20 December 2010
We have done export in 2008 and we are not able to recover the same from customer due to leakage or damage. we had not covered the transaction of insurance. SO we would like to write off the same.
As per my knowledge we need to take approval from RBI. Can any one brief us on this matter and provide us a letter format for request to BRI?
21 December 2010
In cases where the exporter has not been able to realise the outstanding
export dues despite his best efforts, he may approach the authorised dealer, who had
handled the relevant shipping documents, with appropriate supporting documentary evidence with a request for write off of the unrealised portion. Authorised dealers may accede to such requests (the branch concerned should obtain the approval of its controlling office) subject to the undernoted conditions:
(a) The relevant amount has remained outstanding for 360 days or more.
(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.
(c) Satisfactory documentary evidence has been furnished in support of the exporter having made all efforts to realise the dues but has been unsuccessful due to reasons beyond his control. (d) The case falls under any of the undernoted categories:
(i) The overseas buyer has been declared insolvent and a certificate from the official liquidator indicating that there is no possibility of recovery of export proceeds has been produced. (Names, addresses and other relevant particulars of the overseas buyers who have been declared insolvent may be intimated to ECGC for updating their files on buyers).
(ii) The overseas buyer has not been traceable over a reasonably long period of time and suitable supporting documentary evidence to that effect has been produced. (His name, original address and other relevant particulars may be reported to ECGC, for updating their files).
(iii) The goods exported have been auctioned or destroyed by the Port/Customs/Health authorities in the importing country and a certificate issued by the said authorities or the Indian Mission or Chamber of Commerce in the country of destination indicating that the goods have been auctioned or destroyed has been produced.
(iv) The unrealised amount represents the balance due in a case settled through the intervention of the Indian Embassy, Foreign Chamber of Commerce or similar Organisation.
(v) The unrealised amount represents the undrawn balance of an export bill (not exceeding 10 per cent of the invoice value) and has remained outstanding and turned out to be unrealisable despite all efforts made by the exporter. The authorised dealer should take into consideration the track record of the exporter, documentary evidence/correspondence showing that there is no possibility of recovery of the undrawn balance, frequency of similar cases considered in the past and the antecedents of the overseas buyer, if available, before allowing the closure.
(vi) The cost of resorting to legal action would be disproportionate to the unrealised amount of the export bill or where the exporter even after winning the Court case against the overseas buyer could not execute the Court decree due to reasons beyond his control and sufficient documentary evidence is produced to fully satisfy the authorised dealer.
(vii) Bills were drawn for the difference between the letter of credit value and actual export value or between the provisional and the actual freight charges but the amount has remained unrealised consequent on dishonour of the bills by the overseas buyer and documentary evidence is produced to show that there are no prospects of realisation.
(e) The case is not the subject matter of any civil or criminal suit which is pending.
(f) The exporter has not come to the adverse notice of the Enforcement Directorate or the Central Bureau of Investigation or such other law enforcement agency.
(g) The exporter has surrendered proportionate export incentives, if any, availed in respect of the relative shipments.
21 December 2010
Therefore you should write a letter to your bank, who has handled the documents with respect to said consignment, mentioning the reasons and facts of the material destroyed outside India. Submit the copies of the certificate given by the customs department of foreign country or Indian Embassy of that country.
In this case we have photos of material leakage and also mail from customer.But no certificate copies are available from department of foreign country or Indian Embassy of that country.
CAclubindia
