Authorised dealers may allow advance remittances for import of goods without any ceiling subject to the following conditions :

(a) Documentary evidence indicating the cost of the goods and the insistence of the overseas seller on advance payment should be submitted by the importer.

(b) The importer should hold the EC copy of a valid import licence if the goods to be imported are those included in the negative list of imports given in the Export and Import Policy.

(c) Remittance is made direct to the suppliers.

(d) If the amount of advance remittance exceeds U.S.$25,000 or its equivalent , a guarantee from an international bank of repute situated outside India or a guarantee of an authorised dealer in India, if such a guarantee is issued against the counter-guarantee of an international bank of repute situated outside India, should be obtained. An unconditional standby L/C from an international bank of repute situated outside India may be accepted in lieu of bank guarantee provided it is irrevocable , non-transferable and lists out full particulars of the transacations and there is a clear provision for prompt payment being received in convertible currency in an approved manner. The validity of the guarantee /letter of credit should cover adequately the period for the purpose of enforcing payment.

(e) Physical import of goods into India should be made within three months (twelve months in case of capital goods) from the date of remittance and the importer should give an undertaking to furnish documentary evidence of import within fifteen days from the close of the relevant period. Authorised dealers may allow extension of time for import not exceeding one month (three months in the case of capital goods) provided the reasons for seeking extension of time are found convincing. In cases where the advance remittance has been made against a bank guarantee, the guarantee should be suitably amended, if need be, to cover the extended period for import of goods into India.

(f) In case of import of capital goods, certified copy of importers contract with the supplier or any other evidence indicating terms of payment should be submitted.

(g) In the case of import of books, a list of books to be imported should be obtained. This should be attached to the form A1 while submitting it along with the relevant R return.

(h) Authorised dealer should ensure that in the event of non-import of goods, the amount of advance remittance is repatriated to India.