Under Regulation 9 of Export of Goods & Services Regulations, 2015 (“Export Regulations”) the amount representing full export value of goods needs to be realized and repatriated within 9 (nine) months from the date of export for all exporters including Units in Special Economic Zones (SEZs), Status Holder Exporters, Export Oriented Units (EOUs), Units in Electronic Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) & Bio-Technology Parks (BTPs).
In case of goods exported to a warehouse established outside India, the same may be realized within 15 (fifteen) months from the date of shipment of goods.
Therefore, the obligation is on the exporter to ensure that the export proceeds are repatriated within the prescribed period. The AD Banks are required to ensure repatriation within said period and are required to report any delay to RBI. Accordingly, banks have internal mechanism in place to ensure that the export proceeds are repatriated within the stipulated time.
Further, in the case of goods exported on consignment basis, the authorized dealer 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.
Therefore, even in the case of consignment sales or sales through a consignment agent, the exporter should realize the exports within nine months from the date of export of the goods.
Further, It may be noted that RBI has issued detailed directions in A.P. (DIR Series) Circular No.68 [(1)/23(R)] dated May 12, 2016 (“Export Circular”) for the procedure to be followed on export of goods, the relevant guidelines in relation to consignment export is reproduced below:
(i) When goods have been exported on consignment basis, the AD, 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. 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) Freight and marine insurance must be arranged in India.
(v) AD 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.
Therefore, any entity engaged in export of goods has to ensure that it complies with these guidelines in the case of consignment exports.
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