CHAPTER 8
FOREIGN TRAVEL AND MISCELLANEOUS REMITTANCES
PART A - FOREIGN TRAVEL
8A.1 Sale of Exchange
8A.2 International Credit Cards (ICCs)
8A.3 Unspent Exchange
8A.4 Cultural Tours
8A.5 Pilgrimage
8A.6 Deleted
8A.7 Private Visit
8A.8 Chartered Accountancy
8A.9 Remittances for Tour Arrangements, etc.
PART B - REMITTANCES BY AIRLINENE / SHIPPING COMPANIES OR THEIR AGENTS
8B.1 Remittance of Surplus Passage/Freight Collections by
Foreign Airline Companies
8B.2 Remittance of Surplus Passage/Freight Collections by
Foreign Shipping Companies
8B.3 Remittances by Multimodal Transport Operators (MTOs) to
their Overseas Agents
8B.4 Remittance of Insurance Premium by MTOs
8B.5 Remittance of Break-bulk Agents' Remuneration on
consolidation of outward Sea/Air Cargo
8B.6 Remittance of Freight Pre-paid on Inward Consolidation of
Cargo by Air/Sea
8B.7 Remittances towards cost of Euro Rail etc.
passes/tickets, Overseas hotel reservations, etc. for Indian travellers
8B.8 Remittances on account of Consolidated Tour Arrangements
for Foreign Tourists Visiting Neighbouring Countries
8B.9 Operating Expenses of Indian Airline/Shipping Companies
8B.10 Remittances towards Dry-docking, Repairs to Ships,
Survey fees and Purchase of Spares
8B.11 Remuneration to Agents Abroad appointed by Indian
Airline/Shipping Companies
8B.12 Remittance of Charter Hire in respect of Foreign
Ships/Aircraft on Voyage Charter basis
8B.13 Remittance of Charter Hire in respect of foreign ships
chartered on Time Charter basis
8B.14 Remittance of Demurrage
8B.15 Remittance of Freight in respect of vessels chartered by
Public Sector Undertakings (PSUs)
8B.16 Remittances towards Purchase of Ships/Aircraft by Indian
Airline/Shipping Companies
8B.17 Remittance to Foreign Courier companies
8B.18 Submission of statements by Indian Shipping Companies
PART C - OTHER REMITTANCES
8C.1 Sundry Remittances
8C.2 Advertisements Abroad
8C.2A Remittance of magazine subscription by recognised agents
8C.3 Remittances towards Legacies, Bequests or Inheritances
8C.4 Payment of Freight in Foreign Currency by Indian
Exporters / Importers to Airline / Shipping Companies or their Agents in India
8C.5 Bids in Foreign Currency for Projects to be executed in
India.
8C.6 Supply of Goods by one 100% EOU/EPZ Unit to another 100%
EOU/EPZ Unit against payment in foreign exchange
8C.7 Sale of Overseas Telephone Cards
8C.8 Commission to Overseas Agent on securing Advertisements
for Indian newspapers / periodicals, etc.
8C.9 Supply of goods by 100% Export Oriented Units
8C.10 Advance Remittances for transactions other than Imports
ANNEXURES
Annexure I - Guidelines for release of
exchange for travel Abroad and for other purposes
Annexure IA - F.No.18/1/97.B.O.I. Government
of India Ministry of Finance
Annexure II - Use of International Credit
Cards
Annexure III - Guidelines for acceptance of
passage fare/ Freight in rupees/foreign currency in India by Airline/Shipping
Companies or their agents
Annexure IV - Guidelines for granting
remittance Facilities to travel agents etc. relating to Remittances towards
surface transportation, Hotel accommodation and use of telephone Cards abroad
Annexure V - Guidelines to Authorised
Dealers for scrutiny Of applications for remittance of surplus Passage/freight
collections by agents of Foreign steamship companies.
FOREIGN TRAVEL AND MISCELLANEOUS REMITTANCES
PART A - FOREIGN TRAVEL
Sale of Exchange
8A.1
- Powers have been delegated to authorised dealers for release of exchange
for travel abroad for various purposes, including higher studies subject to
certain guidelines. These have been set out in Annexure I (Part A) to this
chapter. Intending travellers should, therefore, approach authorised dealers
for drawal of exchange. The limits specified in the Annexure are indicative
limits up to which exchange facilities can be made available by authorised
dealers without reference to Reserve Bank. Additional exchange can also be
released by authorised dealers in certain cases as indicated in
sub-paragraph (ii). Applications which cannot be considered by authorised
dealers within the delegated authority and those which are required to be
considered by Reserve Bank in terms of the instructions laid down in this
chapter should be referred to Reserve Bank by authorised dealers. While
releasing exchange under the powers delegated to them or against permits
issued by Reserve Bank, authorised dealers should adhere to the following:
- Where permits have been issued by Reserve Bank, exchange may be sold
within the period of validity stated on the permit after endorsing the
sale on the reverse of the permit.
- The traveller is in possession of a valid passport authorising travel to
the countries proposed to be visited as well as ticket for travel to the
country/countries for which exchange has been applied for. As regards
release of exchange under BTQ authorised dealers/ full-fledged money
changers should also keep on their records a photocopy each of the
relevant pages of the traveller's passport where personal particulars
are available for example name, address, date of birth, signature,
photograph and number, date, place of issue and validity period of the
passport, visa for country of visit, if required,and the page where
endorsement for BTQ has been made alongwith the application and produce
the same to the Inspecting Officials of Reserve Bank as and when
demanded.
- The ticket held by the traveller has been issued for a journey
commencing not later than sixty days from the date of sale of foreign
exchange (not applicable in case of students going abroad for studies).
- Exchange sold should be endorsed on the traveller's passport under the
authorised dealer's stamp and signature. In case of a child travelling
on a parent's passport, the endorsement should be made on the joint
passport.
- In case of issue of travellers cheques, the traveller should be required
to sign the cheques in the presence of an authorised official and the
purchaser's acknowledgement for receipt of the travellers cheques should
be duly obtained in the issue register maintained for such cheques or on
the purchase slip.
- Exchange in the form of foreign currency notes and coins may be sold up
to U.S.$ 500 or its equivalent subject to the traveller's overall
foreign exchange entitlement. Exchange in the form of currency notes and
coins may, however, be sold up to the full entitlement of the traveller
proceeding to Islamic Republic of Iran, Russian Federation and other
Republics of Commonwealth of Independent States. Exchange in the form of
foreign currency notes may also be sold to businessmen visiting Iraq or
Libya for a period not exceeding two weeks.
- The relevant forms A2 relating to sale of exchange for travel purposes
should be retained by authorised dealers together with the connected
papers for the purpose of verification by their Internal
auditors/Reserve Bank.
- Authorised dealers may also grant exchange facilities in the following
types
of caseseven in excess of the prescribed scales and/or the duration of
the visit abroad, provided they are satisfied about the bona fides of
the application and the need for release of exchange in excess of the
prescribed scales.
| |
Purpose of visit |
No. of item in Part A of Annexure I |
| i) |
Business Travel abroad including Entertainment Allowance |
Items III, IV, V & VIII |
| ii) |
Participation in overseas conferences/seminars of scientific/
technical/educational nature |
Item VI
|
| iii) |
Specialised training/Study tours/ Apprenticeship training |
Items VII, XIII & XIV |
| iv) |
Medical treatment/check-up/ consultation abroad |
Items XI & XII |
The other terms and conditions regarding release of exchange for the
above purposes laid down in sub-paragraph(i) above and against the
relative item mentioned above remain unchanged. The decision to release
exchange in excess of the prescribed scale should be taken at the level
of Officer not below the rank of Chief Manager or Officer in Scale IV.
Authorised dealers should keep on record the documentary evidence
produced by the applicant justifying the need for release of exchange in
excess of the prescribed scale.
International Credit Cards (ICCs)
8A.2
- Banks or their subsidiaries in India do not require permission
from Reserve Bank of India from exchange control angle for issue of ICCs
to residents. The credit card issuing banks or subsidiaries may remit to
the overseas organisation with whom they have tie-up arrangement the
annual fees/joining fees, late payments/delinquency fees, etc., as per
the rules framed by the overseas organisation concerned. The conditions
governing the use of ICCs and the instructions to be followed by the
card issuing banks/subsidiaries of banks are given in Annexure II.
- Returning Indians maintaining Resident Foreign Currency (RFC)
Accounts in India or Foreign Currency Accounts abroad can also use ICCs
freely without any end-use restrictions provided the reimbursements are
made by debit to their RFC accounts in India or foreign currency
accounts held abroad.
- Non residents are free to nominate any resident as
additional/add-on card holder. The claims arising out of use of such
cards should be met by the non-residents from their foreign currency
accounts maintained in India or abroad. If the additional/add-on card
has been arranged by a NRI the claims against the card may be met from
the NRIs' NRE/FCNR account held in India also. However, no remittance
from India by the resident add-on cardholder will be permitted for
settlement of claims against such additional/add-on credit cards.
- EEFC facility will not be available to the recipients in respect of
payments received from residents against ICCs.
- Residents in India are permitted to hold International Credit Cards
arranged by overseas organisations provided liabilities arising out of
use of such cards, in India and/or outside India, are met by the
organisation arranging the card. Under any circumstances no remittance
from India will be allowed to meet the liabilities arising out of use of
such cards.
Unspent Exchange
8A.3
- Exchange brought back to India by a traveller should be surrendered to
an
authorised dealer against payment in rupees within 90 days from the date
of return of the traveller if the unspent exchange is in the form of
currency notes. If such exchange is in the form of travellers cheques,
the same should besurrendered to an authorised dealer within 180 days
from the date of return. Exchange so retained can be utilised by the
traveller for his subsequent visit abroad within the aforesaid period in
terms of Reserve Bank Notification No.FERA.172/97-RB dated 24th February
1997.
- Authorised dealers may, if requested by the traveller, record under
their stamp and
signature, details of the exchange surrendered by the traveller on the
latter's passport.
NOTE:
In view of the general permission granted under the Central Government
Notification referred to in NOTE D under paragraph 3E.1, the requirement
of surrender of unspent foreign exchange brought back would apply to
foreign currency/ies held in excess of U.S.$ 2000 or its equivalent
inclusive of foreign currency/ies, if any, held for numismatic purpose.
Cultural Tours
8A.4
Dance troupes, artistes, etc. who wish to undertake tours abroad for
cultural purposes
should apply to Ministry of Human Resources Development (Department of
Education and Culture), Government of India, for recommendation
regarding their foreign exchange requirements. Authorised dealers may
release exchange, on the strength of the sanction from the Ministry, to
the extent and subject to conditions indicated therein.
Pilgrimage
8A.5
Exchange facilities for undertaking pilgrimage outside India are granted
only to a.
limited extent for the performance of Haj and Ziarat Intending Haj and
Ziarat pilgrims should approach the Haj Committee at Mumbai for guidance
regarding the procedure to be followed by them for availing of such
facilities
8A.6
Deleted
Private Visit
8A.7
Exchange is not ordinarily granted for undertaking visits abroad for
private purposes.
such as meeting close relatives etc. except under Basic Travel Quota
(Item XV of Part A of Annexure I). In cases where it is essential for
persons to proceed abroad for any specific personal reason, applications
may be referred to Reserve Bank giving details regarding country to be
visited, reasons for the visit, period of visit, amount of exchange
required and other relevant particulars supported by documentary
evidence
Chartered Accountancy
8A.8
Authorised dealers may release exchange to students Wishing to proceed
to the U.K..
to take up articleship with firms of Chartered Accountants with a view
to appearing for the examination conducted by the Institute of Chartered
Accountants, U.K. in terms of item XVI of Part A of Annexure I.
Remittancees for Tour Arrangements, etc.
8A.9
Authorised dealers may effect remittances up to Reasonable limits if
requested by a.traveller out of his exchange Entitlement (including exchange drawn
under the Basic Travel Quota) towards his hotel accommodation, tour
arrangements, etc.in the countries proposed to be visited by him.
PART B - REMITTANCES BY AIRLINE/SHIPPING
COMPANIES OR THEIR AGENTS
Airline/shipping companies and their agents are required to comply with the
Exchange Control regulations laid down in Annexure III to this Chapter in the
matter of acceptance of rupees/foreign currency in payment of cost of passages
booked by them for journeys which are partly or wholly outside India or freight
on goods exported from or imported into India or transhipped at Indian ports.
Approvals for remittances of surplus collections of foreign airline/shipping
companies (or their agents) and towards operating expenses by Indian
airline/shipping companies are subject to adherence to these Guidelines.
Remittance of Surplus Passage/Freight
Collections by Foreign Airline Companies
8B.1
- Foreign airline companies operating in or through India are required to
submit to Reserve Bank through their bankers monthly statement (in
duplicate) of their passage and freight collections and disbursements made
therefrom in form SPM 1 duly signed by the Chief Executive in India of the
airline in terms of paragraph 22 of the Guidelines (Annexure III).
Applications for remittance of surplus passage fare and freight collections
to the non-resident owners and operators of the foreign airline companies,
as and when desired, should be made by their offices or agents in India to
their bankers on form A2 along with the statement in form SPM 1 indicating,
inter alia, the amount to be remitted. The concerned authorised dealer may
allow the remittance of surplus funds provided the company has produced the
necessary undertaking/certificate regarding payment of income-tax (cf.
paragraph 3B.10). Before allowing the remittance, the bank should verify
that the concerned airline has obtained the necessary permission from
Reserve Bank under Section 29 of FERA 1973 for carrying on their commercial
activity in India and also advise the concerned airline company that
discrepant amounts noticed during the scrutiny of the statements by Reserve
Bank or the amount remitted in excess of its entitlement should be brought
to India immediately by the airline company concerned by inward remittance
and no adjustment from other surplus funds held/future accretions, etc.
would be permitted.
- Likewise, foreign off-line carriers i.e. those airline companies which
are not operating their services in or through India but are issuing their
tickets and/or airway bills in India are required to submit to Reserve Bank
through their bankers monthly statements (in duplicate) of their passage
fare and freight collections and disbursements made therefrom in form SPM 1
duly signed by the Chief Executive in India of the airline or their General
Sale Agents in India in terms of paragraph 22 of the Guidelines (Annexure
III). Applications for remittance of surplus passage fare and freight
collections should be made by their Offices or their Agents in India to
their bankers on form A2 alongwith the statement in form SPM 1, indicating,
inter alia, the amount to be remitted. The authorised dealer may allow the
remittance of passage fare/freight collections subject to the terms and
conditions/documents prescribed in sub-paragraph (i) and after obtaining the
following additional documents:
- A certified copy of Reserve Bank's permission under Section 29 of
FERA 1973.
- Approval granted by the Director General of Civil Aviation, in
original, for the flight/s (i.e. YA signals) concerned, if the
collections reported are in respect of flight/s to/from India.
- Undertaking/certificate regarding payment of income-tax (cf.
paragraph 3B.10).
- Authorised dealers may, on request, allow remittance upto 75% of
remittable surplus (subject to availability of balance in the account) on
ad-hoc basis as per quick estimates made by the foreign airline company/its
agent, pending submission of statement form SPM 1 any time after the 20th of
the month to which it relates. The balance amount of net remittable surplus
may be allowed after scrutiny of the form SPM 1 statement. No further
remittance should be allowed on ad-hoc basis till the relative form SPM 1
statement is submitted.
- One copy of the statement in form SPM 1 should be forwarded by the
authorised dealer to Reserve Bank after completing the certificate mentioned
therein immediately after making the remittance along with the
undertaking/certificate regarding payment of income-tax (cf. paragraph
3B.10). The statement should be submitted irrespective of whether remittance
of surplus funds out of India is intended to be applied for or
not.Authorised dealer should also specifically confirm on form A2 that the
remittance has been made on the basis of airline's statement in form SPM 1
for the relevant month.
- Authorised dealers should watch the regular receipt of the monthly
statements from the airlines concerned who are maintaining rupee accounts
with them and bring to the notice of Reserve Bank cases where the statements
are not received by them for any particular month.
- Authorised dealers may ensure that foreign airline companies or their
agents do not keep the surplus collections of passage fare and freight in
term deposits.
Remittance of Surplus Passage/Freight Collections by Foreign Shipping
companies
8B.2
- Foreign shipping companies/their agents in India are required to submit
to Reserve Bank through their bankers voyage-wise statements (in duplicate)
in form SPM 2 within 35 days from the date of sailing of the vessel, vide
paragraph 23 of the Guidelines (Annexure III) irrespective of whether
remittance of surplus funds out of India is intended to be applied for or
not. Applications for remittance of surplus freight and passage fare
collections due to non-resident ship owners and shipping companies operating
to/from India may be made by their offices or local agents in India to their
bankers on form A2 together with a copy of the statement in form SPM 2 and
the documents mentioned therein. The concerned authorised dealer may allow
the remittance after scrutinising the application in accordance with the
Guidelines given in Annexure V and after satisfying that the remittable
amount has been correctly arrived at with reference to the documents
produced and provided that the company has submitted the necessary
undertaking/certificate regarding payment of income-tax (cf. paragraph 3
B.10). Detailed guidelines for scrutiny of applications received in form SPM
2 are given separately in Annexure V at the end of this Chapter. While
permitting the remittance, the authorised dealer should also advise the
agent that the discrepant amounts noticed during the scrutiny of the
statements by Reserve Bank or the amount remitted in excess of its
entitlement should be brought to India immediately by inward remittance from
the overseas company concerned.
- Authorised dealers should watch the receipt of the statements from the
shipping companies/their agents concerned who are maintaining bank accounts
with them for crediting the freight/passage collections. They should
maintain a register for recording the particulars of SPM 2 statements
received and remittances of surplus passage/freight collections allowed in
form SRM.
- Authorised dealers should also forward to Reserve Bank a monthly
statement of remittances allowed in form SRM i.e. the form in which a
register is maintained by them, after completing the certificate mentioned
therein, alongwith copies of statements in form SPM 2 without its
enclosures. The statement should be sent to Reserve Bank on or before 10th
day of the succeeding month. The documents submitted by the applicants
alongwith SPM 2 should be preserved for a period of one year from the date
of remittance or till the date of acceptance of the transaction/s as in
order by their internal auditors, whichever is later.
- The local agents of the overseas Non Vessel Operating Common Carriers
(NVOCCs) operating to/from India may approach the concerned Regional Office
of Reserve Bank under whose jurisdiction the port of their activity falls
for grant of general permission for remittance of surplus freight
collections to their overseas principals, through a designated branch i.e. a
branch of an authorised dealer with whom they are maintaining bank accounts
styled
as_________________________________________.A/c.__________________________
(Name of the Agent)
(Name of the principal)
alongwith the following documents -
- Certificate of Incorporation, Memorandum and Articles of Association
of the overseas company i.e. NVOCC.
- Details of its membership of any P & I Club or any other
organisation for marine cargo insurance and a copy of the receipt in
respect of last premium/subscription paid to such club/organisation or
copy of membership certificate.
- Financial status certificate from the bankers of NVOCC.
Reserve Bank will grant general permission to the local agent to make
the remittances through the designated branch. After the general
permission has been granted by the Reserve Bank for the purpose, the
designated branch of authorised dealer may allow the remittances of
surplus freight collection to the principal NVOCC in accordance with the
instructions contained in sub-paragraphs (i) to (iii) above.
- uthorised dealers may, on request, allow remittance upto 75% of
remittable surplus (subject to availability of balance in the account) on
ad-hoc basis as per estimates made by the agent of a foreign shipping
company, pending submission of SPM2 statement, after sailing of the vessel.
The balance amount of net remittable surplus may be allowed only after
scrutiny of the SPM2 statement (cf. Annexure V to this Chapter). No further
remittance should be allowed if the relative SPM 2 statement is not
submitted within 20 days from the date of ad-hoc remittance.
- Foreign shipping companies operating feeder services to/from India or
their agents in India and collecting freight/slot hire charges from Main
Line Operators, Multimodal Transport Operators, NVOCCs or their agents
should submit to Reserve Bank a voyagewise statement in form SPM 4 vide item
(23A) of the Guidelines (Annexure III ). Applications for remittance of
surplus collections due to non-resident owners and operators of feeder
services operating in or through India should be made by their local offices
or agents in India to their bankers on form A 2, citing a reference to the
statement submitted directly to Reserve Bank. Such applications should be
referred to Reserve Bank for approval.
- Authorised dealers may ensure that the foreign shipping companies or
their agents do not keep the surplus collections of passage fare and freight
in term deposits.
Remittances by Multimodal Transport Operators (MTOs) to their
Overseas Agents
8B.3
- Multi Modal Transport Operators (MTOs) are allowed to issue a single
document i.e. Multi-Modal Transport Document (MTD) which is a negotiable
document. For purposes of handling the export cargo the MTOs appoint agents
at the port of discharge/ trans-shipment for onward transport by ocean,
rail, road and/or inland water ways. The MTOs desirous of making remittances
to these agents towards the services rendered by them for on-carriage of the
cargo may approach a designated branch of authorised dealer with agency
agreement entered with the overseas agents togetherwith a copy of the
registration certificate issued by the Director General of Shipping. The
designated branch may allow the remittances towards commission and other
charges payable to the overseas agents after verifying the following
documents.
- Agency agreement indicating the rates of various items of work to be
attended by him
- Full details of remittance applied for in form MTR
- Non-negotiable copy of multi-modal transport documents
- Invoices/debit notes from overseas agents indicating charges for the
services endered,and
- Undertaking/Certificate regarding payment of income-Tax (cf. paragraph
3B.10)
As a proof of on-carriage (POC), authorised dealers may call for Bill of
Lading/Railway receipt/transport or lorry receipt togetherwith evidence of
rates having been decided prior to shipment/ on-carriage. Authorised dealers
should ensure with reference to registration certificate issued by the
Director General of Shipping that the freight was collected during its
validity period. In cases of freight pre-paid MTDs a declaration from
exporter in form DIC may be obtained.
Note :
Change in designated branch of an authorised dealer should be advised to
Reserve Bank
- Remittance of lease rental of containers may be allowed by authorised
dealers on the
basis of approval of the Director General of Shipping to take the containers
on lease, Lease Agreement, invoice of rental and a Chartered Accountant's
certificate stating that the containers have been taken on the books of
accounts of the leasee.
- Remittances towards cost of repairs may be allowed by authorised dealers to
the
overseas company which has carried out the repairs to the containers or to
the overseas agents of the applicant towards reimbursement of the expenses
incurred by them for carrying out the repairs after verifying the shipping
documents to show that the containers have been taken abroad and an invoice
from the overseas repairers.
- MTOs are sometimes required to arrange for return of empty containers from
overseas ports to India or to any other port outside India. When the
containers are being returned to India they should be received on 'charges
to collect ' basis. In case the empty containers are received on a foreign
port, authorised dealers may allow remittances towards freight charges to
overseas shipping companies or reimbursement to MTO's agents abroad, after
verifying invoice from the company and service bill of lading indicating
container number or copies of loading/discharge certificates from respective
port authorities (please also see item 21B of Annexure III).
- Authorised dealers should maintain a systematic record of the remittances
allowed
and related documents thereto and make them available to the internal
auditors/Reserve Bank officials as and when called for.
Remittance of Insurance Premia by MTOs
8B.4
Authorised dealers may allow remittances towards insurance premia by the
MTOs to the overseas through Transport Club (TT Club)/OTIM subject to
verification of the original
invoice from TT Club/OTIM and No Objection Certificate (NOC) from the
General Insurance Corporation, in original.
Remittance of Break-Bulk Agents Remunerations on
Consolidation of Outward Sea/Air Cargo
8B.5
- Freight forwarders undertaking consolidation of out-bound cargo need
services of break-bulk agents abroad. Sea cargo forwarders and IATA
recognised Air cargo agents may
approach a designated branch of an authorised dealer for remitting
remuneration to break-bulk agents giving full particulars of the
arrangements in form BBX 1 togetherwith a copy of the relative agency
agreement. Authorised dealers may allow the remittance of remunerations to
break-bulk agents on outward cargo on the basis of a Chartered Accountant's
certificate to the effect that the amount of remittance applied for has been
verified with reference to break-bulk agent's debit notes/invoices, copy of
Master Air-Way Bill (MAWB)/Master Bill of Lading (MBL) and original relative
House Air-Way Bill (HAWB)/House Bill of Lading (HBL), as the case may be.
Before allowing the remittance authorised dealers may also obtain
undertaking/certificate regarding payment of Income-tax (cf. paragraph
3B.10) and a statement in form BBX2.
NOTE :
Application from Air Cargo Consolidators not recognised by IATA should be
referred to Reserve Bank.
- Air/Sea cargo agents are also permitted to pay freight to airlines/shipping
companies
in rupees in respect of exports made on FOB basis and recover the freight
amount from the overseas consignee through their break-bulk agent abroad
provided they undertake to repatriate the same to India through normal
banking channels within a period of 30 days in case of Air Cargo and 90 days
in case of Sea Cargo from the date of shipment.
- Authorised dealer may call for Chartered Accountant's Certificate in form
CAS to
determine outstanding receivables. In cases where the receivables from an
overseas agent outstanding for more than 6 months exceed U.S. $ 2500 no
remittance should be allowed without prior approval of Reserve Bank.
- Authorised dealers should maintain systematic record of the remittances
allowed
togetherwith documents called for which should be made available to their
internal auditors/Reserve Bank officials as and when called for.
Remittance of Freight Prepaid on Inward
Consolidation of Cargo by Air/Sea
8B.6
- While normally freight on goods imported as consolidated air/sea cargo is
prepaid by overseas suppliers, in some cases overseas consolidators advance
the freight abroad
to the airline/shipping company on behalf of the Indian importer and the
break-bulk agent in India is required to collect freight amount from the
Indian importer and remit the same to the overseas consolidator. In such
cases, Indian agents of overseas cargo consolidators desirous of making
remittance are required to submit their agency agreements to a designated
branch of an authorised dealer. The designated branch may allow the
remittance on the basis of the agreement and statement in form BBI giving
full details of inward shipments on `charges to collect' basis and a
Chartered Accountant's certificate to the effect that the amount of
remittance applied for has been verified with reference to copy of prepaid
Master Air-Way Bill (MAWB)/Master Bill of Lading (MBL) together with the
original relative House Air-Way Bill (HAWB)/House Bill of Lading (HBL) as
also cargo manifests and invoices from overseas consolidators and has been
found correct. Declaration from importers in form DIC regarding payment of
freight on import may also be called for.
- Authorised dealers may call for Chartered Accountant's certificate in form
CAS to
determine outstanding receivables. In cases where the receivables from the
same overseas consolidators outstanding for more than 6 months exceed US $
2500 no remittance should be allowed without prior approval of Reserve Bank.
- Authorised dealers should maintain systematic record of the remittances
allowed
together with documents called for and should be made available to their
internal auditors/Reserve Bank officials as and when called for.
Remittances towards cost of Euro Rail etc. passes/tickets,
Overseas hotel reservations, etc. for Indian travellers
8B.7
- Agents in India appointed by reputed overseas transport organisations for
selling their passes/tickets for rail/road/water transportation abroad to
persons resident in
India undertaking visits to foreign countries, against payment in foreign
exchange or in rupees, should apply to an authorised dealer for remittance
of total cost thereof, net of commission payable to the Indian agent, to the
overseas principal(s). The application should contain, inter alia, details
such as name and address of the overseas transport organisation,
country(ies)/ areas covered, types of passes/tickets sold, rate of
commission receivable etc. duly accompanied by a copy of the agency
agreement(s) indicating the aforesaid particulars. Agents in India should
designate a branch of an authorised dealer with which the collection of cost
of passes/tickets sold against payment in rupee/foreign currency will be
deposited and through which remittances of net amount i.e. amount collected
less commission/mark up would be made to the foreign principal. The
designated branch of authorised dealer may allow the remittance, subject to
the compliance with the Guidelines given in Annexure IV.
- Agents in India who have made tie up arrangements with overseas
hotels/agents etc.
for providing hotel accommodation to travellers undertaking visits from
India should apply to the authorised dealer giving full details of the
arrangements supported by a copy of the relevant agreement. Authorised
dealer may allow the remittance of the actual cost of the hotel
accommodation provided it is paid out of the foreign exchange drawn for
visits abroad and subject to the compliance with the Guidelines in Annexure
IV. In case such agents desire to open foreign currency account for
depositing collections made in foreign exchange, these agents will be
permitted by Reserve Bank on application to collect payments in foreign
currency from the travellers and deposit the same in foreign currency
accounts opened with the designated branches of authorised dealers i.e.
their bankers in India and remit the amounts so collected to their
principals after deduction of their commission/mark up. Application for
opening of foreign currency account for the purpose may be made by such
agents to the Reserve Bank with full particulars.
Remittances on account of Consolidated Tour Arrangements
for Foreign Tourists Visiting Neighbouring Countries
8B.8
- Travel agents are not permitted to incur any expenditure in India on behalf
of foreign
tourists arriving in India through their agency unless they have received
advance remittance or have made arrangements to obtain reimbursement through
an authorised dealer in an approved manner. In respect of consolidated tours
arranged by travel agents for foreign tourists visiting India and
neighbouring countries like Nepal, Bangladesh, Sri Lanka, etc. part of the
foreign exchange received in India against such consolidated tour
arrangements will have to be remitted from India to those countries for
services rendered by travel agents and hoteliers in the neighbouring
countries. Travel agents may apply to authorised dealers for such
remittances on form A2 together with a statement in form CTA duly supported
by documents mentioned therein. Authorised dealers should verify the
following:
- Supporting debit notes/bills/invoices (in original) from the hotel/travel
agent in the foreign country and the bank certificates relate to the same
tourist group or family to which the statement relates.
- The neighbouring countries' share of tourism earnings appears prima facie
reasonable on the basis of the duration of stay in the respective countries.
- Amount repatriated is supported by bank certificates (in original)
confirming the receipt of foreign exchange in an approved manner (If the
currency of remittance was rupees, the rupees should not have been derived
from the non-convertible source).
- If the full amount of the tour price has not been repatriated,
- reasons therefor have been furnished and the undertaking on the form for
repatriation of the balance has been completed;
- at least 90 per cent of the tour price has been repatriated;
and
- amount to be remitted to the neighbouring country (inclusive of remittances,
if any, already made against the tour) does not exceed the amount actually
repatriated to India.
- Country of residence of beneficiary is not Pakistan.
If the application for remittance satisfies the above requirements,
authorised dealer may make the remittance and report it to Reserve Bank
under the relative R Return, enclosing a copy of form CTA (after
countersigning it) with the covering form A2. The supporting bank
certificates should be retained by authorised dealer after noting therein
the remittance made for future reference in case of need.
- In all cases where the undertaking to repatriate the balance amount of tour
price has
been completed by the travel agent, authorised dealers should watch the
submission of further bank certificates for the outstanding amount within
the time limit of three months. If any part of the balance amount cannot be
repatriated due to reduction in tour price, disputes, etc. authorised dealer
should verify appropriate documentary evidence such as correspondence
between travel agent and the overseas tour operator, final settlement of
account, etc. and satisfy himself that the tour account stood closed and no
further amount was due to be repatriated.
- Authorised dealers should promptly bring to the notice of Reserve Bank any
cases
where travel agents have not repatriated outstanding balances even after the
expiry of the period of three months.
NOTE:
Authorised dealers should permit remittances in terms of this paragraph only
if the bank certificates show that the foreign exchange has been realised in
India; in other words, in cases where the tour price has been settled by
overseas tour operators by means of drafts drawn on banks outside India, the
instruments should have been collected and proceeds realised before
remittances to neighbouring countries can be permitted. As an exception to
this rule, authorised dealers may permit remittances to Nepal even in
advance of their realisation, provided the drawers/drawees of the drafts are
well known banks and the drafts have been sent for collection through the
medium of the same authorised dealers. The remittance to Nepal in such cases
should be made by draft/mail transfer/TT drawn in favour of the Nepal Rastra
Bank for account of the beneficiary. If in any case after remittance of the
dues to Nepal, the payment on the draft is not realised, it should be
reported promptly to Reserve Bank.
- Applications not satisfying the requirements laid down in above paragraph
(illustratively, cases where tour price has been settled through MCOs issued
by airline companies, both Indian and foreign, and cases where less than 90
per cent of the price has been realised) as also all remittances to Pakistan
will require specific approval of Reserve Bank.
Operating expenses of Indian Airline/Shipping Companies
8B.9
Indian Airline/shipping companies which are incorporated in and/or whose
seat of control is in India may apply to authorised dealers for remittances
towards operating expenses etc. in
case balances in their foreign currency accounts are not sufficient to meet
these expenses. Authorised dealer may allow remittance on the basis of
invoices/debit notes received from overseas agents and in case of bunkers
suppliers' invoice accompanied by master's confirmation for the bunkers
supplied to the vessel. The invoice should contain full details i.e. Name of
the Vessel/Aircraft, Voyage No. etc. Authorised dealers may ensure that
balances in the foreign currency account are not sufficient to meet the
expenditure and also that the shipping companies hold requisite
authorisation from the Director General of Shipping for the particular
voyage of the vessel or for its operations on foreign voyage in general. In
case of application for remittance of Income-tax a demand note from the
concerned Income-tax authorities may be called for.
Remittances towards Dry-docking, Repairs to
Ships, Survey fees and Purchases of Spares
8B.10
- Indian shipping companies are allowed to meet the expenditure of
dry-docking,repairs to ships, payment of survey fees as also purchase of
spares abroad from their foreign
currency accounts permitted to be maintained by Reserve Bank [See paragraph
12.5(i)] or remit them from India through authorised dealers. Authorised
dealers may allow remittances towards the aforesaid expenditure if
application is submitted by the company on form A2 together with the
documentary evidence such as invoice/bills etc. in support of the expenses
incurred/to be incurred.
- Application for remittance from India for other purposes such as solicitors
fees or
average adjustor's fees may be allowed by authorised dealers subject to the
conditions mentioned in item V of Part B of Annexure I.
Remuneration to Agents Abroad appointed
by Indian Airline/Shipping Companies
8B.11
Indian airline/shipping companies are permitted to appoint agents at various
overseas ports for looking after their interests and make payment of
remuneration/commission and other charges
actually incurred out of their freight/passage collections or out of
balances held in their foreign currency accounts maintained abroad with the
approval of Reserve Bank [cf. paragraph 12.1] provided the commission
payable conform to the international trade practices/IATA regulations
subject to a maximum of 5% of the freight collections abroad in the case of
shipping companies and 15% of the passage/freight collections abroad in the
case of airline companies made by the foreign agents on behalf of Indian
principals. In case the freight/passage collections or balances in foreign
currency at a particular place are insufficient, applications for remittance
may be made by Indian airline/shipping companies to their bankers
(authorised dealers), supported by documentary evidence. The authorised
dealer may, on application, and subject to verification of the terms of the
agency agreements entered into between the Indian airline/shipping company
and its overseas agent and documentary evidence such as debit notes, details
of passage fare/freight collected etc. allow the remittance of
remuneration/commission to the overseas agents of Indian airline/shipping
companies within the above ceilings. Copies of the documentary evidence
verified should be submitted to Reserve Bank alongwith the relative form A2
while reporting the transaction in the R Returns for the relevant period.
Remittance of Charter Hire in respect of
Foreign Ships/Aircrafts on Voyage Charter basis
8B.12
- Authorised dealers may allow remittance of freight in respect of foreign
ships engaged by Indian exporters/importers on `voyage charter basis' on the
strength of charter party
agreement, approval from Director General of Shipping [from TRANSCHART
(Chartering Wing of Ministry of Surface Transport) in respect of public
sector undertakings], invoices from shipowners/agents and
undertaking/certificate regarding payment of Income-tax (cf. paragraph
3B.10). In case of import, Bill of Entry/Custom Certified invoices and in
case of exports, on Board Bill of Lading may be called for.
NOTE :
Authorised dealers should ensure that the vessel was engaged within the `laycan'
time indicated, if any, in the DGS/TRANSCHART approvals.
- Applications if any received for advance payment i.e. before sailing of
vessel in
respect of export cargo and before arrival of vessel at Indian Port in
respect of import cargo should be referred to Reserve Bank for prior
approval in cases where the amount of remittance exceeds U.S.$ 15000/-.
- Applications for remittance of demurrage charges on account of delay in
loading/discharge of the cargo or non-availability of berth may be allowed
by authorised dealers with reference to sale/purchase contract, charter
party agreement showing rates of demurrage agreed to, duly approved by
DGS/TRANSCHART. Authorised dealers may also call for survey report,
worksheet for demurrage calculation, invoice from ship owners and also a
certificate from port authority if the delay was on account of
non-availability of berth.
- Remittances in respect of charter hire of aircrafts (ad hoc flights) may be
permitted
by the authorised dealer at the centre at which the registered/Head Office
of the charterer is situated on submission of an application for remittance
in form A2 accompanied by invoice, copy of agreement/contract and after
verifying the approval (i.e. YA signals) obtained from the Director General
of Civil Aviation (DGCA) in original for such ad hoc flights and documentary
evidence from Airport Authority to show the actual flight operation. The
undertaking/certificate regarding payment of income-tax (cf. paragraph 3
B.10) should also be obtained before allowing the remittance. It should be
ensured that the remittances are made by the charterers to the owners and
not through any other airline, etc. in India.
- Authorised dealers should maintain systematic record of the remittances
allowed
together with documents verified for verification by their internal
auditors/Reserve Bank officials whichever is earlier.
NOTE :
In case of import cargo on FOB/FAS terms and remittance being made to the
shipowner belonging to the country having Double Taxation Avoidance
Agreement with Government of India, annual No Objection Certificate valid as
on the date of remittance may be accepted.
Remittance of Charter Hire in respect of foreign
ships chartered on Time Charter basis
8B.13
- Firms/companies desirous of engaging foreign flag vessels on `time charter
basis'
should approach the office of Reserve Bank under whose jurisdiction their
Head office/registered office is situated for approval of the arrangement
through their bankers along with the following documents.
- Purpose of engaging the vessel with details of estimated expenses, earnings,
etc.
- Approval in original (with a copy thereof) granted by DGS or TRANSCHART
[i.e. Chartering Wing of Ministry of Surface Transport in respect of Public
Sector Undertakings (PSUs)] for engagement of the vessel.
- Charter party agreement in original with a copy thereof.
- Delivery certificate in original with a copy thereof, and
- Survey report for bunkers on board the vessel for bunker adjustment, if any.
After obtaining the approval of Reserve Bank, the authorised dealer
concerned may allow the remittance of the instalments of charter hire on
submission of (a) form A2 in duplicate,(b) copy of the charter party
agreement, (c) the invoice from the ship owner duly certified for payment by
the charterer as per charter party agreement and (d)
undertaking/accountant's certificate for payment of income-tax.
Remittances of last such instalment wherein the adjustments towards bunkers,
other eligible dues, if any, are involved, will be allowed by the authorised
dealer on production of redelivery certificate supported by survey report,
final accounts etc. by the charterer with details of adjustment(s).
- The details of charter hire remitted, freight earned and the expenses
incurred on the
vessel should be incorporated by the Indian Shipping Company engaging the
vessel on time charter basis in the Statement SPG 4 which should be
submitted to Reserve Bank through the authorised dealer through whom the
remittance of charter hire is made.
- Sometimes Indian exporters/importers may engage foreign flag vessels on
`time
charter basis' for one time export/import of the goods. In such cases,
authorised dealers may allow remittance of the charter hire after obtaining
the following documents and scrutiny thereof in accordance with the terms of
charter party agreement.
- Approval in original, with a copy thereof, obtained from the Director
General of Shipping or from TRANSCHART (i.e. chartering wing of Ministry of
Surface Transport in respect of Public Sector Undertakings).
- Charter party agreement in original duly signed by both the owner of the
vessel and charterer with a copy thereof.
- Freight Invoice.
- Non-negotiable copy of Bill of Lading.
- Undertaking/Accountant's certificate regarding payment of Income-tax (cf.paragraph
3B.10).
- Delivery certificate with survey report for bunker.
The delivery of the vessel concerned should be in conformity with the
approval granted by DGS/TRANSCHART.
- The remittance of bunker charges and other cargo related expenses at foreign
ports in
respect of the vessel engaged on time charter basis may be allowed in
accordance with the provisions of paragraph 8B.9 by the authorised dealer
through whom the remittance of charter hire of the vessel is made. Other
expenses such as normal wages of crew and expenses for spare parts,
insurance (other than cargo insurance) which are required to be borne by the
owner of the vessel shall not be allowed by the authorised dealer unless
there is a specific clause in the Charter Party Agreement for deduction of
such payments from the charter hire.
NOTE:
Applications in respect of aircraft chartered on 'time charter' basis should
be referred to Reserve Bank.
Remittance of Demurrage
8B.14
- Application for remittance of demurrage including demurrage in respect of
FOB Exports and CIF/C&F imports may be allowed by authorised dealers subject
to submission of the following documents :
- Sale contract
- Charter Party Agreement (to be insisted upon only in the cases when in the
sale/purchase agreement there is a specific reference to Charter Party
Agreement)
- Notice of readiness
- Lay time statement/statement of facts or
- Survey report
- Work sheet for demurrage calculation
- Copy of Bill of Lading
- Certified copy of bill of entry (in respect of imports)
- Undertaking/certificate in respect of payment of Income-tax (cf. paragraph
3B.10).
- In case of application orf remittance of demurrage in respect of contracts
on terms
other than CIF exports or FOB/FAS imports by Central/State Governments,
Government and Public Sector Undertakings and autonomous bodies, a No
Objection Certificate from TRANSCHART (chartering wing of Ministry of
Surface Transport) should be insisted upon before allowing any remittance.
Remittance of Freight in respect of vessels
chartered by Public Sector Undertakings (PSUs)
8B.15
- PSUs desirous of remitting approved percentage of freight in respect of
voyage charter of vessels chartered by them on the basis of Fixture Note
issued by TRANSCHART
(chartering wing of Ministry of Surface Transport) pending submission of
documents as per paragraph 8B.12 may approach their bankers with the
original Fixture Note issued by TRANSCHART.
The authorised dealer may, after verifying original Fixture Note issued by
TRANSCHART, allow remittance to the extent of percentage of freight
indicated therein. The balance amount of freight including claims towards
demurrage, if any, may be allowed by the same authorised dealer after
obtaining and scrutinising the documents listed in paragraph 8B.12(i) and
8B.12(iii). The authorised dealer concerned should ensure that the
application for the balance amount of freight alongwith the required
documents are submitted to him within a period of forty five days from the
date of making remittance of approved percentage of freight. Non-submission
of the application/documents within stipulated period should immediately be
brought to the notice of the concerned Regional Office of Reserve Bank.
- A proper record of the remittance allowed and the documents verified should
be kept
by the authorised dealer for verification by their internal auditors/Reserve
Bank officials.
Remittances towards Purchase of Ships/Aircraft
by Indian Airline/Shipping Companies
8B.16
- Purchase of ships/aircraft by Indian shipping/airline companies requires
approval of
Ministry of Surface Transport/Ministry of Civil Aviation, Government of
India. Shipping/airline companies wishing to acquire ships/aircraft should,
therefore, approach Government of India for permission. Purchase of
ships/aircraft will generally require remittances towards advance/down
payments, obtaining of foreign currency loans, issue of guarantees, etc.
Applications for these purposes should be submitted to Reserve Bank by the
shipping/airline company through an authorised dealer together with a
certified copy of letter of approval issued by Government for acquisition of
the ship/aircraft, certified copy of the contract, and other supporting
documents.
- In cases where purchase of ships/aircraft is to be made out of a foreign
currency loan/credit, a certified copy of the foreign currency loan/credit agreement
should also be forwarded indicating whether repayment of the loan/credit
will be made out of surplus passage, freight collections or earnings
retained abroad or by remittances made from India. In approved cases,
Reserve Bank will permit the authorised dealer to issue bank guarantee and
to effect remittances towards repayment of the loan, interest etc. where
necessary. Reserve Bank will also allot a registration number to each
foreign currency loan/suppliers' credit approved and advise it to the
shipping/airline company while conveying its approval to the proposal. The
registration number should invariably be quoted in all correspondence with
the Reserve Bank regarding the loan/credit. The registration number should
also be cited on form A2 covering remittances made or rupee transfers
effected under the loan/credit arrangement. The procedure with regard to
drawal, utilisation and repayment of loan/credit shall be the same as
described in paragraphs 7 B.6 and 7 B.7.Authorised dealers and borrowers
should ensure strict compliance with these provisions.
- The import of aircraft, helicopters, ships and containers on financial lease
basis will
also be governed by the provisions contained in sub-paragraphs (i) and (ii)
above.
Remittances to Foreign Courier Companies
8B.17
- Indian Courier Companies/firms enter into tie-up arrangements with their
overseas counterparts for providing mutual assistance for delivery of
parcels/documents.
Courier companies may apply for No Objection to the tie-up to Regional
Office of Reserve Bank through a designated branch of an authorised dealer
with full details of the arrangement. Reserve Bank will authorise the
designated branches of authorised dealers to allow remittances towards
services/handling etc. charges. The designated branches of authorised
dealers may allow the remittances for these services after obtaining duly
filled in statement in form RCC together with a certificate from Chartered
Accountant/Auditor that the amount applied for remittance has been checked
with reference to invoices received from overseas company and invoices
raised by the Indian company and applicable rates and the amount applied for
remittance has been found correct. Authorised dealers may also obtain
undertaking/certificate regarding payment of income-tax (cf. paragraph
3B.10).
- Authorised dealers may call for Chartered Accountant's certificate giving
details of
all receivables from overseas counterparts. In cases where the receivables
from the same overseas counterparty outstanding for more than 6 months
exceed U.S.$ 2500 no remittance should be allowed without prior approval of
Reserve Bank.
Submission of statements by Indian Shipping Companies
8B.18
Head Offices of Indian shipping companies operating ocean-going vessels
should, in addition to the statement in form SPM 3 [see paragraph 24 of the
Guidelines (Annexure III)], submit to Reserve Bank the following statements
(in duplicate).
|
Description |
Periodicity |
Form |
| 1. |
Statement of earnings and disbursements at foreign and Indian ports and net
repatriation to India |
Quarterly |
SPG 1 |
| 2. |
Operations on foreign currency account/s maintained with overseas banks |
Quarterly |
SPG 2 |
| 3. |
Charter hire earnings and disbursements of company's vessels on Time/Voyage
Charters |
Quarterly |
SPG 3 |
| 4. |
Foreign exchange receipts and expenditure on foreign vessels chartered |
Quarterly |
SPG 4 |
PART C - OTHER REMITTANCES
Sundry Remittances
8C.1 Authorised dealers may allow remittances for various
purposes indicated in Annexure I (Part B) subject to guidelines laid down
therein. Applications not covered by the Annexure should be referred to Reserve
Bank.
NOTE:
Authorised dealers should note that remittances can be made only on behalf of
individuals, firms and companies actually availing of services. In cases where
the remitter is a collection agent remitting collections from various parties
towards examination fees, club membership fees etc., such remittances will
require approval of Reserve Bank.
Advertisements abroad or on Internet
8C.2
- Reserve Bank may consider requests from Indian agents of overseas TV
media to collect advertisements from Indian exporters, who are having export
earnings of not less than Rs.10 lakhs during each of the preceding two
years, for transmission on overseas TV media subject to fulfilment of
certain conditions. The eligible exporters should submit their requests for
release of exchange in form ADV to Reserve Bank through such approved
agents. (See note under paragraph 6E.1 for regulations applicable to
exporters maintaining EEFC accounts).
- Remittances towards advertisements in print media abroad or on Internet
may be allowed by authorised dealers subject to limits and conditions
stipulated in item IX (Part B) of Annexure I.
- Authorised dealers may allow remittances of net rupee collections made
by Indian agents of foreign newspapers/periodicals or Internet companies
representing charges for advertisements in overseas print media, after
deduction of income tax, commission and other charges, if any, due to the
applicants. to the overseas companies subject to submission of following
documents:
- Form A2 together with clipping/text of the advertisement.
- Invoice/bill from the overseas publisher/Internet company,
indicating the total charges, amount of commission etc. due to the
applicant and the net remittable amount (A copy of the agency agreement
or any other documentary evidence in support of commission payable to
the applicant should also be enclosed to the application).
- A statement indicating how net remittable amount has been arrived
at, duly certified by a Chartered Accountant.
- A certificate/undertaking regarding compliance with Income Tax
provisions (cf. paragraph3B.10).
- An approval letter from the Ministry of Finance, Department of
Economic Affairs, Government of India, New Delhi in case the
advertisement is released by Central/State Government
Departments/Undertakings.
- In case of advertisement for public issue of equity shares of Indian
companies, a declaration from the competent authority of the concerned
company to the effect that the total expenditure in foreign exchange on
conference, advertisements, publicity abroad is within 1% of the total
value of the equity shares (including premium amount, if any) allotted
to FIIs/OCBs/NRIs against payment in foreign exchange.
- A declaration from the applicant that he has not applied for
remittance of these collections to any other authorised dealer.
NOTE: A. Authorised dealers may allow remittance in
advance subject to the provisions of paragraph 8C.10 towards cost of
advertisement in print media or on Internet, out of EEFC account of the
advertiser concerned provided the overseas agency insists advance
remittance and an undertaking has been obtained from the applicant that
he would submit documentary evidence in support of publication of
advertisement within 3 months from the date of remittance. Authorised
dealers should follow up submission of documentary evidence with the
remitter.
B. The instructions contained in paragraph 8C.2(iii) are not applicable
for remittance of charges for advertisements over foreign television
media.
Remittance of magazine subscription by recognised agents
8C.2A Authorised dealers may allow remittance of net rupee
collections made by Indian agents towards subscription to foreign
magazines/periodicals to overseas publishers/distributors after deduction of
commission, handling charges, etc. due to the Indian agent (i.e. applicant)
subject to the following conditions:
- None of the magazines subscribed should be on the banned list.
- Remittances of net amount of subscription after deduction of
commission/discount, handling charges due to the collection agent in India
(i.e. applicant) is made direct to the overseas publishers/distributors of
the magazines/periodicals against their invoices/price lists.
- A statement showing how the remittable amount has been arrived at net of
commission, handling charges, etc. togetherwith documentary evidence (viz.
invoices from overseas publishers/price lists, agreements between the
publishers and Indian agents, etc.)
- Authorised dealers should satisfy themselves that subscription amounts
from overseas subscribers (including subscribers from Nepal/Bhutan) have
been received in foreign exchange.
- A declaration from the applicant that he has not remitted the cost of
the magazines/periodicals separately through any other authorised dealer.
Remittances towards Legacies, Bequests or Inheritances
8C.3 Applications for remittances on account of legacies,
bequests or inheritances to beneficiaries resident outside India should be
submitted to Reserve Bank in form LEG.
Payment of Freight in Foreign Currency by Indian Exporters/Importers to
Airline/ Shipping Companies or their Agents in India
8C.4 Indian exporters/importers are permitted to make payment
of freight in respect of exports/imports from/into India in foreign currency to
airline/shipping companies operating in India. Authorised dealers may sell
foreign exchange to Indian exporters/importers on verification of the relative
Airway Bill/Bill of Lading. Such sales should be reported to Reserve Bank on
form A2 together with copies of the relative Airway Bill/Bill of Lading.
Bids in Foreign Currency for Projectsto be executed in India
8C.5
- In terms of the guidelines issued by the Government of India, where the
Central Government has authorised bidding procedures enabling Indian as well
as foreign companies/entities to bid for the supply of goods and services,
Indian bidders have been permitted to bid in any currency and receive
amounts in such currencies as in the case of foreign bidders. In cases where
such bids providing for payment in foreign currency are accepted from Indian
bidders, it will be necessary for the Indian agency inviting the bid to make
payment in foreign currency to the Indian bidders as also the Indian bidder
to receive payment in foreign currency from the Indian agency. Reserve Bank
has accordingly granted general permission vide its Notification
No.FERA.l25/93-RB dated l5th January 1993, issued under Section 8(l) of FERA
1973, to persons resident in India to incur liability in foreign exchange
and to make or to receive payments in foreign exchange in respect of global
bids where the Central Government has authorised bidding procedure enabling
Indian as well as foreign companies/entities to bid for the supply of goods
and services for projects to be executed in India. To enable the concerned
Indian companies to meet their financial obligations in foreign currencies
in such cases, authorised dealers may sell foreign exchange to the concerned
resident Indian company which has awarded the contract on verification of
the Government authorisation and terms of the contract. The Indian bidder
will also be entitled to receive payments in foreign currency in such cases
which should be surrendered to an authorised dealer in foreign exchange in
terms of paragraph 3A.4 of ECM. Authorised dealers may also treat such
foreign currency receipts by the Indian bidders on par with remittances
received from abroad and extend the facility of crediting the foreign
currency receipts to their EEFC account in accordance with the instructions
laid down in Part D of Chapter 14 of ECM.
- The following will constitute Government authorisation for the purpose:
- Where foreign companies are permitted to bid for a project under a financing
arrangement with a multilateral or bilateral institution and a certification
to that effect has been given by the Indian agency or entity.
- Where a bid is certified by an Administrative Ministry of the Government of
India as one in which foreign companies/entities are permitted to bid as per
guidelines specifically approved by the Department of Economic Affairs of
the Ministry of Finance.
- Where a certificate is issued by ONGC, OIL and GAIL in the case of global
tenders floated by them in accordance with the guidelines issued by the
Empowered Committee of Indigenisation of Oil fields equipment and services.
- In all other cases, where specific authorisation has been issued by the
Department of Economic Affairs of the Ministry of Finance.
- All foreign currency sales as stated in paragraph (i) above should be
reported to
Reserve Bank on form A2, together with the copy of the Government
authorisation.
Supply of Goods by one 100% EOU/EPZ Unit to another 100% EOU/EPZ Unit
against payment in foreign exchange
8C.6
100% EOUs and units in EPZs have been permitted to sell goods manufactured
by
them to other 100% EOUs/EPZs units against payment in foreign exchange
provided such goods are required as input by buyer EOU/EPZ unit for its
export production and both the buyer and supplier units comply with the
relevant provisions of Exim Policy in force and the prescribed value
addition criteria. Authorised dealers may sell foreign exchange to buyer
units on receipt of application on form A2 containing details of the
payments such as name, address of the EOU/EPZ beneficiary, cost of goods
duly supported by documentary evidence such as invoice/bill etc. Such sales
should be reported to Reserve Bank on form A2 in appropriate R Return
together with copies of the relative invoice/bill and other required
details.
NOTE:
The above provisions will also apply, mutatis mutandis, to supply of
computer services and hardware by one unit in Software Technology Park
(STP)/ Electronic Hardware Technology Park (EHTP) to another unit in
STP/EHTP against payment in foreign exchange.
Sale of Overseas Telephone Cards
8C.7
Agents in India enter into arrangements with reputed overseas organisations
for selling
latter's pre-paid telephone cards against payment in Indian rupees or in
foreign exchange drawn for business etc. visits abroad including travel
under the Basic Travel Quota except for employment and on emigration. These
cards are sold to the Indian travellers. Authorised dealers may allow the
agents to remit the cost of such telephone cards to the overseas principals,
after deducting commission. The application should be made by the Indian
agent alongwith a statement showing the details such as the name and address
of the overseas organisation, cost of each card, country/ies where the card
can be used, rate of agency commission/mark-up receivable by the agent,
name/address and passport number of each Indian traveller, accompanied by a
certified copy of the agency agreement(s). An agent in India should also
designate the branch of an authorised dealer with which the collections will
be deposited and through which the remittance will be made to foreign
principal/s. The designated branch of authorised dealer on satisfying that
the application is in order with reference to the particulars furnished,
allow the remittance net of commission of Indian agent subject to the
compliance with the Guidelines in Annexure IV. No advance payment towards
pre-paid telephone cards should be made to the overseas principal.
Commission to Overseas Agents on securing Advertisements for Indian
newspapers/ periodicals, etc.
8C.8
- Indian newspapers, periodicals etc. are permitted to enter into agreements
with their
overseas agents through whom advertisements are secured, for payment of
commission
and other charges actually incurred towards postage, telephone, etc.
provided the total amount does not exceed 30% of the gross tariff earned in
foreign exchange for such advertisements. Authorised dealers may allow
remittances of commission and reimbursement of other charges to the overseas
agents of Indian newspapers etc. provided the net amount does not exceed 30%
of the gross tariff earned by them in foreign exchange for advertisement in
India subject to verification of the relative agreements entered into with
their overseas agents, bank certificates of realisation of advertising
charges and obtaining an undertaking/certificate regarding payment of
Income-tax (cf. paragraph 3B.10)
- Sometimes, the Indian newspapers etc. may enter into agreements with their
overseas agents providing for deduction of the amount of commission and
other charges as stated above from the gross amount of the bills raised for
tariff in foreign exchange. It will be necessary for the Indian newspapers
etc. to ensure that the total deductions do not exceed 30% of tariff amount
earned and atleast 70% is repatriated to India through normal banking
channel and the tax liability of the non-resident is met by the Indian
company concerned.
Supply of goods by 100% Export Oriented Units (EOUs)/Units in Export
Processing Zones (EPZs), Electronic Hardware Technology Parks (EHTPs) and
Software Technology Parks (STPs) to units in Domestic Tariff Area (DTA)
against payment in foreign exchange
8C.9
In terms of paragraph 9.10(b) of Chapter 9 of Export and Import Policy
(1997-2002)
supplies made in Domestic Tariff Area (DTA) by EOUs and units in EPZs, EHTPs
and STPs against payment in foreign exchange shall be counted towards
fulfilment of the export obligation. Accordingly, concerned authorities may
permit EOUs, units in EPZs, EHTPs and STPs to sell goods to buyers in DTA
against payment in free foreign exchange. Authorised dealers may allow the
buyers in DTA to make payment in free foreign exchange including funds held
in their Exchange Earners Foreign Currency (EEFC) Accounts, without prior
approval of the Reserve Bank. Authorised dealers should ensure that the
seller EOUs, units in EPZs, EHTPs and STPs have been specifically authorised
by the concerned authority to sell their goods in DTA and that the relative
provisions of the Export and Import Policy and the terms and conditions of
the permission granted by the concerned authority have been fully complied
with.
Advance Remittances for Transactions other than Imports
8 C.10
Authorised dealers have been permitted to make advance remittances for
import of goods
subject to conditions stipulated in paragraph 7A.10. Advance remittances may
similarly be required to be made in respect of transactions other than
imports e.g. engagement of foreign nationals, consultancy services, charges
for advertisement in overseas newspapers/periodicals, specialised training
in India/abroad, etc. which are either covered under the powers delegated to
authorised dealers or which are being remitted by authorised dealers after
obtaining approval in principle from Reserve Bank. It will be in order for
authorised dealers to allow advance remittances in such cases after
verifying the terms of contract and satisfying other conditions stipulated
in the relevant paragraphs of the Manual. A guarantee from an overseas bank
of international repute should be obtained from the overseas beneficiary,
where the amount of remittance exceeds U.S. $ 15,000 or its equivalent. The
authorised dealer concerned should follow up the matter to ensure that the
beneficiary of the advance remittance has fulfilled his obligation under the
contract/agreement with the remitter in India.