Deemed Export Transactions.

[Guest]

One of our Customer approached us for issuance of e BRC issuance post supply of goods where an ICB awarded to them in multiple currencies.

Approx 90% amount has been received in INR and the remaining 10% in any of the freely convertible FC(as mentioned in contract).

As per issued advance license from DGFT, exporter can claim for certain export under duty drawback scheme, however as a part of supply some additional goods has been dispatched along with under advance license covered items. where customer is agreed to submit an undertaking regarding the additional goods will not be claim under the said scheme.

Invoices has been raised in FC/INR and approx 60-90% claim(In INR only) to be settled against advance license(due to addition of normal supply as well).

What should be approach to handle a transaction in terms of

1. Bill should be processed in INR of FC as money receive in INR and transaction is being completed within DTA.

2. A partial amount bill can be processed as there is no inflow on FC or bill needs to be lodged for full invoice amount.

3. If full money for any invoice has been received in INR and raised invoices are in FC, how these invocies should be treats in banks book.

4. Does bank needs to endorse advance license/ Invalidation letter for deemed export transaction.

5. What should be a possible mechanism to prevent duplicate utilisation of the same amount(INR value, no FIRC issued)

6. Can bank issue a BRC for the extent of amount receive in bank and close their books for a bill as advance license/ Invalidation letter has been issued for a particular sum and customer will not be able to claim additional amount(DGFT will have a cap on it)

Regards,

Piyush Jain

+91 8238 035 446

AI Summary

Deemed export transactions: guidance on currency, documentation, and eBRC issuance when receipts are partly in domestic currency. Query addresses handling of supplies treated as deemed export where an advance license permits duty-drawback claims for certain items but additional goods were supplied with buyer undertaking they will not be claimed. Invoices are in foreign and domestic currency while receipts are partly in domestic currency and partly in freely convertible foreign currency. Core issues: whether bills and bank records should be processed in INR or FC; whether partial billing is permissible or full invoice lodging required when no foreign inward remittance certificate exists for INR receipts; how banks should treat FC invoices if full payment is received in INR; and whether banks must endorse or invalidate advance licenses, prevent duplicate utilisation of INR amounts, and issue eBRCs proportionate to amounts received.