RBI revives instructions about Refund of Export Proceeds of goods exported from India

In the Statement on Development and Regulatory Policies dated December 4, 2020, RBI announced greater flexibility to AD banks in the areas like Direct Dispatch of Shipping Documents, /“Write-off” of unrealized export bills, /Set-off of Export receivables against Import payables/ as well as ‘Refund of Export Proceeds of goods from India’.

In terms of RBI Circular No.37 dated April 05, 2007 AD banks were allowed to consider a request for refund of export proceeds of goods exported from India and being re-imported into India on account of poor quality. However, in view of there are instances of exporters could not reimport the goods exported by them due to such goods are being auctioned or destroyed in the importing country, RBI  vide. it’s circular dated December 04, 2020, instructed AD banks  “Not insist on the requirement of re-import of goods, where exported goods have been auctioned or destroyed by the Port / Customs / Health authorities/ any other accredited agency in the importing country subject to the submission of satisfactory documentary evidence”. Nevertheless, while permitting refund of export proceeds of goods exported from India, AD banks shall exercise due diligence on the track record of the exporter and also verify the bona-fides of the transaction/s. The exporter needs to furnish a certificate issued by DGFT / Custom authorities that no export incentive has been availed of by the exporter against the relevant export or the proportionate export incentives availed, if any, have been surrendered.

In all other cases, AD banks shall ensure those procedures as applicable to normal imports are adhered to and that an undertaking from the exporter, to re-import the goods within three months from the date of refund of export proceeds, shall be obtained.