Direct Tax Services
Select Your Location
Export can be understood as a process in which goods are sent outside India. Modes of transport for goods taken outside the country will include land, air and sea. The definition of export also consists of the term ‘Consignment’. Consignment of Goods, lease, hire purchase, or any other form of arrangement would come under the meaning of export. Exporting a software product can be covered through electronic media or transmission. Therefore the export of goods and services from India has an in-depth meaning for the various types of goods and services sent outside India.
The meaning of Export of Goods and Services has to comply with the laws related to Foreign Exchange Management Act, 1999. Apart from this law, the definition of export has come within the purview of the Foreign Exchange Management (Export of Goods & Services) Regulations 2015. Export transactions are governed by the Foreign Exchange Management (Current Account Transactions) Rules, 2000. The Director-General of Foreign Trade (DGFT) regulates the export of goods and services in India. Apart from this, the Foreign Trade Policy (FTP) has been amended from time to time. These institutions manage export transactions within India. RBI and FEMA governs export transactions in India. RBI has the authority to make specific rules related to export transactions outside India. These rules and regulations are circulated to Authorised Dealers/ Authorised Person (AD/ AP) Category –I. Authorized Dealers have to be compliant with the laws on the export of goods and services.
For construing compliance of export of goods and services from India, it is crucial to understand important terms related to Exports:
Table of Contents
Whenever an exporter wants to send goods outside India, then the same must be declared. This would take place where the goods are sent through the Customs Manual Ports. Declaration of goods would be for all types of goods, services, and software products. Declaration of goods and services are not required when the export is made to Nepal and Bhutan. Specific documents and evidence has to be provided when the goods are exported outside India. The following are the requirements which have to be stated regarding the export of goods outside India:
Apart from this, the exporter would have to satisfy all the declarations. Any form of realization of export proceeds or software from the third party must be mentioned in the declaration form.
An exporter would not have to declare the export of goods and services under the following circumstances:
When goods are declared at the Customs Department, the Import Export Code has to be mentioned. The Director-General of Foreign Trade would allot this number. This code has to be mentioned on the copies of the declaration form. The exporter also has to mention this code on all correspondences with the RBI and Authorised Dealer.
Export of Goods and Services are declared on form EDF (Form Export Declaration Form). Form EDF has to be submitted to the Commissioner of Customs department. When software goods are exported the same has to be declared through the form SOFTEX. Three copies of form Softex must be submitted to the Ministry of Informational Technology.
When the declaration form is submitted to the Commissioner of Customs or the Ministry of Informational Technology, the following evidence must be provided:
The payment can be made via the authorized dealer through normal banking conditions and channels. The payment made has to be under the conditions under the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000.
When foreign importers pay the value for the export of goods during their visit to India, then a copy of the Export Declaration Form (EDF) should be sent to the authorized bank. This would be carried out when the funds are received in the Nostro Account. If the authorized bank does not have a credit card servicing bank, then the exporter would have to produce a certificate from the Credit Card Servicing Bank in India.
Repatriation and realization are carried out by Authorised banks through the Online Payment Gateway Service Providers (OPGSPs). There are specific requirements which have to be followed by the exporter and the authorized bank:
Third parties are allowed to pay for export transactions. However, the following conditions have to be satisfied:
There are specific time limits on the export value of the goods. Export of goods and services are subject to adhere to these conditions. The following time limits are required for the realization and repatriation of goods and services:
Documents relating to the export have to be submitted to the Authorised Dealer. The documents which are mentioned in the Export Declaration Form (EDF) have to be submitted to the Authorised Dealer. This form must be submitted within 21 days of the date of the export. Documents can also be submitted on the date when the SOFTEX Form is certified. However, the Authorised dealer can accept documents even after 21 days, if there are circumstances which are beyond the control of the exporter.
Authorized dealer can accept documents which are subject to transfer, negotiation and collection. These documents would include shipping documents, a copy of the invoices, shipping documents. However, before accepting the documents related to the export of goods and service, the authorized dealer shall consider the following:
An individual without the prior permission of the RBI or the Authorised Dealer cannot deal with the payment related to the export of goods and services. The payment for goods and services exported has to be made according to the rules of the RBI. The following have to be adhered to:
When there is a delay in payment for the goods and services, the RBI will provide an order regarding the delay. The following situations would arise:
There are circumstances where the exporter will receive advance payment for the goods and services exported. In such situations, the exporter has to fulfil the following:
If the exporter is not able to pay, then no prior approval is required from the RBI regarding the remittance of advance payment or the payment of interest or the refund. The payment or refund has to be made after the expiry of one year. If there is an agreement between the exporter and the foreign importer provides a clause for advance payment, then the exporter is allowed to receive advance payment. The exporter has to follow specific conditions related to advance payment on the export of goods and services.
Exporters are not required by law to declare any form of export of service. However, the exporter is required to realize and repatriate foreign exchange, which accrues on the export.
Exporters are allowed to write off any bills that are not paid or unrealized. An exporter can either write off the bills that are not realized. The exporter even has the option to approach the Authorised bank to write off unrealized bills. There are certain conditions related to write off of bills. The following terms have to be fulfilled:
Therefore an exporter has to comply with the above requirements before exporting goods and services outside India.
Exporting is the process in which an individual or a company sends goods outside India. The Foreign Trade Policy (FTP) governs the procedure-related to exports.Apart from this, the rules related to export are regulated by the RBI and FEMA. Exporters are allowed to export goods, services, and software. Export of Goods and Services are subject to several compliances which have to be adhered to by the exporter. The RBI provides guidelines related to exports, which have to be followed by the authorized banks. Exporters have to declare their goods which are exported to another country. However, not all goods need to be declared. Payment related to the exports is through normal banking channels, which are regulated by the Authorised bank. The RBI and Authorised Bank can deal with issues related to the export. The institutions that govern the export process have made the process of exports systematic.
Read, Also: Compliance for Import of Goods under FEMA Law.
Varun Hariharan has completed the Legal Practice Course from BPP Law School, Manchester. He has a Masters in Commercial and Corporate Law from the Queen Mary University of London and LLB Honours from Bangor University, UK. He specialises in law related to corporate, artificial intelligence and technology law.
Many investors use fixed deposits as their primary investment vehicle. Investors with a high-ri...
The main idea of CDS, which was initially to give banks a way to transfer credit exposure, has...
Black money has been the subject of heated political debate in India for a long time. Successiv...
The Apex Court pronounced a judgement in the case titled Tata Motors Vs The Brihan Mumbai Elect...
Since economies are moving towards digitalisation and making it feasible to conduct transaction...
The Alternative Investment Funds (AIFs) Pro-rata and Pari-Passu Rights Proposal Consultation Pa...
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Are you human?: 4 + 5 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
The National Adaptation Fund for Climate Change (NAFCC) is a Central Sector Scheme that was established in the 2015...
01 May, 2023
Document registration regarding the sale and purchase of immovable property is mandatory. Mandatory registration of...
19 Jul, 2018
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!