Annexure to bill of exchange
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.1 Introduction
(i) Export trade is regulated by the Foreign Trade Policy (FTP) in vogue. FTP is issued
by the Directorate General of Foreign Trade (DGFT) functioning under the Ministry of
Commerce and Industry, Government of India.
(ii) 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 FTP 2015-20,
“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.” Indian Rupee is not a freely convertible currency, as yet.
(iii) 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.
(iv) “Financial Year” (April to March) may be reckoned as the time base for all trade
related transactions.
A.2 Realization and repatriation of proceeds of export of goods / software /
services
It is obligatory on the part of the exporter to realize and repatriate the full value of goods
/ software / services to India within nine months from the date of export for all exporters
including Units in Special Economic Zones (SEZs), Status Holder Exporters, Export
Oriented Units (EOUs), Units in Electronic Hardware Technology Parks (EHTPs),
Software Technology Parks (STPs) & Bio-Technology Parks (BTPs) until further notice.
In case of goods exported to a warehouse established outside India, the same may be
realized within fifteen months from the date of shipment of goods.
A.3 Foreign Currency Account
(i) Participants in international exhibition/trade fair have been granted general
permission vide Regulation 5. (E) (5) of the Foreign Exchange Management (Foreign
Currency Account by a Person Resident in India) Regulations, notified vide Notification
No. FEMA 10(R)/2015-RB dated January 21, 2016 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 concerned.
(ii) Reserve Bank may consider applications in Form EFC (Annex-1) from exporters
having good track record for opening a foreign currency account with ADs in India and
outside India subject to certain terms and conditions. Applications for opening the
account with a branch of an AD in India shall 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 AD 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 remittance for
the purpose of normal business operations of the said office/branch or representative
subject to conditions stipulated in Regulation 5 (B) of Notification No. FEMA
10(R)/2015-RB dated January 21, 2016.
(iv) A unit located in a Special Economic Zone (SEZ) may open, hold and maintain a
Foreign Currency Account with a bank in India subject to conditions stipulated in
Regulation 4 (D) of Notification No. FEMA 10(R)/2015-RB dated January 21, 2016.
(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 of Instructions on Project and
Service Exports.
(i) Export trade is regulated by the Foreign Trade Policy (FTP) in vogue. FTP is issued
by the Directorate General of Foreign Trade (DGFT) functioning under the Ministry of
Commerce and Industry, Government of India.
(ii) 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 FTP 2015-20,
“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.” Indian Rupee is not a freely convertible currency, as yet.
(iii) 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.
(iv) “Financial Year” (April to March) may be reckoned as the time base for all trade
related transactions.
A.2 Realization and repatriation of proceeds of export of goods / software /
services
It is obligatory on the part of the exporter to realize and repatriate the full value of goods
/ software / services to India within nine months from the date of export for all exporters
including Units in Special Economic Zones (SEZs), Status Holder Exporters, Export
Oriented Units (EOUs), Units in Electronic Hardware Technology Parks (EHTPs),
Software Technology Parks (STPs) & Bio-Technology Parks (BTPs) until further notice.
In case of goods exported to a warehouse established outside India, the same may be
realized within fifteen months from the date of shipment of goods.
A.3 Foreign Currency Account
(i) Participants in international exhibition/trade fair have been granted general
permission vide Regulation 5. (E) (5) of the Foreign Exchange Management (Foreign
Currency Account by a Person Resident in India) Regulations, notified vide Notification
No. FEMA 10(R)/2015-RB dated January 21, 2016 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 concerned.
(ii) Reserve Bank may consider applications in Form EFC (Annex-1) from exporters
having good track record for opening a foreign currency account with ADs in India and
outside India subject to certain terms and conditions. Applications for opening the
account with a branch of an AD in India shall 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 AD 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 remittance for
the purpose of normal business operations of the said office/branch or representative
subject to conditions stipulated in Regulation 5 (B) of Notification No. FEMA
10(R)/2015-RB dated January 21, 2016.
(iv) A unit located in a Special Economic Zone (SEZ) may open, hold and maintain a
Foreign Currency Account with a bank in India subject to conditions stipulated in
Regulation 4 (D) of Notification No. FEMA 10(R)/2015-RB dated January 21, 2016.
(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 of Instructions on Project and
Service Exports.
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