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Frequently Asked Question (FAQ)

Question: How do transactions get processed in EDPMS, when I file my shipping bill, and submit the same to my bank for negotiation?
  • Exporter exports goods and files EDF with Customs

  • ‘Let Export’ Order issued by Customs, and goods exported

  • Customs issues Shipping Bill (SB) to Exporter and captures details on EDPMS under AD Code mentioned in the Shipping Bill

  • Authorised Dealer (AD) downloads EDPMS data on the day following the export happening, and uses the same to track document submission

  • Exporter submits export documents to bank

  • AD selects Shipping Bill from list on EDPMS and complete Registration of Documents (ROD) process in the system

  • Documents sent by AD on collection to the buyer

  • Export proceeds received by AD from overseas buyer

  • Bank creates an IRM reference on EDPMS to indicate the same as an export remittance     

  • PRN process done by AD in EDPMS by the bank handling the inward remittance to settle the Shipping Bill; proceeds credited by AD to exporter’s Account
Question: I have changed my banking transactions to a new bank, but have erroneously mentioned the AD code of my old banker while filing Shipping Bill. How can I submit the documents to my new bank?

Variation to the above procedure can happen if exporter submits documents at the counters of another bank other than the one whose AD code is mentioned in the Shipping Bill.

When that happens, the AD which receives the documents requests for a transfer of the Shipping Bill to its own AD from the original AD. The first AD then has 24 hours to either accept or reject the transfer request. In case the request remains open beyond 24 hours, the same is automatically transferred to the requesting AD.

Question: We are a large export house and bank with multiple banks. Considering that we need to capture the correct AD code in the Shipping Bill, how do we register the AD codes of all our banks with Customs?

Prior to implementation of EDPMS, Customs authorities could capture only one AD code against the IE code of the exporter. That is, it was a one-to-one mapping for IE code to AD code.          

However, to accommodate the changes necessitated by EDPMS, Customs authorities have now made modifications in their system to map multiple AD codes against single IE Code. That is, a one-to-many mapping for IE code to AD code.

As and when the Shipping Bill checklist is being filed, the exporter has to choose from the list of AD codes registered against his IE code, based on which bank he wishes to submit the export documents at. This will ensure that the correct AD code gets captured in the Shipping Bill, without error.

Question: I have received advance payment for my exports, and am now submitting the shipping bill to my bank after completing the exports against the same. How are these transactions processed in EDPMS?
  1. AD receives inward remittance from Overseas Buyer on behalf of exporter.

  2. AD creates IRM in the EDPMS system for every export payment received, capturing details of remitter, purpose, amount, etc.

  3. Export documents to be submitted by exporter within 12 months from the date of receipt of export advance.

  4. Exporter completes export and submits export documents to the AD.

  5. AD chooses the specific SB in EDPMS and uses the relevant IRM to execute the PRN process, thus settling the Shipping Bill.

  6. Multiple Shipping Bills can be settled against one IRM and multiple IRMs can be settled against one SB.
Question: While export guidelines require exporter to submit export documents to the same bank where he has received advance payment, I am currently finding it difficult to comply with this, as I have changed my banking relationships to a new bank. What do I do?

A variation to the standard process is permitted if export documents are submitted to a bank other than the one where the advance payment was received.

In such situations, the exporter will have to request the first bank (bank which has received the export advance) for an eFIRC to be issued in EDPMS favouring the bank where the documents have been submitted, for the value of the export documents, or the amount of advance payment, whichever is less. On the basis of the eFIRC issued in its favour, the document receiving bank will record receipt of documents and settlement of the same in the system.

Question: What are the circumstances when there might be a difficulty in settling the export bill in the EDPMS? What is the exporter expected to do in such cases?

Difficulties can arise in settlement of the Shipping Bill mainly due to two reasons:

  1. There is a delay in receipt of export payment beyond the mandated period
  2. Export proceeds have not been realised at all (fully or partially)

Where there is a delay in receipt of export proceeds, exporter has to seek approval to extend the time-period of realisation

Where export proceeds have not been realised either partially or fully and exporter feels that further realization is not possible, exporter should undertake the process to write off the unrealised portion of the export bill. However, any exports benefit, if taken on the unrealized value, the same should be refunded with applicable interest to the concerned authority.

Question: How can I seek approval to extend the time period for realisation of my export proceeds?

Export guidelines mandate a time period of 9 months from the date of export for the exporter to realise and repatriate the export proceeds. In case there is a delay in realization beyond this period, the exporter has to seek approval from his Authorised Dealer to extend the time period for realisation.

Banks can extend the time period for realisation upto a period of 6 months at one time, without consideration of invoice value, subject to the following conditions being met

  1. The AD is convinced that the delay is for reasons beyond the control of the exporter
  2. The exporter submits a declaration that the export proceeds will be realised during this extended period. Hence the exporter himself must be reasonably sure that the proceeds will be realised within the committed time period.

The transactions which are being submitted for approval should not be under investigation by any investigating agencies.

Where the extension approval provided makes the total time period for realisation cross one year from the date of export, the Authorised Dealer has to also ensure that the total export outstanding of the exporter does not exceed either:

  1. US$ 1 million;
  2. Or
  3. 2. 10% of average export realizations during the preceding three financial years; whichever is higher.

Transactions falling beyond the delegated authority of the Authorised Dealer will have to be referred to RBI for approval.

Question: I have not been able to realise the export proceeds, despite my best efforts, and now wish to write off the same as bad debt. Is there something that I should do to remain regulatorily compliant?

Current export guidelines permit exporters to write-off a portion of their export receivables, subject to a limit as specified in the guidelines.

Accordingly, a non-status holder exporter can write off up to 5% of the total export proceeds realised during the previous year, while a status holder exporter can write off up to 10%. Authorised Dealers have been delegated powers to write off export receivables of up to 10% of export proceeds realised during the previous year.

‘Year’ is taken as calendar year and not financial year. The above limits are linked to export proceeds realised, which is the sum-total of all inward remittances received under purpose codes P0101 and P0102 during the calendar year.

An exporter can do write-off of export receivables (either self or under AD approval) only if it has remained outstanding for more than one year, and not before.

Also, before deciding to write off the export receivables, the exporter has to demonstrate that he has done all that he could to recover the dues, and these remain outstanding despite his best efforts.

The transaction has to fall in any of the stipulated 7 categories for it to be eligible for write off. Else it will have to be referred to RBI for approval.

And once a transaction has been chosen for write-off, any export incentive availed against the same has to be surrendered, and documentary evidence obtained for the same.

The 7 categories eligible to be written off are as below:

  1. Overseas buyer has been declared insolvent

  2. Buyer not traceable despite best efforts

  3. Goods have been auctioned/destroyed by port/customs/health authorities

  4. Amount represents balances due in a case settled through the Indian Embassy, Foreign Chamber of Commerce, etc.

  5. Amount represents balances less than 10% of value of the export bill, unrealised despite best efforts

  6. Cost of legal action would be prohibitively expensive and disproportionate to the invoice amount, or execution of order is difficult even after winning the case

  7. Amount represents:
  • Difference between LC value and actual export value
  • Provisional and actual freight charges and remains unrealised despite best efforts to recover

Where exporter has done self-write off, he has to report the transaction to the Authorised Dealer for reporting on EDPMS and thus regularising the same.

Transactions falling beyond the delegated authority of ADs have to be referred to RBI for approval.

Question: I have received an enquiry letter from RBI even though I have realised and repatriated all my export receivables. Why is this?

In a number of cases for exporters who have realised and repatriated export proceeds, the export bills still remained without being settled in the EDPMS system. This was either due to the negligence of the exporter to report the settlement to his banker, or due to issues at the bank’s end to settle the transaction in the system.

Question: What are the new provisions relating to caution listing of exporters? What are the implications if I am caution listed? What should I do to avoid being caution listed?

As per the revised guidelines issued in June 2016, any exporter, who has a Shipping Bill reflecting against his/her IE Code within the EDPMS for more than a period of two years, without regularisation, will automatically be included in the caution list by the system.

Accordingly, the caution list is no more a physically managed database, but a system generated database, which uses specific logic and arguments to decide which IE Codes to be included in the same. Manual additions can still be done to the list, similar to how it was being done earlier.

The deciding criteria for automatic caution listing is the period for which an export bill has remained open without being regularised, or extension approved, or being written off. The current specified period is 2 years from the date of export.

Once an exporter is caution listed, he will be required to obtain either 100% advance or a Letter of Credit, before he can export against a particular order. This severely affects the business of the exporter, leading to loss of business and also much more complicated process for those exports which he is able to do.

A caution listed exporter will also find it difficult to obtain export credit from his bankers, and also to lodge bills for collection for those exports that he has already executed. Finally, bankers are prohibited from issuing any export guarantees on behalf of such caution listed exporters. In order to avoid being caution listed, an exporter should ensure that the export proceeds are realised and repatriated on time, and are also reported to the bank on time for updating in EDPMS. Further, in case of any delay in receipt of export proceeds, or inability to recover the proceeds (even partially) the exporter should initiated the procedure for either extending the time, or write off of export proceeds, whichever is applicable.

Question: I have received export settlement in INR which was credited to my account via RTGS/NEFT transfer from another bank. How can I settle my export bill, as there is no foreign currency received?

Such transactions use the VOSTRO account of the overseas buyer’s bank held with a bank in India. As and when the exporter receives such a credit, he has to instruct his bank to obtain details of the credit from the Indian bank which has initiated the RTGS/NEFT transfer. Based on the details provided by the transferring bank, your bank will be able to categorise this as an export settlement transaction, and thereby settle the export bill.

Question: I have received advance payment from my overseas buyer, which was received by one of the banks in India, and was transferred to my bank by way of a NOSTRO transfer. I have been trying to get an FIRC issued from the bank which originally received the money, but am being told that this is no longer possible. What is the native?

Since June 2016, FIRCs are no longer issued for export transactions. However, as per the current process, these are no longer required, and the bank which credits the funds to the exporter’s account is supposed to capture these details in EDPMS, and mark the same as export proceeds – either advance or export settlement.

To ensure that details are captured correctly, you will need to provide the Disposal Instructions correctly to your banker as and when the remittance is received. This will avoid complications at later stages.

Question: I have received one single inward remittance for a number of export bills that I had submitted to my bank for negotiation. Will I face any issues in settling these bills?

As per the functionality available on EDPMS, multiple shipping bills can be settled against a single inward remittance. Accordingly this transaction can be processed without any problem. Also, multiple inward remittances can also be used to settle a single shipping bill, to account for part payments being received for export settlement.

Question: I have received settlement for an export bill that I have sent on collection, but have received short payment due to a dispute with my buyer. The Shipping Bill is partially unsettled due to this. What can I do to ensure that I do not get caution listed due to this?

You will need to undertake a write-off process, either self-write-off, or after obtaining approval from the AD, to remove this pending item.

Question: I wish to understand the details of export bills outstanding against my name in EDPMS so that I can do the needful to clear the same. Where can I get this data from?

You can view the status of individual Shipping Bills through the ICEGATE portal. In case you require a consolidated database of all shipping bills, the only option currently is to obtain the same from your Authorised Dealer by way of an extract from EDPMS. Industry bodies are working to improve the quality of data from ICEGATE and make it more suitable for the exporters’ needs, but it might take some more time.

Question: All my export remittances have bank charges deducted from them as the intermediary bank deducts charges of $100-200 from the export realisation. Will this an issue for me while settling export bills?

It may not. If you can validate that the short payment was due to only bank charges and not due to any other reason, the bank will consider the gross amount of remittance as having received and will use the same to settle the shipping bill.

FIEO is working with a number of exporters, helping them manage the items pending against their name on the Export Data Processing & Monitoring System (EDPMS), with a fair bit of success. Exporters and Authorised Dealers have also been helped in this regard by the various exemptions and timeline extensions provided by RBI to complete the regularization. FIEO is pursuing certain relaxation in the caution list guidelines as it does not recognize that when exporters are exporting hundred of shipments , few may remain outstanding even beyond 2 years limit.  Exporter is confident that he will realize the payment, thus will not opt for waiver  but bank may think otherwise to grant him extension. Whether you are a large exporter sending out 1000+ shipments in a month, or a small exporter sending out few shipments in a month; it does not matter whether you have an export turnover in US$ billions, or mere thousands – if you have even one single Shipping Bill remaining unsettled in the system, you will be caution listed as your Shipping Bill  crosses the two-year period. There is  need to liberalise the caution-list guidelines to keep exporters out of the caution list based on the number or value of unsettled Shipping Bills remaining below a particular cut-off. This cut-off could be linked to the export performance in the particular year pertaining to the unsettled Shipping Bill, and could be managed by way of ADs approvals to start with.

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