Eou unit

This query is : Resolved

Girish

(Querist)
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04 July 2012 one of our client who is a 100% EOU Unit is expected to receive payment in Foreign currency from Singapore, but the shipment for the payment received is to made in India i.e. DTA, please advise what are the procedure to be followed prior to making the shipment:
Please also advise as under:
Whether to charge Duty and VAT on such sale?
whether these would be consider as DTA sale?
Regards

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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05 July 2012 As per para 2.40 (A) AND (B) of the Foreign Trade Policy,
2009-2014

All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realised in freely convertible currency.

However export proceeds against specific exports may also be realized in rupees provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of ACU or Nepal or Bhutan.
Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non-resident bank account. Free foreign exchange remitted by buyer to his non-resident bank (after deducting the bank service charges) on account of this transaction would be taken as export realization under export promotion schemes of FTP.

Contracts for which payments are received through Asian Clearing Union (ACU)] shall be denominated in ACU Dollar. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and Invoices can be denominated in Indian rupees against EXIM Bank / Government of India line of credit.

Regards,