75th Founding Day Lecture Meeting on “India@2030” Know More

December 2011

A.P. (DIR Series) Circular No. 47, dated 17-11-2011 — ‘Set-off’ of export receivables against import payables — Liberalisation of procedure.

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
fiogf49gjkf0d
Presently, set-off of export receivables against import payables are considered by RBI. This Circular now delegates that power to banks. As a result banks can now deal with cases of set-off of export receivables against import payables subject to fulfilment of certain conditions:

(a) The import is as per the Foreign Trade Policy in force.

(b) 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 bank.

(c) Payment for the import is still outstanding in the books of the importer.

(d) The relative GR forms will be released by the AD bank only after the entire export proceeds are adjusted/received.

(e) The ‘set-off’ of export receivables against import payments must be in respect of the same overseas buyer and supplier and that consent for ‘set-off’ must have been obtained from him. (f) Export/import transactions with ACU countries are not covered by this arrangement.

(g) All relevant documents are submitted to the concerned bank which will have to comply with all the regulatory requirements relating to the transactions.

Download PDF

You May Also Like

A.P. (DIR Series) Circular No. 46, dated 17-11-2011 — Overseas forex trading through electronic/internet trading portals.

Press Note No. 3 (2011 Series) — D/o IPP File No.: 1/16/2010-FC-I, dated 8-11-2011 — Review of the policy on Foreign Direct Investment in pharmaceuticals sector insertion of a new paragraph 6.2.25 to ‘Circular 2 of 2011-Consolidated FDI Policy’.