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Reduction vs write off outstanding export

Jayanta Bandyopadhyay (310 Points)

12 August 2023

In connection with outstanding export bills, RBI permits both Reduction in invoice value and write off.

What is the difference between two?

Pl guide

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4 Replies

Yasaswi Gomes new (Finance ) (4514 Points)
Replied 12 August 2023

I can guess and in correlation with GDP formula C+I+G-X. RBI don't have money and always in a deficit but not literally.

Reduction in invoice value= attracting debtors to pay my due

Write off- since international trade is governments headache they write off your debts when a court can't convict them or too expensive to file against foreign traders. This is a gist and a wholesome one

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sabyasachi mukherjee (27574 Points)
Replied 13 August 2023

Not very justified and correct querry.

Jayanta Bandyopadhyay (310 Points)
Replied 13 August 2023

My simple query is as follows

In case of outstanding export realusation beyond 9 months, exporter has option either to write off as per status holder certificate or reduce invoice value

These are available with any AD dealing export bills.

Query is difference between reduction of invoice value and write off.

Only foreign trade and banking persons can throw light more effectively.

vipul bohra (2 Points)
Replied 25 September 2023

For quick understanding -

If invoice value is 100 and due to certain situation (like fluctuation in prices) the value of invoice is reduced say 90 , then exporter goes for invoice reduction . This comes into picture after a bill (set of export documents) has been negotiated or sent for collection to overseas bank.

If invoice value is 100 and exporter is unable to get the export proceeds , then he will go for write off .

There are % criterias upto which write off and invoice reduction are applicable . pls refer latest master direction on export of goods & services for more info.