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Master Direction – Import of Goods and Services (Updated as on November 21, 2022)

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..... tory framework and published through amendment notifications. 2. Within the contours of the Regulations, Reserve Bank of India also issues directions to Authorised Persons under Section 11 of the Foreign Exchange Management Act (FEMA), 1999. These directions lay down the modalities as to how the foreign exchange business has to be conducted by the Authorised Persons with their customers/constituents with a view to implementing the regulations framed. 3. Instructions issued on import of goods and services into India have been compiled in this Master Direction. The list of underlying circulars/ notifications which form the basis of this Master Direction is furnished in the Appendix. Reporting instructions can be found in Master Direction on reporting ( Master Direction No. 18 dated January 01, 2016 ). 4. It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Regulations or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Master Direction issued herewith shall be amended suitably simu .....

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..... .S.R.381 (E) dated May 3, 2000 and the Directions issued by Reserve Bank under Foreign Exchange Management Act, 1999 from time to time. (ii) AD Category I banks should follow normal banking procedures and adhere to the provisions of Uniform Customs and Practices for Documentary Credits (UCPDC), etc. while opening letters of credit for import into India on behalf of their constituents. (iii) Compliance with the provisions of Research Development Cess Act, 1986 may be ensured for import of drawings and designs. (iv) AD Category I banks may also advise importers to ensure compliance with the provisions of Income Tax Act, wherever applicable. (v) Any reference to the Reserve Bank should first be made to the Regional Office of the Foreign Exchange Department situated in the jurisdiction where the applicant person resides, or the firm / company functions, unless otherwise indicated. If, for any particular reason, they desire to deal with a different office of the Foreign Exchange Department, they may approach the Regional Office of its jurisdiction for necessary approval. Section II - General Guidelines for Imports B.1. General Guidelines Rules and regu .....

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..... thing contained in the Manner of Payment in foreign Exchange (FEMA 14R/2016-RB dated May 02, 2016), a person resident in India may make payment for import of goods in foreign exchange through an international card held by him/in rupees from international credit card/ debit card through the credit/debit card servicing bank in India against the charge slip signed by the importer or as prescribed by Reserve Bank from time to time ,provided that the transaction is in conformity with the extant provisions and the import is in conformity with the Foreign Trade Policy in force. (iv) Any person resident in India may also make payment as under: (a) In rupees towards meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India; (b) By means of a crossed cheque or a draft as consideration for purchase of gold or silver in any form imported by such person in accordance with the terms and conditions imposed under any order issued by the Central Government under the Foreign Trade (Development and Regulations) Act, 1992 or under any other law, rules or regulations for the .....

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..... wed without restriction as to the time limit, provided, interest payment, if any, is as per the instructions in para C.2 of Section III of this Circular. 7 B.5.4 Extension of Time (i) AD Category I banks can consider granting extension of time for settlement of import dues up to a period of six months at a time (maximum up to the period of three years) irrespective of the invoice value for delays on account of disputes about quantity or quality or non-fulfilment of terms of contract; financial difficulties and cases where importer has filed suit against the seller. In cases where sector specific guidelines have been issued by Reserve Bank of India for extension of time (i.e. rough, cut and polished diamonds), the same will be applicable. (ii) While granting extension of time, AD Category I banks must ensure that: The import transactions covered by the invoices are not under investigation by Directorate of Enforcement / Central Bureau of Investigation or other investigating agencies; While considering extension beyond one year from the date of remittance 8 , the total outstanding of the importer does not exceed USD one million or 10 per cent of the ave .....

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..... of India on a temporary visit, may bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes of Government of India and Reserve Bank of India notes up to an amount not exceeding Rs.25,000 (Rupees twenty five thousand only). (ii) A person may bring into India from Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India for any amount in denominations up to Rs.100/-. B.7. Third Party Payment for Import Transactions AD category I banks are allowed to make payments to a third party for import of goods, subject to conditions as under: Firm irrevocable purchase order / tripartite agreement should be in place. However this requirement may not be insisted upon in case where documentary evidence for circumstances leading to third party payments / name of the third party being mentioned in the irrevocable order / invoice has been produced. AD bank should be satisfied with the bonafides of the transactions and should consider the Financial Action Task Force (FATF) Statement before handling the transactions; The Invoice should contain a narration that the related pa .....

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..... in conformity with the Foreign Trade Policy in force and under the provisions of the Foreign exchange Management (Current Account Transactions) Rules, 2000 framed by the Government of India vide Notification No. G. S. R. 381 (E) dated May 3, 2000 and the Directions issued by Reserve Bank of India under Foreign Exchange Management Act, 1999 from time to time. Section III - Operational Guidelines for Imports C.1. Advance Remittance C.1.1. Advance Remittance for Import of Goods (i) AD Category I bank may allow advance remittance for import of goods without any ceiling subject to the following conditions: (a) If the amount of advance remittance exceeds USD 200,000 or its equivalent, an unconditional, irrevocable standby Letter of Credit or a guarantee from an international bank of repute situated outside India or a guarantee of an AD Category I bank in India, if such a guarantee is issued against the counter-guarantee of an international bank of repute situated outside India, is obtained. (b) In cases where the importer (other than a Public Sector Company or a Department/Undertaking of the Government of India/State Government/s) is unable to obtain bank gu .....

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..... ne by the AD Category - I banks as per the existing guidelines. vii. AD Category - I banks should follow-up submission of the Bill of Entry / documents evidencing import of rough diamonds into the country by the importer, in terms of the Act / Rules / Regulations / Directions issued in this regard. b) In case of an importer entity in the Public Sector or a Department / Undertaking of the Government of India / State Government/s, AD Category - I banks may permit the advance remittance subject to the above conditions and a specific waiver of bank guarantee from the Ministry of Finance, Government of India, where the advance payments is equivalent to or exceeds USD 100,000/- (USD one hundred thousand only). 12 viii. Based on the AD code declared by the importer, the banks shall download the Bill of Entry (BOE) issued by EDI ports from BOE Master in IDPMS. For non-EDI ports, AD banks of the importer shall upload the BoE data in IDPMS as per message format Manual BoE reporting on daily basis on receipt of BoE from the customer/Customs Office. ix. AD banks will enter BOE details and mark off ORMs as per the message format BOE Settlement x. In case of payment after .....

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..... ods into India is made within six months (three years in case of capital goods) from the date of remittance and the importer gives an undertaking to furnish documentary evidence of import within fifteen days from the close of the relevant period. It is clarified that where advance is paid as milestone payments, the date of last remittance made in terms of the contract will be reckoned for the purpose of submission of documentary evidence of import. vi. Prior to making the remittance, the AD Category I bank may ensure that the requisite in principle approval of the Ministry of Civil Aviation in case of Scheduled Air Service Operators and in other cases approval of the Director General of Civil Aviation / other agencies in terms of the extant Foreign Trade Policy has been obtained by the company, for import. vii. In the event of non-import of aircraft and aviation sector related products, AD Category - I bank should ensure that the amount of advance remittance is immediately repatriated to India. Prior approval of the concerned Regional Office of the Reserve Bank will be required in case of any deviation from the above stipulations. 13 viii. Concerned AD Category I ban .....

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..... ensure proper remark/indicator is entered for ORM mark off in IDPMS etc as per extant IDPMS guidelines. C.3. Remittances against Replacement Imports Where goods are short-supplied, damaged, short-landed or lost in transit and the Exchange Control Copy of the import licence has already been utilised to cover the opening of a letter of credit against the original goods which have been lost, the original endorsement to the extent of the value of the lost goods may be cancelled by the AD Category I bank and fresh remittance for replacement imports may be permitted without reference to Reserve Bank, provided, the insurance claim relating to the lost goods has been settled in favour of the importer. It may be ensured that the consignment being replaced is shipped within the validity period of the license. 17 AD bank should ensure that proper remark/indicator is entered for ORM mark off/closure of Bills in IDPMS etc. as per extant IDPMS guidelines. C.4. Guarantee for Replacement Import In case replacement goods for defective import are being sent by the overseas supplier before the defective goods imported earlier are reshipped out of India, AD Category-I banks may .....

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..... limited, deemed public limited and private limited companies. C.6.2. Receipt of import documents by the importer directly from overseas suppliers in case of specified sectors As a sector specific measure, AD Category - I banks are permitted to allow remittance for imports by non-status holder importers up to USD 300,000 where the importer of rough diamonds, rough precious and semi-precious stones has received the import bills / documents directly from the overseas supplier and the documentary evidence for import is submitted by the importer at the time of remittance. Status holder importers as defined in the Foreign Trade Policy dealing in the import of rough diamonds, rough precious and semi- precious stones can receive import bills directly from the suppliers without any ceiling. AD Category - I banks may undertake such transactions subject to the following conditions: (i) The import would be subject to the prevailing Foreign Trade Policy. (ii) The transactions are based on their commercial judgment and they are satisfied about the bonafides of the transactions. (iii) AD Category - I banks should do the KYC and due diligence exercise and should be fully satisfied .....

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..... AD Category I bank shall verify the evidence of import from IDPMS at the time of effecting remittance of import bill. However, if importers fail to produce documentary evidence due to genuine reasons such as non- arrival of consignment, delay in delivery/ customs clearance of consignment, etc., AD bank may, if satisfied with the genuineness of request, allow reasonable time, not exceeding three months from the date of remittance, to the importer to submit the evidence of import. 22 (iii) AD banks are required to create Outward Remittance Message (ORM) for all such outward remittances irrespective of value and shall perform the subsequent activity viz document submission, outward remittance data, matching with ORM, closing of transactions etc. as per IDPMS guidelines. C.7.2. Evidence of Import in Lieu of Bill of Entry (i) AD Category I bank may accept, in lieu of Exchange Control Copy of Bill of Entry for home consumption, a certificate from the Chief Executive Officer (CEO) or auditor of the company that the goods for which remittance was made have actually been imported into India provided :- (a) The amount of foreign exchange remitted is less than USD 1,000,000 o .....

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..... y of evidence of import documents i.e., BoE Exchange Control copy has been discontinued with effect from December 1, 2016 as the same is available in IDPMS. The revised procedure is as under: (iv) AD banks shall enter BoE details (BoE number, port code and date) for ORM associated with the advance payments for import transactions as per the message format BOE settlement . (v) In case of payment after receipt of BoE, the AD bank shall generate ORM for import payments made by its importer customer as per the message format BOE settlement . (vi) Multiple ORMs can be settled against single BoE and also multiple BoE can be settled against one ORM. 27 (vii) On settlement of ORM with evidence of import AD Category I bank shall in all cases issue an acknowledgement slip to the importer containing the following particulars: importer's full name and address with code number ; number and date of BoE and the amount of import ; and a recap advice on number and amount of BoE and ORM not settled for the importer. 28 (viii) The importer needs to preserve the printed Importer copy of BoE as evidence of import and acknowledgement slip for fu .....

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..... e importer in the form of BoE data as per message format Manual BOE reporting in IDPMS. Follow-up for Evidence of Import 30 (xvi) AD Category I banks shall continue to follow up for outward remittance made for import (i.e. unsettled ORM) in terms of extant guidelines and instructions on the subject. In cases where relevant evidence of import data is not available in IDPMS on due dates against the ORM, AD Category I bank shall follow up with the importer for submission of documentary evidence of import. Similarly, if BoE data is not settled against ORM within the prescribed period, AD Category I banks shall follow up with the importer in terms of extent instructions. 31 C.9. Verification and Preservation (i) Internal inspectors and IS auditors (including external auditors appointed by AD Category I bank) should carry out verification and IS audit and assurance of the BOE Settlement process in IDPMS. Data and process followed by AD Category I bank for BOE Settlement should be preserved in terms of the guidelines under Cyber Security Framework in the bank. (ii) Internal inspectors or auditors (including external auditors appointed by AD Category I ba .....

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..... oins and medallions by banks continues pending further review. Head Offices / International Banking Divisions of AD Category - I banks shall henceforth submit the following statements under XBRL system from October 2014 onwards. (a) Statement on half yearly basis (end March / end September), showing the quantity and value of gold imported by the nominated banks/ agencies/ qualified jewellers/ EOUs/ SEZs in Gem Jewellery Sector, mode of payment-wise. (b) Statement on monthly basis showing the quantity and value of gold imports by the nominated agencies (other than the nominated banks)/ EOUs/ qualified jewellers/ SEZs in Gem Jewellery sector during the month under report as well as the cumulative position as at the end of the said month beginning from the 1st month of the Financial Year. Both the statements shall be submitted, even if there is 'Nil' position, by the 10th of the following month / half year, to which it relates. C.11.2. Import of Gold Jewellery Including Jewellery Made of Precious Metals or/and Studded With Diamonds / Precious Stones /Semi-precious. Suppliers and Buyers credit (trade credit) including the usance period of Letters of Credit open .....

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..... gulations. IFSCA shall also put in place necessary system to ensure that the advance remittance received from QJs are solely for the purpose for import of gold through IIBX. iii. AD bank shall ensure that: all required documentation, custom duty related procedures and filing Bill of Entry (BoE) as evidence of import, etc. is complete for the import of gold by QJ within the specified applicable period. single/multiple ORMs created and matched with corresponding BoEs and closed appropriately in IDMPS. the importer that is QJs comply with the related extant instructions relating to imports under FEMA, 1999, FTDR Act 1992, Foreign Trade Policy and regulations of IFSCA. AD banks may frame their own internal guidelines to deal with such cases, with the approval of their Board of Directors. iv. Reporting requirement by AD banks AD bank shall create Outward Remittance Message (ORM) for all such outward remittances in IDPMS in terms of extant guidelines. All these transactions need to be reported in FETERS in terms of extant guidelines. AD bank shall report the import of gold through QJ in XBRL as prescribed at para C.1 .....

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..... me of business should be closely examined to ensure that the transactions are bonafide and are not intended for interest / currency arbitrage. C.12.2. Import of Platinum / Silver on Unfixed Price Basis The nominated agency/bank may allow import of platinum and silver, on outright purchase basis subject to the condition that although ownership of the same shall be passed on to the importers at the time of import itself, the price shall be fixed later as and when the importer sells to the user. C.13. Import Factoring (i) AD Category I bank may enter into arrangements with international factoring companies of repute, preferably members of Factors Chain International, without the approval of Reserve Bank. (ii) They will have to ensure compliance with the extant foreign exchange directions relating to imports, Foreign Trade Policy in force and any other guidelines/directives issued by Reserve Bank in this regard. C.14. Merchanting Trade 41 C.14.1. AD banks may handle the Merchanting Trade Transactions (MTT) subject to the following guidelines: For a trade to be classified as merchanting trade, goods acquired shall not enter the Domestic Tariff Ar .....

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..... o the payment for import leg, may be parked either in Exchange Earners Foreign Currency (EEFC) account or in an interest-bearing INR account till the import leg liability arises. It shall be strictly earmarked/ lien-marked for the payment of import leg and the liability of the import leg, as soon as it arises, shall be extinguished out of these funds without any delay. If such receipts are kept in interest-bearing INR account, hedging thereof may be allowed by the AD bank at the request of its customer, as per extant regulations. No fund/non-fund-based facilities shall be extended against these balances. In case of discounting of export leg LC where payment for import leg is still to be made (even if partially), the proceeds shall be utilized in the manner prescribed at point no. 2 (viii) above. Payment for import leg may also be allowed to be made out of the balances in EEFC account of the merchant trader. Merchanting traders may be allowed to make advance payment for the import leg on demand made by the overseas supplier. In case where inward remittance from the overseas buyer is not received before the outward remittance to the overseas supplier, AD ba .....

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..... mbassy, Foreign Chamber of Commerce or similar Organization; provided, the MTT is in adherence to all other provisions except the delays in timelines (either for outlay or completion period of MTT or both) attributed to reasons mentioned at a, b and c above. ii. In addition to above, write-off as at (i) shall be subject to following conditions: AD bank shall satisfy itself with the bonafides of the transactions and ensure that there are no KYC/AML concerns. The transaction shall not be under investigation under FEMA by any of the investigating agency/ies. The counterparty to the merchant trader is not from a country or jurisdiction in the updated FATF Public Statement on High Risk Non-Co-operative Jurisdictions on which FATF has called for counter measures. C.14. 4 Third Party payments Third party payments for export and import legs of the MTT are not allowed. C.14.5 Payment of Agency Commission Agency commission is not allowed in MTTs. However, AD banks may allow payment of agency commission up to a reasonable extent by way of outward remittance under exceptional circumstances, subject to the following conditions: .....

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..... of import and report the transaction in R-Return under the foreign currency payment head. (c) The permitted credits in the OPGSP Import Collection account will be: collection from Indian importers for online purchases from overseas exporters electronically through credit card, debit card and net banking and charge back from the overseas exporters. (d) The permitted debits in the OPGSP Import Collection account will be: payment to overseas exporters in permitted foreign currency; payment to Indian importers for returns and refunds; payment of commission at rates/frequencies as defined under the contract to the current account of the OPGSP; and bank charges 42 C.16. Settlement of Import transactions in currencies not having a direct exchange rate To further liberalize the procedure and facilitate settlement of import transactions where the invoicing is in a freely convertible currency and the settlement takes place in the currency of the beneficiary, which though convertible, does not have a direct exchange rate, it has been decided that AD Category-I banks may permit settlement of such import transactions ( .....

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..... 007 14 77 Advance Remittance for Import of aircrafts / helicopters / other aviation related purchases June 29, 2007 15 18 Direct Receipt of Import Bills / Documents - Liberalisation November 7, 2007 16 37 Direct Receipt of Import Bills / Documents for Import of Rough Precious Semi-Precious Stones April 16, 2008 17 03 Advance Remittance for Import of Rough Diamonds August 4, 2008 18 08 Advance Remittance for Import of Rough Diamonds August 21, 2008 19 09 Foreign Exchange Management Act, 1999- Advance Remittance for Import of Goods - Liberalisation August 21, 2008 20 12 Foreign Exchange Management Act, 1999 Import of Platinum / Palladium / Rhodium / Silver August 28, 2008 21 13 Direct Receipt of Import Bills / Documents - Liberalisation September 1, 2008 22 15 Foreign Exchange Management Act, 1999 Advance Remittances for Import of Services September 8, 2008 23 21 Advance Remittance for Import of Rough Diamon .....

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..... 46 133 Import of Gold by Nominated Banks / Agencies / Entities May 21, 2014 47 146 Export Import of Currency- Enhanced Facilities June 19, 2014 48 2 Import of Rough, Cut and Polished Diamonds - credit relaxation July 07, 2014 49 42 Import of Gold by Nominated Banks/Agencies November 28, 2014 50 76 Form A1- Payments for Imports - Discontinuance thereof February 12, 2015 51 79 Guidelines on Import of Gold by Nominated Banks / Agencies February 18, 2015 52 96 Merchanting Trade to Nepal and Bhutan April 30, 2015 53 16 Processing and settlement of import and export related payments facilitated by Online Payment Gateway Service Providers September 24 , 2015 54 29 Import of Goods into India Evidence of Import November 26, 2015 55 30 Advance Remittance for Import of aircrafts / helicopters /other aviation related purchases November 26, 2015 56 42 Settlement of Export/ Import transactions .....

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..... edits for which the procedural guidelines as laid down in the Master Circular for External Commercial Borrowings and Trade Credits may be followed. 7 Inserted vide AP DIR Series circular No.65 dated April 28, 2016 8 Clarification: may be considered as date of shipment 9 Inserted vide AP DIR Series circular No.05 dated October 06, 2016 10 Modified vide Notification No.6(R)/2015-RB prior to modification it read as Notification No. FEMA 6/2000-RB dated May 3, 2000 11 Inserted vide AP (DIR Series) Circular dated No.5 dated October 06, 2016 12 Point viii to xi. Inserted vide AP (DIR Series) Circular No.5 dated October 06, 2016 13 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 14 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 15 Inserted vide AP (DIR Series) Circular No. 13 dated September 28, 2021 16 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 17 Inserted vide AP (DIR Series) Circu .....

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..... P (DIR Series) Circular No.5 dated October 06, 2016 23 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 24 Clarification: ORM not applicable for non physical imports 25 Modified vide AP (DIR series circular) No.5 dated October 05, 2016 prior to modification it read as Issue of Acknowledgement : AD Category I bank should acknowledge receipt of evidence of import e.g. Exchange Control Copy of the Bill of Entry, Postal Appraisal Form, or Customs Assessment Certificate, etc., from importers by issuing acknowledgement slips containing all relevant particulars relating to the import transactions. 26 Inserted vide AP (DIR Series) Circular No.27 dated January 12, 2017 27 Inserted vide AP (DIR Series) Circular No. 27 dated January 12, 2017 28 Inserted vide AP (DIR Series) Circular No. 27 dated January 12, 2017 29 Inserted vide AP (DIR Series) Circular No.27 dated January 12, 2017 30 Modified vide AP (DIR Series) Circular No. 27 dated January 12, 2017 prior to modification it read as AD Category I banks are required to follow up for submission of prescribed .....

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