Rupee receipts allowed

CHATROOM

Exporters can receive payments in Rupees under the FEMA rules.

We import new steel plates, which are supplied by the supplier free of cost. We manufacture dome shaped discs for re-export, with only job charges added on for export realisation. Can we import duty-free and export after job work?

As per para 4.1.8 of the Foreign Trade Policy (FTP), "the facility of advance authorisation shall also be available where some or all of the inputs are supplied free of cost to the exporter. In such cases, for calculation of value addition, the notional value of free of cost inputs along with value of other duty-free inputs shall be taken into consideration. However, if all the inputs are supplied free of cost, the exporter shall also have the option to follow the provision prescribed in paragraph 4.2.7 of the policy."

As per para 4.2.7 of the FTP, "Import of goods, including those mentioned as restricted in ITC (HS) but excluding prohibited items, supplied free of cost, may be permitted for the purpose of jobbing without an authorisation/certificate/permission as per the terms of notification issued by department of revenue from time to time. Similarly, import of goods for carrying out repairs, reconditioning, re-engineering, testing, etc., shall be allowed as per terms and conditions of the customs notification even though the goods may be restricted for imports under the foreign trade policy/ ITC (HS) classification of imports and exports book. The above provisions shall, however, be subject to all conditionality or requirement of authorisation or permission, as may be required, under schedule II of ITC (HS)."

The customs exemption notification no 93/2004 dated 10.09.2004 deals with imports under advance authorisation/license whereas the customs exemption notification no 32/97 dated 01.04.1997 deals with import of goods for jobbing in accordance with para 4.2.7 of the policy.

Can we to accept payment in INR against our exports from foreign buyers?

Under Foreign Exchange Management (Manner of Receipt & Payment) Regulations, 2000, notified vide notification no. FEMA 14/2000-RB dated May 3, 2000, payment for exports may be debited to FCNR/NRE account maintained by the buyer with an authorised dealer or an authorised bank in India or in rupees from the credit card servicing bank in India against the charge slip signed by the buyer or by debit to a rupee account held in the name of an exchange house with an authorised dealer if the amount does not exceed Rs two lakh per transaction or in accordance with the directions issued by the RBI to authorised dealers, where the export is covered by an arrangement between the central government and the government of a foreign country or by the credit arrangement entered into by the Exim Bank with a financial institution in a foreign state.