Date Time No. of Days Fees (Inclusive Taxes)
17/11/2022 2:00 PM - 5:00 PM 2 5015

FEMA & Trade Finance

Introduction

Recently some of leading corporate received notice from Reserve Bank of India for non submission of bill of entry, non fulfilment of export obligations after receiving advance remittances and cases where import of goods not done after sending advance remittance to overseas suppliers. It is also learnt that issuance of bill of entry hard copy is dispensed with.  EDPMS and IDPMS are put to operation.  These are the some of the developments in the recent past.

In the advent of electronic data taking over the export and import transactions most of the guidelines of under FEMA 1999 has been modified.

From the time FEMA was introduced in June 2000, till today lot of relaxations have been introduced by Reserve Bank for smooth facilitation of trade operations.  In most of the cases exchange control administration is decentralized and the Authorized Dealers are being delegated with powers to handle the transactions.

In case of exports, dispatch of documents directly to consignee, reduction in invoice value, write off, netting off export receivables, allowing export through ware house abroad, agency commission remittance, export claims, handling advance remittance and delayed presentation of regulatory documents etc., powers are delegated to Authorized Dealers for approving such transactions subject to certain conditions.

Likewise, import transactions are also liberalized.  Authorized dealers are delegated with requisite powers to approve advance remittance for imports with/without the guarantee from the overseas seller, trade credit transactions (suppliers credit / buyers credit), merchanting trade and high-sea sales transactions etc.,

Regarding outward remittances Authorised Dealers can permit most of the current account transactions and also capital account transactions subject to certain limits.

In spite of the wide range of delegated authority, still there are some gaps in understanding and interpreting these guidelines.

This workshop will exclusively address the changes introduced by Reserve Bank of India through Master Directions and AP DIR circulars with case studies on the following issues.

  • Clear distinction between current and capital account transactions
  • Export related regulatory issues trade discount, reduction in invoice value, Regulatory waiver, and dispatch of documents directly to the consignee, advance remittance, write off, netting off
  • Import related regulatory issues time limit for import payment, interest payments, advance remittance for imports, import of services, trade credit suppliers credit and buyers credit, High sea sales, Merchanting trade.
  • Remittances other than imports

Princeton Academy Resources https://princetonacademy.in/resources/

RBI circulars https://rbi.org.in/scripts/Fema.aspx

Course Content

Programme Schedule:

  • FEMA 1999 on Import & export of goods and services
  • Relevant sections under FEMA with regard to current/capital account transactions
  • Methods of payment Advance remittances, Doc. Collections, Doc. Credit
  • Roles & Responsibilities of AD in handling Import and Export transactions
  • Settlement of imports, delayed remittances, write-off, etc.
  • Reporting system for import remittances, IDPMS & issues thereon.
  • High sea sales and merchanting trade
  • Supplier credit and Buyers credit
  • Export of Software & Service Exports
  • Time limit for presentation of export documents
  • Time limit for realizing export payments
  • Change of buyer, Extension of an Export bill & write off
  • Set of Export bills & Netting off
  • E-BRC
  • GR/EDF Waivers, Participation in Trade Fairs abroad,
  • Reporting of Export transactions, EDPMS & Issues thereon
  • EEFC Account
  • Capital account transactions FDI, ODI & ECBs.
  • Foreign Bank Guarantees/SBLCs
  • Miscellaneous remittances  Schedule III
  • Export related remittances
  • Relaxations permitted during the COVID-19 relating to Exports & Imports