Receipt of exports from third party must be declared upfront: Expert

We had exported certain go­ods to a buyer abroad against an order placed by him and also raised an inv­oice for payment. How­ever, before the due date, the bu­yer said the payment will be made by a third party, and it was rece­ived from the third party. Our bankers say this is irregular. Are they correct? If so, how to regularise the matter?

Para B.8 of RBI FED Master Direction no. 16/2015-16 dated January 1, 2016 (as amended), says that realisation of export proceeds in respect of export of goods/software from third party should be duly declared by the exporter in the appropriate declaration form. This condition is not fulfilled in your case. Also, Para A.3(vi) of the same Master Direction lists more conditions to be fulfilled for permitting receipts of export proceeds from third party. These conditions are not fulfilled in your case. So, I think your bankers are quite right in pointing out the irregularity. You may approach Reserve Bank of India with a request to condone the lapse and regularise the matter.

We refer to JDGFT, New Delhi Trade Notice No. 36/2020-21 dated January 4, 2021, asking us to implement the security protocols such as Sender Policy Framework (SPF), Domain Keys Identified Mail (DKIM) and Domain-based Message Authenticated, Reporting and Conformance (DMARC). We do not use any of these protocols. Does it amount to violation of DGFT instructions?

No. The Trade Notice is only an advisory. The JDGFT has drawn attention to increased instances of email spoofing/ phishing cyber frauds that are causing trade disputes and loss of cargo as well as payment for the victims. So, the JDGFT has advised the trade to adopt SPF, DKIM and DM­ARC protocols for standard email signatures. In your own interest, it is desirable that you heed the advice of the JDGFT.

  

We exported certain goods last year and received full payment. The buyer rejected a part of the consignment. So, we shipped free replacement to him against a GR waiver from the bank. Thus, we need not remit any mo­ney to the buyer. Now, we are importing the rejected goods. Are we required to surrender the export incentives taken?

In my opinion, if you pay full duty under Section 20 of the Customs Act, 1962, you need not surrender any benefits taken at the time of exports. However, if you opt for exemption under notification no.45/2017-Cus dated June 30, 2017, then you have to surrender the export incentives availed at the time of exports.

We obtained an advance authorisation and fulfilled the export obligation by exporting goods from our stocks, before making any imports. Now, if we import raw materials duty-free under advance authorisation, manufacture the finished goods and export them under drawback shipping bill, can we claim benefits under the RoDTEP scheme?

Yes. RoDTEP benefit is available for exports made under drawback or free shipping bills.

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