Foreign visitors to India usually buy goods by making payment in freely convertible foreign currency deposited in cash with Authorised Dealers in FOREX.  Such goods purchased against free foreign exchange deposited by them, is generally exported as tourist baggage.

Foreign Visitor

Foreign visitor includes as tourist visa holder besides business and other visitors.

Drawback

Duty drawback is available on such purchase and exported outside India by a manufacturer exporter or merchant-exporters, provided –

(i) there is clear linkage between the good purchased in India and their export on an appropriate shipping bill prescribed for drawback,

(ii) foreign exchange was declared by him/her on arrival to the customs on a Currency Declaration Form (CDF) and the same was duly encashed with an Authorised Dealer in FOREX.

Conditions

(i) DBK shipping bill is to be filed by the exporter (and not the foreign visitor). But since a visiting tourist may procure goods for himself or for his company/principals abroad the consignee in the shipping bill may be the visiting tourist/buyer or a third party.

(ii) Relevant encashment document of foreign currency must also be submitted. Tourist signatures on the Currency Declaration Form to Foreign Exchange Encashment Certificate must match. But where foreign exchange is deposited by a representative of Indian exporter/foreign visitor, the signature of the visiting tourist/buyer on the Currency Declaration Form must tally with his signature on his passport.

(iii) No written contract is necessary. But where it exists, the signature of the visiting tourist/buyer on the contract must tally with his signature on the Currency Declaration Form or his passport.

(iv) No export benefit shall be admissible to packer, forwarders or tour operators.

Application and Documents

Exporter (and not tourist-visitor) i.e. seller of goods to foreign visitor against free foreign exchange must submit –

(i) Drawback Shipping Bill for export of such goods which itself is an application for claim of drawback

(ii) Encashment document of foreign currency, relating to forex declared to Customs

(iii) a copy of Currency Declaration Form submitted to Customs at the time of visitor’s arrival in India.

The above mentioned documents are to be submitted at the time of clearance of goods for export or at the time of examination of cargo.