Payment from EEFC Account-

[Ramaswamy S]

RBI circular allows payment from EEFC account to EOU/EHTP/STP in foreign currency.

The question is whether payment received by an 2nd EOU from another 1st EOU (in case of Inter unit transfers as per para 6.13 of FTP) from the EEFC account of the latter is considered as FE earnings in the hands of the former.

The FE is earned by the 1st EOU in its EEFC account. Payment is made by the 1st EOU to 2nd EOU from the EEFC account. Whether such earnings are considered as FE in both EEFC account.

Thanks and Regards

S.Ramaswamy

AI Summary

Clarification Sought on EEFC Account Transactions Between EOUs as Foreign Exchange Earnings Under FTP and RBI Guidelines. A discussion was initiated regarding whether payments made from an EEFC account by one Export Oriented Unit (EOU) to another EOU are considered foreign exchange (FE) earnings for the recipient. The conversation involved clarifications on the applicability of RBI circulars and Foreign Trade Policy (FTP) provisions. It was noted that FTP does not explicitly mention EEFC accounts concerning FE earnings. The debate focused on whether such transactions should be considered FE earnings for the supplier EOU, given that the FE was originally earned by the customer EOU. The discussion suggested consulting the Development Commissioner for further clarification.