What changed
Previously, BPO companies needed specific RBI permission for remittances when equipment was installed overseas without physical import into India, as they couldn't produce a Bill of Entry. Now, AD Category-I banks can directly allow such remittances based on their commercial judgment and the transaction's bonafides.
What it means for you
This simplifies forex compliance for BPOs setting up International Call Centres abroad, reducing their need for direct RBI approvals. Banks gain more flexibility and responsibility in approving these remittances, but must ensure strict adherence to conditions like government approvals and obtaining a CEO/auditor certificate as import evidence.
What you must do
- Verify that the BPO company has approval from the Ministry of Communications and Information Technology and other relevant authorities for the ICC.
- Assess the remittance request based on commercial judgment, transaction bonafides, and the contract terms.
- Ensure remittances are made directly to the overseas supplier's account.
- Obtain a certificate from the CEO or auditor of the importer confirming import and installation of goods at overseas sites.
- Inform your constituents and customers about this new facility.
Who it affects
AD Category-I banks, BPO companies in India setting up International Call Centres, Overseas equipment suppliers
What if the BPO company doesn't have the required government approval?
The circular mandates that the BPO must have obtained necessary approval from the Ministry of Communications and Information Technology and other authorities. Without it, the remittance cannot be allowed.
How do we document the import if equipment is installed overseas?
Instead of a Bill of Entry, you must obtain a certificate from the CEO or auditor of the importer company confirming that the goods were imported and installed at the overseas site.