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Export Earnings Must Be Converted Into $ At Rate Ruling On Date Of Licence'

Date 24-December-2013
Subject Export Earnings Must Be Converted Into $ At Rate Ruling On Date Of Licence'

For redeeming our EPCG Licence, what exchange rate should be taken, when we receive the payments in Indian rupees through a freely convertible Vostro Account of a Non-Resident Bank, in accordance with Para 2.40 (b) of the Foreign Trade Policy? We have approached our bankers with the payment advice copy of the Non-Resident Bank concerned, but they are unwilling to give us any certificate of equivalent foreign currency value. Please inform how to proceed.

As per DGFT Policy Circular no. 8 dated 28.05.1998, export proceeds realised in any currency shall be converted into US dollars at the exchange rate prevailing on the date of issuance of the EPCG licence which has been endorsed on the reverse of the licence, with a view to ascertaining whether the export obligation has been fulfilled or not.

What are "switch" bills of lading and when they are sought? "Switch" bills of lading are a second set of bills of lading issued by the carrier (or by the carrier's agent) in substitution for the bills of lading issued at the time of shipment. The agent who is asked to issue the second set is often at a port other than the load port. The reasons for seeking the 'switch' bill of lading could be that the original bill names a discharge port which is subsequently changed (for example, because the receiver has an option or the goods have been resold) and new bills are required, naming the new discharge port. The other reason could be that a seller of the goods in a chain of contracts does not wish the name of the original shipper to appear on the bill of lading, and so a new set is issued, sometimes naming the seller as the shipper. The third situation could be when the goods were shipped originally in small parcels, and the buyer of those goods requires one bill of lading covering all of the parcels to facilitate his on-sale. It could also be that one bill of lading is issued for a bulk shipment which is then to be split into multiple bills covering smaller parcels.

For making payment to a non-resident or foreign company, the remitter is required to submit form 15CA and 15CB to an authorised dealer. I understand that some private banks accept an undertaking from their clients in lieu of 15CA and 15CB. Is it in order? Rule 37 BB of the income Tax Rules, 1962 has been amended through notification no. 58/2013 dated 5.8.2013. Sub-rule (2) of the said Rule 37BB says that the information in Form No. 15CA shall be furnished electronically to the website designated by the Income-tax Department and thereafter a signed printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment. Form 15CB is not required if a certificate from the Assessing Officer under section 197 or an order from the Assessing Officer under sub- section (2) or sub-section (3) of section 195 is produced before the authorised dealer.


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