RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001
March 31, 2000
A.D.( M.A. Series) Circular No.4To,
All Authorised Dealers in Foreign Exchange.
Dear Sir,
Amendments to the Exchange Control Manual (ECM)It has been decided to amend/modify exchange control regulations as stated in the following paragraphs:
1. XOS Statement
In terms of paragraph 6 C.12(ii) of the Exchange Control Manual (ECM), authorised dealers are required to furnish, half-yearly, to Reserve Bank, a consolidated statement in form XOS giving details of all export bills outstanding, beyond the period prescribed for realisation i.e. due date for payment or within 6 months from the date of shipment, whichever is earlier, as at the end of June and December every year. On a review, it has now been decided that the authorised dealers should give details of only those bills which remained unrealised beyond the period of 180 days from the date of shipment in the XOS statement from the half-year ending 30th June 2000, onwards. However, it may be noted that this relaxation does not presuppose any amendment to the Rule 8 of the Foreign Exchange Regulations Rules, 1974, which provides that the amount representing the full export value of goods exported shall be realised and be paid to the authorised dealer on the due date for payment or within six months from the date of shipment of the goods, whichever is earlier. The authorised dealers should continue to treat the export bills which remained unrealised and unpaid on the due date of payment as outstanding export bills for all purposes.
2. Write-off of Unrealised Export Bills
In terms of Paragraph 6 C.14(i)(b) of ECM, the branch of the authorised dealer handling the relevant shipping document may allow requests to write off unrealised portion of export bills subject, inter alia, to the condition that the aggregate amount of “write off” during the calendar year should not exceed 5% of the total export proceeds realised by the concerned exporter through its medium during the previous calendar year. It has now been decided that the aggregate amount of “write-off” allowed by the authorised dealer at all branches put together during a calendar year should not exceed 10% of the total export proceeds realisedby the exporter through the concerned authorised dealer during the previous calendar year.
3. Gift Parcels
In terms of paragraph 6F.1(i) of ECM, the requirement of declaration on GR/PP forms is not applicable in respect of export in the form of gift parcels, publicity materials, etc. sent by air freight and post parcel and certified by the authorised dealers, as not involving any transaction in foreign exchange and the value of shipment not exceeding Rs.25,000/-. On a review, the value limit for export of such gift parcels, publicity materials, etc. has been enhanced from Rs.25,000/- to Rs.1 lakh. All other conditions referred to in the paragraph remain unchanged.
4. Supply of goods by 100% Export Oriented Units (EOUs)/ Units in Export Processing Zones (EPZs)/Electronic Hardware Technology Parks (EHTPs) and Software Technology Parks (STPs)to units in Domestic Tariff Area (DTA) against payment in foreign exchange
In terms of paragraph 8C.9 of ECM, buyers in Domestic Tariff Area (DTA) have been allowed to make payment in free foreign exchange for the supplies made to them by Export Oriented Units (EOUs), units in Export Processing Zones (EPZs), Electronic Hardware Technology Parks (EHTPs) and Software Technology Parks (STPs) without prior permission of Reserve Bank if the payments are sought to be made from the Exchange Earners Foreign Currency (EEFC) accounts. On a review, it has now been decided that authorised dealers may also allow payment, by the buyers in DTA for the supplies made to them by EOUs, units in EPZs, EHTPs, STPs in free foreign exchange including funds held in their EEFC accounts, subject to the conditions stipulated in paragraph 8C.9 of the ECM.
5. Discontinuation of STAT 2 statement
In terms of paragraph 13D.6 and 13D.8 of ECM, authorised dealers are required to submit to Reserve Bank annual statement showing balances and securities held by them in blocked accounts as on 31st March in Form STAT 2. On a review it has been decided to discontinue the submission of STAT 2 statement forthwith.
6. The following consequential amendments may be carried out in the Exchange Control Manual.
Volume I(i) Paragraph 6C.12(ii) may be replaced by Slip 1.
(ii) Paragraph 6C.14(i)(b) may be replaced by Slip 2.
(iii) In paragraph 6F.1(i)(c) the figure Rs.25,000 may be changed to Rs.one lakh.
(iv) Paragraph 8C.9 may be replaced by Slip 3.
(v) The words “along with the annual statement in STAT 2 regarding operation on blocked accounts (see paragraph 13D.8)” appearing in the last two lines of paragraph 13D.6 may be deleted.
(vi) Paragraph 13D.8 may be deleted.
Volume II(vii) STAT 2 statement may be deleted along with its entry in the Index to Appendix IV - Forms.
7. Authorised dealers may bring the contents of this circular to the notice of their concerned constituents.
8. The directions contained in this circular have been issued under Section 73(3) of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.
Yours faithfully,
B. MAHESHWARAN
Chief General Manager
Slip 1[AD/MA4/2000]XOS Statement
6C.12
(ii) Authorised dealers should furnish to Reserve Bank a consolidated statement in form XOS giving details of all export bills which remained unrealised beyond the period of 180 days from the date of shipment as at the end of June and December every year. The statements should be submitted in triplicate within fifteen days from the close of the relative half year.However, authorised dealers should ensure that export bills which remained unrealised and unpaid on the due date of payment are treated as outstanding export bills for all purposes.
________________________________________________________________________
Slip 2[AD/MA4/2000]Write-off of unrealised Exports Bills
6C.14(i)
(b) The aggregate amount of write off allowed by the authorised dealer (at all branches put together) during a calendar year should not exceed 10% of the total export proceeds realised by the exporter through the concerned authorised dealer during the previous calendar year.
________________________________________________________________________
Slip 3[AD/MA4/2000]Supply of goods by 100% Export Oriented Units (EOUs)/Units in Export Processing Zones (EPZs), Electronic Hardware Technology Parks (EHTPs) and Software Technology Parks (STPs) to units in Domestic Tariff Area (DTA) against payment in foreign exchange
8C.9
In terms of paragraph 9.10(b) of Chapter 9 of Export and Import Policy (1997-2002) supplies made in Domestic Tariff Area (DTA) by EOUs and units in EPZs, EHTPs and STPs against payment in foreign exchange shall be counted towards fulfilment of the export obligation. Accordingly, concerned authorities may permit EOUs, units in EPZs, EHTPs and STPs to sell goods to buyers in DTA against payment in free foreign exchange. Authorised dealers may allow the buyers in DTA to make payment in free foreign exchange including funds held in their Exchange Earners Foreign Currency (EEFC) Accounts, without prior approval of the Reserve Bank. Authorised dealers should ensure that the seller EOUs, units in EPZs, EHTPs and STPs have been specifically authorised by the concerned authority to sell their goods in DTA and that the relative provisions of the Export and Import Policy and the terms and conditions of the permission granted by the concerned authority have been fully complied with.___________________________________________________________________________________________
Presented by eximkey.com