9911796707
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 ..... 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. Import factoring C.17. Merchanting Trade Annex -1 Annex - 2 Annex-3 Annex- 4 Annex-5 Appendix List of Circulars consolidated in the Master Circular Section A - Introduction (i) Import trade is regulated by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce & Industry, Department of Commerce, Government of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by a cheque drawn on the applicant's bank account or by a Demand Draft. B.3. Import Licenses Except for goods included in the negative list which require licence under the Foreign Trade Policy in force, AD Category - I banks may freely open letters of credit and allow remittances for import. While opening letters of credit, the '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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999, and the Foreign Exchange Management (Export and Import of Currency) Regulations 2000, made by Reserve Bank vide Notification No. FEMA 6/2000-RB dated May 3, 2000, as amended from time to time. (ii) Reserve Bank may allow a person to bring into India currency notes of Government of India 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 equivalen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards advance remittance for imports shall be subject to the specified conditions. C.1.2. Advance Remittance for Import of Rough Diamonds (i) AD Category - I bank are permitted to allow advance remittance without any limit and without bank guarantee or standby 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions: * i. The AD Category - I banks should undertake the transactions based on their commercial judgment and after being satisfied about the bonafide of the transactions. KYC and due diligence exercise should be done by the AD Category-I banks for the Indian importer entity and the overseas manufacturer company as well. * ii. 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. * iii. AD Category - I bank may frame their own internal guidelines to deal with such cases, with the approval of their Board of Directors. * iv. 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 guaranteehas been specifically waived by the Ministry of Finance, Government of India for advance remittances exceeding USD 100,000. * v. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een claimed or LIBOR of the currency in which the goods have been invoiced, whichever is applicable. Where interest is not separately claimed or expressly indicated, remittances may beallowed after deducting the proportionate interest for the unexpired portion of 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 earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to allow remittance for imports up to USD 300,000 where the importer of rough diamonds, rough precious and semi-precious stones has received the import bills / documents directly from the overseas supplier and the documentary evidence 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 ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date of its last audited balance sheet, or, the importer is a public sector company or an undertaking of the Government of India or its departments. (ii) The above facility may also be extended 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 Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.12.1. Import on consignment basis Gold may be imported by the nominated agencies/banks on consignment basis where the ownership will remain with the supplier and 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 st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the aforesaid office of RBI by the 10th of the following month / half year to which it relates. The statements may also be submitted by e-mail. C.14. Gold Loans (i) Nominated agencies / authorised banks can import gold on loan basis for on lending to exporters of jewellery under this scheme. (ii) EOUs and units in SEZ who are in the Gem and Jewellery sector can import gold on loan basis for manufacturing and export of jewellery on their own account only. (iii) The maximum tenor of gold loan would be as per the Foreign Trade Policy 2009-2014, or as notified by the Government of India from time to time in this regard. (iv) AD bank may open Standby Letters of Credit (SBLC), for import of gold on loan basis, where ever required, as per FEDAI guidelines dated April 1, 2003. The tenor of the SBLC should be in line with the tenor of the gold 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 renowne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to export (except Export Declaration Form) and import (except Bill of Entry) are complied with for the export leg and import leg, respectively. (b) The entire merchant trade transaction is completed within a period of 6 months. (c) The transactions do not involve foreign exchange outlay for a period exceeding three months. (d) Payment is received in time for the export leg. (e) Where the payment for export leg of the transaction precedes the payment for import leg, AD Category - I banks should ensure that the terms of payment are such that 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. AD Category - I banks 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. Appendix List of Circulars consolidated in the Master Circular Import of Goods and Services * AP (DIR Series) Circular No. 106 dated June 19, 2003 * AP (DIR Series) Circular No. 4 dated July 19, 2003 * AP (DIR Series) Circular No. 9 dated August 18, 2003 * AP (DIR Series) Circular No. 15 dated Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
