08 August 2012
Normally, exports are made in US Dollars/Euro/Sterling Pounds, etc. Some consultants in the field of textile exports are now suggesting that exports, even to non-Asia Clearing Union countries such as UK and Japan, can be made in Indian Rupees! This necessarily entails that: 1) Invoices will be in Indian Rupees 2) Customs shipping bills will be in Indian Rupees 3) G.R.Forms will be in Indian Rupees
Is this really possible and allowed? Can anyone guide me to some written reference, policy notification, etc. which confirms that exports in Rupees are freely allowed by the Indian Government?
Can we claim duty drawback against such exports in Indian Rupees?Again, I request that you suggest some written reference material or notification confirming this.
08 August 2012
As per para 2.40 of the Foreign Trade Policy,
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.
08 August 2012
Thank you,Rameshji! Can you also kindly reply to my second query:
Can we claim duty drawback against such exports in Indian Rupees? Again, I request that you suggest some written reference material or notification confirming this.
CAclubindia
