Time Limit for Import Remittance

The remittance against imports should be completed not later than 6 months from the date of shipment. Accordingly, deferred payment arrangements involving payments beyond 6months are not permissible without approval of RBI/Gol. However, no objection to importers withholding a small part of the cost of the goods not exceeding 15 percent towards guarantee of performance etc. Authorised dealers may make remittances of amounts so withheld provided the earlier remittance had been made through them. No interest payment should be allowed to be remitted on these withheld amounts.

Sometimes, settlement of import dues may be delayed due to disputes, financial difficulties, Authorised dealers are permitted by the RBI to make remittances in such cases even if the period of 6 months expires, provided-
Authorised dealer is satisfied about the bona fides of the circumstances leading to the delay in payment. No payment of interest is involved for the additional period.

In case, where the overseas supplier insists on payment of interest, it may be allowed in accordance with the provisions contained in para 7A.12 up to a maximum period of 60 days beyond 180days from the date of shipment provided the import bill is paid within that period. Remittances against import of books may be allowed without restrictions as to time-limit, providedno interest payment is involved nor has the importer forgone any part of the discount/rebate normally allowed to importers towards compensation for delay in settlement of dues.

Interest remittance on import bills-interest accrued on usance bills under 'normal interest clause' or of overdue interest paid on sight bills for a period. not exceeding 6 months from the date of shipment in respect of imports without prior approval of RBI. In case of pre-payment of usance import bills, remittances may be made only after reducing the proportionate interest for the unexpired portion of usance at the rate at which the interest has been claimed or the 'prime' rate (or its equivalent) of the country in the currency of which the goods are invoiced, whichever is higher. Where interest is not separately claimed remittances may be allowed after deducting the proportionate interest for the unexpired portion of usance at the prevalling 'prime'.

However, interest under normal interest clause would mean interest at the prime rate (or its equivalent) of the country in the currency of which the goods are invoiced.