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Home>> Publications >> Exchange Control Manual Category >> Exchange Control Manual - Exchange Control Manual View
 
Date : 02 Jun 2005
Import licences
7A.2, 7A.9, 7A.15, 7A.19
Import Licences

7A.2 Authorised dealers should not open letters of credit or allow remittances for the import of goods included in the negative lists unless the importer submits a licence marked For Exchange Control Purposes'. Special conditions, if any, attached to the licence should be adhered to while opening letters of credit or making remittances.

Import Licences for c.i.f. Value

7A.9 (i) Import licences wherever issued are for the c.i.f. value of the goods to be imported which includes commission, if any, allowed by the supplier/manufacturer. Import licences cannot be used to the full amount in cover of f.o.b. cost of the goods leaving insurance, freight and commission to local agent of the supplier, as additional charges to be paid in rupees over the amount specified in the import licence. (See paragraph 7A.13 also).

(ii) Importers sometime enter into contracts on f.o.b. terms and agree to the suppliers paying for the freight to be reimbursed to them along with the cost of the goods. Authorised dealers in such cases should, before making the remittance of freight charges, ascertain the actual freight amount paid with reference to the original freight bill or memo issued by the shipping company or the amount stated on the relative bill of lading.

Imports by Government/Public Sector Undertakings, etc.

7A.9A As per the procedure laid down by Government of India, import contracts by Central/State Governments, Central & State Public Sector undertakings and autonomous bodies are required to be made on FOB/FAS basis in respect of transportation of Government owned / controlled cargo by foreign flag vessels (i.e. ocean transportation of cargo) . In case of the import contracts entered into on terms other than FOB/FAS, a No Objection Certificate from the Ministry of Surface Transport (MOST), Government of India is required to be obtained. Authorised dealers, before opening import letters of credit or releasing foreign exchange for imports, should ensure that necessary No Objection Certificate is obtained by the concerned Government organisation in cases of import contracts made on terms other than FOB/FAS.

Endorsement on Import Licences

7A.15 (i) Authorised dealers should note to endorse on import licences, under their stamp and signature, the details of letters of credit opened or forward contracts booked or remittances made in foreign currency as also the amount of insurance, freight and commission paid by the importer locally in rupees [See paragraph 7A.9].

(ii) Authorised dealers may likewise endorse the value of the back-to-back inland letters of credit opened by them on behalf of duty free licence holders (including transferees) as required in terms of the relevant provisions of the Export Import Policy.

Surrender of Import Licences to Exchange Control

7A.19 Exchange Control copy of import licence submitted by importer for opening letters of credit or making remittances should be retained by authorised dealer and forwarded to Reserve Bank after it has been fully utilised along with R Returns pertaining to the period during which the last remittances under the licences were made.

 
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