What changed
This was a master circular consolidating all existing RBI instructions on import of goods and services into a single document. It was issued with a sunset clause of one year, meaning it would be replaced by an updated version on July 1, 2008.
What it means for you
Banks must ensure all import transactions comply with FEMA, DGFT policies, and KYC norms. The circular provides operational clarity on advance remittances, time limits for payment settlement, and documentation requirements, reducing ambiguity for AD banks.
What you must do
- Ensure all import payments adhere to FEMA and current Foreign Trade Policy.
- Follow KYC guidelines strictly for all import-related transactions.
- Maintain proper documentation and evidence of import for all remittances.
- Adhere to time limits for settlement of import payments as specified.
Who it affects
All Authorised Dealer banks handling import payments, Importers and their constituents, Banks dealing with foreign exchange transactions
What is the sunset clause in this circular?
The circular had a one-year sunset clause, meaning it would stand withdrawn on July 1, 2008, and be replaced by an updated master circular.
What is the minimum amount for using Form A-1?
Applications for payments exceeding USD 500 or its equivalent require Form A-1.
Which regulations govern import of goods and services?
Imports are governed by Section 5 of FEMA 1999, read with Notification GSR 381(E) dated May 3, 2000, and DGFT policies.