Question 1

What is the deadline to realise export proceeds and which regulation governs it?

Accepted Answer

Under FEMA 1999 read with RBI Master Direction on Export of Goods and Services (updated 2023), export proceeds must be realised and repatriated to India within 9 months from the date of shipment for goods (15 months for exports to warehouse establishments abroad). The obligation is on the exporter under Section 8 of FEMA 1999 and Regulation 9 of FEMA (Export of Goods and Services) Regulations 2015.

Question 2

What form must the exporter submit when export proceeds are not realised in time?

Accepted Answer

If proceeds are not realised within the prescribed period, the exporter must report the outstanding export bill to the AD Category-I bank and, if the amount exceeds USD 1 million or the delay exceeds 6 months beyond the due date, an application under the EDPMS (Export Data Processing and Monitoring System) must be submitted. For write-off beyond permissible limits, an application on Form ETX or a request letter with CA certificate is submitted to the AD bank, which may escalate to RBI under A.P. (DIR Series) Circular No. 25 (2014).

Question 3

Can an exporter write off unrealised export proceeds, and what is the limit?

Accepted Answer

Yes. AD Category-I banks are authorised to allow write-off of unrealised export bills up to 10% of the total export proceeds realised during the previous calendar year, subject to conditions in RBI Master Direction on Export of Goods and Services, Para 2.6. Write-off beyond 10% requires prior RBI approval via the AD bank. Supporting documents include a CA certificate confirming the total realisations and the write-off amount.

Question 4

What are the penal consequences of non-realisation of export proceeds under FEMA?

Accepted Answer

Non-realisation beyond the permitted period is a contravention under Section 8 read with Section 13 of FEMA 1999. The penalty can be up to three times the amount involved. The Directorate of Enforcement (ED) can issue a Show Cause Notice and impose a penalty adjudicated under Section 16 of FEMA 1999. Compounding of the contravention is available under Section 15 of FEMA 1999 read with FEMA (Compounding Proceedings) Rules 2000.

Question 5

Does GST apply on export proceeds, and is there any refund mechanism linked to realisation?

Accepted Answer

Exports of goods and services are zero-rated under Section 16 of the IGST Act 2017. Exporters can either export under a Letter of Undertaking (LUT) without paying IGST and claim refund of accumulated ITC under Rule 89 of the CGST Rules 2017, or pay IGST and claim refund under Rule 96. Refund processing under Rule 89 or 96 requires the shipping bill and GST return data to be matched in ICEGATE; delays in BRC (Bank Realisation Certificate) closure in EDPMS can stall the refund workflow since CBIC cross-checks realisation before final sanction.

Fema Export Realisation

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