TaxTMI 
TaxTMI 
TaxTMI 
Trade Credits
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....Direction No. 18/2015-16 dated 01-01-2016 on "reporting" 1. Introduction: Trade Credits (TC) refer to the credits extended by the overseas supplier, bank, financial institution and other permitted recognised lenders for maturity, as prescribed in this framework, for imports of capital/non-capital goods permissible under the Foreign Trade Policy of the Government of India. Depending on the source of finance, such Trade Credits include suppliers' credit and buyers' credit from recognised lenders. [ Para 13 of RBI FED Master Direction No. 5/2018-19 dated 26.03.2019 ] 2. Trade Credits Framework [ Para 14 of RBI FED Master Direction No. 5/2018-19 dated 26.03.2019 ] Trade Credit (TC) for imports into India can be rai....
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....ds:- this period shall be a) up to one year or b) the operating cycle whichever is less. c) For shipyards / shipbuilders, the period of Trade Credit for import of non-capital goods can be up to three years. Vi All-in-cost ceiling per annum (i) Benchmark Rate plus 350 bps spread: For existing Trade Credits linked to LIBOR whose benchmarks are changed to ARR. (ii) Benchmark rate plus 300 bps spread: For new Trade Credits. Benchmark rate plus 250 bps spread. Vii Exchange rate Change of currency of FCY Trade Credits into INR Trade Credits can be at the exchange rate prevailing on the date of the agreement between the parties concerned for such change or at an e....
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....FTWZ subject to compliance with parameters given at paragraph 2 above. • An entity in DTA is also allowed to raise Trade Credit for purchase of capital / non-capital goods from a unit or a developer of a SEZ including FTWZ. 2. Date of Trade credit • Trade Credits transactions in respect of SEZs and DTAs as permitted above should also be in compliance with applicable provisions of SEZ Act, 2005 as amended from time to time. • For Trade Credit transactions related to SEZ, date of transfer of ownership of goods will be treated as Trade Credits date. • As there will be no bill of entry for sale transactions within SEZ, the inter unit receipt generated through NSDL can b....
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.... of overseas lender / security trustee on immovable assets / movable assets / financial securities / issuance of corporate and / or personal guarantee; ii. No objection certificate, wherever necessary, from the existing lenders in India has been obtained; iii. such arrangement is co-terminus with underlying Trade Credits; iv. In case of invocation, the total payments towards guarantee should not exceed the dues towards trade credit; and v. Creation/ enforcement / invocation of charge shall be as per the provisions contained in Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 and Foreign Exchange Management (Transfer or Issue of Security by a Person Re....
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....k. Format of Form Trade Credit is available at Annex IV of Part V of Master Directions - Reporting under Foreign Exchange Management Act dated January 1, 2016, as amended from time to time. Note:- • Suppliers' credit beyond 180 days and up to one year/three years from the date of shipment for non-capital/capital goods respectively, should also be reported by the Authorised Dealer banks. • Further, permissions granted by the Authorised Dealer banks/Regional offices of Reserve Bank for settlement of delayed import dues in terms of paragraphs B.5 and C.2 of the Master Direction on Import of Goods and Services dated January 1, 2016, as amended from time to time, should also be reported by the Authorised D....
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....he XBRL platform. • For the above purpose Authorised Dealer banks may login to the site https://secweb.rbi.org.in/orfsxbrl/ using their User name, Password and Bank code. For downloading the relevant form, Authorised Dealer banks may follow the link 'Download Returns Package' and download the form. • After following the successive steps, Authorised Dealer banks may upload the file. For User name and Password, Authorised Dealer banks may write at [email protected] along with contact details. Clarification required, if any, may also be sent to the aforesaid email of the Reserve Bank and/ or may be communicated at Telephone No. 022-22601000 (extension2715). • Guide for using XBRL website is also availa....