Important amendments to the exchange control regulations in export and import marketing are given below:
1. Interest in Import Bills
2. Import through Courier – submission of evidence of import
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3. Payment of royalty on Computer Software
4. Remittance facilities for holding international Conferences/Seminars/ Training programmes in India
5. Loans/Overdrafts to Residents against security of Fixed Deposits in NRE accounts Credit to NRE Accounts
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6. Credit to NRE Accounts
It has been decided to amend/modify the Exchange Control Regulations as set out in the following paragraphs.
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1. Interest in Import Bills:
In terms of paragraph 7A12 of ECM [as amended vide AD (MA Series) Circular No. 7 dated 3rd February 1998] Authorised Dealers are permitted to allow remittance of interest accrued on usance Import bills under normal interest clause of overdue interest paid on Sight Import Bills for a period not exceeding six months from the date of Shipment.
Authorised dealers were also advised that where such interest does not form part of invoice value and is being remitted separately, they should advise the concerned importer to declare the interest to the Customs Authorities and produce Exchange Control Copy of revised or supplementary Bill of Entry, incorporating therein the amount of interest before effecting the remittance.
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The matter has since been reviewed and it has been decided that Authorised Dealers need not insist on importers declaring the Interest amount, where-it does not form part of the Invoice value, to Customs Authorities and submitting their revised or supplementary Bill of Entry.
2. Import through Courier – Submission of Evidence of Import:
In terms of Paragraph 7A 20 (I) of ECM, importers are required to submit Courier wrappers as evidence of import in respect of goods imported through Courier Services.
Under the provisions of the Courier Imports (Clearance) Regulations, 1995 with the Courier Imports (Clearance) Amendment Regulations, 1997 issued by the Government of India, Department of Revenue, Central Board of Excise and Customs (CBEC), New Delhi, importers are required to file a separate Bill of Entry where the value of such import is Rupee One lakh or more.
Accordingly, in respect of import made through Courier services where the CIF value of the consignment is Rupees one lakh or more, Authorised Dealers should insist on submission of Exchange Control Copy of Bill of Entry for home consumption by the importer as in the case of other imports.
Where however, the value of the import is less than Rupees one lakh, Authorised Dealers may obtain from the importers a certified copy of Bill of Entry in the prescribed form issued by the Customs in the name of the registered Courier Company, duly certified by the Authorised Dealer of the Company indicating the particulars of consignment for which the remittance was/is sought to be made.
3. Payment of Royalty on Computer Software:
In terms of items IV of Part B of Annexure 1 to Chapter 8 of ECM Authorised Dealers have been permitted to allow remittances of royalty by Indian Software reproducers to overseas copyright holders for reproduction of Computer Soft view, for upto 30% of the Indian published price.
Where the royalty exceeds 30%, the applicant is required to obtain specific approval from the Government of India. It is clarified that in such cases also Authorised Dealer concerned may allow the remittance in accordance with the terms of approval issued by the Government of India, Department of Electronics.
4. Remittance Facilities for Holding International Conferences/Seminars/Training Programmes in India:
At present Applications for payment of Honoraria to persons invited as guest speakers, etc, in connection with International Conferences/Seminars/Training Programmes of Scientific, Technical or Educational nature organised in India are required to be referred to the Reserve Bank.
Similarly, remittances of fees to the concerned International Organisations abroad, by Indian organisers for holding such Seminars/Conferences in India also require the approval of Reserve Bank.
It has now been decided that Authorised Dealers may permit remittances of Honoraria to overseas invitees visiting India as best speakers, remittances of Honoraria to overseas invitees visiting India as best speakers, etc., as also towards fees.
If any, payable to the concerned International Organisations in connection with such Conferences/Seminars/Training Programmes, etc., organised in India, provided the Indian organisers have obtained prior approval of the concerned Administrative Ministry of the Government of India for holding such Conferences/Seminars/Training Programmes in India.
Approval from the Ministry of Affairs and Ministry of External Affairs of the Government of India is also necessary in case of participation of foreign delegates; remittances towards fees, remuneration, etc., in such cased may be allowed by the Authorised Dealers after verification of appropriate documentary evidence indicating details of payment, name of the Conference/Seminar etc.
A certified copy of approval obtained by the applicant from the concerned Administrative Ministry of the Government of India, as also of the permission obtained from the Ministry of Home Affairs and Ministry of External Affairs, as the case may be should verified and kept on record by Authorised Dealers for verification by their Internal Auditors/ Reserve Bank.
Further, the remittance may be affected on production of among other things, an undertaking relating to payment of Income-tax together with an Accountant’s Certificate in the prescribed form, regarding payment of Income-tax for onward transmission to the Income-tax authorities.
5. Loans/Overdrafts to Residents against Security of Fixed Deposits in NRE Accounts:
In terms of paragraph 13B.9 (ii)(b), 13B 9 (iii) (a) and 13B, 10(b) of ECM, Authorised Dealers have been permitted to grant loans/overdrafts to NRE account holders and to resident individuals/firms/companies in India against collateral security of fixed deposits held in NRE accounts subject, inter alia, to the condition that the period of the loan should not exceed the unexpired period of maturity of the fixed deposit accepted as security.
It is clarified that there is no objection to Authorised Dealers renewing such deposit as also the loan granted there against on specific request from the NRI depositor and resident borrower, provided the interest rate directives issued by Reserve Bank are complied with. The other terms and conditions mentioned in the above Paragraphs of ECM remain unchanged.
6. Credit to NRE Accounts:
In terms of item (I) of paragraph 13B 22 of ECM [as amended vide AD (MA Series) Circular No. 11 dated 3rd March, 1988], Authorised Dealers have been permitted to credit to NRE/FCNR Account interest, if any, paid by the House Building Agency on the application money for allotment of flat/earnest money, provided the original payment was made by debit to the NRE/FCNR Account or by direct remittance from the concerned NRI.
It is clarified that only the net amount (i.e., after payment of tax, if any) of the interest received should be credited to the NRE/FCNR Account. Other conditions stipulated in item (I) of paragraph 13B 22 remain unchanged.