TaxTMI 
TaxTMI 
TaxTMI 
Master Direction – Import of Goods and Services (Updated as on October 01, 2025)
X X X X Extracts X X X X
X X X X Extracts X X X X
....e changes in the regulatory framework and published through amendment notifications. 2. Within the contours of the Regulations, Reserve Bank of India also issues directions to Authorised Persons under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999. These directions lay down the modalities as to how the foreign exchange business has to be conducted by the Authorised Persons with their customers/constituents with a view to implementing the regulations framed. 3. Instructions issued on import of goods and services into India have been compiled in this Master Direction. The list of underlying circulars/ notifications which form the basis of this Master Direction is furnished in the Appendix. Reporting instructions can be found in Master Direction on reporting (Master Direction No. 18 dated January 01, 2016). 4. It may be noted that, whenever necessary, Reserve Bank shall issue directions to Authorised Persons through A.P. (DIR Series) Circulars in regard to any change in the Regulations or the manner in which relative transactions are to be conducted by the Authorised Persons with their customers/ constituents. The Master Direction issued herewit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Foreign Exchange Management Act, 1999 from time to time. (ii) AD Category - I banks should follow normal banking procedures and adhere to the provisions of Uniform Customs and Practices for Documentary Credits (UCPDC), etc. while opening letters of credit for import into India on behalf of their constituents. (iii) Compliance with the provisions of Research & Development Cess Act, 1986 may be ensured for import of drawings and designs. (iv) AD Category - I banks may also advise importers to ensure compliance with the provisions of Income Tax Act, wherever applicable. (v) Any reference to the Reserve Bank should first be made to the Regional Office of the Foreign Exchange Department situated in the jurisdiction where the applicant person resides, or the firm / company functions, unless otherwise indicated. If, for any particular reason, they desire to deal with a different office of the Foreign Exchange Department, they may approach the Regional Office of its jurisdiction for necessary approval. Such references should be routed through the Compliance Head of the AD bank. Section II - General Guidelines for Imports B.1. General Guidelines Rules and regulations....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ort Payments B.5.1. Time limit for Normal Imports (i) In terms of the extant regulations, remittances against imports should be completed not later than six months from the date of shipment, except in cases where amounts are withheld towards guarantee of performance, etc. 6Further, for the disruptions due to outbreak of COVID-19 pandemic, with effect from May 22, 2020, the time period for completion of remittances against normal imports (except in cases where amounts are withheld towards guarantee of performance etc.) was extended from six months to twelve months from the date of shipment for such imports made on or before July 31, 2020. (ii) AD Category - I banks may permit settlement of import dues delayed due to disputes, financial difficulties, etc. However, interest if any, on such delayed payments, usance bills or overdue interest is payable only for a period of up to three years from the date of shipment and may be permitted in terms of the directions in para C.2 of Section III below. B.5.2. Time Limit for Deferred Payment Arrangements Any deferred payment arrangements (including suppliers' and buyers' credit) entered into, for up to three ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Bank, import or bring into India, any foreign currency. Import of foreign currency, including cheques, is governed by Foreign Exchange Management (Export and Import of Currency) Regulations 2000, issued by Reserve Bank vide 11Notification No. FEMA 6(R)/2015-RB dated December 29, 2015. (ii) Reserve Bank may allow a person to bring into India currency notes of Government of India and / or of Reserve Bank subject to such terms and conditions as the Reserve Bank may stipulate. B.6.1. Import of Foreign Exchange into India A person may- (i) Send into India, without limit, foreign exchange in any form other than currency notes, bank notes and travellers cheques; (ii) Bring into India from any place outside India, without limit, foreign exchange (other than unissued notes), subject to the condition that such person makes, on arrival in India, a declaration to the Custom Authorities at the Airport in the Currency Declaration Form (CDF) annexed to these Regulations; provided further that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in by such person ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt in respect of any debt, obligation or other liability incurred by a person resident in India and owned to a person resident outside India (being an overseas supplier of goods, bank or a financial institution), for import of goods, as permitted under the Foreign Trade Policy announced by Government of India from time to time and subject to such terms and conditions as may be specified by Reserve Bank of India from time to time. B.8.3 An authorised dealer may, in the ordinary course of his business, give a guarantee in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, subject to such terms and conditions as stipulated by Reserve Bank of India from time to time: Provided that no guarantee for an amount exceeding USD 500,000 or its equivalent shall be issued on behalf of a service importer other than a Public Sector Company or a Department / Undertaking of the Government of India / State Government: Provided further that where the service importer is a Public Sector Company or a Department / Undertaking of the Government of India / State Government, no guarantee for an amount exceeding USD 100,000 or its equivalent....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... advance remittance for imports shall be subject to the specified conditions 12and AD banks are required to create Outward Remittance Message (ORM) for all such outward remittances in IDPMS & follow other extant IDPMS guidelines. C.1.2. Advance Remittance for Import of Rough Diamonds a) AD category - I banks are permitted to take decision on overseas mining companies to whom an importer (other than Public Sector Company or Department / Undertaking of Government of India / State Government) can make advance payments, without any limit / bank guarantee/ stand-by letter of Credit. Banks must ensure the following: i. The overseas mining company should have the recommendation of GJEPC. ii. The importer should be a recognised processor of rough diamonds and should have a good track record. iii. AD Category - I banks should, undertake the transaction based on their commercial judgment and after being satisfied about the bonafides of the transaction. iv. Advance payments should be made strictly as per the terms of the sale contract and should be made directly to the account of the company concerned, that is, to the ultimate beneficiary and not through numbered accounts or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Credit, up to USD 50 million. Accordingly, AD Category - I banks may allow advance remittance, without obtaining a bank guarantee or an unconditional, irrevocable Standby Letter of Credit, up to USD 50 million, for direct import of each aircraft, helicopter and other aviation related purchases. 2. Importers of Aircrafts/ Helicopters and other Aviation related Purchases, not eligible under clause (1) above can make advance remittance without bank guarantee, in terms of Para C.1.1 above. 3. The remittances for the transactions at 1 and 2 above shall be subject to the following conditions: i. The AD Category - I banks should undertake the transactions based on their commercial judgment and after being satisfied about the bonafide of the transactions. KYC and due diligence exercise should be done by the AD Category-I banks for the Indian importer entity and the overseas manufacturer company as well. ii. Advance payments should be made strictly as per the terms of the sale contract and directly to the account of the manufacturer (supplier) concerned. iii. AD Category - I banks may frame their own internal guidelines to deal with such cases, with the approval of their Board of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al repute situated outside India, should be obtained from the overseas beneficiary. (b) In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/ State Governments, approval from the Ministry of Finance, Government of India for advance remittance for import of services without bank guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent would be required. (c) AD Category - I banks should also follow-up to ensure that the beneficiary of the advance remittance fulfils his obligation under the contract or agreement with the remitter in India, failing which, the amount should be repatriated to India. 16(d) AD Category - I banks should ensure generation of ORMs and marking off in the IDPMS etc., as per extant IDPMS guidelines. C.2. Interest on Import Bills (i) AD Category - I bank may allow payment of interest on usance bills or overdue interest on delayed payments for a period of less than three years from the date of shipment at the rate prescribed for trade credit from time to time. (ii) In case of pre-payment of usance import bills, remittances may be made only after reducing the proportionate inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Information Technology, Government of India and other authorities concerned for setting up of the ICC. (ii) The remittance should be allowed based on the AD Category - I banks' commercial judgment, the bonafides of the transactions and strictly in terms of the contract. (iii) The remittance is made directly to the account of the overseas supplier. (iv) The AD Category - I banks should also obtain a certificate as evidence of import from the Chief Executive Officer (CEO) or auditor of the importer company that the goods for which remittance was made have actually been imported and installed at overseas sites. 20(v) The AD Category I bank should ensure compliance with IDPMS guidelines as applicable. C.6. Receipt of Import Bills/Documents 21Concerned AD Category banks to ensure generation of ORMs, BoE entries and BoE settlement with the respective ORMs in compliance with IDPMS guidelines as applicable. C.6.1 Receipt of import documents by the importer directly from overseas suppliers Import bills and documents should be received from the banker of the supplier by the banker of the importer in India. AD Category - I bank should not, therefore, make remittances where i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty, the AD Category - I bank should obtain a report on each individual overseas supplier from the overseas banker or a reputed overseas credit agency. However, such credit report on the overseas supplier need not be obtained in cases where the invoice value does not exceed USD 300,000 provided the AD Category - I bank is satisfied about the bonafides of the transaction and track record of the importer constituent. C.7. Evidence of Import C.7.1. Physical Imports 22(i) In case of all imports, irrespective of the value of foreign exchange remitted / paid for import into India, it is obligatory on the part of the AD Category- I bank through which the relative remittance was made, to ensure that the importer submits:- 23(a) The importer shall submit BoE number, port code and date for marking evidence of import under IDPMS as detailed in para C.8. (b) Customs Assessment Certificate or Postal Appraisal Form, as declared by the importer to the Customs Authorities, where import has been made by post, or Courier Bill of Entry as declared by the courier companies to the Customs Authorities in cases where goods have been imported through couriers, as evidence that the goods....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stitutions that their accounts are audited by CAG. 25(iii) Outward Remittance Message has to be created & BoE has to be downloaded from "BoE Master "in IDPMS (in case of EDI ports). In case of Non-EDI ports duplicate copy/customs certified copy have to be submitted or BoE waiver obtained from RBI. C.7.3. Non-physical Imports (i) Where imports are made in non-physical form, i.e., software or data through internet / datacom channels and drawings and designs through e-mail / fax, a certificate from a Chartered Accountant that the software / data / drawing/ design has been received by the importer, may be obtained. (ii) AD Category - I bank should advise importers to keep Customs Authorities informed of the imports made by them under this clause.26 27C.8. Detailed Operational Procedures for IDPMS The operational guidelines are summarised as below: (i) AD banks are required to create Outward Remittance Message (ORM) for all outward remittance/s for import payments on behalf of their importer customer for which the prescribed documents for evidence of import have not been submitted. (ii) Creation of ORM for all outstanding outward remittance/s for import payments need to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lose the BoE for such import transactions where write off is on account of quality issues; short shipment or destruction of goods by the port / Customs / health authorities in terms of extant guidelines on the matter subject to submission of satisfactory documentation by the importer irrespective of the amount involved. AD Bank shall settle and close ORM/BoE with appropriate "Adjustment Indicator" in IDPMS. (xii) The above operational guidelines for extension and write off are meant to facilitate closure of bills in IDPMS and will be subject to extant guidelines on the matter and not absolve the importer from remitting / receiving the amount in case of change in circumstances. (xiii) While allowing write off, AD Category - I banks must ensure that: a. The case is not the subject matter of any pending civil or criminal suit; b. The importer has not come to the adverse notice of the Enforcement Directorate or the Central Bureau of Investigation or any such other law enforcement agency; and c. There is a system in place under which internal inspectors or auditors of the AD category - I banks (including external auditors appointed by authorised dealers) should carry out rando....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d under paragraph C.7. of Section III, within 3 months from the date of remittance involving foreign exchange 34irrespective of value, the AD Category - I bank should rigorously follow-up for the next 3 months, 35by using various modes of communications. It should, however, be ensured that atleast one communication with the importer in this regard is by issuance of registered letter. 36(ii) In IDPMS, all outstanding import remittances, irrespective of the amount involved, should be reported by the AD Category-I banks. Further, submission of a separate BEF Statement by the AD Category-I bank would be required till the half year ended December 2017 and discontinued thereafter. 37Omitted C.11 Import of Gold C.11.1 Import of Gold. i. The 20:80 scheme of import of gold was withdrawn on November 28, 2014. However, the obligation to export under the 20:80 scheme would apply to the unutilised gold imported before November 28, 2014. 38ii. Nominated banks and nominated agencies, as notified by DGFT, are permitted to import gold on consignment basis. In addition to the above, qualified jewellers and Tariff Rate Quota Holders (TRQ Holders) under India-UAE CEPA,&....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fied Jewellers to import gold through IIBX or any other exchange approved by IFSCA and DGFT, Government of India: * AD banks may allow Qualified Jewellers to remit advance payments for eleven days for import of gold through IIBX in compliance to the extant Foreign Trade Policy and regulations issued under IFSC Act. AD banks shall ensure that advance remittance for such import through exchange/s authorised by IFSCA shall be as per the terms of the sale contract or other document in the nature of an irrevocable purchase order in terms of IFSC Act and regulations made thereunder by IFSCA. AD bank shall carry out all the due diligence and ensure the remittances sent are only for the bona fide import transactions through exchange/s authorised by IFSCA. * The advance remittance for import of Gold should not be leveraged in what-so-ever form for importing Gold worth more than the advance remittance made. * In case the import of Gold through IFSCA authorised exchange, for which advance remittance has been made, does not materialise, or the advance remittance made for the purpose is more than the amount required, the unutilized advance remittance shall be remitted back to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IFSCA) AD Category-I banks may allow valid India-UAE CEPA Tariff Rate Quota (TRQ) Holders to remit advance payment for eleven days for import of gold through IIBX subject to the directions as mentioned in A.P. (DIR Series) Circular No.04 dated May 25, 202242. C.12. Import of Other Precious Metals C.12.1. Import of Platinum/ Palladium/ Rhodium/ Silver/ Rough, Cut & Polished Diamonds/ Precious and Semi-precious Stones. (a) Suppliers' and Buyers' Credit, including the usance period of Letters of Credit opened for import of Platinum, Palladium, Rhodium and Silver and rough, cut and polished Diamonds, Precious and semi-precious stones; should not exceed 90 days from the date of shipment. However, for Clean Credit i.e. credit given by a foreign supplier to its Indian customer/ buyer, without any Letter of Credit (Suppliers' Credit)/ Letter of Undertaking (Buyers' Credit)/ Fixed Deposits from any Indian financial institution for import of rough, cut and polished diamonds, precious and semi-precious stones, may be permitted for a period not exceeding 180 days from the date of shipment. 43Further, AD banks may allow extension of time in respect of such clean credit for i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... exchange directions relating to imports, Foreign Trade Policy in force and any other guidelines/directives issued by Reserve Bank in this regard. C.14. Merchanting Trade46 C.14.1. AD banks may handle the Merchanting Trade Transactions (MTT) subject to the following guidelines: * For a trade to be classified as merchanting trade, goods acquired shall not enter the Domestic Tariff Area. * Considering that in some cases, the goods acquired may require certain specific processing/ value-addition, the state of goods so acquired may be allowed transformation subject to the AD bank being satisfied with the documentary evidence and bonafides of the transaction. * The MTT shall be undertaken for the goods that are permitted for exports / imports under the prevailing Foreign Trade Policy (FTP) of India as on the date of shipment. All rules, regulations and directions applicable to exports (except Export Declaration Form) and imports (except Bill of Entry) shall be complied with for the export leg and import leg respectively. * AD bank shall satisfy itself with the bonafides of the transactions. Further, KYC and AML guidelines shall be scrupulously adhered to by the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove. * Payment for import leg may also be allowed to be made out of the balances in EEFC account of the merchant trader. * Merchanting traders may be allowed to make advance payment for the import leg on demand made by the overseas supplier. In case where inward remittance from the overseas buyer is not received before the outward remittance to the overseas supplier, AD bank may handle such transactions based on its commercial judgement. It may, however, be ensured that any such advance payment for an import leg beyond USD 500,000/- per transaction, shall be made against Bank Guarantee / an unconditional, irrevocable standby Letter of Credit from an international bank of repute. Overall prudential limits on allowing such advance payments by a customer may be fixed by the AD bank. * Letter of Credit to the supplier for the import leg is permitted against confirmed export order, keeping in view the foreign exchange outlay of four months and completion of the MTT within nine months and subject to compliance with the instructions issued by Department of Banking Regulation on "Guarantees and Co-acceptances", as amended from time to time. * AD bank shall ensure one-to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arty payments for export and import legs of the MTT are not allowed. C.14.5 Payment of Agency Commission Agency commission is not allowed in MTTs. However, AD banks may allow payment of agency commission up to a reasonable extent by way of outward remittance under exceptional circumstances, subject to the following conditions: * MTT has been completed in all respects. * The payment of agency commission shall not result in the MTT ending into a loss. * The Merchanting trader shall make a specific request to the AD bank in this regard. C.14.6 AD bank may approach Regional Office (RO) concerned of the Reserve Bank for regularization of the MTT for deviation, if any, from the prescribed guidelines and the MTT shall be closed only after receiving approval from the RO concerned of the Reserve Bank. C.14.7 Reporting for merchanting trade transactions under FETERS shall be done on gross basis, against the undermentioned codes: Trade Purpose Code under FETERS Description Export P0108 Goods sold under merchanting /receipt against export leg of merchanting trade Import S0108 Goods acquired under merchanting /payment against import leg of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rency and the settlement takes place in the currency of the beneficiary, which though convertible, does not have a direct exchange rate, it has been decided that AD Category-I banks may permit settlement of such import transactions (excluding those put through the ACU mechanism), subject to conditions as under: * Importer shall be a customer of the AD Bank, * Signed contract / invoice is in a freely convertible currency, * The beneficiary is willing to receive the payment in the currency of beneficiary instead of the original (freely convertible) currency of the invoice/ contract, Letter of Credit as full and final settlement, * AD bank is satisfied with the bonafides of the transactions, and * The counterparty to the importer of the AD bank is not from a country or jurisdiction in the updated FATF Public Statement on High Risk & Non Co-operative Jurisdictions on which FATF has called for counter measures. 49C.17 Import Data Processing and Monitoring System (IDPMS) - reconciliation of import entries - Special Procedure Notwithstanding anything contained in this master direction, AD banks shall adopt the following procedure while closing entries (in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... aircrafts / helicopters / other aviation related purchases June 29, 2007 15 18 Direct Receipt of Import Bills / Documents - Liberalisation November 7, 2007 16 37 Direct Receipt of Import Bills / Documents for Import of Rough Precious & Semi-Precious Stones April 16, 2008 17 03 Advance Remittance for Import of Rough Diamonds August 4, 2008 18 08 Advance Remittance for Import of Rough Diamonds August 21, 2008 19 09 Foreign Exchange Management Act, 1999- Advance Remittance for Import of Goods - Liberalisation August 21, 2008 20 12 Foreign Exchange Management Act, 1999 - Import of Platinum / Palladium / Rhodium / Silver August 28, 2008 21 13 Direct Receipt of Import Bills / Documents - Liberalisation September 1, 2008 22 15 Foreign Exchange Management Act, 1999 - Advance Remittances for Import of Services September 8, 2008 23 21 Advance Remittance for Import of Rough Diamonds December 29, 2009 24 56 Advance Remittance for Import of Goods - Liberalisation April 29, 2011 25 59 Import of rough, cut and polished diamonds May 06, 2011 26 82 Release of Foreign Exchange for Imports - Further Liber....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vice Providers September 24, 2015 54 29 Import of Goods into India - Evidence of Import November 26, 2015 55 30 Advance Remittance for Import of aircrafts / helicopters /other aviation related purchases November 26, 2015 56 42 Settlement of Export/ Import transactions in currencies not having a direct exchange rate February 4, 2016 57 57 Import of Rough, Cut and Polished Diamonds March 31, 2016 58 65 Import of goods- Import Data Processing and Monitoring System (IDPMS) April 28, 2016 59 05 Import Data Processing and Monitoring System (IDPMS) October 06, 2016 60 11[(1)/14(R)] Foreign Exchange Management (Manner of Receipt and Payment) Regulations 2016 October 20, 2016 61 27 Evidence of Import under Import Data Processing and Monitoring System (IDPMS) January 12, 2017 62 33 Import of goods and services- Extension of time limits for Settlement of import payment May 22, 2020 63 04 Guidelines on import of gold by Qualified Jewellers as notified by - The International Financial Services Centers Authority (IFSCA) May 25, 2022 64 13 Use of any Alternative reference rate in place of LIBOR for interest pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No.5 dated October 06, 2016 14 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 15 Inserted vide AP(DIR Series) Circular No 07 dated June 13, 2025 16 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 17 Inserted vide AP (DIR Series) Circular No. 13 dated September 28, 2021 18 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 19 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 20 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 21 Inserted vide AP (DIR Series) Circular No.65 dated April 28, 2016 and AP (DIR Series) Circular No.5 dated October 06, 2016 22 Modified vide AP (DIR Series) Circular No.65 dated April 28, 2016 prior to modification it read as "In case....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eipt of evidence of import e.g. Exchange Control Copy of the Bill of Entry, Postal Appraisal Form, or Customs Assessment Certificate, etc., from importers by issuing acknowledgement slips containing all relevant particulars relating to the import transactions." 28 Inserted vide AP (DIR Series) Circular No.27 dated January 12, 2017 29 Inserted vide AP (DIR Series) Circular No. 27 dated January 12, 2017 30 Inserted vide AP (DIR Series) Circular No. 27 dated January 12, 2017 31 Inserted vide AP (DIR Series) Circular No. 27 dated January 12, 2017 32 Modified vide AP (DIR Series) Circular No. 27 dated January 12, 2017 prior to modification it read as "AD Category - I banks are required to follow up for submission of prescribed documents for evidence of import in terms of extant guidelines on the subject" 33 Modified vide AP (DIR Series) Circular No. 27 dated January 12, 2017 prior to modification it read as "(i) Internal inspectors or auditors (including external auditors appointed by AD Category - I bank) should carry out verification of the documents evidencing import, e.g. Exchange Control copies of Bills of ....