RBI 2013 14 14 Master Circular No 14 2013 14 July 1 2013 To All Category ndash I Authorised Dealer Banks Madam Sir Master Circular on Exports of Goods and Services Export of Goods and Services from India is allowed in terms of clause a of sub section 1 and sub section 3 of Section 7 of the Foreign Exchange Management Act 1999 42 of 1999 read with Notification No G S R 381 E dated May 3 2000 viz Foreign Exchange Management Current Account Rules 2000 as amended from time to time 2 This Master Circularconsolidates the existing instructions on the subject of Export of Goods and Services from India at one place The list of underlying circulars notifications consolidated in this Master Circular is furnished in Appendix 3 This Master Circular is being issued with a sunset clause of one year This circular will stand withdrawn on July 01 2014 and be replaced by an updated Master Circular on the subject Yours faithfully C D Srinivasan Chief General Manager INDEX PART 1 A Introduction PART 2 B General guidelines for Exports B 1 Exemption from Declarations B 2 Manner of Receipt and Payment B 3 Realisation and Repatriation of export proceeds B 4 Foreign Currency Account B 5 Diamond Dollar Account DDA B 6 Exchange Earners rsquo Foreign Currency EEFC Account B 7 Setting up of Offices Abroad and Acquisition of Immovable Property for Overseas Office B 8 Advance Payments against Exports B 9 GR Approval for Trade Fair Exhibitions abroad B 10 GR approval for Export of Goods for re imports B 11 Part Drawings Undrawn Balances B 12 Consignment Exports B 13 Opening Hiring of Ware houses abroad B 14 Direct dispatch of documents by the exporter B 15 Invoicing of Software Exports B 16 Short Shipments and Shut out Shipments B 17 Counter Trade Arrangement B 18 Export of Goods on Lease Hire etc B 19 Export on Elongated Credit Terms B 20 Export of goods by Special Economic Zones SEZs B 21 Project Exports and Service Exports B 22 Export of Currency B 23 Forfaiting B 24 Exports to neighbouring countries by Road Rail or River B 25 Border Trade with Myanmar B 26 Repayment of State Credits B 27 Counter ndash Trade Arrangements with Romania PART ndash 3 C Operational Guidelines for AD Category ndash I banks C 1 Citing of Specific Identification Numbers C 2 GR SDF PP SOFTEX procedure C 3 A GR forms C 3 B Mid Sea Trans Shipment of catch by Deep Sea Fishing Vessels C 4 SDF C 5 PP Forms C 6 SOFTEX Forms C 7 Random verification C 8 Certification for EEFC Credits C 9 Consolidation of Air Cargo Sea Cargo C 10 Delay in submission of shipping documents by exporters C 11 Check list for Scrutiny of Forms C 12 Return of Documents to Exporters C 13 Handing Over Negotiable Copy of Bill of Lading to Master of Vessel Trade Representative C 14 Export Bills Register C 15 Follow up of Overdue Bills C 16 Reduction in Invoice Value on Account of Prepayment of Usance Bills C 17 Reduction in Invoice Value in other cases C 18 Export Claims C 19 Change of buyer consignee C 20 Extension of time and Self write off by the exporters C 21 Extension of Time C 22 Write off by AD Category ndash I banks C 23 Write off in cases of Payment of Claims by ECGC and private insurance companies regulated by Insurance Regulatory and Development Authority IRDA C 24 Write off in other cases C 25 Write off ndash Relaxation C 26 Shipments Lost in Transit C 27 A lsquo Netting off rsquo of export receivables against import payments ndash Units in Special Economic Zones SEZs C 27 B Set off of export receivables against import payables C 28 Agency Commission on Exports C 29 Refund of Export Proceeds C 30 Exporters Caution List PART ndash 4 Annex 1 Annex 2 Notification No FEMA 23 2000 RB dated 3rd May 2000 Annex 3 Notification No FEMA 14 2000 RB dated 3rd May 2000 Annex 4 Annex 5 Annex 6 Annex 7 Annex 8 Appendix PART 1 A Introduction i Export trade is regulated by the Directorate General of Foreign Trade DGFT and its regional offices functioning under the Ministry of Commerce and Industry Department of Commerce Government of India Policies and procedures required to be followed for exports from India are announced by the DGFT from time to time ii AD Category ndash I banks may conduct export transactions in conformity with the Foreign Trade Policy in vogue and the Rules framed by the Government of India and the Directions issued by Reserve Bank from time to time In exercise of the powers conferred by clause a of sub section 1 and sub section 3 of Section 7 and sub section 2 of Section 47 of the Foreign Exchange Management Act 1999 42 of 1999 the Reserve Bank has notified the Foreign Exchange Management Export of Goods and Services Regulations 2000 relating to export of goods and services from India hereinafter referred to as the lsquo Export Regulations rsquo These Regulations have been notified vide Notification No FEMA 23 2000 RB dated May 3 2000 as amended from time to time iii The Directions contained in this Circular should be read with the Rules notified by the Government of India Ministry of Finance vide Notification No G S R 381 E dated May 3 2000 Annex 1 as also Regulations notified by Reserve Bank vide its Notification No FEMA 23 2000 RB dated May 3 2000 as amended from time to time Annex 2 iv In terms of Regulation 4 of the Foreign Exchange Management Guarantees Regulations 2000 notified vide Notification No FEMA 8 2000 RB dated May 3 2000 AD Category ndash I banks have been permitted to issue guarantees on behalf of exporter clients on account of exports out of India subject to specified conditions v There is no restriction on invoicing of export contracts in Indian Rupees in terms of the Rules Regulations Notifications and Directions framed under the Foreign Exchange Management Act 1999 Further in terms of Para 2 40 of the Foreign Trade Policy August 27 2009 March 31 2014 ldquo All export contracts and invoices shall be denominated either in freely convertible currency or in Indian Rupees but export proceeds shall be realised in freely convertible currency However export proceeds against specific exports may also be realised in rupees provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of the ACU or Nepal or Bhutan rdquo Indian Rupee is not a freely convertible currency as yet vi Any reference to the Reserve Bank should first be made to the Regional Office of the Foreign Exchange Department situated in the jurisdiction where the applicant person resides or the firm company functions unless otherwise indicated If for any particular reason they desire to deal with a different office of the Foreign Exchange Department they may approach the Regional Office of its jurisdiction for necessary approval vii ldquo Financial Year rdquo April to March is reckoned as the time base for all transactions pertaining to trade related issues PART 2 B General guidelines for Exports B 1 Exemption from Declarations GR Exemption The requirement of declaration of export of goods and software in the prescribed form will not apply to the cases indicated in Regulation 4 of Notification No FEMA 23 2000 RB dated May 3 2000 Annex 2 The exporters shall however be liable to realise and repatriate export proceeds as per FEMA Regulations Grant of GR waiver i AD Category ndash I banks may consider requests for grant of GR waiver from exporters for export of goods free of cost for export promotion up to 2 per cent of the average annual exports of the applicant during the preceding three financial years subject to a ceiling of Rs 5 lakhs For status holder exporters the limit as per the present Foreign Trade Policy is Rs 10 lakhs or 2 per cent of the average annual export realization during the preceding three licensing years April March whichever is higher ii Export of goods not involving any foreign exchange transaction directly or indirectly requires the waiver of GR PP procedure from the Reserve Bank B 2 Manner of Receipt and Payment The amount representing the full export value of the goods exported shall be received through an AD Bank in the manner specified in the Foreign Exchange Management Manner of Receipt and Payment Regulations 2000 notified vide Notification No FEMA 14 2000 RB dated May 3 2000 Annex 3 in the following manner a Bank draft pay order banker s or personal cheques b Foreign currency notes foreign currency travellers rsquo cheques from the buyer during his visit to India c Payment out of funds held in the FCNR NRE account maintained by the buyer d International Credit Cards of the buyer Note When payment for goods sold to overseas buyers during their visits is received in this manner GR SDF duplicate should be released by the AD Category ndash I banks only on receipt of funds in their Nostro account or if the AD Category ndash I bank concerned is not the Credit Card servicing bank on production of a certificate by the exporter from the Credit Card servicing bank in India to the effect that it has received the equivalent amount in foreign exchange AD Category ndash I banks may also receive payment for exports made out of India by debit to the credit card of an importer where the reimbursement from the card issuing bank organisation will be received in foreign exchange ii Trade transactions can also be settled in the following manner a All transactions between a person resident in India and a person resident in Nepal or Bhutan may be settled in Indian Rupees However in case of export of goods to Nepal where the importer has been permitted by the Nepal Rashtra Bank to make payment in free foreign exchange such payments shall be routed through the ACU mechanism b In precious metals i e Gold Silver Platinum by the Gem and Jewellery units in SEZs and EOUs equivalent to value of jewellery exported on the condition that the sale contract provides for the same and the approximate value of the precious metals is indicated in the relevant GR SDF PP Forms iii Processing of export related receipts through Online Payment Gateway Service Providers OPGSPs Authorised Dealer Category ndash I AD Category ndash I banks have been allowed to offer the facility of repatriation of export related remittances by entering into standing arrangements with Online Payment Gateway Service Providers OPGSPs subject to the following conditions ndash a The AD Category I banks offering this facility shall carry out the due diligence of the OPGSP b This facility shall only be available for export of goods and services of value not exceeding USD 10 000 US Dollar ten thousand effective from June 11 2013 Ref A P DIR Series Circular No 109 dtd 11 06 2013 c AD Category I banks providing such facilities shall open a NOSTRO collection account for receipt of the export related payments facilitated through such arrangements Where the exporters availing of this facility are required to open notional accounts with the OPGSP it shall be ensured that no funds are allowed to be retained in such accounts and all receipts should be automatically swept and pooled into the NOSTRO collection account opened by the AD Category I bank d A separate NOSTRO collection account may be maintained for each OPGSP or the bank should be able to delineate the transactions in the NOSTRO account of each OPGSP e The following debits will only be permitted to the NOSTRO collection account opened under this arrangement I Repatriation of funds representing export proceeds to India for credit to the exporters rsquo account II Payment of fee commission to the OPGSP as per the predetermined rates frequency arrangement and III Charge back to the importer where the exporter has failed in discharging his obligations under the sale contract f The balances held in the NOSTRO collection account shall be repatriated and credited to the respective exporter s account with a bank in India immediately on receipt of the confirmation from the importer and in no case later than seven days from the date of credit to the NOSTRO collection account g AD Category I banks shall satisfy themselves as to the bonafides of the transactions and ensure that the purpose codes reported to the Reserve Bank in the online payment gateways are appropriate h AD Category I banks shall submit all the relevant information relating to any transaction under this arrangement to the Reserve Bank as and when advised to do so i Each NOSTRO collection account should be subject to reconciliation and audit on a quarterly basis j Resolution of all payment related complaints of exporters in India shall remain the responsibility of the OPGSP concerned k OPGSPs who are already providing such services as per the specific holding on approvals issued by the Reserve Bank shall open a liaison office in India within three months from November 16 2010 after duly finalizing their arrangement with the AD Category I banks and obtaining approval from the Reserve Bank for this purpose In respect of all new arrangements the OPGSP shall open a liaison office with the approval of the Reserve Bank before operationalising the arrangement AD Category I banks desirous of entering into such an arrangement s should approach the Reserve Bank for obtaining one time permission in this regard and thereafter report the details of each such arrangement as and when entered into iv Settlement system under ACU Mechanism a In order to facilitate transactions settlements effective January 01 2009 participants in the Asian Clearing Union will have the option to settle their transactions either in ACU Dollar or in ACU Euro Accordingly the Asian Monetary Unit AMU shall be denominated as ACU Dollar and ACU Euro which shall be equivalent in value to one US Dollar and one Euro respectively b Further AD Category ndash I banks are allowed to open and maintain ACU Dollar and ACU Euro accounts with their correspondent banks in other participating countries All eligible payments are required to be settled by the concerned banks through these accounts c Relaxation from ACU Mechanism Indo Myanmar Trade Trade transactions with Myanmar can be settled in any freely convertible currency in addition to the ACU mechanism d In view of the difficulties being experienced by importers exporters in payments to receipts from Iran it has been decided that with effect from December 27 2010 all eligible current account transactions including trade transactions with Iran should be settled in any permitted currency outside the ACU mechanism until further notice B 3 Realisation and Repatriation of export proceeds It is obligatory on the part of the exporter to realise and repatriate the full value of goods or software to India within a stipulated period from the date of export as under i Units located in SEZs shall realize and repatriate full value of goods software services to India within a period of twelve months from the date of export Any extension of time beyond the above stipulated period may be granted by Reserve Bank of India on case to case basis Ref A P DIR Series Circular No 108 dated 11 06 2013 ii By Status Holder Exporters as defined in the Foreign Trade Policy Within a period of twelve months from the date of export iii By 100 Export Oriented Units EOUs and units set up under Electronic Hardware Technology Parks EHTPs Software Technology Parks STPs and Biotechnology Parks BTPs schemes Within a period of twelve months from the date of export on or after September 1 2004 iv Goods exported to a warehouse established outside India As soon as it is realised and in any case within fifteen months from the date of shipment of goods and v In all other cases With effect from May 20 2013 this period of realization and repatriation to India has been brought down to nine months from the date of export till September 30 2013 Ref A P DIR Series Circular No 105 dtd 20 05 2013 B 4 Foreign Currency Account i Participants in international exhibition trade fair have been granted general permission vide Regulation 7 7 of the Foreign Exchange Management Foreign Currency Account by a Person Resident in India Regulations 2000 notified vide Notification No FEMA 10 2000 RB dated May 3 2000 for opening a temporary foreign currency account abroad Exporters may deposit the foreign exchange obtained by sale of goods at the international exhibition trade fair and operate the account during their stay outside India provided that the balance in the account is repatriated to India through normal banking channels within a period of one month from the date of closure of the exhibition trade fair and full details are submitted to the AD Category ndash I banks concerned ii Reserve Bank may consider applications in Form EFC Annex 6 from exporters having good track record for opening a foreign currency account with banks in India and outside India subject to certain terms and conditions Applications for opening the account with a branch of an AD Category ndash I bank in India may be submitted through the branch at which the account is to be maintained If the account is to be maintained abroad the application should be made by the exporter giving details of the bank with which the account will be maintained iii An Indian entity can also open hold and maintain a foreign currency account with a bank outside India in the name of its overseas office branch by making remittance for the purpose of normal business operations of the said office branch or representative subject to conditions stipulated in Regulation 7 of Notification No FEMA 10 2000 RB dated May 3 2000 and as amended from time to time iv A unit located in a Special Economic Zone SEZ may open hold and maintain a Foreign Currency Account with an AD Category ndash I bank in India subject to conditions stipulated in Regulation 6 A of Notification No FEMA 10 2000 RB dated May 3 2000 and as amended from time to time v A person resident in India being a project service exporter may open hold and maintain foreign currency account with a bank outside or in India subject to the standard terms and conditions in the Memorandum PEM B 5 Diamond Dollar Account DDA i Under the scheme of Government of India firms and companies dealing in purchase sale of rough or cut and polished diamonds precious metal jewellery plain minakari and or studded with without diamond and or other stones with a track record of at least 2 years in import export of diamonds coloured gemstones diamond and coloured gemstones studded jewellery plain gold jewellery and having an average annual turnover of Rs 3 crores or above during the preceding three licensing years licensing year is from April to March are permitted to transact their business through Diamond Dollar Accounts ii They may be allowed to open not more than five Diamond Dollar Accounts with their banks iii Eligible firms and companies may apply for permission to their AD Category ndash I banks in the format prescribed iv AD Category I banks are required to submit quarterly reports to the Foreign Exchange Department Reserve Bank of India Central Office Trade Division Mumbai giving details of name and address of the firm company in whose name the Diamond Dollar Account is opened along with the date of opening closing the Diamond Dollar Account by the 10th of the month following the quarter to which it relates v AD Category I banks are required to submit a statement giving the data on the DDA balances maintained by them on a fortnightly basis within seven days of close of the fortnight to which it relates to the Foreign Exchange Department Reserve Bank of India Central Office Trade Division Mumbai vi Condition mentioned at Para B 6 iv shall also apply B 6 Exchange Earners rsquo Foreign Currency EEFC Account i A person resident in India may open with an AD Category ndash I bank in India an account in foreign currency called the Exchange Earners rsquo Foreign Currency EEFC Account in terms of Regulation 4 of the Foreign Exchange Management Foreign Currency Account by a Person Resident in India Regulations 2000 notified under Notification No FEMA 10 2000 RB dated May 3 2000 as amended from time to time Resident individuals are permitted to include resident close relative s as defined in the Companies Act 1956 as a joint holder s in their EEFC bank accounts on former or survivor basis However such resident Indian close relative being made eligible to become joint account holder shall not be eligible to operate the account during the life time of the resident account holder ii This account shall be maintained only in the form of non interest bearing current account No credit facilities either fund based or non fund based shall be permitted against the security of balances held in EEFC accounts by the AD Category ndash I banks iii All categories of foreign exchange earners are allowed to credit 100 of their foreign exchange earnings to their EEFC Accounts subject to the condition that a the sum total of the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the succeeding calendar month after adjusting for utilization of the balances for approved purposes or forward commitments Further in case of requirements EEFC account holders are permitted to access the forex market for purchasing foreign exchange b The facility of EEFC scheme is intended to enable exchange earners to save on conversion transaction costs while undertaking forex transactions This facility is not intended to enable exchange earners to maintain assets in foreign currency as India is still not fully convertible on Capital Account iv It may be noted that the provisions at paragraph iii a and iii b above will apply mutatis mutandis also to holder of either a Resident Foreign Currency Account Domestic or a Diamond Dollar Account DDA Ref A P DIR Series Circular No 12 dated 31 07 2012 A P DIR Series Circular No 79 dtd 22 01 2013 v The eligible credits represent ndash a inward remittance received through normal banking channel other than the remittance received pursuant to any undertaking given to the Reserve Bank or which represents foreign currency loan raised or investment received from outside India or those received for meeting specific obligations by the account holder b Payments received in foreign exchange by a unit in Domestic Tariff Area DTA for supplying goods to a unit in Special Economic Zone out of its foreign currency account vi AD Category ndash I banks may permit their exporter constituents to extend trade related loans advances to overseas importers out of their EEFC balances without any ceiling subject to compliance of provisions of Notification No FEMA 3 2000 RB dated May 3 2000 as amended from time to time vii AD Category ndash I banks may permit exporters to repay packing credit advances whether availed in Rupee or in foreign currency from balances in their EEFC account and or Rupee resources to the extent exports have actually taken place B 7 Setting up of Offices Abroad and Acquisition of Immovable Property for Overseas Offices i At the time of setting up of the office AD Category ndash I banks may allow remittances towards initial expenses up to fifteen per cent of the average annual sales income or turnover during the last two financial years or up to twenty five per cent of the net worth whichever is higher ii For recurring expenses remittances up to ten per cent of the average annual sales income or turnover during the last two financial years may be sent for the purpose of normal business operations of the office trading non trading branch or representative office outside India subject to the following terms and conditions the overseas branch office has been set up or representative is posted overseas for conducting normal business activities of the Indian entity the overseas branch office representative shall not enter into any contract or agreement in contravention of the Act Rules or Regulations made there under the overseas office trading non trading branch representative should not create any financial liabilities contingent or otherwise for the head office in India and also not invest surplus funds abroad without prior approval of the Reserve Bank Any funds rendered surplus should be repatriated to India iii The details of bank accounts opened in the overseas country should be promptly reported to the AD Bank iv AD Category ndash I banks may also allow remittances by a company incorporated in India having overseas offices within the above limits for initial and recurring expenses to acquire immovable property outside India for its business and for residential purpose of its staff v The overseas office branch of software exporter company firm may repatriate to India 100 per cent of the contract value of each lsquo off site rsquo contract vi In case of companies taking up lsquo on site rsquo contracts they should repatriate the profits of such lsquo on site rsquo contracts after the completion of the said contracts vii An audited yearly statement showing receipts under lsquo off site rsquo and lsquo on site rsquo contracts undertaken by the overseas office expenses and repatriation thereon may be sent to the AD Category ndash I banks B 8 Advance Payments against Exports 1 In terms of Regulation 16 of Notification No FEMA 23 2000 RB dated May 3 2000 where an exporter receives advance payment with or without interest from a buyer outside India the exporter shall be under an obligation to ensure that ndash the shipment of goods is made within one year from the date of receipt of advance payment the rate of interest if any payable on the advance payment does not exceed London Inter Bank Offered Rate LIBOR 100 basis points and the documents covering the shipment are routed through the AD Category ndash I bank through whom the advance payment is received Provided that in the event of the exporter rsquo s inability to make the shipment partly or fully within one year from the date of receipt of advance payment no remittance towards refund of unutilized portion of advance payment or towards payment of interest shall be made after the expiry of the said period of one year without the prior approval of the Reserve Bank 2 lsquo AD Category I banks may allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship and where the lsquo export agreement rsquo provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment subject to the following conditions i the KYC and due diligence exercise has been done by the AD Category ndash I bank for the overseas buyer ii compliance with the Anti Money Laundering standards has been ensured iii the AD Category I bank should ensure that export advance received by the exporter should be utilized to execute export and not for any other purpose i e the transaction is a bona fide transaction iv progress payment if any should be received directly from the overseas buyer strictly in terms of the contract v the rate of interest if any payable on the advance payment shall not exceed London Inter Bank Offered Rate LIBOR 100 basis points vi there should be no instance of refund exceeding 10 of the advance payment received in the last three years vii the documents covering the shipment should be routed through the same authorised dealer bank and viii in the event of the exporter s inability to make the shipment partly or fully no remittance towards refund of unutilized portion of advance payment or towards payment of interest should be made without the prior approval of the Reserve Bank rsquo 3 AD Category ndash I banks may allow the purchase of foreign exchange from the market for refunding advance payment credited to EEFC account only after utilizing the entire balances held in the exporter rsquo s EEFC accounts maintained at different branches banks Note AD Category ndash I banks may also be guided by the Master Circular on Guarantees and Co acceptances issued by DBOD B 9 GR Approval for Trade Fair Exhibitions abroad Firms Companies and other organizations participating in Trade Fair Exhibition abroad can take export goods for exhibition and sale outside India without the prior approval of the Reserve Bank Unsold exhibit items may be sold outside the exhibition trade fair in the same country or in a third country Such sales at discounted value are also permissible It would also be permissible to gift rsquo unsold goods up to the value of USD 5000 per exporter per exhibition trade fair AD Category ndash I banks may approve GR Form of export items for display or display cum sale in trade fairs exhibitions outside India subject to the following The exporter shall produce relative Bill of Entry within one month of re import into India of the unsold items The sale proceeds of the items sold are repatriated to India in accordance with the Foreign Exchange Management Realisation Repatriation and Surrender of Foreign Exchange Regulations 2000 The exporter shall report to the AD Category ndash I banks the method of disposal of all items exported as well as the repatriation of proceeds to India Such transactions approved by the AD Category ndash I banks will be subject to 100 per cent audit by their internal inspectors auditors B 10 GR approval for Export of Goods for re imports i AD Category ndash I banks may consider request from exporters for granting GR approval in cases where goods are being exported for re import after repairs maintenance testing calibration etc subject to the condition that the exporter shall produce relative Bill of Entry within one month of re import of the exported item from India ii Where the goods being exported for testing are destroyed during testing AD Category ndash I banks may obtain a certificate issued by the testing agency that the goods have been destroyed during testing in lieu of Bill of Entry for import B 11 Part Drawings Undrawn Balances i In certain lines of export trade it is the practice to leave a small part of the invoice value undrawn for payment after adjustment due to differences in weight quality etc to be ascertained after arrival and inspection weighment or analysis of the goods In such cases AD Category ndash I banks may negotiate the bills provided The amount of undrawn balance is considered normal in the particular line of export trade subject to a maximum of 10 per cent of the full export value An undertaking is obtained from the exporter on the duplicate of GR SDF PP forms that he will surrender account for the balance proceeds of the shipment within the period prescribed for realization ii In cases where the exporter has not been able to arrange for repatriation of the undrawn balance in spite of best efforts AD Category ndash I banks on being satisfied with the bona fides of the case should ensure that the exporter has realised at least the value for which the bill was initially drawn excluding undrawn balances or 90 per cent of the value declared on GR PP SDF form whichever is more and a period of one year has elapsed from the date of shipment B 12 Consignment Exports i When goods have been exported on consignment basis the AD Category I bank while forwarding shipping documents to his overseas branch correspondent should instruct the latter to deliver them only against trust receipt undertaking to deliver sale proceeds by a specified date within the period prescribed for realization of proceeds of the export This procedure should be followed even if according to the practice in certain trades a bill for part of the estimated value is drawn in advance against the exports ii The agents consignees may deduct from sale proceeds of the goods expenses normally incurred towards receipt storage and sale of the goods such as landing charges warehouse rent handling charges etc and remit the net proceeds to the exporter iii The account sales received from the Agent Consignee should be verified by the AD Category ndash I banks Deductions in Account Sales should be supported by bills receipts in original except in case of petty items like postage cable charges stamp duty etc iv In case of goods exported on consignment basis freight and marine insurance must be arranged in India AD Category ndash I banks may allow the exporters to abandon the books which remain unsold at the expiry of the period of the sale contract Accordingly the exporters may show the value of the unsold books as deduction from the export proceeds in the Account Sales B 13 Opening Hiring of Ware houses abroad AD Category ndash I banks may consider the applications received from exporters and grant permission for opening hiring warehouses abroad subject to the following conditions Applicant rsquo s export outstanding does not exceed 5 per cent of exports made during the previous financial year Applicant has a minimum export turnover of USD 100 000 during the last financial year Period of realisation should be as applicable All transactions should be routed through the designated branch of the AD Banks The above permission may be granted to the exporters initially for a period of one year and renewal may be considered subject to the applicant satisfying the requirement above AD Category ndash I banks granting such permission approvals should maintain a proper record of the approvals granted B 14 Direct dispatch of documents by the exporter i AD Category ndash I banks should normally dispatch shipping documents to their overseas branches correspondents expeditiously However they may dispatch shipping documents direct to the consignees or their agents resident in the country of final destination of goods in cases where Advance payment or an irrevocable letter of credit has been received for the full value of the export shipment and the underlying sale contract letter of credit provides for dispatch of documents direct to the consignee or his agent resident in the country of final destination of goods The AD Category ndash I banks may also accede to the request of the exporter provided the exporter is a regular customer and the AD Category ndash I bank is satisfied on the basis of standing and track record of the exporter and arrangements have been made for realisation of export proceeds Documents in respect of goods or software are accompanied with a declaration by the exporter that they are not more than Rs 25 000 in value and not declared on GR SDF PP SOFTEX form ii AD Category ndash I banks may also permit Status Holder Exporters rsquo as defined in the Foreign Trade Policy and units in Special Economic Zones SEZ to dispatch the export documents to the consignees outside India subject to the terms and conditions that The export proceeds are repatriated through the AD banks named in the GR Form The duplicate copy of the GR form is submitted to the AD banks for monitoring purposes by the exporters within 21 days from the date of shipment of export iii AD Category ndash I banks may regularize cases of dispatch of shipping documents by the exporter direct to the consignee or his agent resident in the country of the final destination of goods up to USD 1 million or its equivalent per export shipment subject to the following conditions a The export proceeds have been realised in full b The exporter is a regular customer of AD Category ndash I bank for a period of at least six months c The exporter rsquo s account with the AD Category ndash I bank is fully compliant with the Reserve Bank rsquo s extant KYC AML guidelines d The AD Category ndash I bank is satisfied about the bonafides of the transaction In case of doubt the AD Category ndash I bank may consider filing Suspicious Transaction Report STR with FIU IND Financial Intelligence Unit in India B 15 Invoicing of Software Exports i For long duration contracts involving series of transmissions the exporters should bill their overseas clients periodically i e at least once a month or on reaching the lsquo milestone rsquo as provided in the contract entered into with the overseas client and the last invoice bill should be raised not later than 15 days from the date of completion of the contract It would be in order for the exporters to submit a combined SOFTEX form for all the invoices raised on a particular overseas client including advance remittances received in a month ii Contracts involving only lsquo one shot operation rsquo the invoice bill should be raised within 15 days from the date of transmission iii The exporter should submit declaration in Form SOFTEX in quadruplicate in respect of export of computer software and audio video television software to the designated official concerned of the Government of India at STPI EPZ FTZ SEZ for valuation certification not later than 30 days from the date of invoice the date of last invoice raised in a month as indicated above The designated officials may also certify the SOFTEX Forms of EOUs which are registered with them iv The invoices raised on overseas clients as at i and ii above will be subject to valuation of export declared on SOFTEX form by the designated official concerned of the Government of India and consequent amendment made in the invoice value if necessary B 16 Short Shipments and Shut out Shipments i When part of a shipment covered by a GR form already filed with Customs is short shipped the exporter must give notice of short shipment to the Customs in the form and manner prescribed In case of delay in obtaining certified short shipment notice from the Customs the exporter should give an undertaking to the AD banks to the effect that he has filed the short shipment notice with the Customs and that he will furnish it as soon as it is obtained ii Where a shipment has been entirely shut out and there is delay in making arrangements to re ship the exporter will give notice in duplicate to the Customs in the form and manner prescribed attaching thereto the unused duplicate copy of GR form and the shipping bill The Customs will verify that the shipment was actually shut out certify the copy of the notice as correct and forward it to the Reserve Bank together with unused duplicate copy of the GR form In this case the original GR form received earlier from Customs will be cancelled If the shipment is made subsequently a fresh set of GR form should be completed B 17 Counter Trade Arrangement Counter trade proposals involving adjustment of value of goods imported into India against value of goods exported from India in terms of an arrangement voluntarily entered into between the Indian party and the overseas party through an Escrow Account opened in India in US Dollar will be considered by the Reserve Bank subject to following conditions i All imports and exports under the arrangement should be at international prices in conformity with the Foreign Trade Policy and Foreign Exchange Management Act 1999 and the Rules and Regulations made there under ii No interest will be payable on balances standing to the credit of the Escrow Account but the funds temporarily rendered surplus may be held in a short term deposit up to a total period of three months in a year i e in a block of 12 months and the banks may pay interest at the applicable rate iii No fund based or non fund based facilities would be permitted against the balances in the Escrow Account iv Application for permission for opening an Escrow Account may be made by the overseas exporter organisation through his their AD Category ndash I bank to the Regional Office concerned of the Reserve Bank B 18 Export of Goods on Lease Hire etc Prior approval of the Reserve Bank is required for export of machinery equipment etc on lease hire basis under agreement with the overseas lessee against collection of lease rentals hire charges and ultimate re import Exporters should apply for necessary permission through an AD Category ndash I banks to the Regional Office concerned of the Reserve Bank giving full particulars of the goods to be exported B 19 Export on Elongated Credit Terms Exporters intending to export goods on elongated credit terms may submit their proposals giving full particulars through their banks for consideration to the Regional Office concerned of the Reserve Bank B 20 Export of goods by Special Economic Zones SEZs A Units in SEZs are permitted to undertake job work abroad and export goods from that country itself subject to the conditions that i Processing manufacturing charges are suitably loaded in the export price and are borne by the ultimate buyer ii The exporter has made satisfactory arrangements for realisation of full export proceeds subject to the usual GR procedure AD Category ndash I banks may permit units in DTAs to purchase foreign exchange for making payment for goods supplied to them by units in SEZs B Export of Services by Special Economic Zones SEZs to DTA Unit Authorised Dealer Banks are permitted to sell foreign exchange to a unit in the DTA for making payment in foreign exchange to a unit in the SEZ for the services rendered by it i e a unit in SEZ to a DTA unit It must be ensured that in the Letter of Approval LoA issued to the SEZ unit by the Development Commissioner DC of the SEZ the provisions pertaining to the goods services supplied by the SEZ unit to the DTA unit and for payment in foreign exchange for the same should be mentioned Ref A P DIR Series Circular No 46 dated 23 10 2012 B 21 Project Exports and Service Exports Export of engineering goods on deferred payment terms and execution of turnkey projects and civil construction contracts abroad are collectively referred to as lsquo Project Exports rsquo Indian exporters offering deferred payment terms to overseas buyers and those participating in global tenders for undertaking turnkey civil construction contracts abroad are required to obtain the approval of the AD Category ndash I banks EXIM Bank Working Group at post award stage before undertaking execution of such contracts Regulations relating to lsquo Project Exports rsquo and lsquo Service Exports rsquo are laid down in the revised Memorandum of Instructions on Project and Service Exports PEM October 2003 as amended from time to time In order to provide greater flexibility to project exporters and exporters of services in conducting their overseas transactions the guidelines stipulated vide paragraphs B 10 i f C 1 ii D 1 i D 3 and D 4 iv of the PEM have been modified as set out below Project Service exporters have also been extended the facility of deployment of temporary cash balance as set out here under i Inter Project Transfer of Machinery B 10 i f and D 4 iv The stipulation regarding recovery of market value not less than book value of the machinery etc from the transferee project has been withdrawn Further exporters may use the machinery equipment for performing any other contract secured by them in any country subject to the satisfaction of the sponsoring AD Category ndash I bank s EXIM Bank Working Group and also subject to the reporting requirement and would be monitored by the AD Category ndash I bank s EXIM Bank Working Group ii Inter Project Transfer of Funds D 1 i and D 3 AD Category ndash I bank s EXIM Bank Working Group may permit exporters to open maintain and operate one or more foreign currency account s in a currency ies of their choice with inter project transferability of funds in any currency or country The Inter project transfer of funds will be monitored by the AD Category ndash I bank s EXIM Bank Working Group iii Deployment of Temporary Cash Surpluses Project Service exporters may deploy their temporary cash surpluses generated outside India in the following instruments products subject to monitoring by the AD Category ndash I bank s EXIM Bank Working Group investments in short term paper abroad including treasury bills and other monetary instruments with a maturity or remaining maturity of one year or less and the rating of which should be at least A 1 AAA by Standard and Poor or P 1 Aaa by Moody rsquo s or F1 AAA by Fitch IBCA etc deposits with branches subsidiaries outside India of AD Category ndash I banks in India iv Repatriation of Funds in case of On site Software Contracts C 1 ii The requirement of repatriation of 30 per cent of contract value in respect of on site contracts by software exporter company firm has been dispensed with They should however repatriate the profits of on site contracts after completion of the contracts as per para B 7 vii ibid B 22 Export of Currency In terms of Foreign Exchange Management Export and Import of Currency Regulations 2000 notified vide Notification No FEMA 6 2000 RB dated 3rd May 2000 as amended from time to time any export of Indian currency of value exceeding Rs 7 500 except to the extent permitted under any general permission granted under the Regulations will require prior permission of the Reserve Bank B 23 Forfaiting Export Import Bank of India EXIM Bank and AD Category ndash I banks have been permitted to undertake forfaiting for financing of export receivables Remittance of commitment fee service charges etc payable by the exporter as approved by the EXIM Bank AD Category ndash I banks concerned may be done through an AD bank Such remittances may be made in advance in one lump sum or at monthly intervals as approved by the authority concerned B 24 Exports to neighbouring countries by Road Rail or River The following procedure should be adopted by exporters for filing original copies of GR SDF forms where exports are made to neighboring countries by road rail or river transport i In case of exports by barges country craft road transport the form should be presented by exporter or his agent at the Customs station at the border through which the vessel or vehicle has to pass before crossing over to the foreign territory For this purpose exporter may arrange either to give the form to the person in charge of the vessel or vehicle or forward it to his agent at the border for submission to Customs ii As regards exports by rail Customs staff has been posted at certain designated railway stations for attending to Customs formalities They will collect the GR SDF forms for goods loaded at these stations so that the goods may move straight on to the foreign country without further formalities at the border The list of designated railway stations can be obtained from the Railways For goods loaded at stations other than the designated stations exporters must arrange to present GR SDF forms to the Customs Officer at the Border Land Customs Station where Customs formalities are completed B 25 Border Trade with Myanmar This is governed by the Agreement on Border Trade between India and Myanmar People living along both sides of the India Myanmar border are permitted to exchange certain specified locally produced commodities Annex 5 under the barter trade arrangement They can also trade in freely convertible currency AD banks should follow the guidelines stipulated in A P DIR Series Circular No 17 dated October 16 2000 B 26 Repayment of State Credits Export of goods and services against repayment of state credits granted by erstwhile USSR will continue to be governed by the extant directions issued by the Reserve Bank as amended from time to time B 27 Counter ndash Trade Arrangements with Romania The Reserve Bank will consider counter trade proposals from Indian exporters with Romania involving adjustment of value of exports from India against value of imports made into India in terms of a voluntarily entered arrangement between the concerned parties subject to the condition among others that the Indian exporter should utilize the funds for import of goods from Romania into India within six months from the date of credit to Escrow Accounts allowed to be opened PART ndash 3 C Operational Guidelines for AD Category ndash I banks C 1 Citing of Specific Identification Numbers i In all applications correspondence with the Reserve Bank the specific identification number as available on the GR PP and SOFTEX forms should invariably be cited ii In the case of declarations made on SDF form the port code number and shipping bill number should be cited C 2 GR SDF PP SOFTEX procedure In terms of Regulation 6 of Foreign Exchange Management Export of Goods and Services Regulations 2000 notified vide Notification No FEMA 23 2000 RB dated 3rd May 2000 as amended from time to time export declaration forms should be disposed of as under C 3 A GR forms GR forms should be completed by the exporter in duplicate and both the copies submitted to the Customs at the port of shipment along with the shipping bill Customs will give their running serial number on both the copies after admitting the corresponding shipping bill The Customs serial number will have ten numerals denoting the code number of the port of shipment the calendar year and a six digit running serial number Customs will certify the value declared by the exporter on both the copies of the GR form at the space earmarked and will also record the assessed value They will then return the duplicate copy of the form to the exporter and retain the original for transmission to the Reserve Bank Exporters should submit the duplicate copy of the GR form again to Customs along with the cargo to be shipped After examination of the goods and certifying the quantity passed for shipment on the duplicate copy Customs will return it to the exporter for submission to the AD Category ndash I banks for negotiation or collection of export bills Within 21 days from the date of export exporter should lodge the duplicate copy together with relative shipping documents and an extra copy of the invoice with the AD Category ndash I banks named in the GR form After the documents have been negotiated sent for collection the AD Category ndash I banks should report the transaction to the Reserve Bank in statement ENC under cover of appropriate R Supplementary Return The duplicate copy of the form together with a copy of invoice etc shall be retained by the AD Category ndash I banks and may not be submitted to the Reserve Bank In the case of exports made under deferred credit arrangement or to joint ventures abroad against equity participation or under rupee credit agreement the number and date of the Reserve Bank approval and or number and date of the relative RBI circular should be recorded at the appropriate place on the GR form Where Duplicate copy of GR form is misplaced or lost AD Category ndash I banks may accept another copy of duplicate GR form duly certified by Customs Note At present GR Forms to be completed in duplicate for export otherwise than by Post including export of software in physical form i e magnetic tapes discs and paper media can be obtained by the exporters from the Regional Offices of the Reserve Bank As part of simplifying the procedures GR Forms are now made available on line on the Reserve Bank rsquo s website www rbi org in Link Notification rarr FEMA rarr Forms rarr For Printing of GR Form Accordingly the exporters have the option to use the GR Forms available on line as well C 3 B Mid Sea Trans shipment of catch by Deep Sea Fishing Vessels effective from November 21 2011 Since deep sea fishing involves continuous sailing outside the territorial limit trans shipment of catches takes place in the high sea leading to procedural constraints in regulatory reporting requirement viz the Declaration of Export in terms of Notification No FEMA 23 2000 RB dated May 3 2000 For mid sea trans shipment of catches by Indian owned vessels as per the norms prescribed by the Ministry of agriculture Government of India the GR declaration procedure in this regard has been rationalized in consultation with the Government of India as outlined below should be followed by the exporter in conformity with Regulation 3 of Notification No FEMA 23 2000 RB dated May 3 2000 i The exporters may submit the GR form duly signed by the Master of the Vessel in lieu of Custom Certification indicating the composition of the catch quantity export value date of transfer of catch etc ii The date of transfer of catch may be indicated in the column for lsquo Date of Shipment rsquo with suitable remarks iii In SDF form Bill of Lading No and date shall be mentioned in lieu of the Shipping Bill No and date iv Bill of Lading Receipt of Trans shipment issued by the carrier vessel should include the GR Form Number v The GR Forms should be duly supported by a certificate from an international cargo surveyor vi The prescribed period of realization and repatriation should be reckoned with reference to the date of transfer of catch as certified by the Master of the Vessel or the date of the invoice whichever is earlier vii The GR Form both original and duplicate should indicate the number and date of Letter of Permit issued by Ministry of Agriculture for operation of the vessel viii The exporter will complete the GR Form in duplicate and both the copies may be submitted to the Customs at the registered port of the vessel or any other port as approved by Ministry of Agriculture GR Original will be retained by the Customs for capturing of data in Customs rsquo Electronic Data Interchange ix Customs will give their running serial number on both the copies of GR Form and will return the duplicate copy to the exporter as the value certification of the export has already been done as mentioned above x Rules Regulations and Directions issued in respect of the procedure for submission of the GR form by exporter to the AD Category I banks and the disposal of these forms by these banks will be same as applicable to the other exporters C 4 SDF The following system may be followed in case of SDF i The SDF should be submitted in duplicate to be annexed to the relative shipping bill to the Commissioner of Customs concerned ii After verifying and authenticating the declaration in SDF the Commissioner of Customs will hand over to the exporter one copy of the shipping bill marked lsquo Exchange Control Copy rsquo to which form SDF has been appended for being submitted to the AD Category ndash I banks within 21 days from the date of export iii The AD Category ndash I banks should accept the Exchange Control EC copy of the shipping bill and SDF appended thereto submitted by the exporter for collection negotiation of shipping documents iv The manner of disposal of EC copy of Shipping Bill and form SDF appended thereto is the same as that for GR forms The duplicate copy of the form together with a copy of invoice etc shall be retained by the AD Category ndash I banks and may not be submitted to the Reserve Bank In cases where ECGC and private insurance companies regulated by Insurance Regulatory and Development Authority IRDA initially settles the claims of exporters in respect of exports insured with them and subsequently receives the export proceeds from the buyer buyer rsquo s country through the efforts made by them the share of exporters in the amount so received is disbursed through the bank which had handled the shipping documents In such cases ECGC and private insurance companies regulated by IRDA will issue a certificate to the bank which had handled the relevant shipping documents after full proceeds have been received The certificate will indicate the number of declaration form name of the exporter name of the AD Category ndash I banks date of negotiation bill number invoice value and the amount actually received by ECGC and private insurance companies regulated by IRDA C 5 PP Forms The manner of disposal of PP forms is the same as that for GR forms Postal Authorities will allow export of goods by post only if the original copy of the form has been countersigned by an AD Category ndash I bank Therefore PP forms should be first presented by the exporter to an AD Category ndash I bank for countersignature i The AD Category ndash I banks will countersign the forms after ensuring that the parcel is being addressed to their branch or correspondent bank in the country of import and return the original copy to the exporter who should submit the form to the post office with the parcel ii The duplicate copy of the PP form will be retained by the AD banks to whom the exporter should submit relevant documents together with an extra copy of invoice for negotiation collection within the prescribed period of 21 days iii The concerned overseas branch or correspondent should be instructed to deliver the parcel to consignee against payment or acceptance of relative bill iv AD Category ndash I banks may however countersign PP forms covering parcels addressed direct to the consignees provided An irrevocable letter of credit for the full value of the export has been opened in favour of the exporter and has been advised through the AD Category ndash I banks concerned Or The full value of the shipment has been received in advance by the exporter through an AD Category ndash I banks Or The AD Category ndash I bank is satisfied on the basis of the standing and track record of the exporter and the arrangements made for realization of the export proceeds that he could do so In such cases particulars of advance payment letter of credit AD Category ndash I bank rsquo s certification of standing etc of the exporter should be furnished on the form under proper authentication v Any alteration in the name and address of consignee on the PP form should also be authenticated by the AD Category ndash I banks under his stamp and signature C 6 SOFTEX Forms A software exporter whose annual turnover is at least Rs 1000 crore or who files at least 600 SOFTEX forms annually will be eligible to submit a statement in excel format as per Annexure A giving all particulars alongwith quadruplicate set of SOFTEX form to the nearest STPI STPI will then verify the details and decide on a percentage sample check of the documents in details Software companies will submit all the documents on demand to STPI within 30 days of their advice or any reasonable extended time at the discretion of the Director STPI at the request from the exporter STPI will thus certify the statement and SOFTEX forms in bulk on the ldquo Top Sheet rdquo regarding the values etc and will thereafter forward the first copy of the revised SOFTEX format to the concerned Regional Office of RBI the duplicate copy alongwith bulk statement in excel format to Authorised Dealers for negotiation collection settlement the third copy to the exporter and the last copy will be retained by STPI for its own record Under the revised procedure the exporters however will have to provide information about all the invoices including the ones lesser than US 25000 in the bulk statement in excel format The revised procedure for submission of the Softex form and other relevant documents are detailed in the Annex 8 of the Master Circular Ref A P DIR Series Circular No 46 dated 23 10 2012 The new procedure has been made effective at all STPIs and SEZs EPZs 100 EOU DTA since 1 1 2013 Ref A P DIR Series Circular No 66 dtd 01 01 2013 C 7 Random verification In all the above procedures AD Category ndash I bank should ensure by random check of the relevant duplicate forms by their internal concurrent auditors that non realization or short realization allowed if any is within the powers delegated to them or has been duly approved by the Reserve Bank wherever necessary C 8 Certification for EEFC Credits Where a part of the export proceeds are credited to an EEFC account the export declaration duplicate form may be certified as under ldquo Proceeds amounting to hellip hellip representing hellip per cent of the export realisation credited to the EEFC account maintained by the exporter with hellip hellip rdquo C 9 Consolidation of Air Cargo Sea Cargo a Consolidation of Air Cargo Where air cargo is shipped under consolidation the airline company rsquo s Master Airway Bill will be issued to the Consolidating Cargo Agent The Cargo agent in turn will issue his own House Airway Bills HAWBs to individual shippers AD Category ndash I banks may negotiate HAWBs only if the relative letter of credit specifically provides for negotiation of these documents in lieu of Airway Bills issued by the airline company b Consolidation of Sea Cargo AD Category ndash I banks may accept Forwarder rsquo s Cargo Receipts FCR issued by IATA approved agents in lieu of bills of lading for negotiation collection of shipping documents in respect of export transactions backed by letters of credit if the relative letter of credit specifically provides for negotiation of this document in lieu of bill of lading even if the relative sale contract with the overseas buyer does not provide for acceptance of FCR as a shipping document in lieu of bill of lading Further authorized dealers may at their discretion also accept FCR issued by Shipping companies of repute IATA approved agents in lieu of bill of lading for purchase discount collection of shipping documents even in cases where export transactions are not backed by letters of credit provided their relative sale contract with overseas buyer provides for acceptance of FCR as a shipping document in lieu of bill of lading However the acceptance of such FCR for purchase discount would purely be the credit decision of the bank concerned who among others should satisfy itself about the bona fides of the transaction and the track record of the overseas buyer and the Indian supplier since FCRs are not negotiable documents It would be advisable for the exporters to ensure due diligence on the overseas buyer in such cases C 10 Delay in submission of shipping documents by exporters In cases where exporters present documents pertaining to exports after the prescribed period of 21 days from date of export AD Category ndash I banks may handle them without prior approval of the Reserve Bank provided they are satisfied with the reasons for the delay C 11 Check list for Scrutiny of Forms AD Category ndash I banks may ensure The number on the duplicate copy of a GR form presented to them is the same as that of the original which is usually recorded on the Bill of Lading Shipping Bill and the duplicate has been duly verified and authenticated by appropriate Customs authorities The Shipping Bill No on the SDF form should be the same as that appearing on the Bill of Lading In the case of c i f c and f etc contracts where the freight is sought to be paid at destination that the deduction made is only to the extent of freight declared on GR SDF form or the actual amount of freight indicated on the Bill of Lading Airway Bill whichever is less The documents submitted do not reveal any material inter se discrepancies in regard to description of goods exported export value or country of destination Where the marine insurance is taken by the exporters on buyer rsquo s account to verify that the actual amount paid is received from the buyer through invoice and the bill To accept the Bill of Lading Airway Bill issued on lsquo freight prepaid rsquo basis where the sale contract is on f o b f a s etc basis provided the amount of freight has been included in the invoice and the bill To negotiate the documents in cases where the documents are being negotiated by a person other than the exporter who has signed GR PP SDF SOFTEX Form for the export consignment concerned after ensuring compliance with Regulation 12 of Foreign Exchange Management Export of Goods and Services Regulations 2000 To accept the variations in the value declared to the customs authorities and that is reflected on the export documents which stem from the terms of contract on production of documentary evidence after verifying the arithmetical accuracy of the calculations and on conforming the terms of underlying contracts Some such instances where the values declared to the customs authorities and that shown on the documents may differ are enumerated hereunder The export realizable value may be more than what was originally declared to accepted by the Customs on the GR SDF form in certain circumstances such as where in c i f or c and f contracts part or whole of any freight increase taking place after the contract was concluded is agreed to be borne by buyers or where as a result of subsequent devaluation of the currency of the contract buyers have agreed to an increase in price In certain lines of export trade the final settlement of price may be dependent on the results of quality analysis of samples drawn at the time of shipment but the results of such analysis will become available only after the shipment has been made Sometimes contracts may provide for payment of penalty for late shipment of goods in conformity with trade practice concerning the commodity In these cases while exporters declare to the Customs the full export value based on the contract price invoices submitted along with shipping documents for negotiation collection may reflect a different value arrived at after taking into account the results of analysis of samples or late shipment penalty as the case may be To accept for negotiation or collection the bills for exports by sea or air which fall short of the value declared on GR SDF forms on account of trade only if the discount has been declared by the exporter on relative GR SDF form at the time of shipment and accepted by Customs C 12 Return of Documents to Exporters The duplicate copies of GR SDF PP forms and shipping documents once submitted to the AD Category ndash I banks for negotiation collection etc should not ordinarily be returned to exporters except for rectification of errors and resubmission C 13 Handing Over Nego