2.    It has come to the notice of the Board that certain Custom Houses had refused to allow drawback and other export benefits on export goods which were procured by foreign buyers during their visit to India by making payment in freely convertible foreign currency which was deposited in case with authorised foreign currency which was deposited in cash with authorised foreign exchange dealers; and where such goods were generally exported as tourist baggage.

3.    The issue has been examined in the Board and it is clarified the so long as there is clear linkage between the goods purchased in India and their export on an appropriate shipping bill filed under section 50 of the Customs Act, 1962, prescribed for DBK / DEPB scheme, even it the buyer is a tourist visa holder, and the foreign exchange was declared by him on arrival to the Customs on a Currency Declaration Form, and the same was duly encashed with an authorised dealer, then such goods will have to be treated as export from India. The provisions of the Exchange Control Manual also allow such goods to be exported and paid for, under the regulations framed under FERA, against convertible currency brought into India and converted into Indian repees.

4.    In such cases, the following conditions should be fulfilled.

i)    The appropriate shipping bill should be filed under Section 50 of the Customs Act, 1962 by the Indian Exporter / Seller or his authorised representative and not by the foreign tourist, because the foreign tourist would leave India and it would not be possible to fix responsibility in India for any possible mis-declaration on the shipping bill. However, since a visiting tourist may procure goods for himself or for his company/ principals abroad the consignee in the shipping bill may be the visiting tourist/ buyer or a their party.

ii)    The visiting tourist/ buyer must furnish a copy of Currency Declaration Form submitted to Customs at the time of his arrival in India, at the time of clearance of goods for export or at the time of examination of cargo; simultaneously, relevant encashment document of foreign currency must also be submitted. The foreign exchange may be been deposited in the India Bank by the visiting tourist/ buyer. In such a case, his signature on the Currency Declaration Form and on the Encashment Certificate must match. In another situation, the foreign exchange may also be deposited in the Indian Bank by a representative of the Indian Exporter/ Seller. In such a case it must be possible to link the Currency Declaration Form to Foreign Exchange Encashment certificate and the signature of the visiting tourist/ buyer on the Currency Declaration Form must tally with his signature on his passport.

iii)    A written contract may not be insisted upon. However, in case a written contract is produced to Customs at the time of clearance of goods or at the time of examination of cargo, them the signature of the visiting tourist/ buyer on the contract must tally with his signature on the Currency Declaration form or his passport.

iv)    Export benefits should be allowed only to bonafide exporters, whether manufacturer exporters or merchant exporters. No export benefits should be allowed to packers and forwarders or tour operators. However, export consignments should not be held back for verification whether the consignor is merchant exporter or merely a forwarder or packer. In such cases, provisional export may be allowed immediately, following which necessary verification may be completed by Customs to ascertain the status of the consignor, and export benefits may be permitted only after such verification is completed.