This circular permits “write-off” a certain % of unrealised export bills without obtaining prior approval of RBI. The amount that can be written-off has to be calculated as a % total export proceeds realised during the previous calendar year. The “write-off” permitted by this circular is as under: –
The above limits are cumulative and can be availed of at any time during the year. To avail of this facility, the exporter will have to fulfill the following conditions: –
1. The relevant amount must be outstanding for more than one year.
2. Satisfactory documentary evidence is furnished by the exporter to indicate that all efforts have been made to realise the dues.
3. The exporters case falls under any of the undernoted categories: –
a. The overseas buyer has been declared insolvent and a certificate from the official liquidator indicating that there is no possibility of recovery of export proceeds has been produced.
b. The overseas buyer is not traceable over a reasonably long period of time.
c. The goods exported have been auctioned or destroyed by the Port/Customs/Health authorities in the importing country.
d. The unrealised amount represents the balance due in a case settled through the intervention of the Indian Embassy/Foreign Chamber of Commerce/similar Organisation.
e. The unrealised amount represents the undrawn balance of an export bill (not exceeding 10% of the invoice value) remaining outstanding and turned out to be unrealisable despite all efforts made by the exporter.
f. The cost of resorting to legal action would be disproportionate to the unrealised amount of the export bill or where the exporter even after winning the Court case against the overseas buyer, has not been able to execute the Court decree due to reasons beyond his control.
g. Bills were drawn for the difference between the letter of credit value and actual export value or between the provisional and the actual freight charges, but the amount has remained unrealised due to dishonour of the bills by the overseas buyer and there are no prospects of realisation.
h. The exporter has surrendered proportionate export incentives, if any, availed of in respect of the relative shipments and submitted documents evidencing the same.
4. In case of self-write-off, the exporter will have to submit to the concerned bank, a Chartered Accountant’s certificate, indicating the following: –
a. Export realisation in the preceding calendar year.
b. The amount of write-off already availed of during the year, if any.
c. The relevant GR/SDF Nos. to be written off. d. Bill No., invoice value, commodity exported, country of export.
e. Surrender of export benefits, if any, availed of by the exporter.
Write-off cannot be availed of under the following circumstances without obtaining prior approval of RBI: –
a. Exports made to countries with externalisation problem i.e. where the overseas buyer has deposited the value of export in local currency but the amount has not been allowed to be repatriated by the central banking authorities of the country.
b. GR/SDF forms which are under investigation by agencies like, Enforcement Directorate, Directorate of Revenue Intelligence, Central Bureau of Investigation, etc. as also the outstanding bills which are subject matter of civil /criminal suit.
c. Cases not complying with the above conditions/ beyond the above limits.
