Write-off” of unrealized export bills – UNDER AUTOMATIC ROUTE
Export of Goods and Services –
Simplification of procedure
Attention of Authorized Dealer Category – I (AD Category –I)
banks is invited to
A.P. (DIR. Series)
Circular No. 12,
30,
61,
40,
33
and
03 dated September 09, 2000, April 04, 2001, December 14,
2002, December 05, 2003, February 28, 2007 and July 22, 2010 respectively in
terms of which the exporters were given limited powers of write-off and also AD
Category – I banks have been permitted to accede to the requests for "write-off"
made by the exporters, subject to the conditions, inter alia, that the exporter
had to surrender proportionate export incentives, if availed of, in respect of
the relative shipments.
2. With a view to further simplifying and liberalizing the
procedure and for providing greater flexibility to all exporters as well as the
Authorized Dealer banks, the earlier instructions have been reviewed. It has now been decided to effect, subject to the stipulations
regarding surrender of incentives prior to”write-off” adduced in the A.P. (DIR
Series) Circular No. 03 dated 22 July 2010, the following liberalization
in the limits of “write-offs” of unrealized export bills:
-
Self “write-off” by an exporter
(Other than Status Holder Exporter)
----------------------------------------------------- 5%*
-
Self “write-off” by Status Holder Exporters
------------------------------------------ 10%*
-
‘Write-off” by Authorized Dealer bank
------------------------------------------------ 10%*
*of the total export
proceeds realized during the previous calendar year.
3. The above limits will be related to total export proceeds realized during
the previous calendar year and will be cumulatively available in a year.
4. The above “write-off” will be subject to the following conditions:
(a) The relevant amount has remained outstanding for more than one year;
(b) Satisfactory documentary evidence is furnished in support of the exporter
having made all efforts to realize the dues;
(c) The case falls under any of the undernoted categories :
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(i) |
The overseas buyer has been declared insolvent and a certificate from the
official liquidator indicating that there is no possibility of recovery of
export proceeds has been produced. |
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(ii) |
The overseas buyer is not traceable over a reasonably long period of
time. |
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(iii) |
The goods exported have been auctioned or destroyed by the Port / Customs /
Health authorities in the importing country. |
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(iv) |
The unrealized amount represents the balance due in a case settled through
the intervention of the Indian Embassy, Foreign Chamber of Commerce or similar
Organization; |
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(v) |
The unrealized amount represents the undrawn balance of an export bill (not
exceeding 10% of the invoice value) remaining outstanding and turned out to be
unrealizable despite all efforts made by the exporter; |
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(vi) |
The cost of resorting to legal action would be disproportionate to the
unrealized amount of the export bill or where the exporter even after winning
the Court case against the overseas buyer could not execute the Court decree due
to reasons beyond his control; |
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(vii) |
Bills were drawn for the difference between the letter of credit value and
actual export value or between the provisional and the actual freight charges
but the amount has remained unrealized consequent on dishonour of the bills by
the overseas buyer and there are no prospects of realization. |
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(d) |
The exporter has surrendered proportionate export incentives (for the cases
not covered under A. P. (DIR. Series) Circular No.03 dated July 22, 2010), if
any, availed of in respect of the relative shipments. The AD Category – I banks
should obtain documents evidencing surrender of export incentives availed of
before permitting the relevant bills to be written off. |
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(e) |
In case of self write-off, the exporter should submit to the concerned AD
bank, a Chartered Accountant’s certificate, indicating the export realization in
the preceding calendar year and also the amount of write-off already availed of
during the year, if any, the relevant GR / SDF Nos. to be written off, Bill No.,
invoice value, commodity exported, country of export. The CA certificate may
also indicate that the export benefits, if any, availed of by the exporter have
been surrendered. |
5. However, the following would not qualify for the “write off” facility
:
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Exports made to countries with externalization problem i.e. where the
overseas buyer has deposited the value of export in local currency but the
amount has not been allowed to be repatriated by the central banking authorities
of the country.
-
GR / SDF forms which are under investigation by agencies like, Enforcement
Directorate, Directorate of Revenue Intelligence, Central Bureau of
Investigation, etc. as also the outstanding bills which are subject matter of
civil / criminal suit.
6. The respective AD banks may forward a statement in form
EBW, in the senclosed format, to the Regional Office of
Reserve Bank under whose jurisdiction they are functioning, indicating details
of write-offs allowed under this circular.
7. AD banks are advised to put in place a system under which their internal
inspectors or auditors (including external auditors appointed by authorised
dealers) should carry out random sample check / percentage check of “write-off”
outstanding export bills.
8. Cases not covered by the above instructions / beyond the above limits, may
be referred to the concerned Regional Office of Reserve Bank of India.
Ref-
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RBI/2012-13/435
A.P. (DIR Series) Circular No. 88 dated 12 March 2013
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