import regulations may 2010

Apr 28, 2023 pnbcsc 1

WELCOMETO

CENTRAL STAFF COLLEGE

DELHI


PRESENTATION

ON EXCHANGE REGULATIONS

IMPORTS

BY NALIND SAXENA


INTRODUCTION

IMPORT TRADE IS REGULATED BY DGFT

POLICIES AND PROCEDURES ANNOUCED BY DGFT TIME TO TIME


IMPORT TRADE CONTROL CONTROL IMPOSED THROUGH DIR

WITH THE LAPSE OF DIR CONTROL CONTINUED UNDER EMERGENCY PROVISIONS (CONTINUANCE)ORDINANCE,1946

ORDINANACE REPLACED BY IMPORTS AND EXPORTS (CONTROL) ACT 1947

NOW TRADE CONTROL IS UNDER FOREIGN TRADE ( DEVELOPMENT AND REGULATIONS )ACT,1992

TRADE POLICY IS ANNOUCED THROUGH GAZETTE

PRESENT TRADE POLICY WAS ANNOUCED IN 2009 FOR 5 YEARS,AMENDMENTS ARE THERE EVERY YEAR.


NOTIFICATIONS

GOI NOTIFICATION NO. G.S.R.381(E) DT. 3rd MAY 2000 NOTIFYING FOREIGN EXCHANGE MANAGEMENT( CURRENT ACCOUNT TRANSACTIONS ) RULES,2000

AMENDED BY NOTIFICATION NO. S.O.301(E) DT 30th MARCH 2001

RULES UNDER FEMA 1999

POWERS CONFERRED BY SEC. 5 & SUB SECTION (1) AND CLAUSE (a) OF SUB SECTION (2) OF SECTION 46 OF FEMA 1999


IMPORT OF GOODS & SERVICES RUPEE A/Cs MAINTAINED BY CITIZENS OF

INDIA,NEPAL AND BHUTAN, RESIDENTS IN NEPAL ,BHUTAN AS WELL AS FIRMS COMPANIES,ORGANISATIONS INCLUDING BANKS INTHESE COUTRIES ARE REGARDED AS RESIDENT ACCOUNT,RUPEE TRANSFER TO THESE A/Cs MAY BE MADE FREELY.

RULE 3 OF GOI NOTIFICATION G.S.R 381(E) DT. 3.5.2000, SALE OF FOREIGN EXCHANGE FOR CURRENT A/C TRANSACTIONS IS PROHIBITED


IMPORT LICENCES EXCHANGE CONTROL COPY OF LICENCE

IS REQUIRED FOR GOODS INCLUDED IN NEGATIVE LIST.

IMPORT LICENCES ARE ISSUED ON CIF VALUE.

Ads SHOULD ENDORSE THE LICENCE UNDER SIGNATURE AND RUBBER STAMP.

EC COPY OF IMPORT LICENCE SHOULD BE RETAINED BY AD TILL INTERNAL OR EXTERNAL AUDIT.


OBLIGATION OF PURCHASER OF FOREX SEC. 10 (6) OF FEMA 99 ANY PERSON

ACQUIRING FOREX IS PERMITTED TO USE IT FOR THE PURPOSE DECLARED UNDER SEC. 10(5) OR ANY OTHER USE PERMITTED UNDER THE ACT OR RULES OR REGULATIONS.

PERSON ACQUIRING FOREX IS RESPONSIBLE FOR EVIDENCE OF IMPORT, EVEN IN CASE OF CREDIT OF FOREX TO RESIDENT ACCOUNT OF NON RESIDENT BANK.


MANNER OF RUPEE PAYMENT PAYMENT OF IMPORT BILLS MUST BE TO THE

DEBIT OF IMPORTER’S A/C OR BY CROSSED CHEQUES.

CASH FOR PAYMENT OF IMPORT BILLS NOT ACCEPTABLE EVEN IN CASE OF BILLS ARE RECEIVED ON COLLECTION BASIS.

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.


LETTERS OF AUTHORITY LETTER OF AUTHORITY CAN BE ISSUED

BY LICENCE HOLDER. L/C CAN BE OPENED IN THE NAME OF

THE PERSON OTHER THAN THE LICENCE HOLDER.

WITHOUT LICENCE IN CASE IMPORT IS PERMITTED WITH OUT LICENCE.

RESPONSIBILITY FOR PRODUCTION OF CUSTOM’S B/E,WHEREVER REQUIRED ,WILL BE FO LETTER OF AUTHORITY HOLDER OR AGENT.


FORM A 1 REMITTANCE IN FOREIGN

CURRENCY,TRANSFER OF RUPEES TO NON RESIDENT BANK A/C AND REMITTANCE THROUGH ACU IS TO APPLIED BY PERSONS, FIRMS AND COMPANIES ON FORM A 1.

DIFFERENT VARIANTS OF A 1FORM IN DIFFERENT COLOUR


Contd…. NOW FORMS ARE NOT TO BE

SUBMITTED ALONG WITH R-RETURN

( APDIR 76 3.2.2003 )


CONTD……. As per the extant instructions, residents while making

remittances exceeding USD 500 towards imports are required to apply in Form A1 and for other remittances in Form A2.

Now software exporters and other entities required to make recurring remittances may be permitted to file consolidated A1/A2 forms giving complete details of the transactions for which the remittances are being made. These consolidated A1/A2 forms may be accepted by Authorised Dealers on a fortnightly basis from their constituents and the periodicity would be co-terminus with the periodicity of the R-Returns.


LICENCE FOR CIF VALUE IMPORT LICENCES ARE ISSUED FOR CIF

VALUE IMPORT LICENCES CAN NOT BE USED

FOR FULL AMT. IN COVER OF FOB VALUE LEAVING COMM., INSURANCE& FREIGHT TO LOCAL AGENT OF SUPPLIER.

IN CASE OF FOB TERMS IF IMPORTER AGREES TO PAY FREIGHT, SHOULD BE ASCERTAIN BY AD BEFORE REMITTANCE.


ADVANCE REMITTANCE AD can allow upto USD 100,000 without guarantee Discretion to allow upto USD 5 million without guarantee

– track record and own guidelines For PSUs waiving guarantee beyond USD 100,000

requires approval from MoF. Advance remittance for diamond imports from specified

mining companies without limits subject to: Recognition of importer by Gem and Jewellery EPC Good track record of realisation and requirement in sale contract No conflict diamonds KYC, due diligence, commercial judgment of AD

Half yearly statement to RBI of advance remittances without guarantee in excess of USD 5,000,000

AD can permit remittances upto USD 50 mio for import of aircraft waiving requirement of guarantee subject to:

KYC, due diligence, commercial judgment Payment in terms of sale contract and direct to

manufacturer Documentary evidence of import within specified time -

undertaking Approval of DGCA Ensure refund in case of non import



A Public Sector Company or a Department/ Undertaking of the Central/State Government/s which is not in a position to obtain a guarantee from an international bank of repute against an advance payment, is required to obtain a specific waiver for the bank guarantee from the Ministry of Finance, Government of India before making advance remittance exceeding USD 100, 000.

Service imports Advance Remittance: No ceiling for amounts with guarantee May permit USD 500,000 without guarantee in case of service

contracts Obligation to ensure fulfillment of contract BPOs may be allowed to make remittances towards the cost of

equipment for their overseas sites for setting up International Call Centres subject to:

Approval of Ministry of IT for setting up ICC Remittance in terms of contract direct to overseas

supplier Evidence of import – certificate from CEO/ Auditor



STANDBY LETTER OF CREDIT IS ALSO ACCEPTABLE

PHYSICAL GOODS SHOULD COME INTO INDIA WITHIN 3 MONTHS FROM DT. OF REMITTANCE( 36M IN CASE OF CAPITAL GOODS)

AD SHOULD ENSURE REPATRIATION OF FOREX IN CASE OF NO IMPORT


FOR SETTLEMENT TIME LIMIT RMITTANCES AGAINST IMPORTS

SHOULD BE COMPLETEDNOT LATER THAN SIX MONTHS.

IN CASE OF DEFERRED PAYMENT ARRANGEMENTS INVOLVING PAYMENTS BEYOND SIX MONTHS FROM THE DATE OF SHIPMENT , RBI PERMISSION IS REQUIRED.

NO OBJECTION ON WITHHOLDING 15% AMOUNT, NO INTEREST IS PAYABLE FOR WITHELD AMOUNT.


IN GENUINE CASES PAYMENT IS ALLOWED AFTER 6 MONTHS IF AD IS SATISFIED.NO INTEREST IS ALLOWED FOR ADDITIONAL PERIOD.

IN CASE OF BILLS NEGOTIATED UNDER LC IF THE BILL IS RETIRED AFTER 6 MONTHS.WILL BE DEEMED COMPLETED WITH IN SIX MONTHS


Authorised Dealers may permit settlement of import dues delayed due to disputes, financial difficulties etc. Interest in respect of such delayed payments may be permitted.

Remittances against import of books may be allowed without restriction as to time limit, provided, interest payment, if any.


INTEREST ON IMPORT BILLS Authorised Dealers may allow

payment of interest on usance bills or overdue interest for a period of less than three years from the date of shipment at the rates prescribed in the Master Circular on trade credits.


REPLACEMENT IMPORTS REMITTANCE OF FOREX FOR IMPORT OF REPLACEMENT

GOODS FOR A DEFECTIVE ITEM IS ALLOWED AFTER ENSURING THAT NO DOUBLE PAYMENT IS THERE FOR SAME IMPORT.

IMPORT LICENCE IF SURRENDERED ,WILL BE TREATED AS VALID FOR PAYMENTS IN CASE OF REPLACEMENT IMPORTS.

IF GOODS ARE TO BE SHIPPED AFTER EXPIRY OF LICENCE , THE IMPOTER SHOULD BE ASKED TO APPLY DGFT FOR REVALIDATION OF LICENCE.

AD MAY ISSUE GUARANTEE IN CASE SUPPLIER REPLACES THE GOODS BEFORE SHIPMENT OF GOODS DESPATCHED OUT OF THE COUNTRY.


EVIDENCE OF IMPORTS AS PER SEC 10(6) FEMA 99 PURCHASER

OF FOREX IS UNDER OBLIGATION TO PRODUCE THE EVIDENCE OF IMPORT.

EXCEPT IN CASE OF IMPORTS THROUGH COURIER IN ALL CASES WHERE VALUE OF IMPORTS EXCEEDS $100000, IT IS OBLIGATORY ON THE PART OF AD TO ENSURE THAT IMPORTER SUBMITS THE EC COPY OF B/E.


IN CASE OF 100% EOU WHAREHOUSING COPY OF B/E.

IN CASE OF IMPORT THROUGH POST CUSTOMS ASSESSMANT CERTIFICATE OR POSTAL APPRAISAL.


EVIDENCE CONTD…….. IN CASE OF NON-PHYSICAL IMPORT

CERTIFICATE FROM CHARTERED ACCOUNTANT. IMPORTER SHOULD BE ADVISED TO INFORM THE CUSTOMS.

IMPORT THROUGH COURIER-ONE LAC AND ABOVE EC COPY OF B/E FROM CUSTOM. BELOW ONE LAC CERTIFIED COPY BY COURIER.

IN CASE OF DA BASIS BILLS NORMALLY, DELIVERY OF GOODS IS TAKEN BY IMPORTER BEFORE DUE DATE, AD SHOULD INSIST EC COPY OF B/E AT THE TIME OF REMITTANCE.


AD SHOULD ISSUE ACKNOWLDGEMENT

INTERNAL INSPECTORS OR AUDITOR SHOULD CARRY OUT 100% VERIFICATION.

DOCUMENTS EVIDENCING IMPORT SHOULD BE PRESERVED FOR ONE YEAR.


where the amount of foreign exchange remitted for import is less than USD 1MIO or its equivalent, authorised dealers may accept, either Exchange Control copy of Bill of Entry for home consumption or a certificate from the Chief Executive Officer (CEO) or Auditor of the Company that the goods for which remittance was made have actually been imported into India, provided :


1. the importer is a company listed on a stock exchange in India and whose net worth is not less than Rs.100/- crores as on the date of last audited balance sheet,

OR2. the importer is a Public Sector Company or

an Undertaking of the Government of India or its Departments.


FOLLOW UP BY AD NON SUBMISSION OF B/E BY IMPORTER

WITHIN 3 MONTHS FROM DT. OF REMITTANCE SHOULD BE REPRTED TO RBI ON BEF ON HALFYEARLY BASIS.

WHERE FOREIGN EXCHANGE IS USED FOR SOME OTHER PURPOSE PERMITTED UNDER RULES SHOULD NOT BE TREATED AS DEFAULT.


RECEIPT OF BILLS/DOCUMENTS Should be received through AD normally Exceptions

Value of import does not exceed USD 300,000 Bills received by WOS of foreign cos. Bills received by Status holders, 100% EOUs, SEZ units, PSU All limited companies Specified sector – Diamonds upto USD 300,000 with

documentary evidence of import Direct receipt by AD from overseas supplier – AD satisfied of

financial standing etc., report on overseas supplier for imports exceeding USD 300,000


At the request of importer clients, Authorised Dealers may receive bills direct from the overseas supplier as above, provided the Authorised Dealer is fully satisfied about the financial standing/status and track record of the importer customer.

Before extending the facility, Authorised Dealer should obtain report on each individual overseas supplier from the overseas banker or reputed credit agency.


Authorised Dealers may note that short-term credit either by way of suppliers' credit or buyers' credit is not available for merchanting trade or intermediary trade transactions.

While undertaking bonafide merchanting trade transactions on behalf of their trader clients, Authorised Dealers should ensure that the terms of payment for the import leg and the export leg of the transactions are such that


i. the liability for the import leg of the transaction is extinguished by the payment received for the export leg of the transaction, without any delay and

ii. the entire merchant trade transaction is completed within a period of 6 months.


MERCHANTING TRADE Authorised Dealers may take necessary

precautions in handling merchanting trade transactions or intermediary trade transactions to ensure that

(a) goods involved in the transactions are permitted to be imported into India,

(b) such transactions do not involve foreign exchange outlay for a period exceeding three months, and

.


(c) all rules, regulations and directions applicable to export out of India (except Export Declaration Form) are complied with in respect of the export leg and all rules, regulations and directions applicable to import (except Bill of Entry) are complied with in respect of the import leg of merchanting trade transactions. Authorised Dealers are also required to ensure timely receipt of payment for the export leg of such transactions


HAVE A NICE DAY

NALIND

import regulations may 2010

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