RBI Provides Relaxation In Timeline Of Realisation And Repatriation Of Export Proceeds
The Reserve Bank of India (RBI), vide A.P. (DIR Series) Circular No. 27 dated 1st April 2020, has increased the period of realisation and repatriation of the export proceeds to India in respect of the export of goods or software or services, from 9 (nine) months to 15 (fifteen) months from the date of such corresponding exports.
The RBI has made the above relaxation in pursuance of the representations received from various Exporters Trade bodies owing to the current outbreak of pandemic COVID-19 and it is to be noted that it is applicable only in respect of those exports that are made on or before 31, July 2020.
It is to be noted that the above mentioned relaxation shall not be applicable for those export of goods/services to the warehouses established outside India by the respective exporters and the timelines for realisation and repatriation of the export proceeds in respect of such exports shall remain unchanged i.e. fifteen(15) months from the date of shipment of such exports.
Further, the said extension of six (6) months will enable the exporters to realise their receipts, especially from COVID-19 affected countries and also provide sufficient scope for the exporters to negotiate their export contracts with the corresponding buyers abroad in order to realise the export proceeds within the extended timelines.
As the circular does not explicitly mention the date from which the relaxation would become applicable, it can be construed to be applicable from 1st April 2020, i.e. exports made on or after 1st April 2020, being the date of the circular. Nevertheless, it is advisable that the exporters approach their respective AD Category-1 banks to seek the clarity as to whether this extension of timelines will be applicable even for those export of goods/software/services occurred prior to the date of this circular i.e. 1st April 2020.
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