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Export
Promotion Council for EOUs & SEZ Units
L.B.
Singhal IMPORTANT CIRCULARS FROM RSERVE BANK OF INDIA
RBI has issued AP (DIR Series) Circular No. 40 dated 5-12-2003, copy enclosed, wherein it has allowed all exporters, including status holders to write-off outstanding export dues and extend the prescribed period of realization beyond 180 days provided the aggregate value of such export bills written off (including reduction in invoice value) and bills extended for realization does not exceed 10% of the export proceeds due during the calendar year and such export bills are not subject to Enforcement Directorate/CBI or in other investigating agency. This facility will be available in respect of export proceeds falling due from January 1, 2004. In other words, the new facility will be available for exports made after July 1, 2003 and proceeds due for realization on 1-1-2004. The procedure to be followed for availing this facility is given in Para 4 of the Circular. Some of the units had also desired to know the details of circular which permits a DTA unit to purchase foreign exchange from authorized dealer to pay for the goods supplied to them by a 100% EOU and SEZ unit. RBI AP (DIR Series) Circular No. 54 dated 25-11-2002 and AP (DIR Series) Circular No. 105 dated 16-6-2003, copy enclosed, permits units in DTA to purchase foreign exchange from authorized dealers to pay for the goods supplied to them by 100% EOUs and SEZ Units. Some of the units had desired to know the details of the circular which permits a SEZ unit to make payment to DTA in free foreign exchange (for supply of goods by DTA to SEZ). AP (DIR Series) Circular No. 62 dated 17-12-2002, copy enclosed, permits a SEZ unit to make payment to DTA in free foreign exchange out of its foreign currency account. Payment received in foreign exchange by a unit in DTA are to be treated as eligible foreign exchange earning for the purpose of credit to the EEFC account. This is for your kind information. Reserve
Bank of India A.P.(DIR
Series) Circular No.40 To Madam / Sirs, Export of Goods and Services – Liberalisation Attention of Authorised Dealers is invited to A.P (DIR Series) Circular No.12 dated September 9, 2000, as amended from time to time, relating to Export of Goods and Services and Part C of the said circular wherein directions have been issued for allowing write-off, reduction in invoice value and extension of time limit for realisation of export proceeds to exporters in respect of outstanding / overdue export bills 2. With a view to simplifying and liberalising the procedure, providing full flexibility to all exporters and reducing the paper work associated with seeking extension of time or reduction in invoice value or write-off, it has been decided to allow all exporters (including Status Holder) to : -
provided, the aggregate value of such export bills written-off (including reduction in invoice value) and bills extended for realisation does not exceed 10 per cent of the export proceeds due during the calendar year and such export bills are not a subject of investigation by Enforcement Directorate / Central Bureau of Investigation or any other Investigating Agencies. This facility will be available in respect of export proceeds falling due from January 1, 2004. In other words, the new facility will be available for exports made after July 1, 2003 and proceeds due for realisation on January 1, 2004 (ie., within the prescribed period of 180 days). In the case of exports where Reserve Bank has prescribed longer period of realisation, the said facility would be available for exports made prior to July 2003, but proceeds of which are due for realisation within the prescribed period of one year. 3. Exporters dealing with more than one Authorised Dealer can avail of this facility through each AD, i..e., the limit of 10 per cent for self write-off (including reduction in invoice value) and extension of time for realisation of export proceeds would be applicable for export bills lodged for realisation with that Authorised Dealer. However, exporters operating under a consortium of banks or with multiple banks will also have the option of computing the 10 per cent limit on an aggregate basis with all the banks, provided the lead bank of the consortium or in case of multiple banking, a nodal bank undertakes to verify the exporters’ annual performance on behalf of all the banks. 4. Within a month from the close of the calendar year, exporters should submit a statement, as per enclosed format, giving details of export proceeds due, realised and not realised to the concerned Authorised Dealer. Export bills due in the year 2004, for which exporter has extended the period of realisation on his own (within the 10 per cent limit) or sought extension of time from the Authorised Dealer but unrealised as at the end of calendar year 2004, will be computed for export proceeds due in the following year. The Authorised Dealer will be required to verify the statement with his records and review the export performance of the exporter during the calendar year to ascertain that in cases where the 10 per cent limit of self extension, write-off (including reduction in invoice value) and non-realisation has been breached, exporter has sought necessary approval for write-off, reduction in invoice value or extension of time, as the case may be, for the excess over the 10 per cent limit before the end of the calendar year. In cases where exporters have failed to comply with this requirement, Authorised Dealers may promptly advise the said exporter to seek extension of time/reduction in invoice value/write-off in respect of non-realisation in excess of the 10 per cent limit, failing which, the Authorised Dealers may inform the exporter about the withdrawal of this facility of self write-off / extension of time, within a month, under advice to the concerned Regional Office of the Reserve Bank. 5. Requests received from exporters in terms of Paragraph 4 above may be dealt with by the Authorised Dealers as per the existing instructions relating to extension of time for realisation of export proceeds, reduction in invoice value and write-off issued by the Reserve Bank. 6. Regarding disposal of GR/SOFTEX/SDF/PP forms under the above facility, Authorised Dealers may release the respective forms relating to the write-off (including reduction in invoice value) by the exporter himself, provided the exporter submits evidence to the Authorised Dealer for surrender of export incentives availed of, if any, along with the annual statement. In the case of export bills extended for realisation by the exporter within the 10 per cent limit, Authorised Dealers may report such bills as outstanding in the XOS statement with the remark "extended by the exporter". 7. Authorised Dealers may bring the contents of this circular to the notice of their constituents concerned. 8. The directions in this circular have been issued under Sections 10 (4) and 11(1) of the FEMA, 1999 (42 of 1999). Yours faithfully, Grace
Koshie Reserve
Bank of India
A.P.
(DIR Series) Circular No.62 To Madam/Sirs, Exchange
Earners' Foreign Currency Attention of authorised dealers is invited to sub-paragraph No.1(A)(ii) of the Schedule to the Reserve Bank Notification No.FEMA 10/2000-RB dated 3rd May 2000 as amended from time to time, in terms of which payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in (a) Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park are allowed to be credited to Exchange Earner’s Foreign Currency (EEFC) Account. 2. It has been decided that, payments received in foreign exchange by a unit in Domestic Tariff Area (DTA) for supply of goods to a unit in Special Economic Zone (SEZ) out of its foreign currency account are to be treated as eligible foreign exchange earnings for the purpose of credit to the EEFC Account. It will, therefore, be in order for authorised dealers to credit such payments received in foreign exchange by a unit in DTA to its EEFC Account. 3. The facility will be available in respect of foreign exchange received by the recipients from the date of this circular. 4. Necessary amendments to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations 2000 are being notified separately. 5. Authorised dealers may bring the contents of this circular to the notice of their concerned constituents. 6. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA 1999 (42 of 1999). Yours faithfully, Grace
Koshie Reserve
Bank Of India A.P.
(DIR Series) Circular No.54 To Madam/Sirs, Remittance of Foreign Exchange for Miscellaneous purposes Attention of authorised dealers is invited to paragraph 3 of A.D. (M.A. Series) Circular No.11 dated May 16, 2000, advising them to be guided by the provisions of Exchange Control Manual (1993 edition) regarding matters listed in Annexure V of the circular, pending issue of further instructions. 2. The matter has been reviewed and authorised dealers may allow remittance of foreign exchange for miscellaneous purposes as indicated in the Annexure to this circular. Directions contained in the Annexure supercede the instructions contained in Part B and C of Chapter 8 of the Exchange Control Manual (1993 edition). 3. Authorised Dealers may please bring the contents of this circular to the notice of their constituents concerned. 4. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999). Yours faithfully, Grace
Koshie Reserve
Bank of India A.P.(DIR
Series) Circular No.105 To Madam/Sirs, Supply
of goods by Special Economic Zones (SEZs) to Attention of authorised dealers is invited to paragraph 8 of Annexure to A.P.(DIR Series) Circular No.54 dated November 25, 2002, in terms of which Units in Domestic Tariff Areas (DTAs) have been permitted to purchase foreign exchange from authorised dealers to pay for the goods supplied to them by 100% EOUs, EPZs, EHTPs and STPs. It has now been decided to extend this facility to units in DTAs for making payment towards goods supplied to them by Units in Special Economic Zones (SEZs). 2. Authorised dealers may bring the contents of this circular to the notice of their constituents. 3. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of Foreign Exchange Management Act, 1999(42 of 1999). Yours faithfully, Grace
Koshie
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