Page 214 - DMGT401Business Environment

Unit 9: Foreign Exchange Management

9.2.3 Export of Goods and Services Notes

Regulations relating to the export of goods and services from India are contained in the Foreign
Exchange Management (Export of Goods and Services) Regulations 2000.
Every exporter of goods or software in physical form or through any other form, either directly
or indirectly, to any place outside India, other than Nepal and Bhutan, shall furnish to the
specified authority, a declaration in one of the forms set out in the Schedule. The declaration
should be submitted with in 21 days from exports.
Such a declaration should be supported by evidence specified, containing true and correct
particulars of the material:
1. the full export value of the goods or software; or
2. if the full export value is not ascertainable at the time of export, the value which the
exporter, having regard to the prevailing market conditions, expects to receive from the
sale of the goods or the software in the overseas market, and affirms in the said declaration
that the full export value of goods or the software has been or will within the specified
period, be paid in the specific manner.

Every exporter of services shall furnish to the RBI or to such other authorities, a declaration in
such form and in such a manner as may be specified containing the true and correct particulars
of material in relation to payment for such services.

9.2.4 Possession and Retention of Foreign Currency

Under FEMA, restrictions prevail only for physical possessions and retention of foreign currency
and not in respect of the foreign currency kept in permissible account with authorized dealers
(banks).
Limits for possessions and retention of foreign currency or foreign Coins:
1. An authorized person can retain and possess foreign currency and coins within the scope
of his authority without any limit;
2. Any person can possess foreign coins without limit;
3. A person residing in India can retain foreign currency notes, bank notes and foreign
currency travellers' cheques up to a certain limit as prescribed by RBI;
4. A person residing in India but not permanently resident therein may possess without
limit, foreign currency in the form of currency notes, bank notes and travelers cheques if
such foreign currency was acquired, held or owned by him when he was resident outside
India and has been brought into India in accordance with the regulation made under the
Act i.e. after making the declaration when required.

9.2.5 Realization and Repatriation of Foreign Exchange

A person residing in India to whom any account of foreign exchange is due or has accrued, shall
take all reasonable steps to realize and repatriate to India such foreign exchange within such
period and in such manner as may be specified by the RBI.

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