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TMI BlogBILL TO OVERSEAS- SHIP TO INDIA FROM INDIAX X X X Extracts X X X X X X X X Extracts X X X X ..... We have delivered goods to Indian party as per order from overseas party. Billing is in the name of overseas party and ship to is Indian party. We have paid full gst amount since goods are not crossing Indian border . Now we want to receive payment from overseas customer but bank is not allowing us to receive payment. we are ready for payment in INR too what is way out. how to get this payment. Has anyone faced this problem? How to resolve it. whom to contact in RBI for this issue. pls reply urgently - Reply By KASTURI SETHI - The Reply = As per Section 10 of IGST Act , Bill to -ship to model/facility is available within India only and not for transaction outside India whether import or export. Read language of the title of Section 10 and Section 10(b) of IGST Act . None will go beyond law whether it is Bank or RBI or Other Departments of Govt.. Foreign Exchange is not involved. Export is not involved. - Reply By YAGAY andSUN - The Reply = Export means physical export i.e. sending goods out of India. You may get payment from your foreign counter part but no export benefits/incentive would be allowed to you. - Reply By KASTURI SETHI - The Reply = Undoubtedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sir. - Reply By Neeta Dharamshi - The Reply = I AGREE IT IS NOT EXPORT. we don't want to claim any export benefit also. GST IS ALREADY PAID ON IT We just want payment from overseas customer. - Reply By KASTURI SETHI - The Reply = Practical approach without any hurdle. In the absence of export documents , best option is to get payment in Indian currency from your customer's customer i.e. . third person (Indian buyer). Deal is between you and foreign buyer. Your customer (foreign buyer) must be having cordial business relations his customer (third person). Your foreign buyer can issue directions to his customer (Indian buyer) to make payment in Indian Currency to you. How to get payment through Bank in India is between your foreign buyer and his customer. It is duty of your foreign buyer to arrange your payment in In Indian currency at the earliest. Leave it to both of them. If you want to go to RBI, that is time consuming process. Short-cut step is to get your proceeds from your customer's customer i.e. to whom you have delivered goods. - Reply By Neeta Dharamshi - The Reply = Indian buyer where goods are delivered is subsidiary and it was gl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obal order issued by parent company of Indian Buyer to my parent company (overseas) which intern has raised order on its group co that is my Indian Co. Indian buyer is not going to pay for goods received by him. Hence little difficult to get payment from Indian Buyer. still I will try. but pls tell me whom to /where to contact in RBI for sorting this issue. We have many transactions of this nature. Our parent co is getting global order and intern We are selling for Indian requirement, - Reply By KASTURI SETHI - The Reply = Bank becomes party only when export or import is declared through bank. Hence no involvement of bank. RBI never entertains public dealing directly. In my opinion, your foreign buyer can deposit/credit the sale proceeds/amount into your Bank Account in India citing the whole sequence of facts and development. - Reply By CSSANJAY MALHOTRA - The Reply = Indian buyer shall get funds transferred from their parent company (overseas) to India and they shall clear your dues. No restriction in transfer of payment by parent company abroad to Indian entity. You will not get payment directly from overseas company for supply in India. - Reply By KASTURI SETHI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - The Reply = Sh.Sanjay Malhotra C.S. Sir, Thank for your intervention and cleaing the air on this issue. - Reply By KASTURI SETHI - The Reply = Dear Sir, I am cock sure that now with your final touch the querist will be able to reach her destination. - Reply By Ganeshan Kalyani - The Reply = Can your parent company (in overseas) receive payment from the overseas customer. And then transfer money to your company in India, being a subsidiary. Is this seems feasible. - Reply By Ganeshan Kalyani - The Reply = Sri Sanjay Sir, How are you ? We were missing your participation in this forum. - Reply By CSSANJAY MALHOTRA - The Reply = Thanks Sh. Ganeshan ji. I always appreciate and love to go through yours Sh. Kasturi ji reverts to queries at this platform. You both are doing great job... - Reply By Neeta Dharamshi - The Reply = Very happy to see so many replies formy issue. with respect to reply from - Ganeshan Kalyani. i have following query IF overseas customer gives payment to my parent company overseas then I can adjust it against debtors lying in my account? Is it allowed as per Income Tax Act? Else there will be debtors on one side and loan/adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance received from the overseas parent on the other side - Reply By Subhash Modi - The Reply = Since physical delivery of the goods was from India to within India you have done the right thing by raising a GST invoice akin to any domestic sale. You can legitimately receive payment in free foreign exchange or from the INR balances held in India by the overseas bank of the 'bill to' party known as Vostro Account.. Though there is no export payment in FE or Rupees in Vostro A/c is permitted vide the following ; Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 Notification No.FEMA 14 /2000-RB dated 3 rd May 2000 - Reply By Subhash Modi - The Reply = My site is svmodi.com from where you will find my email IDs. - Reply By Neeta Dharamshi - The Reply = Thank you subhash sir for your valuable input. Sure i will contact you for further guidance. This group is really very helpful and knowledgeable group. Thanks to one and all. will update how my issue was resolved. - Reply By malay pota - The Reply = Dear Mam, if your problem is resolved then ok otherwise,please inform the reason due to which your banker is not allowing you to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receive the money. - Reply By Neeta Dharamshi - The Reply = No it is not yet solved. Since goods hv not crossed Indian Border Bank is not aware how to get payment from overseas billed party. Still in process to find the way out - Reply By Vishal Garge - The Reply = Hi Madam , is it resolved? - Reply By malay pota - The Reply = Dear Madam, Which is your bank? can you ask your bank that under which Notification/Circular/ Master circular of RBI the payment in FOREIGN CURRENCY can not be received in India if you have a correspondence with your foreign buyer for supply the goods to Indian Party and you raise Bill in the name of foreign party and the foreign party is ready to pay you as per the correspondence exchanged with you. - Reply By BL Jain - The Reply = in the case of export, you may receive the payment from the overseas buyer even if the goods have been shipped to an Indian customer, provided the actual buyer receives original documents at his bank from the overseas exporter, and customs duty is paid against the BE. - Reply By PRABHAT BK - The Reply = I do endorse the views of Subhash Modiji - Reply By Subhash Modi - The Reply = Please refer to my compr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehensive reply vide Sr. No. 15 dated 15-05-2019 under ID 114954. I am unable to open my own reply which on the screen appears partially up to the first 3 Paragraphs. It appears though though this forum is open to all and it was open for me also when I posted my reply on 15-05-2019 but now limitations of my package restricts me to have access to my own contribution to the Query raised under ID 114954. Request any one who still has access to my complete reply dated 15-05-2019 may copy it and forward to my email ID [email protected] - Reply By Ravindran THiruvengadam - The Reply = I find very strange that bank Should object a internationally accepted commercial transaction - Reply By KASTURI SETHI - The Reply = Bank is bound to follow RBI Rules regulations. - Reply By Neeta Dharamshi - The Reply = No my issue is not yet settled. still struggling to get payment from foreign debtors. pls help if any one know how to get payment in case of BILL TO OVERSEAS- SHIP TO INDIA payment to e received from overseas party - Reply By Subhash Modi - The Reply = Kindly refer my extensive reply dated 15-05-2019 where I have with the authority under law (FEMA) explained as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how your banker can receive foreign inward remittance towards payment for supplies made within India. In discussion forum my complete reply is not now appearing; it has been curtailed. In the subsequent reply I have also forwarded my contact details. I believe that you may take my help not through the forum, but directly. - Reply By Nilesh Jadhav - The Reply = Hello Madam, Please let us know whether the goods supplied by you to Indian party is used as raw material for production of finished goods to be exported to overseas party ?? May be my question can change the direction for solution. - Reply By malay pota - The Reply = Show your banker FEMA Notification No. FEMA 14(R)/2016-RB May 02, 2016 (Amended upto November 13, 2019) on Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 which says as under: 3. Manner of Receipt in Foreign Exchange : - (1) Every receipt in foreign exchange by an authorized dealer, whether by way of remittance from a foreign country or by way of reimbursement from his branch or correspondent outside India against payment for export from India, or against any other payment, shall be as mentioned below: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) Members of the Asian Clearing Union (i) Bangladesh, Myanmar, Pakistan, Sri Lanka Republic of Maldives - Receipt for export of eligible goods and services by debit to the Asian Clearing Union Dollar account and / or Asian Clearing Union Euro account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the Asian Clearing Union Dollar account and / or Asian Clearing Union Euro Account of the authorized dealer maintained with the correspondent bank in that member country ; Receipt may also be made in any freely convertible currency in all other cases. In respect of exports from India to Myanmar, payment may be received in any freely convertible currency or through ACU mechanism from Myanmar. - Reply By Subhash Modi - The Reply = Reply to Ms. Neeta directly through e-mail (and copy + pasted for all others in the discussion forum). Reply: Since physical delivery of the goods was from India to within India you have done the right thing by raising a GST invoice akin to any domestic sale. You can legitimately receive payment in free foreign exchange or from the INR balances held in India by the overseas bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the 'bill to' party known as Vostro Account. Though there is no export, still receipt of payment in FE or in Rupees held by foreign bank in Vostro A/c in India is permitted vide the following: Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016 as updated upto May 2019 (copy attached appropriately highlighted). Show this to bank and tell them not only export related payment but any other payment is allowed to be received in the manner prescribed in the said Regulations including receipt in free foreign exchange. The purpose code will be as highlighted in the attached RBI Circular. While you may succeed in getting your banker to convert the inward remittance to INR for your purposes, but the recipient ( ship to party) in India of your goods may face difficulty with his bank in remitting the value of the goods in foreign currency for which the bill to party must have given him a final value invoice. For any remittance to be made from India in foreign exchange there must be a proof of receipt in India of imported goods or import of services. But that is his ( ship to party) botheration. Any other participant in the discussion forum may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contact me (svmodi.com) for soft copies of the RBI Regulations and Circular mentioned in this reply - Reply By Neeta Dharamshi - The Reply = Thanks a ton sir. It is of great help. You willingly came forward to help is a great thing. Heartfelt gratitude to you This forum is really very useful . Thx to all other also who have replied to my query. I will update you the status after talking to bank. - Reply By malay pota - The Reply = Dear Madam, Subhashji is right i am also saying the same in my reply No.30 of 18.12.2019. I also request you please inform us your banker actions in this regars. - Reply By Vineet Gupta - The Reply = Dear Neeta, I hope your issue is resolved by now. We are also in a same condition. We got an order from European Company to supply the goods to Indian company in India. They have sent the foreign currency to our Bank account. And bank is asking for purpose code to remitt the amount to our account. As said by others, that its not an export but a domestic sale, so its clear we can not take any benefit of GST waiver. But what is the purpose code to be told to bank. And how to show this transaction in our business as domestic sale but proceeds rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived from foreign company in foreign currency? Will it create any hurdles in future? Also In GSTR-1 and GSTR 3B , will it shown under just domestic sale? I will be looking forward for your reply and reply from other experts in this group, Subhash Modi ji. thanks kind regards Vineet Gupta - Reply By Neeta Dharamshi - The Reply = Our bank problem is not yet solved. It is in progress. Hopeful of get it sorted out based on reply from Modiji Mr.Malay. Will keep updated on the same. There wont be any problem in GSTR-1 OR 3B . YOU HAVE TO SHOW IT AS DOMESTIC SALE from unregistered dealer and charge IGST on the applicable rate. No export benefit can be claimed on this. I hope this answer all your queries. - Reply By Vineet Gupta - The Reply = Thanks for the prompt reply and GST treatment of the transaction. Mr. Modi, also helped us very promptly with circulars and highlighted purpose code for this transaction. We are using P1099- Other services not included elsewhere Thanks to the Blog for resolving the issue. - Reply By Robert Kunnel - The Reply = Hi, I would also like to inform that there is another way of doing the said transaction. wherein y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ou can move the goods to an FTWZ and same can be done by filing a Bill of export here you need not pay GST. Also a document is filed as evidence for export to FTWZ, which is now considered as export although the same lies within India. And the foreign company can further sell the goods in India by raising their invoice to final Buyer who will file a Bill of entry and later clear the goods on payment of applicable custom duties. - Reply By Vishal Garge - The Reply = Mr.Robert , You are right but overseas buyer should be ready to take atleast client base registration in FTWZ. - Reply By Robert Kunnel - The Reply = As per instruction 60 (SEZ) we can hold the goods on behalf of the foreign client. they need not register. Just an authorisation to hold goods on their behalf. - Reply By Vishal Garge - The Reply = Ok noted. As per instruction ,FTWZ can hold the goods behalf of buyer but could you please confirm whether FtWZ owner can enter in commercial activities and clear the goods to Indian company behalf of foreign buyer/supplier without agreement? Please confirm. also this type of transaction would attract custom duties which can increase the cost burden by 7.5% to 25% alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with applicable cess to Indian buyer / foreign supplier - Reply By Robert Kunnel - The Reply = The FTWZ Owner can hold the goods on behalf of the foreign client, the foreign client will raise his invoice on the Indian Buyer who will pay applicable custom duty on the said invoice. The Bill of entry will be filed by the Indian Buyer based on said invoice. And BOE can be submitted for remittance. There is no commercial activity, (no manufacturing activity is permitted in FTWZ) the goods are sold as such to Indian Buyer. But if the foreign client wishes he can repack the packages considering same as general cargo. He is also allowed to do the kitting if required. The said activity can be done on basis of Authorisation from foreign /Indian client. - Reply By Saurabh SRIVASTAVA - The Reply = Respected Fellow Members, I am into same situation. We delivered the goods to India address from India (These were Medications for ship staff at Indian port) and received remittances in USD. The issue is PNB keeps sending reminders to submit shipping bill, which we do not have as it was not exported. PNB has listed all the payments received since 2015 and asking us to provide shipping bill fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r advance payment received. My question is how do I justify under which law i can be exempted for Billing Overseas and suppling In India from India. Any help regarding the law will be very much helpfull. - Reply By Saurabh SRIVASTAVA - The Reply = Adding to above : We paid GST on all purchses / supplies - Reply By VIKAS BANSAL - The Reply = Dear Subhash Ji, Can you please mail me ([email protected]) all the relevant documents as i am facing same issue. Thanks in advance - Reply By Subramanya Rayaprol - The Reply = dear sir, what you are trying to do is a kind of hawala transaction, which is illegal and punishable under FEMA with imprisonment and fine. pl avoid entering into such transactions or you may land into trouble. - Reply By VIKAS BANSAL - The Reply = Dear Sir, I think you have not understand my question properly??? - Reply By VIKAS BANSAL - The Reply = Dear Subramanya Ji, I think you have not understand my question properly and without understanding should not reply like this.. My question was same as of neeta - BILL TO OVERSEAS- SHIP TO INDIA FROM INDIA - Query Started By: - Neeta Dharamshi Dated:- 9-5-2019 FEMA - Foreign Exchange Management - Got 47 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eplies - FEMA - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... 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