RBI circular reg. unrealised export bills – write-off- surrender of export incentives
July 26, 2010
Members of the Council
Sub : Reserve Bank of India circular reg. unrealised export bills – write-off- surrender of export incentives
The Reserve Bank of India (RBI) has issued a Circular No. 03 dated 22.7.2010 on the above subject. The RBI Circular states the following.
Para 2.25.4 of Hand book of Procedures – Vol. 1 of the Foreign Trade Policy (FTP) 2009-14 states that realization of export proceeds shall not be insisted upon under any of the export promotion schemes under FTP if the Reserve Bank of India writes-off the requirement of realization of export proceeds on merits and the exporter produces a certificate from the concerned foreign mission of India about the fact of non-recovery of export proceeds from the buyer and this would not be applicable in self-write off cases. Hence, banks may not insist on the surrender of the proportionate export incentives under export promotion schemes of FTP, if availed by the exporter, subject to fulfillment of conditions.
This facility of not insisting for realization of export proceeds however will not apply to the Drawback Scheme and hence exporters who avail Drawback facility should adhere to the realization schedule stipulated by the Reserve Bank of India failing which the Drawback amount will be recovered as per regulations, even if the claim is settled by ECGC or the write-off is allowed by RBI.
Members may also recall that as per the RBI Master Circular No.06/2010-11 dated 1st July 2010, the following is the time frame fixed for realization and repatriation of export proceeds.
(i) By Units in Special Economic Zones (SEZs): No specific time period has been stipulated;
(ii) By Status Holder Exporters as defined in the Foreign Trade Policy : Within a period of twelve months from the date of export;
(iii) By 100 % Export Oriented Units (EOUs) and units set up under Electronic Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Biotechnology Parks (BTPs) schemes : Within a period of twelve months from the date of export on or after September 1, 2004;
(iv) Goods exported to a warehouse established outside India : As soon as it is realized and in any case within fifteen months from the date of shipment of goods; and
(v) In all other cases: With effect from June 3, 2008, this period of realization and repatriation to India has been enhanced to twelve months from the date of export till March 31, 2011.
Members may kindly note the above.
Ali Ahmed Khan
COUNCIL FOR LEATHER EXPORTS