FEMA – 14/2014-15 – Dated:- 1-7-2014 – RBI/2014-15/5 Master Circular No.14/2014-15 July 01, 2014 To, All Category – I Authorised Dealer Banks Madam / Sir, Master Circular on Exports 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) 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 instructions are issued. The date up to which the Master Circular has been updated is suitably indicated. 4. This Master
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B.8 Advance Payments against Exports B.9 EDF Approval for Trade Fair/Exhibitions abroad B.10 EDF approval for Export of Goods for re-imports B.11 Part Drawings /Undrawn Balances B.12 Consignment Exports B.13 Opening / Hiring of Ware houses abroad B.14 Direct dispatch of documents by the exporter B.15 Invoicing of Software Exports B.16 Short Shipments and Shut out Shipments B.17 Counter-Trade Arrangement B.18 Export of Goods on Lease, Hire, etc. B.19 Export on Elongated Credit Terms B.20 Export of goods by Special Economic Zones (SEZs) B.21 Project Exports and Service Exports B.22
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edits C.8 Consolidation of Air Cargo/ Sea Cargo C.9 Delay in submission of shipping documents by exporters C.10 Check-list for Scrutiny of Forms C.11 Return of Documents to Exporters C.12 Handing Over Negotiable Copy of Bill of Lading to Master of Vessel / Trade Representative C.13 Export Bills Register C.14 Follow-up of Overdue Bills C.15 Reduction in Invoice Value on Account of Prepayment of Usance Bills C.16 Reduction in Invoice Value in other cases C.17 Export Claims C.18 Change of buyer/consignee C.19 Extension of Time C.20 Write-off of export bills C.21 Write off in cases of Payment of Claims by
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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 Government of India and the Directions issued by Reserve Bank from time to time. In exercise of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of Section 7 and sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank has notified the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 relating to export of goods and services from India, hereinafter referred to as the Export Regulations . These Regulations have been notified vide Notification No.
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March 31, 2014), All export contracts and invoices shall be denominated either in freely convertible currency or in Indian Rupees but export proceeds shall be realised in freely convertible currency. However, export proceeds against specific exports may also be realised 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 the ACU or Nepal or Bhutan . Indian Rupee is not a freely convertible currency, as yet. (vi) Any reference to the Reserve Bank should first be made to the Regional Office of the Foreign Exchange Department situated in the jurisdiction where the applicant person resides, or the firm / company functions, unless otherwise indicated. If, for any particular reason, they desire to deal with a different office of the Foreign Exchange Department, they may approach the Regional Office of its jurisdiction for necessary approval. (vii) Financial Year (April to March) is reckoned as the
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her. (iii) Expo 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.14/2000-RB dated May 3, 2000 in the following manner: a. Bank draft, pay order, banker's or personal cheques. b. Foreign currency notes/foreign currency travellers cheques from the buyer during his visit to India. c. Payment out of funds held in the FCNR/NRE account maintained by the buyer d. International Credit Cards of the buyer. Note: When payment for goods sold to overseas buyers during their visits is received in this manner, EDF (duplicate) should be released by the AD Category – I banks only on receipt of funds in their Nostro account or
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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 standing arrangements with Online Payment Gateway Service Providers (OPGSPs) subject to the following conditions – a. The AD Category-I banks offering this facility shall carry out the due diligence of the OPGSP. b. This facility shall only be available for export of goods and services of value not exceeding USD 10,000 (US Dollar ten thousand). c. AD Category-I banks providing such facilities shall open a NOSTRO collection account for receipt of the export related payments facilitated through such arrangements. Where the exporters availing of this facility are
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f 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 under this arrangement to the Reserve Bank, as and when advised to do so. i. Each NOSTRO collection account should be subject to reconciliation and audit on a quarterly basis. j. Resolution of all payment related complaints of exporters in India shall remain the responsibility of the OPGSP concerned. k. OPGSPs who are already providing such services as per the specific holding-on approvals issued by the Reserve Bank shall open a liaison office in India within three months from November 16, 2010, after duly finalizing their arrangement with the AD-Category-I banks a
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heir 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 / receipts from Iran, it has been decided that with effect from December 27, 2010, all eligible current account transactions including trade transactions with Iran should be settled in any permitted currency outside the ACU mechanism, until further notice. (v) Third party payments for export / import transactions Taking into account the evolving international trade practices, it has been decided to permit third party payments for export / import transactions can be made subject to conditions as under: a) Firm irrevocable order backed by a tripartite agreement should be in place. H
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overseas buyer from where the proceeds have to be realised, 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 made to the (named) third party, the Bill of Entry should mention the name of the shipper as also the narration that the related payment has to be made to the (named) third party and the importer should comply with the related extant instructions relating to imports including those on advance payment being made for import of goods. B.3 Realisation and Repatriation of proceeds of export of goods / software / services It is obligatory on the part of the exporter to realise and repatriate the full value of goods / software / services to India within a stipulated period from the date of
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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 foreign currency account with banks in India and outside India subject to certain terms and conditions. Applications for opening the account with a branch of an AD Category – I bank in India may be submitted through the branch at which the account is to be maintained. If the account is to be maintained abroad the application should be made by the exporter giving details of the bank with which the account will be maintained. (iii) An Indian entity can also open, hold and maintain a foreign currency account with a bank outside India, in the name of its overseas office/branch, by making remit
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stones, with a track record of at least 2 years in import / export of diamonds / coloured gemstones / diamond and coloured 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) They may be allowed to open not more than five Diamond Dollar Accounts with their banks. (iii) Eligible firms and companies may apply for permission to their AD Category – I banks in the format prescribed. (iv) AD Category-I banks are required to submit quarterly reports to the Foreign Exchange Department, Reserve Bank of India, Central Office, Trade Division, Mumbai, giving details of name and address of the firm / company in whose name the Diamond Dollar Account is opened, along with the date of opening / closing the Diamond Dollar Account, by the 10th of the month following the quarter
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nts on former or survivor basis. However, such resident Indian close relative, being made eligible to become joint account holder, shall not be eligible to operate the account during the life time of the resident account holder (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 exchange earnings to their EEFC Accounts subject to the condition that a) The sum total of the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the succeeding calendar month after adjusting for utilization of the balances for approved purposes or forward commitments. Further, in case of requirements, EEFC account holders are permitted to access the forex mar
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plying goods to a unit in Special Economic Zone out of its foreign currency account. (vi) 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. (vii) 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 Offices (i) At the time of setting up of the office, AD Category – I banks may allow remittances towards initial expenses up to fifteen per cent of the average annual sales/income or turnover during the last two financial years or up to twenty-five per cent of the net worth, whichever is higher.
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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 showing receipts under off-site and on-site contracts undertaken by the overseas office, expenses and repatriation thereon may be sent to the AD Category – I banks. B.8 Advance Payments against Exports (1) In terms of Regulation 16 of Notification No. FEMA 23/2000-RB dated May 3, 2000, where an exporter rec
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nce 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, who 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 adjusted through future exports. (v) The rate of interest payable, if any, should not exceed LlBOR plus 200 basis points. (vi) The documents should be routed through one Authorized Dealer bank only. (vii) Authorised Dealer bank should ensure compliance with AML / KYC guidelines (viii) Such export advances shall not be pe
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ould not be discounted by the overseas branch / subsidiary of bank in India. (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. Note: AD Category – I banks may also be guided by the Master Circular on Guarantees and Co-acceptances issued by DBOD. (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 goods extending beyond the period of one year from the date of receipt of advance payment subject to the following conditions:- (i) The KYC and due diligence exercise has been done by the AD Category – I bank for the overseas buyer; (ii) Compliance with the Anti-Money Laundering standards has been ensured; (iii) The AD Category-I bank
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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 referred to Directorate of Enforcement (DoE) for further investigation. A quarterly statement indicating details of such cases (as per Annex -5) may be forwarded to the concerned Regional Offices of RBI within 21 days from the end of each quarter. B.9 EDF Approval for Trade Fair/Exhibitions abroad 1. Firms / Companies and other organizations partici
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xported, 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 destroyed during testing, AD Category – I banks may obtain a certificate issued by the testing agency that the goods have been destroyed during testing, in lieu of Bill of Entry for import. B.11 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 a
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ed from the date of shipment. B.12 Consignment Exports (i) When goods have been exported on consignment basis, the AD Category-I bank, while forwarding shipping documents to his overseas branch/ correspondent, should instruct the latter to deliver them only against trust receipt/undertaking to deliver sale proceeds by a specified date within the period prescribed for realization of proceeds of the export. This procedure should be followed even if, according to the practice in certain trades, a bill for part of the estimated value is drawn in advance against the exports. (ii) The agents/consignees may deduct from sale proceeds of the goods expenses normally incurred towards receipt, storage and sale of the goods, such as landing charges, warehouse rent, handling charges, etc. and remit the net proceeds to the exporter. (iii) The account sales received from the Agent/Consignee should be verified by the AD Category – I banks. Deductions in Account Sales should be supported by bills/receip
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designated branch of the AD Banks. (v) The above permission may be granted to the exporters initially for a period of one year and renewal may be considered subject to the applicant satisfying the requirement above. (vi) AD Category – I banks granting such permission/approvals should maintain a proper record of the approvals granted. B.14 Direct dispatch of documents by the exporter 1. AD Category – I banks should normally dispatch shipping documents to their overseas branches/correspondents expeditiously. However, they may dispatch shipping documents direct to the consignees or their 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 als
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t, subject to the following conditions: (i) The export proceeds have been realised in full. (ii) The exporter is a regular customer of AD Category – I bank for a period of at least six months. (iii) The exporter s account with the AD Category – I bank is fully compliant with the Reserve Bank s extant KYC / AML guidelines. (iv) The AD Category – I bank is satisfied about the bona-fides of the transaction. (v) In case of doubt, the AD Category – I bank may consider filing Suspicious Transaction Report (STR) with FIU_IND (Financial Intelligence Unit in India). B.15 Invoicing 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 export
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the invoice value, if necessary. B.16 Short Shipments and Shut out Shipments (i) When part of a shipment covered by an EDF already filed with Customs is short-shipped, the exporter must give notice of short-shipment to the Customs in the form and manner prescribed. In case of delay in obtaining certified short-shipment notice from the Customs, the exporter should give an undertaking to the AD banks to the effect that he has filed the short-shipment notice with the Customs and that he will furnish it as soon as it is obtained. (ii) Where a shipment has been entirely shut out and there is delay in making arrangements to re-ship, the exporter will give notice in duplicate to the Customs in the form and manner prescribed, attaching thereto the unused duplicate copy of 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
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and the banks may pay interest at the applicable rate. (iii) No fund based/or non-fund based facilities would be permitted against the balances in the Escrow Account. (iv) Application for permission for opening an Escrow Account may be made by the overseas exporter / organisation through his / their AD Category – I bank to the Regional Office concerned of the Reserve Bank. B.18 Export of Goods on Lease, Hire, etc. Prior approval of the Reserve Bank is required for export of machinery, equipment, etc., on lease, hire basis under agreement with the overseas 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.19 Export on Elongated Credit Terms Exporters intending to export goods on elongated credit terms may submit their proposals giving full particulars through their ban
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Z unit by the Development Commissioner(DC) of the SEZ, the provisions pertaining to the goods / services supplied by the SEZ unit to the DTA unit and for payment in foreign exchange for the same should be mentioned. B.21 Project Exports and Service Exports (i) Export of engineering goods on deferred payment terms and execution of turnkey projects and civil construction contracts abroad are collectively referred to as Project Exports . Indian exporters offering deferred payment terms to overseas buyers and those participating in global tenders for undertaking turnkey/civil construction contracts abroad are required to obtain 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 w
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ry / equipment for performing any other contract secured by them in any country subject to the satisfaction of the sponsoring AD Category – I bank(s) / Exim Bank and also subject to the reporting requirement and would be monitored by the AD Category – I bank(s) / Exim Bank. (b) Inter-Project Transfer of Funds AD Category – I bank(s) / Exim Bank may permit exporters to open, maintain and operate one or more foreign currency account/s in a currency(ies) of their choice with inter-project transferability of funds in any currency or country. 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 a
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pal 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); and (ii) Any person resident outside India, not being a citizen of Pakistan and Bangladesh and also not a traveller coming from and going to Pakistan and Bangladesh, and visiting India may take outside India 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) while exiting only through an airport. B.23 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
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f designated railway stations can be obtained from the Railways. For goods loaded at stations other than the designated stations, exporters must arrange to present EDF to the Customs Officer at the Border Land Customs Station where Customs formalities are completed. B.25 Border Trade with Myanmar This is governed by the Agreement on Border Trade between India and Myanmar. People living along both sides of the India-Myanmar border are permitted to exchange certain specified locally produced commodities (Annex 5) under the barter trade arrangement. They can also trade in freely convertible currency. AD banks should follow the guidelines stipulated in A.P.(DIR Series) Circular No.17 dated October 16, 2000. B.26 Repayment of State Credits Export of goods and services against repayment of state credits granted by erstwhile USSR will continue to be governed by the extant directions issued by the Reserve Bank, as amended from time to time. B.27 Counter -Trade Arrangements with Romania The Res
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disposed of as under: C.3.1. EDF Form (Erstwhile GR and PP Form) (i) The EDF will replace the existing GR form used for declaration of export of Goods at Non-EDI ports. The procedure relating to the exports of goods through EDI ports will remain the same. However, the requirement of declaring the exports of goods / software in the SDF in case of exports taking place through the EDI ports has been dispensed with as the mandatory statutory requirements contained in the erstwhile SDF have been subsumed in the Shipping Bill format. (ii) EDF forms should be completed by the exporter in duplicate and both the copies submitted to the Customs at the port of shipment along with the shipping bill. (iii) Customs will give their running serial number on both the copies after admitting the corresponding shipping bill. The Customs serial number will have ten numerals denoting the code number of the port of shipment, the calendar year and a six- digit running serial number. (iv) Customs will certify
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ENC under cover of appropriate R-Supplementary Return. (x) The duplicate copy of the form together with a copy of invoice etc. shall be retained by the AD Category – I banks and may not be submitted to the Reserve Bank. (xi) In the case of exports made under deferred credit arrangement or to joint ventures abroad against equity participation or under rupee credit agreement, the number and date of the Reserve Bank approval and/or number and date of the relative RBI circular should be recorded at the appropriate place on the EDF form. (xii) Where Duplicate copy of EDF form is misplaced or lost, AD Category – I banks may accept another copy of duplicate EDF form duly certified by Customs. Note: EDF Form numbers are now made available on-line on the Reserve Bank s website www.rbi.org.in. (Link :- Notification → FEMA → Forms → Foreign Exchange Management Act Forms → For Printing of EDF/Softex From No) (Erstwhile PP Form) (xiii) Postal Authorities will allow export of goo
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orms covering parcels addressed direct to the consignees, provided: (e) An irrevocable letter of credit for the full value of the export has been opened in favour of the exporter and has been advised through the AD Category – I banks concerned. Or The full value of the shipment has been received in advance by the exporter through an AD Category – I banks. Or The AD Category – I bank is satisfied, on the basis of the standing and track record of the exporter and the arrangements made for realization of the export proceeds, that he could do so. (f) In such cases, particulars of advance payment/letter of credit / AD Category – I bank s certification of standing, etc., of the exporter should be furnished on the form under proper authentication. (g) Any alteration in the name and address of consignee on the EDF form should also be authenticated by the AD Category – I banks under his stamp and signature. C.3.2. Mid-Sea Trans-shipment of catch by Deep Sea Fishing Vessels (i) Since deep sea fi
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(c) Bill of Lading / Receipt of Trans-shipment issued by the carrier vessel should include the EDF Number. (d) The EDF should be duly supported by a certificate from an international cargo surveyor. (e) The prescribed period of realization and repatriation should be reckoned with reference to the date of transfer of catch as certified by the Master of the Vessel or the date of the invoice, whichever is earlier. (f) The EDF, both original and duplicate, should indicate the number and date of Letter of Permit issued by Ministry of Agriculture for operation of the vessel. (g) The exporter will complete the EDF in duplicate and both the copies may be submitted to the Customs at the registered port of the vessel or any other port as approved by Ministry of Agriculture. EDF (Original) will be retained by the Customs for capturing of data in Customs Electronic Data Interchange. (h) Customs will give their running serial number on both the copies of EDF and will return the duplicate copy to th
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for EDF. The duplicate copy of the form together with a copy of invoice etc. shall be retained by the AD Category – I banks and may not be submitted to the Reserve Bank. (v) In cases where ECGC and private insurance companies regulated by Insurance Regulatory and Development Authority (IRDA) initially settles the claims of exporters in respect of exports insured with them and subsequently receives the export proceeds from the buyer/buyer s country through the efforts made by them, the share of exporters in the amount so received is disbursed through the bank which had handled the shipping documents. In such cases, ECGC and private insurance companies regulated by IRDA will issue a certificate to the bank, which had handled the relevant shipping documents after full proceeds have been received. The certificate will indicate the number of declaration form, name of the exporter, name of the AD Category – I banks, date of negotiation, bill number, invoice value and the amount actually rec
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llection / settlement, the third copy to the exporter and the last copy will be retained by STPI for its own record. Under the revised procedure, the exporters, however, will have to provide information about all the invoices including the ones lesser than US$25000, in the bulk statement in excel format. [The revised procedure for submission of the SOFTEX form and other relevant documents are detailed in the Annex 4] The procedure has been effective at all STPIs and SEZs / EPZs / 100%EOU / DTA since 1.1.2013. (ii) A common SOFTEX Form (Annex 3) has been devised to declare single as well as bulk software exports. (iii) Reserve Bank of India has extended the facility for online generation of the EDF Form Number and the SOFTEX Form Number (Single as well as Bulk for use in off-site software exports). The facility of manual allotment of single as well bulk SOFTEX form number by Regional Offices of RBI has been dispensed with accordingly. C.6 Random verification (iv) In all the above proced
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if the relative letter of credit specifically provides for negotiation of these documents in lieu of Airway Bills issued by the airline company. (ii) Consolidation of Sea Cargo (a) AD Category – I banks may accept Forwarder s Cargo Receipts (FCR) issued by IATA approved agents, in lieu of bills of lading, for negotiation / collection of shipping documents, in respect of export transactions backed by letters of credit, if the relative letter of credit specifically provides for negotiation of this document, in lieu of bill of lading even if the relative sale contract with the overseas buyer does not provide for acceptance of FCR as a shipping document, in lieu of bill of lading (b) Further, Authorized Dealers may, at their discretion, also accept FCR issued by Shipping companies of repute/IATA approved agents (in lieu of bill of lading), for purchase/discount/collection of shipping documents even in cases, where export transactions are not backed by letters of credit, provided their '
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is the same as that of the original which is usually recorded on the Bill of Lading/Shipping Bill and the duplicate has been duly verified and authenticated by appropriate Customs authorities. (ii) In the case of c.i.f., c.& f. etc. contracts where the freight is sought to be paid at destination, that the deduction made is only to the extent of freight declared on EDF or the actual amount of freight indicated on the Bill of Lading/Airway Bill, whichever is less. (iii) The documents submitted do not reveal any material inter se discrepancies in regard to description of goods exported; export value or country of destination. (iv) Where the marine insurance is taken by the exporters on buyer s account to verify, that the actual amount paid is received from the buyer through invoice and the bill. (v) To accept the Bill of Lading/Airway Bill issued on freight prepaid basis where the sale contract is on f.o.b., f.a.s. etc. basis provided the amount of freight has been included in the in
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ole of any freight increase taking place after the contract was concluded is agreed to be borne by buyers or where as a result of subsequent devaluation of the currency of the contract, buyers have agreed to an increase in price. (ix) In certain lines of export trade, the final settlement of price may be dependent on the results of quality analysis of samples drawn at the time of shipment; but the results of such analysis will become available only after the shipment has been made. Sometimes, contracts may provide for payment of penalty for late shipment of goods in conformity with trade practice concerning the commodity. In these cases, while exporters declare to the Customs the full export value based on the contract price, invoices submitted along with shipping documents for negotiation/ collection may reflect a different value arrived at after taking into account the results of analysis of samples or late shipment penalty, as the case may be. (x) To accept for negotiation or collec
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banks should maintain Export Bills Register, in physical or electronic form. Details of EDF/SOFTEX form number, due date of payment, the fortnightly period of R Supplementary Return with which the ENC statement covering the transaction was sent to the Reserve Bank, should be available. (ii) AD Category – I banks should ensure that all types of export transactions are entered in the Export Bills Register and are given bill numbers on a financial year basis (i.e. April to March). (iii) The bill numbers should be recorded in ENC statement and other relevant returns submitted to the Reserve Bank. C.14 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 st
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n Account of Prepayment of Usance Bills Occasionally, exporters may approach AD Category – I banks for reduction in invoice value on account of cash discount to overseas buyers for prepayment of the usance bills. AD Category – I banks may allow cash discount to the extent of amount of proportionate interest on the unexpired period of usance, calculated at the rate of interest stipulated in the export contract or at the prime rate/LIBOR of the currency of invoice where rate of interest is not stipulated in the contract. C.16 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
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the exporter is not on the caution list of the Reserve Bank. (ii) In all such cases of remittances, the exporter should be advised to surrender proportionate export incentives, if any, received by him. C.18 Change of buyer/consignee Prior approval of the Reserve Bank is not required if, after goods have been shipped, they are to be transferred to a buyer other than the original buyer in the event of default by the latter, provided the reduction in value, if any, involved does not exceed 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.19 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 12 months from the date of export, up to a period of six months, at a time, irrespective of the invoice value of the export subject to the following conditions: (a) The export transactions covered by the invoic
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be granted irrespective of the amount involved / outstanding. (ii) In cases where an exporter has not been able to realise proceeds of a shipment made within the extended period for reasons beyond his control, but expects to be able to realise proceeds if further extension of the period is allowed to him, as well as in respect of cases not covered under Para (i) above necessary application (in duplicate) should be made to the Regional Office concerned of the Reserve Bank in form ETX through his AD Category – I bank with appropriate documentary evidence. C.20 Write off of export bills (i) An exporter who has not been able to realise 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 unrealised portion subject to the fulfilment of stipulations regarding surrender of incentives prior to write-
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ng that there is no possibility of recovery of export proceeds has been produced. (b) The overseas buyer is not traceable over a reasonably long period of time. (c) The goods exported have been auctioned or destroyed by the Port / Customs / Health authorities in the importing country. (d) The unrealized amount represents the balance due in a case settled through the intervention of the Indian Embassy, 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 c
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indicate that the export benefits, if any, availed of by the exporter have been surrendered. (vi) However, the following would not qualify for the write off facility : (a) Exports made to countries with externalization problem i.e. where the overseas buyer has deposited the value of export in local currency but the amount has not been allowed to be repatriated by the central banking authorities of the country. (b) 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) The respective AD banks may forward a statement in form EBW, in the enclosed format, to the Regional Office of Reserve Bank under whose jurisdiction they are functioning, indicating details of write-offs allowed under this circular. viii) AD banks are advised to put in place a system under which their internal inspectors or auditors (includi
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tled in rupees by ECGC and private insurance companies regulated by IRDA should not be construed as export realization in foreign exchange. C.22 Write-off – Relaxation As announced in the Foreign Trade Policy (FTP), 2009-14, with effect from August 27, 2009, realisation of export proceeds shall not be insisted upon under any of the Export Promotion Schemes under the said FTP, subject to the following conditions: (a) The write off on the basis of merits is allowed by the Reserve Bank or by AD Category – I bank on behalf of the Reserve Bank, as per extant guidelines; (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. (d) The AD Category – I banks are advised not to insist on the surrender of proportionate export incentives, other than under the Duty Drawback Scheme, if availed of, by the exporter under any of the Export Promotio
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mounts of claims on shipments lost in transit which are partially settled directly by shipping companies/airlines under carrier s liability abroad are also repatriated to India by exporters. C.24 Netting off of export receivables against import payments – Units in Special Economic Zones (SEZs) AD Category – I banks may allow requests received from exporters for netting off of export receivables against import payments for units located in Special Economic Zones subject to the following: (i) The netting off of export receivables against import payments is in respect of the same Indian entity and the overseas buyer / supplier (bilateral netting) and the netting may be done as on the date of balance sheet of the unit in SEZ. (ii) The details of export of goods are documented in EDF (O) forms / DTR as the case may be while details of import of goods / services are recorded through A1 / A2 form as the case may be. The relative EDF will be treated as complete by the designated AD Category –
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ay be reported separately in R Returns. (v) The relative EDF will be released by the AD bank only after the entire export proceeds are adjusted / received. (vi) The set-off of export receivables against import payments should be in respect of the same overseas buyer and supplier and that consent for set-off has been obtained from him. (vii) The export / import transactions with ACU countries should be kept outside the arrangement. (viii) All the relevant documents are submitted to the concerned AD bank who should comply with all the regulatory requirements relating to the transactions. C.26 Agency Commission on Exports (i) AD Category – I banks may allow payment of commission, either by remittance or by deduction from invoice value, on application submitted by the exporter. The remittance on agency commission may be allowed subject to conditions as under: (a) Amount of commission has been declared on EDF/SOFTEX form and accepted by the Customs authorities or Ministry of Information Tec
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Indian Partners towards equity participation in an overseas joint venture / wholly owned subsidiary as also exports under Rupee Credit Route except commission up to 10 per cent of invoice value of exports of tea & tobacco. C.27 Refund of Export Proceeds AD Category – I banks, through whom the export proceeds were originally realised may consider requests for refund of export proceeds of goods exported from India and being re-imported into India on account of poor quality. While permitting such transactions, AD Category – I banks are required to : (i) Exercise due diligence regarding the track record of the exporter (ii) Verify the bona-fides of the transactions (iii) Obtain from the exporter a certificate issued by DGFT / Custom authorities that no incentives have been availed by the exporter against the relevant export or the proportionate incentives availed, if any, for the relevant export have been surrendered (iv) Obtain an undertaking from the exporter that the goods will be
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Foreign Exchange Management (Current Account Transactions) Rules, 2000 Annex-2 – Form EFC Annex 3- Common SOFTEX Form Annex-4- Revised SOFTEX Procedure Annex 5- Quarterly Statement showing details of overdue Export Advances Appendix List of Circulars which have been consolidated in the Master Circular on Export of Goods and Services Sr. No Circular No. Subject Date 1 A.D. (MA Series) Circular No.15 May 31, 1993 2 A.P. (DIR Series) Circular No.12 September 9, 2000 3 A.P. (DIR Series) Circular No.4 Counter-Trade Arrangements with TRADE Romania August 27, 2001 4 A.P. (DIR Series) Circular No.5 Export of Goods and Services August 27, 2001 5 A.P. (DIR Series) Circular No.6 Export of Goods and Services
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02 12 A.P. (DIR Series) Circular No.38 Foreign Exchange Management Act, 1999 – Export of goods and services – Reduction in value April 12, 2002 13 A.P. (DIR Series) Circular No.53 Use of Credit Cards AP (DIR Series) Circular No.53 (June 27, 2002) June 27, 2002 14 A.P. (DIR Series) Circular No.54 Maintenance of foreign currency account abroad by a company/firm/a body corporate registered or incorporated in India June 29, 2002 15 A.P. (DIR Series) Circular No.2 Export of Goods and Services July 4, 2002 16 A.P. (DIR Series) Circular No.10) Export of Goods and Services – Facilities to units in Special Economic Zones (SEZs August 14, 2002 17 A.P. (DIR Series) Circular No.11 Exchange Earners Foreign Currency
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November 8, 2002 24 A.P. (DIR Series) Circular No.61 "Write-off" of unrealised export bills-Surrender of export incentives December 14, 2002 25 A.P. (DIR Series) Circular No.62 Exchange Earners' Foreign Currency (EEFC) Account Scheme December 17, 2002 26 A.P. (DIR Series) Circular No.78 Exchange Earners Foreign Currency (EEFC) Account Scheme February 14, 2003 27 A.P. (DIR Series) Circular No.91 Export of Goods and Services – Facilities to Units in Special Economic Zones (SEZs) April 1, 2003 28 A.P. (DIR Series) Circular No.94 Export of Goods and Services – Export of goods on promotional grounds April 26, 2003 29 A.P. (DIR Series) Circular No.100 Export of Goods and Services – Export
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and Services – Payment of Claims by ECGC September 24, 2003 36 A.P. (DIR Series) Circular No.26 Export of Goods and Services – Export of Books on Consignment Basis October 3, 2003 37 A.P. (DIR Series) Circular No.30 Export of Goods and Services October 21, 2003 38 A.P. (DIR Series) Circular No.32 Export of Goods and Services – Project Exports October 28, 2003 39 A.P. (DIR Series) Circular No.40 Export of Goods and Services – Liberalisation December 5, 2003 40 A.P. (DIR Series) Circular No.61 Exemption from Declaration of Export of Goods and Software – January 31, 2004 41 A.P. (DIR Series) Circular No.68 Export of Goods and Services – Liberalisation February 11, 2004
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es) Circular No.25 Period of Realisation for 100% EOUs Extended to One Year November 1, 2004 49 A,P. (DIR Series) Circular No.21 Export of Goods and Services – Liberalisation – GR Approval for export January 10, 2006 50 A.P. (DIR Series) Circular No.31 Export of Goods and Services – Extension of period of realization April 21, 2006 51 A.P. (DIR Series) Circular No.32 Remittance of initial and recurring expenses for Branch offices opened abroad April 21, 2006 52 A.P. (DIR Series) Circular No.15 Exchange Earner's Foreign Currency (EEFC) Account-Liberalisation of Procedure November 30, 2006 53 A.P. (DIR Series) Circular No.18 Establishment of Offices Abroad December 4, 2006 54 A.P. (DIR Ser
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A.P (DIR Series) Circular No.4 Exchange Earner's Foreign Currency (EEFC) Account August 4, 2008 61 A.P (DIR Series) Circular No.6 Export of Goods and Services- Direct Dispatch of Shipping Documents Realisation and Repatriation of Export Proceeds – Liberalisation August 13, 2008 62 A.P (DIR Series) Circular No.43 Settlement system under ACU Mechanism December 26, 2008 63 A.P (DIR Series) Circular No.51 Opening of Diamond Dollar Accounts – Liberalisation February 13, 2009 64 A.P. (DIR Series) Circular No.60 On-line downloading of GR Forms March 26, 2009 65 A.P. (DIR Series) Circular No.70 Export of Goods and Software – Realisation and Repatriation of export Proceeds – Liberalisation June 30, 2009
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A.P. (DIR Series) Circular No.47 Export of Goods and Software – Realisation and Repatriation of export proceeds – Liberalisation March 31, 2011 73 A.P. (DIR Series) Circular No.15 Exchange Earners Foreign Currency (EEFC) Account and Resident Foreign Currency (RFC) account – Joint holder – liberalisation September 15, 2011 74 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 75 A.P. (DIR Series) Circular No.40 Export of Goods and Software – Realisation and Repatriation of export proceeds – Liberalisation November 01, 2011 76 A.P. (DIR Series) Circular No.47 Set-off of export receivables against import payables – Liberalization of Procedure
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ng of Diamond Dollar Accounts (DDAs) – Change in periodicity of the reporting March 13, 2012 83 A.P. (DIR Series) Circular No.124 Exchange Earner's Foreign Currency (EEFC) Account May 10, 2012 84 A.P. (DIR Series) Circular No.128 Exchange Earner s Foreign Currency Account May 16, 2012 85 A.P. (DIR Series) Circular No.08 Exchange Earner's Foreign Currency Account July 18, 2012 86 A.P. (DIR Series) Circular No.12 EEFC Account, Diamond Dollar Account and Resident Foreign Currency Account – Review of Guidelines July 31, 2012 87 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 88 A.P. (DIR Series) Circular No.4
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Export of Goods and Software – Realisation and Repatriation of export proceeds – Liberalisation May 20, 2013 94 A.P. (DIR Series) Circular No.108 Export of Goods and Services – Realization and Repatriation period for units in Special Economic Zones (SEZ) June 13, 2013 95 A.P. (DIR Series) Circular No.109 Processing and Settlement of Export related receipts facilitated by Online Payment Gateways – Enhancement of the value of transaction June 13, 2013 96 A.P. (DIR Series) Circular No.14 Export of Goods and Software – Realisation and Repatriation of export proceeds – Liberalisation July 22, 2013 97 A.P. (DIR Series) Circular No.43 Export of Goods and Services – Simplification and Revision of Declaration Form for Exports of Goods/Software September 13, 2013
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104 A.P.(DIR Series) Circular No.146 Export & Import of Currencies: Enhanced facilities for residents and non-residents June 19, 2014 105 A.P. (DIR Series) Circular No. 11 Export of Goods and Services – Project Exports July 22, 2014 106 A.P.(DIR Series) Circular No. 37 Export of Goods / Software / Services – Period of Realisation and Repatriation of Export Proceeds – For exporters including Units in SEZs, Status Holder Exporters, EOUs, Units in EHTPs, STPs and BTPs November 20, 2014 107 A.P.(DIR Series) Circular No. 74 Delay in Utilization of Advance Received for Exports February 9, 2015 108 A.P.(DIR Series) Circular No. 101 Export of Goods and Services – Declaration of Exports of Goods / Software May 14 , 2015 – Circular – Trade Notice – Pu
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