Export

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 August 2012 IF A Firm In A Export Business,Then Account Invoice Should be prepared in which currency.
Indian Or Foreign ?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

21 August 2012 As per para 2.40 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.

The Doubt: whether the benefit of Export Promotion Schemes, including incentive schemes, are available to exporters realizing free foreign exchange in ACU$.

The clarification: since ACU$ is equivalent to freely convertible currency as per RBI guidelines, benefits of Export Promotion schemes including the Incentive Schemes, being administered by DGFT, shall be available to the exporters for realisation in ACU$.