In Foreign Exchange,
of the Authorized Dealers is invited F.E.
Circular No. 18 dated the 17th February, 1994,
on the above subject.
2. In suppression
of the instructions constrained in the above F.E. Circular,
it has been decided to permit the Authorized Dealers to
open letters of credit/register the contracts (the term
"contract" includes indents/proforma invoices/purchase
orders) against proforma invoices/order issued by the foreign
suppliers or indents issued by indentures duly registered
as importers under Registration (Importers and Exporters)
Order, 1993, provided the indents bear the registration
number of the indenture concerned.
3. The procedure
for imports by public sector agencies which are provided
foreign exchange allocation to meet their import requirement
will be the same as outlined in F.E.
Circular No. 54 dated the 11th July, 1993.
4. In terms
of para 2.5 of the Import Policy Order issued by the Ministry
of Commerce vide Notification No.736(I)/94 dated the 26th
July, 1994, letters of credit can be opened for a period
upto 12 months while in respect of machinery and mail-work
which are required to be specifically fabricated and the
period of manufacture is more than 12 months, this period
is upto 24th months. The condition of extension
of letters of credit within the validity of the letter of
credit imposed vide F.E. Circular
No. 100 dated that 21st December, 1992 is
hereby waived in so far as extensions within the initial
12/24 months period are concerned. The Import letters of
credit beyond the initial period of 12/24 month mentioned
above for a further period of 24 months/36 months in the
case of items other than machinery / mill-work and "machinery
and mill-work respectively provided request for extension
is received within the initial period of 12/24 months, on
payment of revalidation charge @ 0.25% for each 6 monthly
period on the un-utilized value of letters of credit. The
revalidation charges will payable for the period commencing
after the expiry of initial 12/24 months period mentioned
above. The goods will be released by the Custom authorities
in cases where import has been made within the initial 12/24
months period without any certificate from the L/C-opening
bank while release of goods imported during the extended
period will be subject to production of bank certificate
in the format attached hereto as Annexure
bring the above to the notice of your constituents.