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TMI BlogMaster Circular on Import of Goods and Services.X X X X Extracts X X X X X X X X Extracts X X X X ..... idelines B.2. Form A-1 B.3. Import Licenses B.4. Obligation of Purchaser of Foreign Exchange B.5. Time Limit for Settlement of Import Payments B.6. Import of Foreign exchange / Indian Rupees Section C - Operational Guidelines for Imports C.1. Advance Remittance C.2. Interest on Import Bills C.3. Remittances against Replacement Imports C.4. Guarantee for Replacement Import C.5. Import of Equipment by Business Process Outsourcing (BPO) Companies for their overseas sites C.6. Receipt of Import Bills/Documents C.7. Evidence of Import C.8. Issue of acknowledgement C.9. Verification and Preservation C.10. Follow up for Import Evidence C.11. Issue of Bank Guarantee C.12. Import of Gold / Platinum / Silver by Nominated Banks / Agencies C.13. Direct Import of Gold C.14. Gold Loans C.15. Import of Platinum, Palladium, Rhodium, Silver and rough, cut polished diamonds C.16. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e For Exchange Control purposes copy of the licence should be called for and special conditions, if any, attached to such licences should be adhered to. After effecting remittances under the licence, AD Category - I banks may preserve the copies of utilised licence /s till they are verified by the internal auditors or inspectors. B.4. Obligation of Purchaser of Foreign Exchange (i) In terms of Section 10(6) of the Foreign Exchange Management Act, 1999 (FEMA) , any person acquiring foreign exchange is permitted to use it either for the purpose mentioned in the declaration made by him to an Authorised Dealer Category I bank under Section 10(5) of the Act or to use it for any other purpose for which acquisition of foreign exchange is permissible under the said Act or Rules or Regulations framed there under. (ii) Where foreign exchange acquired has been utilised for import of goods into India, the AD Category I bank should ensure that the importer furnishes evidence of import viz., Exchange Control copy of the Bill of Entry, Postal Appraisal Form or Customs Assessment Certificate, etc., and satisfy himself that goods equivalent to the value of remittance have been im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and / or of Reserve Bank subject to such terms and conditions as the Reserve Bank may stipulate. B.6.1. Import of foreign exchange into India A person may (i) send into India without limit foreign exchange in any form other than currency notes, bank notes and travellers cheques; (ii) bring into India from any place outside India, without limit foreign exchange (other than unissued notes), which shall be subject to the condition that such person makes, on arrival in India, a declaration to the Custom Authorities at the Airport in the Currency Declaration Form (CDF) annexed to these Regulations; provided further that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in by such person at any one time does not exceed USD10,000 (US Dollars ten thousand) or its equivalent and/or the aggregate value of foreign currency notes (cash portion) alone brought in by such person at any one time does not exceed USD 5,000 (US Dollars five thousand) or its equivalent. B.6.2. Import of Indian currency and currency notes (i) Any person resident in India who had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Letter of Credit, by an importer (other than a Public Sector Company or a Department / Undertaking of the Government of India / State Government/s), for import of rough diamonds into India from the under noted mining companies, viz. a) De Beers UK Ltd, b) RIO TINTO, UK, c) BHP Billiton, Australia, d) ENDIAMA, E. P. Angola, e) ALROSA, Russia, f) GOKHARAN, Russia, g) Rio Tinto, Belgium, h) BHP Billiton, Belgium and i) Namibia Diamond Trading Company (PTY) Ltd. (NDTC). (ii) While allowing the advance remittance, AD bank may ensure the following: (a) The importer should be a recognized processor of rough diamonds as per the list to be approved by Gems and Jewellery Export Promotion Council (GJEPC) in this regard and should have a good track record of export realisation; (b) AD Category I bank should undertake the transaction based on their commercial judgment and after being satisfied about the bonafides of the transaction; (c) Advance payments should be made strictly as per the terms of the sale contract and should be made directly to the account of the company concerned, that is, to the ultimate beneficiary and not through numbered accounts or otherwise. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian importer entity and the overseas manufacturer company as well. Advance payments should be made strictly as per the terms of the sale contract and are made directly to the account of the manufacturer (supplier) concerned. AD Category - I bank may frame their own internal guidelines to deal with such cases, with the approval of their Board of Directors. In the case of a Public Sector Company or a Department / Undertaking of Central /State Governments, the AD Category - I bank shall ensure that the requirement of bank guarantee has been specifically waived by the Ministry of Finance, Government of India for advance remittances exceeding USD 100,000. Physical import of goods into India is made within six months (three years in case of capital goods) from the date of remittance and the importer gives an undertaking to furnish documentary evidence of import within fifteen days from the close of the relevant period. It is clarified that where advance is paid as milestone payments, the date of last remittance made in terms of the contract will be reckoned for the purpose of submission of documentary evidence of import. Prior to making the remittance, the AD Cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usance at the prevailing LIBOR of the currency of invoice. C.3. Remittances against Replacement Imports Where goods are short-supplied, damaged, short-landed or lost in transit and the Exchange Control copy of the import licence has already been utilised to cover the opening of a letter of credit against the original goods which have been lost, the original endorsement to the extent of the value of the lost goods may be cancelled by the AD Category I bank and fresh remittance for replacement imports may be permitted without reference to Reserve Bank, provided the insurance claim relating to the lost goods has been settled in favour of the importer. It may be ensured that the consignment being replaced is shipped within the validity period of the license. C.4. Guarantee for Replacement Import In case replacement goods for defective import are being sent by the overseas supplier before the defective goods imported earlier are reshipped out of India, AD Category-I banks may issue guarantees at the request of importer client for dispatch/return of the defective goods, according to their commercial judgment. C.5. Import of Equipment by Business Process Outsourcing (BP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for import is submitted by the importer at the time of remittance. AD Category - I banks may undertake such transactions subject to the following conditions: (i) The import would be subject to the prevailing Foreign Trade Policy. (ii) The transactions are based on their commercial judgment and they are satisfied about the bonafides of the transactions. (iii) AD Category - I banks should do the KYC and due diligence exercise and should be fully satisfied about the financial standing / status and track record of the importer customer. Before extending the facility, they should also obtain a report on each individual overseas supplier from the overseas banker or reputed overseas credit rating agency. C.6.3. Receipt of import documents by the AD Category I bank directly from overseas suppliers (i) At the request of importer clients, AD Category I bank may receive bills directly from the overseas supplier as above, provided the AD Category I bank is fully satisfied about the financial standing/status and track record of the importer customer. (ii) Before extending the facility, the AD Category I bank should obtain a report on each individual overseas supplier fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to autonomous bodies, including scientific bodies/academic institutions, such as Indian Institute of Science / Indian Institute of Technology, etc. whose accounts are audited by the Comptroller and Auditor General of India (CAG). AD Category I bank may insist on a declaration from the auditor/CEO of such institutions that their accounts are audited by CAG. C.7.3. Non Physical Imports (i) Where imports are made in non-physical form, i.e., software or data through internet / datacom channels and drawings and designs through e-mail/fax, a certificate from a Chartered Accountant that the software / data / drawing/ design has been received by the importer, may be obtained. (ii) AD Category I bank should advise importers to keep Customs Authorities informed of the imports made by them under this clause. C.8. Issue of acknowledgement AD Category I bank should acknowledge receipt of evidence of import e.g. Exchange Control copy of the Bill of Entry, Postal Appraisal Form or Customs Assessment Certificate, etc., from importers by issuing acknowledgement slips containing all relevant particulars relating to the import transactions. C.9. Verification and Preservation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the importer (consignee) will be acting as an agent of the supplier (consignor). Remittances towards the cost of import shall be made as and when sales take place and in terms of the provisions of agreement entered into between the overseas supplier and nominated agency/bank. These instructions would also apply to import of platinum and silver. C.12.2. Import on unfixed price basis The nominated agency/bank may import gold on outright purchase basis subject to the condition that although ownership of the gold shall be passed on to the importer at the time of import itself, the price of gold shall be fixed later, as and when the importer sells the gold to the users. These instructions would also apply to import of platinum and silver. C.13. Direct Import of Gold AD Category I bank can open Letters of Credit and allow remittances on behalf of EOUs, units in SEZs in the Gem Jewellery sector and the nominated agencies / banks, for direct import of gold, subject to the following (i) The import of gold should be strictly in accordance with the Foreign Trade Policy. (ii) Suppliers and Buyers Credit, including the usance period of LCs opened for direct import of gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld loan. (v) SBLC can be opened only on behalf of entities permitted to import gold on loan basis, viz. nominated agencies and 100% EOUs/units in SEZ, which are in the Gem and Jewellery sector. (vi) SBLC should be in favour of internationally renowned bullion banks only. AD Category I bank can obtain a detailed list of internationally renowned bullion banks from the Gem Jewellery Export Promotion Council. (vii) All other existing instructions on import of gold and opening of Letters of Credit, with usance period not exceeding 90 days, will continue to be applicable. (viii) AD Category I banks must maintain adequate documentation with them to uniquely link all imports with the SBLC issued for the import of gold on loan basis. C.15. Import of Platinum, Palladium, Rhodium, Silver and rough, cut polished diamonds (a) Suppliers and Buyers credit, including the usance period of Letters of Credit opened for import of Platinum, Palladium, Rhodium and Silver and rough, cut and polished diamonds should not exceed 90 days from the date of shipment. (b) AD Category I banks should ensure that due diligence is undertaken and Know Your Customer (KYC) norms and Anti-Mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR Series) Circular No. 15 dated September 17, 2003 AP (DIR Series) Circular No. 49 dated December 15, 2003 AP (DIR Series) Circular No. 66 dated February 6, 2004 AP (DIR Series) Circular No. 72 dated February 20, 2004 AP (DIR Series) Circular No. 2 dated July 9, 2004 AP (DIR Series) Circular No. 34 dated February 18, 2005 AP (DIR Series) Circular No. 1 dated July 12, 2005 AP (DIR Series) Circular No. 33 dated February 28, 2007 AP (DIR Series) Circular No. 34 dated March 2, 2007 AP (DIR Series) Circular No. 63 dated May 25, 2007 AP (DIR Series) Circular No. 77 dated June 29, 2007 AP (DIR Series) Circular No. 18 dated November 7, 2007 AP (DIR Series) Circular No. 37 dated April 16, 2008 AP (DIR Series) Circular No. 03 dated August 4, 2008 AP (DIR Series) Circular No. 08 dated August 21, 2008 AP (DIR Series) Circular No. 09 dated August 21, 2008 AP (DIR Series) Circular No. 12 dated August 28, 2008 AP (DIR Series) Circular No. 13 dated September 1, 2008 AP (DIR Series) Circular No. 15 dated September 8, 2008 AP (DIR Series) Circular No.21 dated December 29, 2009 AP (DIR Series) Circular No.56 dated April ..... 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