(i) The basic rule relating to remittances against imports is that they should be completed not later than six months from the date of shipment. Accordingly, deferred payment arrangements involving payments beyond a period of six months from the date of shipment are not permissible without approval of Reserve Bank/Government of India (See Part B of this Chapter). There would, however, be no objection to importers withholding a small part of the cost of the goods not exceeding 15 per cent towards guarantee of performance etc. Authorised dealers may make remittances of amounts so withheld, provided the earlier remittance had been made through them. No interest payment should be allowed to be remitted on these withheld amounts.
(ii) Sometimes, settlement of import dues may be delayed due to disputes, financial difficulties, etc. Authorised dealers may make remittances in such cases even if the period of six months has expired, provided -
(a) authorised dealer is satisfied about the bona fides of the circumstances leading to the delay in payment;
(b) No payment of interest is involved for the additional period. However, in cases where the overseas supplier insists on payment of interest, it may be allowed in accordance with the provisions contained in paragraph 7A12 upto a maximum period of 60 days beyond 180 days from the date of shipment provided the import bill is paid within that period.
NOTES: A. The above concession permitting remittances beyond six months from the date of shipment should not be construed as general permission for importers concluding extended payment terms with overseas suppliers of goods providing payment beyond six months from date of shipment. All cases of extended payment terms require prior approval of Reserve Bank.
B. In case of import bills negotiated under letter of credit and retired by importer after expiry of six months from the date of shipment of relative goods, settlement of the payment would be deemed to be completed within six months from shipment if reimbursement was given to overseas bank within that period,
C. Remittances against import of books may be allowed without restriction as to time limit, provided no interest payment is involved nor has the importer forgone any part of the discount/ rebate normally allowed to importers towards compensation for delay in settlement of dues.