Is Export Benefits under FTP is allowed if Export Proceeds are realized in INR against EXIM Bank/Government of India Line of Credit

[Arti Gupta]

Sir/Madame,

We are exporting goods to a project finance by Government of India line of credit.We are receiving paymnet in INR.Are we eligible for the export benefits under FTP?

[Ganeshan Kalyani]

Sir, in my view the benefit of export is depend upon the movement of goods. If it has moved out of India then the document would support your contention. Thanks.

[MUKUND THAKKAR]

please clarify what benefit you want ? EPCG / Advance Authorisation ?

[Arti Gupta]

Thanks for the reply.

Benefits of Advance Authorization,Export Incentive Under Chapter 3 and Duty Drawback.

[MUKUND THAKKAR]

Benefits of Advance Authorization,:- Advance Authorization can also be issued for supplies with in India that are categorized as Deemed Exports. Projects funded by World Bank, ADB,

Export Incentive Under Chapter 3 :- Not eligable in case of deem export

Duty Drawback :-Advance authorisation and Drawback both benifit is not allow.

[Arti Gupta]

Sir,

Let me put my question in a different way.

I am exporting goods to a Country A and the project is financed by Government of India line of credit. We are receiving payment in INR.

Are Benefits of Advance Authorization,Export Incentive Under Chapter 3 and Duty Drawback. applicable for these supplies?

[Kishan Barai]

According to me you will get all export benefit.

[Suryanarayana Sathineni]

Dear Friend,

The relevant provision of FTP is given below and if your exports fall in any of the categories ( particularly category (c) ) , then you may be eligible for the incentives.

2.52 Denomination of Export Contracts

(a) All export contracts and invoices shall be denominated either in freely convertible currency or Indian rupees but export proceeds shall be realized in freely convertible currency.

(b) However, export proceeds against specific exports may also be realized in rupees, provided it is through a freely convertible Vostro account of a non resident bank situated in any country other than a member country of Asian Clearing Union (ACU) or Nepal or Bhutan. Additionally, rupee payment through Vostro account must be against payment in free foreign currency by buyer in his non-resident bank account. Free foreign exchange remitted by buyer to his non-resident bank (after deducting bank service charges) on account of this transaction would be taken as export realization under export promotion schemes of FTP.

(c) Contracts (for which payments are received through Asian Clearing Union (ACU) shall be denominated in ACU Dollar. Central Government may relax provisions of this paragraph in appropriate cases. Export contracts and invoices can be denominated in Indian rupees against EXIM Bank/Government of India line of credit.

Best Regards

Suryanarayana

[Arti Gupta]

Sir,

The Para (C) talks about " Export contracts and invoices can be denominated in Indian rupees against EXIM Bank/Government of India line of credit. ".It does not tell anyting about realization of export contracts.

AI Summary

Denomination of export contracts in rupees may preserve FTP benefits when funded under EXIM Bank or government line of credit. Entitlement to FTP export incentives where payment is received in Indian rupees against an EXIM Bank/Government line of credit depends on movement of goods and classification of the supply. Advance Authorisation can cover deemed exports, but Chapter 3 export incentives do not apply to deemed exports; Advance Authorisation and Duty Drawback are not concurrently available. FTP para 2.52 permits INR-denominated contracts against EXIM/Government lines of credit and limited rupee realization routes, yet it does not expressly resolve how rupee realization affects eligibility for specific incentives.