- OBTAIN IEC (IMPORT/EXPORT CODE) AND PREFIX IT IN EVERY DOCUMENT OF TRADE.
The exporter needs to obtained import/export code (IEC) allotted by the director-general of foreign trade (DGFT). It is the code that must require for the person who engages in export and import business or wants to import and export goods, services, and software (unless exempted by authorities under EXIM policy). Under FEMA, IEC has to be indicated in every declaration form and documents specified in terms of trade which exporter required to submit with the authorities.
2. DECLARATION FORMS AND AUTHORITIES INVOLVED.
There shall be full and detailed disclosure of particulars of goods, services, and software exported in the export procedure and detailed statement have to be filled with the authorized authorities.
The exact values must be shown of the goods imported/exported and if the correct value is not ascertainable, then the fair market value should be taken into consideration.
The detailed information will be provided in Export Declaration Form (EDF) in duplicate to the commissioner of customs in case of export of goods and FORM SOFTEX in triplicate copy in case of export of software. The particulars of declaration form include;
- Import-export Code,
- Specific identification number of the document,
- The value of goods or software exported,
- Particulars of goods, services, and software.
After verifying the particulars by the commissioner, the one copy will be sent to the RBI and one to the exporter being used to show to the Authorized Dealer (AD). And in the case of SOFTEX one copy will be sent to the MINISTRY OF INFORMATION TECHNOLOGY, GOVERNMENT OF INDIA OR FREE TRADE ZONES OR SPECIAL ECONOMIC ZONES as the case may be required.
3. MANNER OF PAYMENT
The amount of exported goods shall be paid through authorized dealer duly authorized by RBI as manner specified under FEM (MANNER OF RECEIPT AND PAYMENT) REGULATION, 2000 and in such a manner as may be prescribed by RBI and authorized dealer in this behalf amended and notified time to time.
4. PERIOD WITHIN WHICH VALUES REALISED
The amount of exported values must be realized within Nine months from the date of export within India and Fifteen months in case of good exported to a warehouse established outside India.
The authorized dealer with the proper direction and order from the RBI and the bank may extend the time of realization after shown proper and reasonable reasons by the exporter.
In case of goods/services/software are made in specials units established under the law like special economic zones, software technology parks, export-oriented units, status holder exporter and biotechnology park the time limit will be Nine months or the time specified by RBI amended and modified time to time.
The manner of receipt is
- The payment should be released by the AD category-1 bank in the NASTRO account.
- It can also receive the amount by debit to the credit card of an importer.
- The AD bank also offers the facility of online payment gateway service providers (OPGSPs) for remittances of export funds but the value of remittances should not be exceeding 10000 USD. The exporters have to open a notional account with OPGSP for this facility and there no funds are allowed to be kept in this account all the amount automatically transferred to NOSTRO account.
5. SUBMISSION OF DOCUMENTS
The export documents need to be submitted to authorized dealer mentioned in the EDF/SOFTEX form as the case may be, within 21 days from the date of exports
The time may be extended by the dealer if proper and sufficient reason shown by the exporter subject to the direction issued by the RBI.
6. PAYMENT FOR THE EXPORT
There shall be prior permission from RBI for payments
- If the payment is not as per prescribed manner, or the declaration form is deficient;
- If the payment is delayed after a certain point of time specifically mentioned in this behalf; or
- If the proceeds of the sale are not as per the fair market value or the full value as may be prescribed time to time by the reserve bank of India;
- there should be taken care of the policies, arrangements between different states involved with India regarding relative public notice issued by trade control authority in India;
- An export under the line of credit extended to a bank or a financial institution operating in a foreign state by the Exim Bank for financing exports from India shall be governed by the terms and conditions advised by the Reserve Bank to the authorized dealers from time to time.
- Payment should be according to the approval of RBI and authorized dealers.
7. ADVANCE PAYMENTS
If the payments of exports received in advance, the exporter should take care of the following conditions
- That the goods shall be shipped within one year from the receipt of payment.
- The rate of interest on the payments, if applicable should not exceed LIBOR+ 100 BASIC POINTS.
- The shipment documents should become through an authorized dealer
Note: In the case of the exporter not able to fulfill the shipment order, then no remittance will be allowed after one year, without the approval of RBI.
8. MODE OF PAYMENT IN CASE SALE PROCEEDS
In case of sale proceeds from equity and non-debt instruments traded between the countries, the remittance should be accordingly
The amount should be paid from abroad as inward remittance through banking channels or out of funds held in NRE/ FCNR(B)/ Escrow account maintained following the Foreign Exchange Management (Deposit) Regulations, 2016.
The foreign currency account shall be maintained and utilized for that purpose only for the purpose it was opened. Otherwise, special permission from RBI has to be obtained by the exporters