Page 54 - Banking Finance December 2022

RBI CIRCULAR

the purpose of financing its participation through and are without prejudice to permissions/ approvals, if
Redeemable Preference Shares in public sector entities any, required under any other law.
to implement the construction of Phase-IV of the Metro
Express Project in Mauritius. The export of eligible Agency Commission for Direct Tax

goods and services from India for the purpose of the
collection under TIN 2.0 regime
construction of Phase-IV of the Metro Express Project
November 14, 2022
in Mauritius, as defined under the agreement, would
be allowed subject to their eligibility under the Foreign
1. Please refer to Para 21 of our Master Circular on
Trade Policy of the Government of India and whose
Conduct of Government Business by Agency Banks -
purchase may be agreed to be financed by the Exim
Payment of Agency Commission dated April 1, 2022
Bank under this agreement. Out of the total credit by
related to claiming of agency commission.
Exim Bank under the agreement, goods, works and
services of the value of at least 75 per cent of the 2. After implementation of TIN 2.0 regime for collection
contract price shall be supplied by the seller from India, of direct taxes, it has been decided to modify
and the remaining 25 per cent of goods and services paragraph 21 of the captioned Master Circular. The
may be procured by the seller for the purpose of the modified paragraph 21 will read as follows:
eligible contract from outside India. “Agency banks are required to submit their claims for
2. The Agreement under the LoC is effective from agency commission in the prescribed format to CAS
November 07, 2022. Under the LoC, the terminal Nagpur in respect of Central government transactions
utilization period is 48 months from the scheduled and the respective Regional Office of Reserve Bank of
completion date of the project. India for State government transactions. However,
agency commission claims with respect to GST receipt
3. Shipments under the LoC shall be declared in Export
transactions and transactions related to direct tax
Declaration Form/Shipping Bill as per instructions issued
collection under TIN 2.0 regime will be settled at
by the Reserve Bank from time to time.
Mumbai Regional Office of Reserve Bank of India only
4. No agency commission is payable for export under the
and accordingly all agency banks, authorized to collect
above LoC. However, if required, the exporter may use
GST and direct tax collection under TIN 2.0, are advised
his own resources or utilize balances in his Exchange
to submit their agency commission claims pertaining
Earners’ Foreign Currency Account for payment of
to the respective receipt transactions at Mumbai
commission in free foreign exchange. Authorised Dealer
Regional Office only. The agency commission for
(AD) Category- I banks may allow such remittance after
transactions related to direct tax under OLTAS will be
realization of full eligible value of export subject to
continued to be settled at CAS, Nagpur, RBI. The
compliance with the extant instructions for payment
formats for claiming agency commission for all agency
of agency commission.
banks and separate and distinctive set of certificates
5. AD Category – I banks may bring the contents of this to be signed by the branch officials and Chartered
circular to the notice of their exporter constituents and Accountants or Cost Accountants are given in Annex 2,
advise them to obtain complete details of the LoC from Annex 2A and Annex 2B respectively. These certificates
the Exim Bank’s office at Centre One, Floor 21, World would be in addition to the usual Certificate from ED /
Trade Centre Complex, Cuffe Parade, Mumbai 400 005 CGM (in charge of government business) to the effect
or from their website www.eximbankindia.in that there are no pension arrears to be credited / delays
in crediting regular pension / arrears thereof.”
6. The directions contained in this circular have been
issued under section 10(4) and 11(1) of the Foreign 3. All other instructions of the said Master Circular remain
Exchange Management Act (FEMA), 1999 (42 of 1999) unchanged.

54 | 2022 | DECEMBER | BANKING FINANCE