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Bank realisation certificate is required for goods exported ?

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Sat May 25 2024

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Please tell me under which rules/ provisions under GST law for foreign exchange realisation certificates are required for goods exported ?

Fri May 24 2024

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CBIC vide Notification No 16/2020-Central Tax dated March 23, 2020 has inserted Rule 96B in the CGST Rules which provides the sale proceed in respect of export of goods have to be realised within the time period allowed under Foreign Exchange Management Act. In case the sale proceed is not realised within the prescribed time limit, the refund amount sanctioned to the extent of non-realisation of export proceeds shall have to be refunded along with applicable interest.

It is pertinent to note that, the time limit for realisation of export proceeds in 9 months from the date of exports. With this recent amendment, exporter claiming refund of IGST paid on export of goods or claiming refund of unutilized ITC, in both the case, are now require to submit proof that the sale proceeds are realised within the prescribed time limit.

In case if the exporter does not realise the export proceeds within the prescribed time limit, the amount of refund to the extent of non-realisation of sale proceeds has to be deposited along with the applicable interest within thirty days of the expiry of the said period. If the refund amount is not deposited within thirty days, the amount of refund shall be recovered in accordance with Section 73 or 74 of the CGST Act.

Foreign Exchange Management (Export of Goods and Services) Regulations, 2015

The exporters’ obligations stem from Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 (‘FEMA Regulations’) and Master Directions on Export of Goods and Services (‘Export Master Direction’) issued thereunder.

As per Regulation 9 of the FEMA Regulations, the exporter is under an obligation to realize the export value within the stipulated period i.e., nine months from the date of export, or fifteen months in case where goods are exported to a warehouse established outside India. Otherwise, the exporters are deemed to be in contravention under the FEMA laws. The law expects from the exporters to take all reasonable steps to realize the payment from the foreign importers in due time.

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