regulatory guidelines for imports

8/6/2019 Regulatory Guidelines for Imports

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General Regulatory Guidelines forImports


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Overview

General & Form A I

Import Licenses

Obligation of Purchaser of Foreign Exchange

Time Limit for Settlement of Import Payments & for deferred payment arrangements Time limit for Import of Books

Import of Foreign Exchange / Indian Rupees

Import of Indian currency and currency notes

Operational Guidelines for Imports

Advance Remittance for the Import of Services

Interest on Import Bills

Receipt of Import Bills/Documents & Receipt of Import Documents by the Importerdirectly from overseas suppliers

Evidence of Import & Evidence of Import in lieu of Bill of Entry

Non Physical Imports

Issue of acknowledgement

Verification and Preservation

Follow up for Import Evidence


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General

AD Category I Banks to follow the Rules and

Regulations while undertaking Import paymenttransactions on behalf of their clients

Where specific regulations do not exist, AD

Category I Banks may be governed by normal

trade practices.

AD Category I Banks to adhere to "Know Your

Customer" (KYC) guidelines issued by Reserve

Bank in all their dealings.


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Form A I

Applications by persons, firms andcompanies for making payments,

exceeding USD 500 or its equivalent,

towards imports into India must bemade in Form A-1


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Import Licenses

AD Category I Banks may freely open letters of credit andallow remittances for imports except for goods included in

the negative list which require license While opening letters of credit, For Exchange Control

purposes copy of the license should be called forandspecial conditions, if any, attached to such licenses shouldbe adhered to

After effecting remittances under the license, AD Category- I Banks may preserve the copies of the utilized license /still they are verified by the internal auditors or inspectors.


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Obligation of Purchaser of ForeignExchange

In terms of FEMA, any person acquiring foreign exchange ispermitted to use it either for the purpose mentioned in the

declaration made by him to an Authorized Dealer Category-I bank

Or to use it for any other purpose for which acquisition offoreign exchange is permissible under the said Act, or Rulesor Regulations

After utilization of Foreign exchange for import of goodsinto India, the AD Category I bank should ensure that theimporter furnishes evidence of import viz., ExchangeControl copy of the Bill of Entry, Postal Appraisal Form orCustoms Assessment Certificate, etc., and satisfy himselfthat goods equivalent to the value of remittance have beenimported

Payment for import can also be made by way of credit to

non-resident account of the overseas exporter maintainedwith a bank in India after due compliance as citied above


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Time Limit for Settlement of ImportPayments

Remittances against imports should becompleted not later than six months from thedate of shipment, except in cases whereamounts are withheld towards guarantee ofperformance, etc.

Banks may permit settlement of import duesdelayed due to disputes, financial difficulties,etc.

Interest in respect of delayed payments, usancebills or overdue interest for a period of less thanthree years from the date of shipment may be

permitted.


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Time limit for Import of Books

Remittances against import of books

may be allowed without restriction as

to time limit, provided subject to

interest payment


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Import of Foreign Exchange / IndianRupees

A person may send into India without limit

foreign exchange in any form other than

currency notes, bank notes and travelers

cheques;


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Import of Foreign Exchange / IndianRupees

bring into India from any place outside India,without limit foreign exchange (other than unissued notes), subject to declaration to theCustom Authorities in Currency Declaration Form(CDF)

Aggregate value of such foreign exchange in theform of currency notes, bank notes or travellerscheques brought in by such person at any one timedoes not exceed USD10,000 (US Dollars tenthousand) or its equivalent and/or the aggregatevalue of foreign currency notes brought in by suchperson at any one time does not exceed USD 5,000(US Dollars five thousand) or its be equivalent.


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Import of Indian currency and currencynotes

(i) Any person resident in India who hadgone out of India on a temporary visit,may bring into India at the time of hisreturn from any place outside India (otherthan from Nepal and Bhutan), currencynotes of Government of India and ReserveBank notes up to an amount notexceeding Rs. 7,500/- per person indenominations not above Rs.100 in eithercase


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Advance Remittance

Advance Remittance for import of goods

(a) If the amount of advance remittance exceeds USD 100,000 orits equivalent, an unconditional, irrevocable standby Letter ofCredit or a guarantee from an international bank of reputesituated outside India or a guarantee of an AD Category I bankin India, if such a guarantee is issued against the counter-guarantee ofan international bank of repute situated outside India

This limit has been enhanced from 29.04.2011i.e. forUSD100,000 to USD 200,000 or its equivalent (other than aPublic Sector Company or a Department / Undertaking ofCentral / State governments where the requirement of Bank

guarantee is to be specifically waived by the Ministry ofFinance, Government of India for advance remittancesexceeding USD 100,000 or its equivalent


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(b) In cases where the importer(other than a Public

Sector Company or a Department/Undertaking of theGovernment of India/State Governments) 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 Letterof Credit may not be insisted upon for advance

remittances up to USD 5,000,000 (US Dollar five

million)


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(c) A Public Sector Company or aDepartment/ Undertaking of theGovernment of India / State Government/swhich is not in a position to obtain aguarantee from an international bank ofrepute against an advance payment, isrequired to obtain a specific waiver for thebank guarantee from the Ministry ofFinance, Government of India beforemaking advance remittance exceedingUSD 100, 000


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Advance Remittance for the Import of

Services

Advance remittance for import of servicespermitted subject to the following conditions:

(a) Where the amount of advance exceeds USD500,000 or its equivalent, a guarantee from a bank ofinternational repute situated outside India, or aguarantee from an AD Category I bank in India, ifsuch a guarantee is issued against the counter-guarantee of a bank of international repute situatedoutside India, should be obtained from the overseasbeneficiary.

(b) AD Category I banks should also follow-up toensure that the beneficiary of the advanceremittance fulfils his obligation under the contract

or agreement with the remitter in India, failing which,the amount should be repatriated to India


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Interest on Import Bills

(i) Banks may allow payment of interest on usance bills oroverdue interest for a period of less than three years from

the date of shipment at the rate prescribed for trade creditfrom time to time

(ii) In case of pre-payment of usance import bills,remittances may be made only after reducing theproportionate interest for the unexpired portion of usanceat the rate at which interest has been claimed or LIBOR ofthe currency in which the goods have been invoiced,

whichever is applicable Where interest is not separately claimed or expressly

indicated, remittances may be allowed after deducting theproportionate interest for the unexpired portion of usanceat the prevailing LIBOR of the currency of invoice


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Receipt of Import Bills/Documents

Receipt of import documents by the importerdirectly from overseas suppliers

Import bills and documents should be receivedfrom the banker of the supplier by the banker of

the importer in India


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Receipt of Import Documents by the Importer

directly from overseas suppliers

Bank should not, make remittances where import bills havebeen 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 Indiansubsidiaries of foreign companies from their principals

(iii) Import bills received by Status Holder Exporters asdefined in the Foreign Trade Policy, 100% Export OrientedUnits / Units in Special Economic Zones, Public SectorUndertakings and Limited Companies

(iv) Import bills received by all limited companies viz.public limited, deemed public limited and private limited

companies


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Receipt of Import Documents directly from overseas

suppliers

(i) At the request of importer clients,AD Category IBank may receive bills directly from the overseas

supplierprovided bank is fully satisfied about thefinancial standing/status and track record of theimporter customer

(ii) Before extending the facility, Bank should obtaina report on each individual overseas supplier from

the overseas banker or a reputed credit agency.However, such credit report on the overseassupplier need not be obtained in cases where theinvoice value does not exceed USD 300,000provided Bank is satisfied about the bonafides of

the transaction and track record of the importerconstituent


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Evidence of Import

Physical Imports

(i) In case of all imports, where value of foreignexchange remitted/paid for import into Indiaexceeds USD 100,000 or its equivalent, Bank toensure that the importer submits :-

(a) The Exchange Control copy of the Bill of

Entry for home consumption, or (b) The Exchange Control copy of the Bill of

Entry for warehousing, in case of 100% ExportOriented Units, or


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Evidence of Import

(c) Customs Assessment Certificate or Postal Appraisal Form,as declared by the importer to the Customs Authorities, where

import has been made by post, as evidence that the goods forwhich the payment was made have actually been imported intoIndia

(ii) In respect of imports on D/A basis, Bank should insist onproduction of evidence of import at the time of effectingremittance of import bill. However, if importers fail to producedocumentary evidence due to genuine reasons such as non-

arrival of consignment, delay in delivery/customs clearance ofconsignment, etc., AD bank may, if satisfied with thegenuineness of request, allow reasonable time, not exceedingthree months from the date of remittance, to the importer tosubmit the evidence of import.


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Evidence of Import in lieu of Bill of

Entry

(i) Bank may accept, in lieu of Exchange Controlcopy 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 :- (a) the amount of foreign exchange remitted is

less than USD 1,000,000 or its equivalent


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Evidence of Import in lieu of Bill of

Entry

(b) the importer is a company listed on a stock exchange in

India and whose net worth is not less than Rs.100 crore ason the date of its last audited balance sheet, ortheimporter is a public sector company or an undertaking ofthe Government of India or its departments

(ii) The above facility may also be extended to autonomousbodies, including scientific bodies/academic institutions,such as Indian Institute of Science / Indian Institute of

Technology, etc. whose accounts are audited by theComptroller and Auditor General of India (CAG). Bank mayinsist on a declaration from the auditor/CEOof suchinstitutions that their accounts are audited by CAG.


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Non Physical Imports

(i) Where imports are made in non-physical form,i.e., software or data through internet / datacomchannels and drawings and designs through e-mail/fax, a certificate from a CharteredAccountant that the software / data / drawing/design has been received by the importer, may

be obtained (ii) Bank should advise importers to keep

Customs Authorities informed of the importsmade by them under this clause


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Issue of acknowledgement

Bank should acknowledge receipt ofevidence of Import e.g. Exchange Controlcopy of the Bill of Entry, Postal AppraisalForm or Customs Assessment Certificate,etc., from Importers by issuing

acknowledgement slips containing allrelevant particulars relating to the importtransactions


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Verification and Preservation

(i) Internal inspectors or auditors (including external auditors

appointed by AD Category I bank) should carry outverification of the documents evidencing import, e.g.Exchange Control copies of Bills of Entry orPostal AppraisalForms or Customs Assessment Certificates, etc.,

(ii). Documents evidencing import into India should bepreserved by AD Category I bank for a period of one year

from the date of its verification. However, in respect ofcases which are under investigation by investigatingagencies, the documents may be destroyed only afterobtaining clearance from the investigating agency concerned.


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(i) In case an importer does not furnish any documentaryevidence of import within 3 months from the date ofremittance involving foreign exchange exceeding USD100,000,Bank should rigorously follow-up for the next 3 months,including issuing registered letters to the importer.

(ii) Bank should forward a statement on half-yearly basis as atthe end of June & December of every year, in form BEFfurnishing details of import transactions, exceeding USD 100,000in respect of which importers have defaulted in submission ofappropriate document evidencing import within 6 monthsfrom the date of remittance, to the Regional Office of ReserveBank under whose jurisdiction the AD Category I bank isfunctioning,. within 15 days from the close of the half-year to whichthe statement relates


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(iii) AD Category I bank need not followup submission of evidence of import

involving amount of USD 100,000 or less

provided they are satisfied about the

genuineness of the transaction and thebonafides of the remitter


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THANK YOU