9911796707
TMI BlogLiability for failure to realise and repatriate export proceeds under FEMA.X X X X Extracts X X X X X X X X Extracts X X X X ..... Liability for failure to realise and repatriate export proceeds under FEMA. X X X X Extracts X X X X X X X X Extracts X X X X ..... ish a declaration to the prescribed authority (e.g., in shipping bill, SOFTEX form, etc.) stating the full export value, and * Ensure that the entire export proceeds are realised and repatriated to India through authorized channels, within the time prescribed by RBI. 📘 Section 8 - Duty to Repatriate Foreign Exchange Section 8 casts a duty on the exporter to: * Take all reasonable steps to ensure that the foreign exchange earned from exports is received in India within the stipulated period, * Ensure repatriation is through an Authorized Dealer (AD) Bank and in the prescribed manner. ⏰ Time Limit for Realisation and Repatriation As per RBI Master Direction on Export of Goods and Services, the general time limits are: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * 9 months from the date of export for goods and services, * 15 months in case of export to a warehouse established outside India (with RBI approval). Exporters must realize and bring the foreign currency to India within this timeline. Failure to do so constitutes a contravention under FEMA. 🚨 Consequences of Non-Compliance Under Section 13 of FEMA, failure to realise and repatriate export proceeds within the permitted time can attract the following penalties: 💰 Monetary Penalty * Penalty up to three times the amount involved in the contravention (if quantifiable), or * Penalty up to Rs.2,00,000 if the amount is not quantifiable. 📅 Continuing Offence * For each day the contravention continues, an addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional penalty of Rs.5,000 per day may be imposed after the first day. ⚖️ Adjudication * The Enforcement Directorate (ED) or other designated authority may initiate adjudication proceedings, which can lead to formal notices, personal hearings, and enforcement actions. 📝 Compounding Option * Under Section 15 of FEMA, the exporter may apply for compounding of the offence to the RBI or Directorate of Enforcement (DoE) to settle the matter by paying a compounding fee and avoid litigation. ✅ Preventive & Remedial Actions If an exporter is unable to realise export proceeds: * Seek Extension: * File an application for extension of the realisation period through the Authorized Dealer Bank with appropriate justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication. * Request for Write-Off: * Where recovery is not possible due to genuine reasons (e.g., buyer insolvency, dispute, etc.), apply for write-off approval through the AD Bank. * Voluntary Disclosure: * If delay or non-realization has occurred, make a voluntary disclosure and cooperate with authorities to mitigate penalties. 🧠 Summary Table FEMA Section Provision Requirement Penalty on Violation Section 7 Export Declaration Declare full value and repatriate funds Action under Section 13 Section 8 Duty to Repatriate Realise and repatriate within RBI timeline Action under Section 13 Section 13 Penalty Clause Penalty for contravention Up to 3x amount or Rs.2 lakh + Rs.5,000/day Section 15 Compounding Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttle offence voluntarily Avoids prosecution Perfect - here are both documents you requested, professionally formatted and ready for use. You can tailor them to suit your specific situation. 📝 1. Request Letter to AD Bank for Extension of Time for Realisation of Export Proceeds [To be printed on your business letterhead] Date: [Insert Date] To The Branch Manager [Name of the Bank] [Branch Address] [City, State, PIN] Subject: Request for Extension of Time for Realisation of Export Proceeds under FEMA Dear Sir/Madam, We are an exporter registered under IEC [Insert IEC Number], engaged in the business of [mention your business activity], and maintain our export transaction accounts with your bank. We wish to bring to your ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention that the export proceeds against the following shipment(s) have not been realised within the prescribed time limit of 9 months from the date of export as specified under the RBI Master Directions on Export of Goods and Services: | Invoice No. | Shipping Bill No. | Date of Export | Invoice Amount (USD) | Reason for Delay | |-------------|--------------------|----------------|-----------------------|------------------| | [Insert] | [Insert] | [Insert] | [Insert] | [Insert Reason] | The delay in realisation has occurred due to [state genuine reason - e.g., buyer's financial difficulty, documentation issues, delay in customs clearance, etc.]. We are in continuous correspondence with the buyer and are hopeful of receiving the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt shortly. In view of the above, we kindly request you to forward our application to the Reserve Bank of India under the applicable provisions and grant us an **extension of time** for realisation of the above export proceeds. We undertake to comply with all applicable rules and provide any additional documentation required by your bank or the RBI. Thank you for your continued support. Yours faithfully, [Authorized Signatory Name] [Designation] [Mobile Number / Email] [Company Name] [IEC Number / GSTIN] Attachments: * Copies of Shipping Bills * Copies of Export Invoices * Correspondence with Buyer (emails/letters) * Bank Realisation Certificate (if any partial payment made) 📝 2. Format of Compounding Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under FEMA (To RBI or ED) [To be printed on business letterhead and addressed to the Compounding Authority] Date: [Insert Date] To The Compounding Authority Foreign Exchange Department Reserve Bank of India [Regional Office Address / FEMA Cell] Subject: Application for Compounding of Contravention under FEMA - Non-Realisation of Export Proceeds Dear Sir/Madam, We, [Name of the Applicant], having our principal place of business at [Address], and holding IEC No. [Insert IEC], hereby submit this application for compounding under Section 15 of the Foreign Exchange Management Act, 1999, read with the Foreign Exchange (Compounding Proceedings) Rules, 2000. ### 1. Particulars of the Applicant: - Name of Entity: [Insert Name] - Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution: Proprietorship / Partnership / Pvt. Ltd. / Others - IEC Number: [Insert IEC] - PAN: [Insert PAN] - Address: [Registered Address] - Contact Person: [Name and Designation] - Email / Phone: [Insert Contact Details] ### 2. Nature of Contravention: Non-realisation and non-repatriation of export proceeds within the time frame stipulated under Section 7 and 8 of FEMA, 1999, read with the RBI Master Direction on Export of Goods and Services. ### 3. Details of Contravention: | Invoice No. | Shipping Bill No. | Date of Export | Amount (USD) | Reason for Non-Realisation | |-------------|--------------------|----------------|---------------|-----------------------------| | [Insert] | [Insert] | [Insert] | [Insert] | [Insert reason - e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .g., buyer default, dispute, etc.] | ### 4. Reasons for Contravention: [Explain the circumstances briefly and mention efforts made to recover the dues, such as communication with buyer, legal notices, etc. If write-off has been approved by AD bank, mention that.] ### 5. Voluntary Disclosure: We hereby voluntarily disclose the above contravention and confirm that the same has not been compounded earlier. We request your good office to consider this application for compounding of the offence and permit us to regularize the matter. We are ready to pay the applicable compounding fees as per the directions of the Compounding Authority. Thanking you, Yours sincerely, [Authorized Signatory Name] [Designation] [Name of the Entity] [Seal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / Signature]
Enclosures:
1. Copy of IEC Certificate
2. Copy of PAN
3. Copies of relevant shipping bills and invoices
4. Export documentation
5. Correspondence with the buyer
6. Copies of communication with AD bank
7. Any other supporting documents
*** X X X X Extracts X X X X X X X X Extracts X X X X
|
