Liberalisation of Export and Import procedures – RBI instructions
In order to facilitate external trade and provide greater flexibility to the Authorised Dealer Category - I banks, the following relaxations have been made in the areas of exports and imports and foreign currency accounts :
A. EXPORTS
I. Extension of Time for Realisation of Export Proceeds
AD Category I banks may now extend the period of realisation of export proceeds, beyond six 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 invoices are not under investigation by Enforcement Directorate / Central Bureau of Investigation or other investigating agencies,
(b) The AD Category - I bank is satisfied that the exporter has not been able to realise export proceeds for reasons beyond his control,
(c) The exporter submits a declaration that the export proceeds will be realised during the extended period,
(d) While considering extension beyond one year from the date of export, the total outstanding of the exporter does not exceed USD one million or 10 per cent of the average export realisations during the preceding three financial years, whichever is higher,
(e) The date up to which extension has been granted is indicated in the `Remarks’ column of the XOS statement as hitherto,
In cases where the exporter has filed suits abroad against the buyer, extension may be granted irrespective of the amount involved / outstanding.
II. Write-off of Unrealised Export bills
It has been decided that Status Holder exporters may write-off outstanding export dues to the extent of
(i) 5 per cent of their average annual realisation during the preceding three financial years or
(ii) 10 per cent of the export proceeds due during the financial year, whichever is higher.
III. Repatriation of Funds in Case of On-site Software Contracts
In order to increase the competitiveness in the Indian IT Sector, the requirement of repatriation of 30 per cent of the contract value in respect of on-site contracts by software exporter company / firm has been dispensed with. The company should, however, repatriate the profits of on-site contract after the completion of the said contract.
IV. Reduction in Invoice Value
It has been decided to allow reduction in value up to 25 per cent of the invoice. Accordingly, AD Category – I banks may allow reduction in the invoice value upto 25 per cent of the invoice.
B. IMPORTS
Import Bills – Credit Report on the Overseas Supplier
Henceforth, credit report on the overseas supplier (where the import documents are received directly) need not be obtained in cases where the invoice value does not exceed USD 100,000, provided that the AD Category - I bank is satisfied about the bonafides of the transaction and track record of the importer constituent.
C.GENERAL
Different Time Base Prescribed in RBI Directives
In the various Directions / Circulars / Notifications issued under FEMA from time to time, Reserve Bank has prescribed different time frames viz. calendar year, financial year, previous year, etc., for considering eligibility for various trade related facilities.
To simplify matters, henceforth, 'financial year' (April to March) is to be reckoned as time base for all transactions pertaining to trade related issues. To mitigate the mismatch in the time period due to change of time base from calendar / previous year to financial year, AD Category – I bank may, up to March 31, 2007 only, reckon the time base which is beneficial to its constituent/s.
CIRCULAR NO. 33/RBI., Dated: February 28, 2007