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Export means sending goods outside India. The definition of export is required to be as per the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 and the transactions of export are governed by the Foreign Exchange Management (Current Account Transactions) Rules, 2000. In India, the export of goods and services are regulated by the Director-General of Foreign Trade (DGFT).
When an exporter intends to export goods, then it must be declared. It must be declared where the goods are sent through the Customs Manual Ports. Such a declaration must be made for all kinds of goods and services; however, goods and services exported to Nepal and Bhutan are not required to be declared. While exporting goods outside India, the value of the goods and services and the aggregate value must be stated. It must be noted that where any material for export not having any payment attached to it, belonging of travelers, goods on behalf of Government or if it is sent by Defence services, spare parts of Airline carriers etc. are exempted from the declaration. The goods are to be declared at the Customs Department where the Import Export Code needs to be mentioned. The Director-General of Foreign Trade will provide this number.
In Form EDF, the export of goods and services is declared, and it is submitted to the Commissioner of the Customs Department. Where software goods are exported, they must be declared via Form SOFTEX. Once the declaration form is submitted some evidence is required to be provided like the exporter is an Indian resident and that the port of disembarkation is the final stop and concerning the export value of the goods and services. The payment of export may be made through an authorized dealer through standard banking, and it must be made as per the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000. The authorized banks carry out the repatriation and realization via Online Payment Gateway Service Providers. Where the third party pays the payment for export transactions, then an agreement must be made between the three parties, but it may not be required in case of sufficient evidence regarding payment by the third party. The bank must be content with the intent of such transactions, and the banks must comply with FATF rules and statements while conducting such transactions. The payment by the third party must be through a proper bank.
There are specific time limits for realization and repatriation of goods and services like the standard time for repatriation and realization would be nine months. Still, such a period would be decided by the RBI depending upon case to case. The export documents are required to be submitted to the Authorized dealer. An individual without the RBI permission cannot deal with the payment concerning export, and such payments must be as per the prescribed manner laid down by the RBI. In case of delay in payment, the RBI shall provide an order concerning such delay. In case of export of services, the exporter must realize and repatriate foreign exchange that accrues on foreign export. Exporters can export goods, services and software. The guidelines by the RBI and the Authorized bank are to be complied with for a smooth process of export.
FEMA Compliance on Export of Goods and Services
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