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Import of Goods and Services

Import of Goods and Services. A.D. Banks have to ensure that import trades handled by them are in conformity with the provisions of, 1. Foreign Trade Policy 2. FEMA --1999 3. R&D cess act 1986 for import of drawings &designs. 4. Income Tax Act Time Limit -

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Import of Goods and Services

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  1. Import of Goods and Services Ashit Hegde

  2. A.D. Banks have to ensure that import trades handled by them are in conformity with the provisions of, 1. Foreign Trade Policy 2. FEMA --1999 3. R&D cess act 1986 for import of drawings &designs. 4. Income Tax Act Time Limit - Remittance against imports should be settled within 6 months from the date of shipment. Third Party Payments - Are allowed subject to conditions. (E.g. Invoice should say payment has to be made to third party) Ashit Hegde

  3. Import Documents – • Normally, documents are received from the overseas suppliers Bank by the importers bank in India. • However, importers may also receive the documents directly from the suppliers. They will then submit them to A.D. Banks for remittance to supplier. Banks are authorized to handle such documents for importers with good track record. • In respect of partnership firms, such documents for value up to USD 300,000/ only can be handled. Ashit Hegde

  4. The importers bank in India is also permitted to receive documents from the overseas suppliers directly. • In this case, Banks have been advised to obtain credit reports on the overseas suppliers if the value is more than USD300,000/- Payment of interest and overdue interest – • Banks are permitted to pay interest on usance bills at rates prescribed for Trade Credits • In case of early payment of usance bills proportionate interest is to be reduced. Ashit Hegde

  5. Evidence of Import – • For all imports of USD 100,000/- and above importers have to submit Exchange Control copy of Bill of Entry to A.D. Banks within 3 months from date of remittance. Default should be reported by Banks to RBI in Form BEF (June and Dec). • In case of imports on DA basis, remittance should be effected only against production of Bill of Entry. • Auditors should carry out verification of E.C. copy of Bill of Entry. • For imports of less than USD 100,000/-, banks should frame a policy and follow the same. Ashit Hegde

  6. Advance Payments for import of goods - Up to USD 200,000/- Freely permitted Above USD 200,000/- Against Standby LC or Guarantee by bank abroad For PSUs Allowed only up to USD 100,000/- Relaxation - • Banks are authorized to waive guarantee requirement up to USD 5.0 Million subject to a policy being in place. • Exceptions -- Import of diamonds and Aircrafts Ashit Hegde

  7. For Service Imports - Up to USD 500,000/- Freely permitted Above USD 500,000/- Against bank guarantee Banks do not have discretion to waive guarantee. Import of Gold - There are restrictions for import of gold. Ashit Hegde

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