular No.5
Export of Goods and Services
August 27, 2001
13
A.P. (DIR Series) Circular No.6
Export of Goods and Services
September 24, 2001
14
A.P. (DIR Series) Circular No.9
Export of Goods and Services – Certification of SOFTEX Forms
October 25, 2001
15
A.P. (DIR Series) Circular No.10
Asian Clearing Union (ACU) Mechanism – Export

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ervices
July 4, 2002
24
A.P. (DIR Series) Circular No.10)
Export of Goods and Services – Facilities to units in Special Economic Zones (SEZs
August 14, 2002
25
A.P. (DIR Series) Circular No.11
Exchange Earners' Foreign Currency (EEFC) Account Scheme – Amendment
August 14, 2002
26
A.P. (DIR Series) Circular No.12
Export of Goods and Services
August 28, 2002
27
A.P. (DIR Series) Circular No.21
Disposal of duplicate copies of Export Declaration Forms
September 16, 2002
28
A.P. (DIR Series) Circular No.28)
Opening, holding and maintaining Foreign Currency Account in India by Unit in Special Economic Zones (SEZs
October 3, 2002
29
A.P. (DIR Series) Circular No.33
Export of Goods and Services
October 23, 2002
30
A.P. (DIR Series) Circular No.34
Exchange Earners' Foreign Currency (EEFC) Account Scheme
October 31, 2002
31
A.P. (DIR Series) Circular No.41
Issue of Corporate Guarantee in lieu of Bid Bond Guarantee
November 8, 2002
32
A.P. (DIR Series) Circu

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

nd Services – Exports to Warehouses Abroad
May 2, 2003
40
A.P. (DIR Series) Circular No.104
Foreign Exchange Management Act, 1999 – Liberalization
May 31, 2003
41
A.P. (DIR Series) Circular No.105
Supply of goods by Special Economic Zones (SEZs) to Units in Domestic Tariff Area (DTA) against payment in foreign exchange
June 16, 2003
42
A.P. (DIR Series) Circular No.8
Foreign Exchange Management Act, 1999
August 16, 2003
43
A.P. (DIR Series) Circular No.12
Export of Goods and Services
August 20, 2003
44
A.P. (DIR Series) Circular No.20
Opening of Foreign Currency Account in India by Project / Service Exporter for Execution of Contract Abroad
September 23, 2003
45
A.P. (DIR Series) Circular No.22
Export of Goods and Services – Payment of Claims by ECGC
September 24, 2003
46
A.P. (DIR Series) Circular No.26
Export of Goods and Services – Export of Books on Consignment Basis
October 3, 2003
47
A.P. (DIR Series) Circular No.30
Export of Goods and Services
Oc

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

o.97
Foreign Exchange Management Act, 1999 –
June 21, 2004
57
A.P. (DIR Series) Circular No.9
Foreign Exchange Management Act, 1999
September 1, 2004
58
A.P. (DIR Series) Circular No.10
Export of Goods and Services to Latin American Countries
September 13, 2004
59
A.P. (DIR Series) Circular No.25
Period of Realization for 100% EOUs Extended to One Year
November 1, 2004
60
A.P. (DIR Series) Circular No.28
Indo-Myanmar Trade – Relaxation from ACU Mechanism
November 19, 2004
61
A,P. (DIR Series) Circular No.21
Export of Goods and Services – Liberalization – GR Approval for export
January 10, 2006
62
A.P. (DIR Series) Circular No.31
Export of Goods and Services – Extension of period of realization
April 21, 2006
63
A.P. (DIR Series) Circular No.32
Remittance of initial and recurring expenses for Branch offices opened abroad
April 21, 2006
64
A.P. (DIR Series) Circular No.15
Exchange Earner's Foreign Currency (EEFC) Account-Liberalization of Procedure
N

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

oceeds-Liberalization
June 3, 2008
74
A.P (DIR Series) Circular No.4
Exchange Earner's Foreign Currency (EEFC) Account
August 4, 2008
75
A.P (DIR Series) Circular No.6
Export of Goods and Services- Direct Dispatch of Shipping Documents Realization and Repatriation of Export Proceeds – Liberalization
August 13, 2008
76
A.P (DIR Series) Circular No.43
Settlement system under ACU Mechanism
December 26, 2008
77
A.P (DIR Series) Circular No.51
Opening of Diamond Dollar Accounts – Liberalization
February 13, 2009
78
A.P. (DIR Series) Circular No.60
On-line downloading of GR Forms
March 26, 2009
79
A.P. (DIR Series) Circular No.70
Export of Goods and Software – Realization and Repatriation of export Proceeds – Liberalization
June 30, 2009
80
A.P (DIR Series) Circular No.13
Opening of Diamond Dollar Accounts (DDAs) – Modification
October 29, 2009
81
A.P. (DIR Series) Circular No.14
Maldives Monetary Authority now ACU Member
October 30, 2009
82
A.P. (DIR S

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

rency (EEFC) Account and Resident Foreign Currency (RFC) account – Joint holder – liberalization
September 15, 2011
90
A.P. (DIR Series) Circular No.35
Processing and Settlement of Export related receipts facilitated by Online Payment Gateways – Enhancement of the value of transaction
October 14, 2011
91
A.P. (DIR Series) Circular No.40
Export of Goods and Software – Realization and Repatriation of export proceeds – Liberalization
November 01, 2011
92
A.P. (DIR Series) Circular No.47
“Set-off” of export receivables against import payables – Liberalization of Procedure
November 17, 2011
93
A.P. (DIR Series) Circular No.48
Mid – Sea Trans-shipment of catch by Deep Sea Fishing Vessel
November 21, 2011
94
A.P. (DIR Series) Circular No.65
Export of Goods and Services – Forwarder's Cargo Receipt
January 12, 2012
95
A.P. (DIR Series) Circular No.73
Opening of Diamond Dollar Accounts (DDAs
January 31, 2012
96
A.P. (DIR Series) Circular No.80
Export of Goods and Serv

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

d Dollar Account and Resident Foreign Currency Account – Review of Guidelines
July 31, 2012
105
A.P. (DIR Series) Circular No.46
Supply of Goods and Services by Special Economic Zones to Units in Domestic Tariff Areas
October 23, 2012
106
A.P. (DIR Series) Circular No.47
Export of Goods and Services – Simplification and Revision of Softex Procedure
October 23, 2012
107
A.P. (DIR Series) Circular No.52
Export of Goods and Software – Realization and Repatriation of export proceeds – Liberalization
November 20, 2012
108
A.P. (DIR Series) Circular No.66
Export of Goods and Services – Simplification and Revision of Softex Procedure at SEZs
January 01, 2013
109
A.P. (DIR Series) Circular No.79
Exchange Earner's Foreign Currency Account, Diamond Dollar Account & Resident Foreign Currency Domestic Account
January 22, 2013
110
A.P. (DIR Series) Circular No.88
“Write-off” of unrealized export bills – Export of Goods and Services – Simplification of procedure
March 12

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ices – Project Exports
September 20, 2013
118
A.P. (DIR Series) Circular No.60
Export Outstanding Statement (XOS) Online Bank wide Submission
October 01, 2013
119
A.P. (DIR Series) Circular No.62
Closing of Old Outstanding Bills : Export – Follow-up – XOS Statements
October 14, 2013
120
A.P. (DIR Series) Circular No.63
Memorandum of Procedure for Channeling Transactions through Asian Clearing Union (ACU)
October 18, 2013
121
A.P. (DIR Series) Circular No.70
Third party payments for export/import transactions
November 08, 2013
122
A.P. (DIR Series) Circular No.100
Third party payments for export/import transactions
February 4, 2014
123
A.P. (DIR Series) Circular No.101
Export of Goods and Services: Export Data Processing and Monitoring System (EDPMS)
February 4, 2014
124
A.P. (DIR Series) Circular No. 109
Export of Goods and Services: Export Data Processing and Monitoring System (EDPMS)
February 28, 2014
125
A.P. (DIR Series) Circular No.132
Export of Goo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Advantages of GST
Query (Issue) Started By: – SANDESH SHINDE Dated:- 29-6-2015 Last Reply Date:- 29-6-2015 Goods and Services Tax – GST
Got 1 Reply
GST
Dear Sir, Please give us some advantges of GST for busines entities that will be different and very important from general advantages.Thanks & regards
Reply By Mahir S:
The Reply:
Advantages of GST :
1. GST is a transparent Tax and also reduce numbers of indirect taxes. With GST implemented a business premises can show the tax applied in the sales invoice. Customer will know exactly how much tax they are paying on the product they bought or services they consumed.
2. GST will not be a cost to registered retailers therefore there will be no hidden taxes and the cost of doing

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GOODS AND SERVICE TAX AS PROPOSED
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 24-6-2015

We are going to have a dual GST model. The Center and the States both, will levy GST on supply of goods and services. On Supply of goods and services in the course of Inter-state only Center will levy and collect taxes (IGST) which will be apportioned between Centre and States based on the recommendation of GST Council. The Center will have power to make place of supply rules in this regard. On supply of goods and services in the course of or International trade or commerce, states will not have any power to levy and collect taxes.
For the first two years under GST (or as GST Council would recommend), 1% additional tax apart from GST will be levied on inter-state sale of goods which will be assigned to the state of origin of supply of goods. The rules regarding the place of origin will be formed by the Parliament. The Central Government would also have power to gr

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

nment may appoint by way of notification, after enactment. For enactment, it has to be passed by two-third majority by both houses of the Parliament of those present and simple majority of total membership of both houses. It has to be then approved by one-half of the state Governments, i.e. atleast 15 states. The said Bill has been passed Lok Sabha on 06.05.2015 but could not be passed by Rajya Sabha. The same has now been referred to the Select Committee of the Rajya Sabha.
For GST network, a special purpose company has been incorporated to implement IT back bone of proposed GST. It will provide IT infrastructure and services to various stakeholders including the Union and State Government. It has been set as an as section 25 (not for profit) company under the Companies Act, 1956, non-government private limited company in which Government will retain strategic control.
The Government seems to Committed to ushering in GST w.e.f. April 2016. GST network planned as back-bone in terms o

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ucts, etc. A very strong infrastructure network would be required to administer GST which would include facility for online payment of tax and e-filing of returns. The GST as a new levy could be a very effective tool and break-through in indirect tax reforms, provided it is made simple and assessee-friendly – not like the present tax system.
Not only GST is expected to change the complexion of indirect taxation in India, it will also bring down the prices of goods and services across the board. The consensus among the states (29) and between the Centre and states hold the key. Once consensus is reached, GST may see the light of the day in a year's time, even during any time of the year, it being a transaction based tax.
While there is no doubt that GST will come, the sooner the better, it should also address the problems in present day taxation i.e., it should seek to achieve rationalization, boost transparency, offer flexibility to Union and states and broaden the much needed tax ba

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Formation of 2 Committees named Steering Committee and another Committee, for facilitating implementation of GST from 1.4.2016. Goods and Services Tax Network (GSTN) is taking steps for preparing the IT infrastructure for roll out of GST.
GST
Dated:- 17-6-2015

Finance Minister has approved the formation of 2 Committees for facilitating implementation of Goods and Services Tax from 1.4.2016.
A Steering Committee been formed under the Co-Chairmanship of Additional Secretary, Department of Revenue and Member Secretary, Empowered Committee of State Finance Ministers. This Committee has Members from Department of Revenue, Central Board of Excise & Customs, Goods and Services Tax Network (GSTN) and representatives of State Governme

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ifferent levels of compliance and broadening of tax base under GST. The Committee would also analyse the Sector-wise and State-wise impact of GST on the economy. The Committee is expected to give its report within two months.
Meanwhile, progress is underway to finalise various aspects of GST design like business processes, payment systems, matters relating to dual control, threshold, exemptions, place of supply rules and also making of model GST, SGST and IGST laws and rules. This task is being undertaken through various Sub-Committees formed by the Empowered Committee which has officers from Government of India as well as State Governments as Members.
Goods and Services Tax Network (GSTN) is taking steps for preparing the IT infrastructu

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST Update 3 – GST threshold
GST
Dated:- 15-6-2015

As per the official sources:
* Traders with a turnover of less than ₹ 10 lakh a year are neither required to pay GST nor to take registration for it.
* Those with annual sales between ₹ 10 lakh and ₹ 50 lakh will need to pay tax at a rate lower than standard GST rate.
* However, the concessional tax rate would not be available for traders making inter-State transactions irrespective of their turnover.
* Th

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST Update 2 – Bill on gst referred to select committee
GST
Dated:- 15-6-2015

A Constitution Amendment Bill providing for roll out of the GST was on 12/05/2015 referred to a select committee after the opposition insisted on its legislative scrutiny of the proposed legislation in Rajya Sabha where the government faces the numbers crunch.
The 21 member panel will give its report by the last day of the first week of the Monsoon session.
FM moved the motion for referring the Bill to

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST update 1 – FM sticks to April deadline for gst
GST
Dated:- 15-6-2015

Finance Minister Arun Jaitely on 14/5/2015 stuck to the April deadline for rolling out GST.
“I would have been much happier if the Rajya Sabha (had) also approved the GST. In that sense I would not have been cutting it too fine with regard to the April 1, 2006 deadline. I would only hope that the principal opposition party had realised the significance of this timeline at this moment,” the Minister told reporters.
The Bill to amend the constitution had to be referred to a select committee of the Rajya Sabha as the Congress blocked its passage, arguing that it needed further consultation. Once the panel's report is received, the Upper House will have to

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST – Some Issues and Possible Solutions
By: – CA Akash Phophalia
Goods and Services Tax – GST
Dated:- 29-5-2015

Goods and service tax
Issues
Solutions
Meaning
GST is a comprehensive VAT on the supply of goods or services or both. All goods and services will be subject to GST unless specifically exempted i.e. operating on negative concept.
Defined as “any tax on supply of goods or services or both except taxes on supply of the alcoholic liquor for human consumption”.
Central & State taxes subsumed
Central Tax – Central Excise Duty, Service Tax, Additional Custom Duty, Central Surcharge,
State Tax – Sales Tax, Entertainment Tax, Octroi Tax, Entry Tax, Purchase Tax, Luxury Tax, Lottery Tax, Betting and Gambling Tax, St

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

commended by GST council.
Procedural Compliance
Likely to increase as it provides that every branch of the manufacturer/ service provider located in different states will have to obtain registration separately.
Common threshold exemption limit for manufacturer/ Service provider
As per the information, there will be common threshold limit for manufacturer/ service provider. This will trouble manufacturer as the limit will be heavily reduced.
Carry forward of CENVAT credit
It has been experienced that in transition phase, the credit is allowed to be carried forward.
Restriction in utilisation of credit
Since, CGST and SGST are to be treated separately, taxes paid against the CGST shall be allowed to be taken as ITC for CGST only and t

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST- Driver for Economic Growth in India
By: – CSSANJAY MALHOTRA
Goods and Services Tax – GST
Dated:- 18-5-2015

Download Power Point Presentation on:
GST- Driver for Economic Growth in India
 
Reply By CS RAHUL AGARWAL as =
WONDERFUL PRESENTATION SIR. HATS OFF!!
REALLY VERY HAPPY TO KNOW ABOUT YOUR PROFILE AND MAKES ME FEEL THAT ATLEST I AM NOT THE ALONE CS IN IDT. THANKS FOR SHARING & YOUR EFFORTS.
Regards,
Dated: 23-5-2015
Reply By kailash singhal as =
dear sir ,
it is a very nice presentation and concerned gst authority should take everyday oath in their office that they will help the assessee / dealers and higher authority will make clear the clouds / doubts immediately and will issue circulars so ordinary person need not to be feeled that they are victims of new laws which had happened in the matter of Central Sales Tax Act, 1956 and thousand of cases was made for items which can be purchased against form c
regards
ca kc singhal
Dated: 24-5-201

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

rms) 5
Slide 4
WHY ???? GOODS AND SERVICE TAX GST introduction is to substitute the Multiple Tax structure with Single Tax structure. Change in Economic Environment (Economic Distortions) with Reduction in Transaction cost /RM/CG cost. Transaction is split into Goods & Services to provide for Taxation for each segment. GST will do away with the split off thus benefit the Industry in terms of complexity, compliance cost, etc.
Slide 5
Benefits of GST – To Whom???? Industry Public / Society Professionals Retailers All Service Providers Reduce Compliance Costs Broadening Tax Base. Reduce Tax Distortions. Increase in Employment. Increase in GDP (approx US$ 15 Billion per year.
Slide 6
Slide 7
Table
Commodity Present Tax Rates Proposed GST Rate Difference
Excise Duty VAT Total CGST SGST Total
CHEMICALS 12% 6.05% 18.05% 10% 10% 20% -1.95%
PHARMACEUTICALS 12% 6.05% 18.05% 10% 10% 20% -1.95%
SMALL PASSENGERS CARS 12% 12.50% 24.50% 10% 10% 20% 4.50%
MID SIZE CARS 24% 12.50

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

make amendment in GST in relation to Inter-State transactions. Section 269A(1) allows Central Govt to levy & collect Tax on Inter State transaction & apportioned to State as defined by Parliament.
Slide 10
GST Council consisting of Union FM/ Union MOR/State FM to be formed by President within 60 days from commencement of Constitution Act GST Council Formation
Slide 11
Rates of GST for various Goods & Services Levy of Special rates For additional levy For natural calamities Types of Taxes to be subsumed Exempted List of Goods & Services Threshold Limit For Exemption GST Council Role of GST Council Any matter which council Feels important for GST
Slide 12
Who are eligible to avail “VCES-2013” ? What is GST (Goods & Service Tax ? What are the Taxes Subsumed under GST ? GST – Single Tax Structure or Multiple Rates ???? What will be happen to Present Tax Exemptions Given by State / Centre? What types of Forms are available under GST?? Persons covered under GS

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

in present regime Cost in GST Regime 1% additional tax Price of Material 100.00 100.00 100.00 Total Price 90.00 90.00 90.00 CGST 10% 9.00 9.00 9.00 Total Price with CGST 99.00 99.00 99.00 IGST / CST 4% 3.96 3.96 3.96 Total Value with Taxes 102.96 102.96 102.96 Additional Tax 1% 1.03 Less : Credit of CGST 9.00 9.00 9.00 Less : Credit of IGST 3.96 0.00 3.96 Net Cost Price 90.00 93.96 91.03
Slide 15
GST vs VAT Concept of “Goods Declared of Special Importance” will have no place in GST i.e. will no longer exists. Petroleum Products will also be subject to GST but from a date to be notified. Till then the same continues to attract duty of Excise. Separate Rules for CGST & SGST. CGST will be retained by Centre and SGST by States. IGST will be levied by Centre & is sum of CGST & SGST.
Slide 16
GST – Removing Tax distortions Input Tax Credit Restricted to Inputs used in the manufacture of Finished Goods. CENVAT breaks in Value chain from Input to Finished Goods. Ca

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ng CGST and SGST. IGST Cross utilisation allowed for IGST against IGST, CGST & SGST.
Slide 20
Impact of GST on Exports & Imports Exports will be Exempted from all Centre & State Levies. Imports are subject to Levy of CGST & SGST. Benefit of SGST will be passed on to States where the goods are consumed as the principle of GST is destination based. Set off available for CSGST or SGST paid on Imports against the tax payable on finished goods
Slide 21
GST REFUNDS WORLDWIDE REFUND worldwide in case of GST regime is processed within 14 days if submitted ONLINE and within 28 days if submitted MANUALLY. REFUND State VAT in India is processed after the filing of quarterly return / Annual Return and Time Range is 4 months – 2 years. In case of Excise / Service Tax time span is 15-90 days from claim submission.
Slide 22
Compensation to States for Loss of State tax Revenues 100% Compensation to States for Loss of Tax Revenues for First 3 Years. 75% of Revenue Loss to be compensa

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

another Concern area? Needs to be specified clearly as to the Tax Incidence. Dual Central GST and State GST should be calculated on the same Tax Base. List of Exempted goods under GST to be specified and items exempted under present tax structure should enjoy Exemption under GST also. Benefits available to New / Expansion Units under GST should be worked out to attract additional investment for Industrial & National Growth. Negative List of Services which are out of levy of GST should be specified. Similar Tax Treatment should exist for both Goods and Services, as differentiation leads to litigations. Common Classification of Goods and Services under both Central GST & State GST Laws . (Contd…)
Slide 26
Voice of Industry in GST Model   GST Exemption in case of supplies to SEZ, EOU and deemed Exports. All forms i.e. C form, Border Forms to be done away with as is applicable under Central Excise Laws. Uniform Tax Collection & Return Filing system for Central & State GST. Si

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

den. Article 366(12A) defines GST as “ Any tax on supply of goods and services or both EXCEPT taxes on supply of alcoholic liquor for human consumption .
Slide 30
GST – Painless Taxation GST will distribute burden of Taxation equally between Manufacturing & Services. GST regime will have Lower Tax Rates and will broaden the Tax Base. Compliance Cost will be reduced. Increase in Exports & lower Prices for Consumers. GST introduction will have common market across nation due to removal of tax distortions.
Slide 31
GOODS AND SERVICE TAX – How it Operates World Wide ???
Slide 32
Industry Expectations from GST SUBSUME all taxes i.e. VAT, Purchase Tax, Mandi Tax, Rural Development fees, Octroi, Entry Tax, Stamp Duty, Electricity Duty, Cesses & Charges, Excise Duty, Customs Duty, Additional Duty of Customs, Service Tax under GST. GST Rate should range around 10 % in totality for both Central GST & State GST, if India follows Dual Model. Uniform rate of SGST acr

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Export of Goods and Services- Declaration of Exports of Goods/Software
101 Dated:- 14-5-2015 Circular
FEMA
Superseded vide A.P. (DIR Series) Circular No. 20 dated 16-01-2026 w.e.f. 01-10-2026

RBI//2014-15/599

A.P. (DIR Series) Circular No. 101

May 14, 2015

To

 All Authorised Dealers in Foreign Exchange

Madam / Sir,

Export of Goods and Services- Declaration of Exports of Goods/Software

Attention of the Authorised Dealers is invited to Regulation 6 of the Notification No.FEMA 23/2000-RB dated May 3, 2000 viz. Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, as amended from time to time, in terms of which every exporter of goods or software has to declare the same in one o

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Tax Uniformity
Query (Issue) Started By: – Deepak Agrawal Dated:- 12-5-2015 Last Reply Date:- 13-5-2015 Goods and Services Tax – GST
Got 2 Replies
GST
1.I wanted to know what is Uniformity in Tax.
2.Do people require to pay State sales tax even after VAT is in force.
3.How Tax evasion can be avoided using VAT?
4.Other than reduction in multiple indirect taxes what are other benefits of GST?
Reply By Deepak Aggarwal:
The Reply: GM,as my understanding, uniformity means there will be no difference in rates across country, only SGST or CGST rate will be in picture.In GST, people need to pay SGSTand CGST on same transaction of supply of goods or services.Tax evasion, as already explained, no diff.in rates, so no tax evasion.Majo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST – THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) BILL, 2014 – AS PASSED BY LOK SABHA
GST
Dated:- 12-5-2015

THE CONSTITUTION (ONE HUNDRED AND TWENTY SECOND AMENDMENT) Bill, 2014
A
BILL
further to amend the Constitution of India.
BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:-
Short title and commencement.
1. (1) This Act may be called the Constitution (One Hundredth Amendment) Act, 2015.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.
Insertion of new article 246A.
2. After article 246 of the Constitution, the following article shall be inserted, namely:-
Special provision with respect to goods and services tax.
&quo

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ot;, the words, figures and letter"goods and services tax provided under article 246A or" shall be inserted.
Amendment of article 250.
5. In article 250 of the Constitution, in clause (1), after the words "with respect to", the words, figures and letter "goods and services tax provided under article 246A or" shall be inserted.
Amendment of article 268.
6. In article 268 of the Constitution, in clause (1), the words "and such duties of excise on medicinal and toilet preparations" shall be omitted.
Omission of article 268A.
7. Article 268A of the Constitution, as inserted by section 2 of the Constitution (Eighty-eighth Amendment) Act, 2003 shall be omitted.
Amendment of article 269.
8. In article 269 of the Constitution, in clause (1), after the words "consignment of goods", the words, figures and letter "except as provided in article 269A" shall be inserted.
Insertion of new article 269A.
9. After article 269 of the C

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Contitution,-
(i) in clause (1), for the words, figures and letter "articles 268, 268A and 269", the words, figures and letter "articles 268, 269 and 269A" shall be substituted;
(ii) after clause (1), the following clause shall be inserted, namely:-
''(1A) The goods and services tax levied and collected by the Government of India, except the tax apportioned with the States under clause (1) of article 269A, shall also be distributed between the Union and the States in the manner provided in clause (2).''.
Amendment of article 271.
11. In article 271 of the Constitution, after the words ''in those articles'', the words, figures and letter ''except the goods and services tax under article 246A,'' shall be inserted.
Insertion of new article 279A.
12. After article 279 of the Constitution, the following article shall be inserted, namely:-
Goods and Services Tax Council.
''279A. (1)The President shall, within sixty days from the date of commencement of the Consti

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

tax;
(b) the goods and services that may be subjected to, or exempted from the goods and services tax;
(c) model Goods and Services Tax Laws, principles of levy, apportionment of Integrated Goods and Services Tax and the principles that govern the place of supply;
(d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
(e) the rates including floor rates with bands of goods and services tax;
(f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
(g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
(h) any other matter relating to the goods and services tax, as the Council may decide.
(5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high s

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

have a weightage of two-thirds of the total votes cast, in that meeting.
(10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of-
(a) any vacancy in, or any defect in, the constitution of the Council; or
(b)any defect in the appointment of a person as a member of the Council; or
(c) any procedural irregularity of the Council not affecting the merits of the case.
(11) The Goods and Services Tax Council may decide about the modalities to resolve disputes arising out of its recommendation.”.
Amendment of article 286.
13. In article 286 of the Constitution,-
(i) in clause (1),-
(A) for the words "the sale or purchase of goods where such sale or purchase takes place", the words "the supply of goods or of services or both, where such supply takes place" shall be substituted;
(B) in sub-clause (b), for the word “goods”, at both the places where it occurs the words “goods or services or both” shall be substituted;
(i

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ll be substituted.
Amendment of Sixth Schedule
16. In the Sixth Schedule to the Constitution, in paragraph 8, in sub-paragraph (3),-
(i) in clause (c), the word "and" occurring at the end shall be omitted;
(ii) in clause (d), the word "and" shall be inserted at the end;
(iii) after clause (d), the following clause shall be inserted, namely:-
"(e) taxes on entertainment and amusements.".
Amendment of Seventh Schedule.
17. In the Seventh Schedule to the Constitution,-
(a) in List I – Union List,-
(i) for entry 84, the following entry shall be substituted, namely:-
"84. Duties of excise on the following goods manufactured or produced in India, namely:-
(a) petroleum crude;
(b) high speed diesel;
(c) motor spirit (commonly known as petrol);
(d) natural gas;
(e) aviation turbine fuel; and
(f) tobacco and tobacco products.";
(ii) entries 92 and 92C shall be omitted;
(b) in List II – State List,-
(i) entry 52 shall be omitted;
(ii)

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

cle 269A, be levied and collected by the Government of India for a period of two years or such other period as the Goods and Services Tax Council may recommend, and such tax shall be assigned to the States in the manner provided in sub-section (2).
(2) The net proceeds of additional tax on supply of goods in any financial year, except the proceeds attributable to the Union territories, shall not form part of the Consolidated Fund of India and be deemed to have been assigned to the States from where the supply originates.
(3) The Government of India may, where it considers necessary in the public interest, exempt such goods from the levy of tax under sub-section (1).
(4) Parliament may, by law, formulate the principles for determining the place of origin from where supply of goods take place in the course of inter-State trade or commerce.
(5) For the purpose of this section, “State” shall have the meaning assigned to it in clause (26B) of article 366 of the Constitution.
Compensati

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ing any difficulty in relation to the transition from the provisions of the Constitution as they stood immediately before the date of assent of the President to this Act to the provisions of the Constitution as amended by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution as amended by this Act or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty:
Provided that no such order shall be made after the expiry of three years from the date of such assent.
(2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament.
STATEMENT OF OBJECTS AND REASONS
The Constitution is proposed to be amended to introduce the goods and services tax for conferring concurrent taxing powers on the Union as well as the States including Union territory with Legislature to make laws for levying goods and ser

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

goods and services;
(b) subsuming of State Value Added Tax/Sales Tax, Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, Taxes on lottery, betting and gambling; and State cesses and surcharges in so far as they relate to supply of goods and services;
(c) dispensing with the concept of 'declared goods of special importance' under the Constitution;
(d) levy of Integrated Goods and Services Tax on inter-State transactions of goods and services;
(e) levy of an additional tax on supply of goods, not exceeding one per cent. In the course of inter-State trade or commerce to be collected by the Government of India for a period of two years, and assigned to the States from where the supply originates;
(f) conferring concurrent power upon Parliament and the State Legislatures to make laws governing goods and services tax;
(g) coverage of all goods and servi

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

that every decision of the Council shall be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting in accordance with the following principles:-
(A) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and
(B) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast in that meeting.
Illustration:
In terms of clause (9) of the proposed article 279A, the "weighted votes of the members present and voting" in favour of a proposal in the Goods and Services Tax Council shall be determined as under:-
WT = WC+WS
Where,
WT = WC+WS × SF
Wherein-
WT = Total weighted votes of all members in favour of a proposal.
WC = Weighted vote of the Union = i.e., 33.33% if the Union is in favour of the proposal and be taken as "0" if, Union is not in favour of a proposal.
WS = Weighted votes of the States in favour of a pr

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

of the Constitution of India, the introduction of the Constitution (One Hundred and Twenty-second Amendment) Bill, 2014 in Lok Sabha and also the consideration of the Bill.
FINANCIAL MEMORANDUM
Clause 12 of the Bill seeks to insert a new article 279A in the Constitution relating to
Constitution of Goods and Services Tax Council. The Council shall function under the Chairmanship of the Union Finance Minister and will have the Union Minister of State incharge of Revenue or Finance as member, along with the Minister in-charge of Finance or Taxation or any other Minister nominated by each State Government.
2. The creation of Goods and Services Tax Council will involve expenditure on office expenses, salaries and allowances of the officers and staff. The objective that the introduction of goods and services tax will make the Indian trade and industry more competitive, domestically as well as internationally and contribute significantly to the growth of the economy, such additional expe

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Lok Sabha passes the GST Constitutional Amendment Bill with 2/3 majority
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 8-5-2015

Dear Professional Colleague,
Lok Sabha passes the GST Constitutional Amendment Bill with 2/3 majority
Amid stiff resistance followed by walk out by the Congress Members, the Lok Sabha today, on May 6, 2015 has passed the much awaited Constitutional (122nd Amendment) Bill, 2014 on Goods and Services Tax (“GST”) with 2/3rd majority.
The Hon'ble Finance Minister, Mr Arun Jaitley, has indeed been working hard for the smooth passage of the GST Constitutional Amendment Bill tabled in the last session of the Parliament in December, 2014 [calling it the “Single biggest tax reform since Independence”], but he was taken aback by the sudden vociferous stand coupled with aggressive and brisk walk-out from the House by the main Opposition Party.
As the Lok Sabha took up discussion on the GST Constitutional Amendment Bill on Tuesday, Finance Mini

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

by its ratification by at least 50% of the States before it becomes law of the land.
In the Rajya Sabha, where the ruling BJP is in a minority, the Congress has said it will insist on sending the Bill to a Parliamentary committee for review. Thus, the GST Constitutional Amendment Bill is likely to face stiff opposition at the Rajya Sabha and may be routed to the Standing Committee.
Following are the salient features of the GST Constitutional Amendment Bill:
* Insertion of new Article 246A conferring simultaneous power to the Union and the State legislatures to legislate on GST.
* Insertion of new Article 279A for the creation of a Goods and Services Tax Council, which will be a joint forum of the Centre and the States. This Council would function under the Chairmanship of the Union Finance Minister.
* To do away with the concept of 'declared goods of special importance' under the Constitutional.
* Central Taxes like Central Excise Duty, Additional Excise Duties, Service Tax,

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

to be levied in the interim period.
* Both Centre and States will simultaneously levy GST across the value chain. The Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State.
* The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of Goods and Services. There will be seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States.
* GST is a destination-based tax. All SGST on the final product will ordinarily accrue to the consuming State.
* GST rates will be uniform across the Country. However, to give some fiscal autonomy to the Centre and States, there will a provision of a narrow tax band over and above the floor rates of CGST and SGST.
* It is proposed to levy a non-vatable Additional Tax of not more than 1% on supply of goods in the course of inter-

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Com (Hons)
A2Z TAXCORP LLP
Tax and Law Practitioners
Delhi:
Flat No. 34B, Ground Floor,
Pocket – 1, Mayur Vihar Phase-1
Delhi – 110091 (India)
Tel: +91 11 22757595/ 42427056
Chandigarh:
H. No. 908, Sector 12-A,
Panchkula, Haryana – 134115
Kolkata:
Ist Floor, 10 R G Kar Road
Shyambazar, Kolkata – 700 004
Email: bimaljain@hotmail.com
Web: www.a2ztaxcorp.com
Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.
Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this docum

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Incentivizing States Under GST Regime
GST
Dated:- 5-5-2015

As tax rates during Goods and Services Tax (GST) regime will be closely aligned to the Revenue Neutral Rates (RNR) of the Centre and the States, the revenues of the Central and State Governments will not be impacted in the long run. To help States in the transition phase, the Constitution (122nd Amendment) Bill, 2014, which was introduced in the Lok Sabha on 19.12.2014 for amending the Constitution to facilitate introductio

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Foreign Exchange Management (Export of Goods & Services) (Amendment) Regulations, 2015
342/RB-2014 Dated:- 23-4-2015 Foreign Exchange Management
FEMA
Foreign Exchange Management Act
FEMA
RESERVE BANK OF INDIA
(Foreign Exchange Department)
(CENTRAL OFFICE)
NOTIFICATION NO. FEMA 342/RB-2014
Mumbai, the 23rd April, 2015
Foreign Exchange Management (Export of Goods & Services) (Amendment) Regulations, 2015
G.S.R. 326(E).-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) and in partial modification of its Notification No.FEMA.23/2000-RB dated May 3, 2000 as amended from time to time, Re

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

ng shall be substituted, namely:-
(i) “(1) In case of exports taking place through Customs manual ports, every exporter of goods or software in physical form or through any other form, either directly or indirectly, to any place outside India, other than Nepal and Bhutan, shall furnish to the specified authority, a declaration in one of the forms set out in the Schedule and supported by such evidence as may be specified, containing true and correct material particulars including the amount representing -”
(ii) In Regulation 6, the word “SDF”, wherever appear, shall be deleted
(iii) In the Schedule, the following shall be deleted,
“Form SDF: To be completed in duplicate and appended to the shipping bill, for exports declared to Custom

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

APPENDIX 04D
LIST OF AGENCIES AUTHORISED TO ISSUE CERTIFICATION FOR GLOBAL SYSTEM OF TRADE PREFERENCES (GSTP), INDIA SRI LANKA FREE TRADE AGREEMENT (ISLFTA), CERTIFICATES OF ORIGIN UNDER ASEAN-INDIA FREE TRADE AGREEMENT INDIA – KOREA COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (CEPA) INDIA-MALAYSIA COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT (IMCECA) AND INDIA-JAPAN COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (IJCEPA)
DGFT
Appendix
APPENDIX 04D of Foreign Trade Procedure (RE – 201

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

GST – FTP Statement – Foreign Trade Policy 2015-20
News and Press Release
Dated:- 3-4-2015

GST – FTP Statement – Foreign Trade Policy 2015-20
The deadline fixed for Goods and Services tax as announced in Budget 2015 is 1st April, 2016. The same was noted in FTP statement issued for Foreign Trade policy 2015-20. The relevant extract is as below:
1) One of Domestic Challenges – Goods and Services Tax (GST)
In the absence of a uniform system of indirect taxation in India, exporte

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Export of Goods and Services – Project Exports
93 Dated:- 1-4-2015 Circular
FEMA
Superseded vide A.P. (DIR Series) Circular No. 20 dated 16-01-2026 w.e.f. 01-10-2026

RBI/2014-15/534

A.P. (DIR Series) Circular No. 93

April 1, 2015

To

All Category – I Authorised Dealer Banks

Madam/ Sir,

Export of Goods and Services – Project Exports

Attention of Authorised Dealers is invited to A. P. (DIR Series) Circular No. 11 dated July 22, 2014 in terms of which AD banks / Exim Bank have been permitted to consider according post-award approvals without any monetary limit and permit subsequent changes in the terms of post award approval within the relevant FEMA guidelines / regulations. Further, in terms of para B. 1

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Shri M.Venkaiah Naidu favours a share of GST revenue for urban local bodies
GST
Dated:- 25-3-2015

Minister of Urban Development Shri M.Venkaiah Naidu has favoured a share of GST(Goods and Services Tax) revenue for the municipalities across the country to ensure predictable and guaranteed flow of funds to enable them take up urban reconstruction initiatives. He expressed concern over the huge urban fiscal gap while addressing a 'National Workshop on Governance, Administrative Reforms and Capacity Building' here today. The Workshop was organized by the Indian Council for Research in International Economic Relations (ICRIER) with the support of the Ministry of Urban Development.
Shri Venkaiah Naidu said that the country's munici

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

e-Rs.6,030
Shri Naidu expressed concern over substantial share of revenues of municipal bodies going towards payment of salaries leaving only a little for mandated functions and development activities.
The Minister emphasized that Public-Private-Partnership model is a crucial vehicle for mobilizing huge order of resources required for building smart cities and bridging the huge infrastructure deficit in other urban areas. Shri Naidu observed that the success of PPP in India is associated with projects that are technically simple, have small gestation periods and allow easy estimation of costs but PPP is needed more in the more complex infrastructure projects and this shall be made a success through good governance and institutional framew

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Cord Wire Classified as “Electronic Goods” Under Tamil Nadu General Sales Tax Rules, Not “Electrical Goods.
Case-Laws
VAT and Sales Tax
Classification of Cord wire – Electronic good or Electr

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =

Centre includes compensation in GST Constitutional Amendment Bill
GST
Dated:- 19-3-2015

The Centre has included in the GST Constitutional Amendment Bill the compensation which will be paid to states for revenue loss on account of rolling out the new indirect tax regime, Parliament was informed.
To a written question on whether the compensation in GST has been incorporated in the Constitutional Amendment Bill, Minister of State for Finance Jayant Sinha said: "Yes".
Elaborating further, he said that as per the provisions of the Bill, Parliament may on the "recommendation of the GST Council, provide for compensation to the states for loss of revenue arising on account of implementation of the GST for such period

= = = = = = = =

Plain text (Extract) only
For full text:-Visit the Source

= = = = = = = =