Duty drawback in case of goods sold to Nepal & payment received in Indian Rupees, Customs - Exim - SEZ

[MOHIT LUTHER]

Dear Sir,

Can a exporter receive duty drawback , if he has sold goods to Nepal & payment is received from the party in Indian Rupees. Please guide.

Posts / Replies

[CS SANJAY MALHOTRA]

No until and unless foreign currency is realised or INR is received through Vostro account.

[YAGAY AND SUN]

All transactions between a person resident in India and a person resident in Nepal or Bhutan may be settled in Indian Rupees. However, in case of export of goods to Nepal, where the importer has been permitted by the Nepal Rashtra Bank to make payment in free foreign exchange, such payments shall be routed through the ACU mechanism.

There is no restriction on invoicing of export contracts in Indian Rupees in terms of the Rules, Regulations, Notifications and Directions framed under the Foreign Exchange Management Act 1999. Further, in terms of Para 2.52 of the Foreign Trade Policy (2015-2020) - “All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized 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 Asian Clearing Union (ACU) or Nepal or Bhutan.” Indian Rupee is not a freely convertible currency, as yet.

[Ganeshan Kalyani]

Nice reply indeed . Healthy discussion. Cherished. Thanks.