FEMA & INTERNATIONAL TAX

FEMA - Regulations on Export of goods and services:

Export realization through Online Payment Gateway Service Providers (OPGSPs)

With ever increasing use of e-commerce platform and online financial transactions across globe, it has become quite easy and is a regular norm to use online payment gateways for purchase of goods and services through the use of Online Payment Gateway service providers. Reserve Bank has therefore come out with regulations governing these payments.

AD Category I banks have been allowed to offer services for realization of export related remittances by entering into standing arrangements with OPGSPs subject to the conditions as mentioned below:

  • AD Category I Banks offering such facility shall carry out a Due Diligence of the OPGSPs.
  • This facility shall only be available for export of goods and services of the value not exceeding US$ 10,000
  • AD bank shall open a NOSTRO collection account for receipt of the export related payments through such arrangement;
  • Exporters availing such facility shall open a NOTIONAL account with OPGSPs. All the receipts in this notional account through such arrangement shall be automatically swept and pooled into the NOSTRO collection account opened by the AD bank. From the NOSTRO collection account, the funds shall immediately, and in no case later than SEVEN days from the date of credit be transferred to Exporters account with the bank;
  • Permissible debits in NOSTRO collection account are:

    • Credit to exporters account;
    • Fee/commission to the OPGSPs as per predetermined rates/frequency/ arrangement;
    • Where exporter has failed in discharging his obligation under the sale contract, charge back to the importer.
  • It is advisable that separate NOSTRO collection accounts shall be kept by the bank for each of the OPGSPs. Otherwise, the bank should be able to delineate the transactions for each OPGSPs.
  • The banks shall satisfy themselves as to the bona-fides of the transactions.
  • Resolution of all the payment related complaints shall remain sole responsibility of concerned OPGSPs
  • The banks shall make regular reporting as regards each such arrangements and NOSTRO account transactions to the RBI.

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