we are manufacturing & Export base company in India. we Export our Goods to other country and buyer want to arrange the payment by Credit Card. is this possible.
We know that, if payment comes by Credit card, so purpose of payment in not mention and also this transaction payment advise is not generated by bank. but when we will submit the document that time we will mention the transaction number on lodgement document. so that bank can identify that, agenst this export payment is receive.
we have talk with our bank manager but not receive any satisfactory answer from his side.
Please inform us the best way, so we will follow that.
06 July 2024
In India, receiving export payments via credit card can be challenging due to certain regulatory requirements and limitations. Here are some key points to consider and steps you can take:
### Challenges with Credit Card Payments for Exports:
1. **Purpose of Payment and Documentation:** - Export transactions require proper documentation to demonstrate the purpose of payment, such as invoices, shipping documents, and export declarations (like Shipping Bill in India). - Credit card payments often do not provide sufficient details regarding the purpose of the transaction, which can complicate compliance with export regulations.
2. **Transaction Identification:** - When receiving export payments via credit card, it's crucial to clearly identify the transaction related to the export sale. You mentioned using the transaction number on the lodgement document, which can help in identifying the payment related to exports.
3. **Bank and Regulatory Compliance:** - Banks may have their own policies and procedures regarding the acceptance of credit card payments for exports. They need to ensure compliance with Foreign Exchange Management Act (FEMA) regulations and Anti-Money Laundering (AML) guidelines.
### Best Practices to Follow:
1. **Consult with Your Bank:** - Despite the initial response, continue discussing with your bank manager or relationship manager. Seek clarity on their requirements and any specific procedures they may have for handling credit card payments for exports.
2. **Documentary Evidence:** - Ensure all export-related documents are properly maintained and linked to the credit card transaction. This includes invoices, shipping documents, export declarations, and any correspondence related to the export sale.
3. **Alternative Payment Methods:** - Consider alternative secure payment methods that provide adequate documentation and comply with regulatory requirements. These may include bank transfers (SWIFT/TT), letters of credit (LC), or payment platforms that support international transactions.
4. **Legal and Regulatory Compliance:** - Stay updated on RBI (Reserve Bank of India) guidelines and FEMA regulations regarding export payments. Ensure all transactions are compliant with these regulations to avoid potential penalties or delays.
### Conclusion:
While receiving export payments via credit card is technically possible, it requires careful handling to ensure compliance with regulatory requirements and to provide adequate documentation of the export transaction. Continue working closely with your bank and consider consulting with a financial advisor or export specialist to navigate the complexities involved in receiving credit card payments for exports effectively.
CAclubindia
