FOREIGN EXCHANGE MANAGEMENT ACT,1999 IMPORT OF GOODS & SERVICES

1. FOREIGN EXCHANGE MANAGEMENT ACT,1999IMPORT OF GOODS & SERVICES CA VINOD JAIN CHAIRMAN INMACS MANAGEMENT SERVICES LTD.

2. INTRODUCTION Import trade regulated by DGFT Foreign Trade Policy FEMA (Current Account Transaction) Rules, 2006 Authorised dealers to adhere to UNIFORM CUSTOMS & PRACTICES FOR DOCUMENTATION CREDIT (UCPDC) – while opening L.C. Import of Drawings & Designs – R&D cess Income Tax provisions

3. REMITTANCE Remittance for Imports to apply in Form A1; Negative list for Import Import License, where applicable to examine conditions Evidence of Import Exchange Control of copy of Bill of Entry Custom Assessment/postal appraisal As per compliance of conditions of Letter of Credit on submission of documents by remittance abroad. Credit to Non-Resident account of exporter maintained in India

4. TIME LIMIT Normal Imports Within 6 months from the date of shipment; Except when amount is withheld towards guarantee of performance Disputed, financial difficulties Usance bills or; Overdue interest upto 3years from shipment may be permitted Deferred payment Supplier’s credit/buyer’s credit upto 3 years – procedural guidelines Import of books – no time limit

5. FOREIGN EXCHANGE IMPORT Import of foreign exchange/cheques not permitted except as per general/special permission; Can bring on arrival subject to declaration in Currency Declaration Form except when amount brought in : less than $10,000 FC/TC/Bank notes less than $5000 foreign currency (cash portion)

6. INDIAN CURRENCY Indian currency notes upto Rs. 7,500 per person can be brought in by resident on temporary foreign visit. No person can bring currency notes of denomination above Rs.100,while returning from Nepal/Bhutan

7. ADVANCE REMITTANCE FOR IMPORT OF GOODS Permitted without any ceiling subject to: Amount exceeding US$200,000 (US$500,000 for services) to obtain: Irrevocable standby letter of credit Guarantee of International Bank of Repute Guarantee of Indian Bank if counter guarantee by International Bank of Repute Amount upto US$5 million for import of Goods be permitted by AD based on satisfactory track – record even without LC/Guarantee PSU/Government Department require special waiver by Ministry Of Finance for remittances exceeding US$100,000 Conditions may be specified by AD

8. SPECIAL PERMISSION FOR ADVANCE REMITTANCE FOR ROUGH DIAMOND IMPORT Without any limit or guarantee or L.C. if importing from: De Beers UK Ltd., RIO TINTO, UK, BHP Billiton, Australia, ENDIAMA, E.P.Angola, Alrosa, Russia etc. Importer is recognised processor by (GJEPC) with good track – record Banks commercial judgment /satisfaction of bonafide Proper terms of sales contract and remittance to specified company’s Bank account only

9. SPECIAL PERMISSION FOR ADVANCE REMITTANCE FOR ROUGH DIAMOND IMPORT (Contd…..) 6 monthly report for all advance payment of US$5million & above to be submitted to RBI by AD Advance remittance for Aircraft/Helicopter import up to US$ 50 million, subject to bonafide time limit etc. Goods short supplied/damaged/short landed or lost in transit – re-import may be permitted under original license Re-importer can provide guarantee if goods not pre-returned in case of replacement import cases. BPO company may remit for overseas international call centre equipments CEO/Auditor to certify that goods imported and installed on foreign sites

10. IMPORT DOCUMENTS Documents to be received through overseas Banker except if : Import bills < US$300 thousands Import from foreign holding company Import by statutes holder exporter/EOU/SEZ units/PSU/Limited companies Documents received by Indian AD from overseas exporter track – record of Importer Report on Exporter is obtained by AD from overseas bank or credit agency for import above US$300,000 (AD satisfaction)

11. IMPORT EVIDENCE Physical Imports Bill Of Entry, EC copy Custom assessment /Postal assessment Evidence of import may be submitted within 3 months of remittance in genuine cases of non-arrival /delay/custom clearance issues OR CEO/Auditor’s certificate about import upto US$1 million for listed companies with Rs. 100 crores plus net worth or by autonomous bodies audited by CA’s

12. IMPORT EVIDENCE (Contd…..) Non - Physical Import CA certificate Importer to inform Custom Authorities Import evidence to be followed up by AD – to furnish report to RBI of default exceeding US$100,000

13. IMPORT OF GOLD/SILVER/PLATINUM Import on consignment Import on un-fixed prices Direct imports As per foreign trade policy Suppliers/buyers credit including usance bills upto 90 days Bank prudence Suppliers credentials Gold Import on Loan Nominated agencies/banks EOU/SEZ in Gem and jewellery section Foreign trade policy limit tenure of loan SBLC in favour of renowned bullion bank opened for permitted parties

14. CA VINOD JAINB.Com (Hons.), FCA, FCS, FICWA, LL.B., DISA INMACS MANAGEMENT SERVICES LTD504 CHIRANJIV TOWER43 NEHRU PLACE,NEW DELHI – 110019TEL : 011-26223712 , 011-26228410FAX: 011-26223014MOB : +91 – 98110 40004E- MAIL : vinodjainca@gmail.comvinodjain@inmacs.com THANK YOU INMACS