Reserve Bank of India has liberalized the rules of set off the export receivable against import payable. This will generally help the export oriented business which need to do a lot of home work for the duty drawback earlier. Reserve Bank of India has made it easy to get the duty back easily. The main features of set off and full circular of RBI is as under.
- The import is as per the Foreign Trade Policy in force.
- Invoices/Bills of Lading/Airway Bills and Exchange Control copies of Bills of Entry for home consumption have been submitted by the importer to the Authorized Dealer bank.
- Payment for the import is still outstanding in the books of the importer.
- Both the transactions of sale and purchase may be reported separately in ‘R’ Returns.
- The relative GR forms will be released by the AD bank only after the entire export proceeds are adjusted / received.
- The ” set-off” of export receivables against import payments should be in respect of the same overseas buyer and supplier and that consent for ”set-off” has been obtained from him.
- The export / import transactions with ACU countries should be kept outside the arrangement.
- All the relevant documents are submitted to the concerned AD bank who should comply with all the regulatory requirements relating to the transactions.
Chief General Manager