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PAYMENT FOR EXPORT OF GOODS, FEMA - Foreign Exchange Management

Issue Id: - 114579
Dated: 3-2-2019
By:- DILIP AGARWALA
PAYMENT FOR EXPORT OF GOODS

  • Contents

I am an NRI resident in UK for past 60 years.

I hold both NRO and NRE accounts in India.

I have a current PAN registration.

I want to purchase machinery for export to UK and make payment in INR from my NRE account;

suppliers are insisting on payment in USD, which would mean that I would have to transfer the

funds from my NRE account out of India and then send them back - which would also mean that

I would suffer two tranches of exchange rates.

One supplier has said that they will accept payment from my NRE account provided that

1. I have a registered business in India

2. I will have to pay GST @ 18%

3. I would then have to export myself.

Surely the fact that my funds are in an NRE account they are treated the same as foreign exchange?

I, and several suppliers have spoken with their various CAs who all are of the opinion that I can not

make payment from my NRE INR account for direct exports.

I understand from RBI Master Directions, Part 2, B2, (i) c, that payments may be made from NRE accounts

for direct exports, but I may be wrong - I am not qualified.

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Showing Replies 1 to 1 of 1 Records

1 Dated: 3-2-2019
By:- DR.MARIAPPAN GOVINDARAJAN

In my view also you cannot make payment from your NRE INR account for direct exports.


1

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