Exchange control regulations – exports Essay
Exchange control regulations – exports
International trade involves movement of goods and matching payment settlements in various currencies. Export results in depletion of the wealth of a nation and imports create demand for currencies of other currencies. In our country, the demand for foreign exchange exceeds the supply and hence the foreign exchange is considered a scare commodity. To preserve foreign exchange, Reserve Bank of India administers exchange control through various Authorised Dealers.
The role of Exchange Control in international trade may be indicated as below;
Statutory Base: Foreign Exchange Regulations Act, 1973
Authority with: Reserve Bank of India
Guidelines: As per Exchange Control Manual (1993 Edition) and RBI’s ADMA Circulars. Authorized by: Authorized Dealer / Banks
The exporter shall register with and obtain importer-exporter code number from the Director General of Foreign Trade (DGFT). The role of exchange control and trade control in international trade may be indicated as follows:
Softex form Export of computer software in non/physical form should be declared on the Softex Form. Each SOFTEX form is in triplicate with identical pre-printed number. The completed SOFTEX Forms are submitted to the Department of Electronics of Central Government. Officials of the DoE will verify the form and certify that the software declared in has been actually transmitted and the export value declared is found to be in order and accepted.
The original will be forwarded to the RBI, duplicate will be returned to the exporter and the triplicate retained by the DoE. Each exporter will have to designate a single branch of an Authorized Dealer to whom the duplicate SOFTEX form and export documents will be submitted for collection.
The Import Export Number of the exporter to be mentioned on all the Export Declaration Forms. Shipping documents and extra copy of the Invoice should be lodged with the AD named in the form within 21 days from the day of shipment of goods. The Ads to whom the duplicate copies of the export control forms are handed over, retain the duplicate with them till the proceeds have been realized.
Ads may accept shipping documents covering exports even where the original declaration on the GR form has been signed by some other party, provided the customer tendering the bill, countersigns on the duplicate copy of the GR form undertaking to deliver the Foreign Exchange proceeds to the AD. If the exporter fails to realize the proceeds and fails to seek extension of time from RBI, the AD is expected to report the matter to RBI. Ads also have to furnish half yearly consolidated statement of all export bills outstanding beyond the period prescribed for realization.