Requirement of Bank Certificate
Evidencing Receipt of Payment in Freely Convertible Currency for Export to Bhutan for
specified Hydroelectric Projects
[Ref: Circular No. 1058/07/2017-CX
dated 16 August 2017]
Sub: Clarification on requirement of submitting Bank
certificate evidencing receipt of payment in freely convertible currency under Notification
No. 45/2001-CE (NT) dated 26.06.2001 for export to Bhutan for specified Hydroelectric Projects.
References
have been received in the Board seeking clarification on, whether proof of export,
namely Bank certificate evidencing receipt of payment in freely convertible currency
as required under Notification No. 45/2001-CE (NT) dated 26.06.2001 as amended,
for export of commodities to Bhutan would have to be submitted in the case of export
for the following Hydroelectric projects, namely, Kurichu
Hydro Electric Project, Tala Hydro Electric Project, Punatsangechhu-I Hydro Electric Project, Punatsangchhu-II Hydro-Electric Project, Mangdechhu Hydro-Electric Project and Kholongchhu
Hydro Electric Project, which are being constructed with the assistance of Government
of India as part of Bilateral Agreements with Bhutan.
2. The said
hydroelectric projects in Bhutan are being constructed with the aid of the Government
of India as part of bilateral agreements between the Government of India and the
Royal Government of Bhutan. The aid inter
alia is by way of grant or loan by the Government of India and has approval
of the Government of India along with facility for payment in INR for exports
to Bhutan.
3. Further,
Article VII of the India-Bhutan Agreement on Trade, Commerce and Transit provides
that bilateral trade between India and Bhutan shall be in INR or Ngultrums. Since
the exports in case of the aforementioned Hydroelectric projects are in INR, the
condition for submitting Bank certificate evidencing receipt of payment in freely
convertible currency as required under Notification No. 45/2001-CE (NT) dated 26.06.2001
as amended have to be read harmoniously with the Agreement on Trade, Commerce and
Transit as well as decisions of the Government of India.
4. Accordingly,
it is clarified that payment condition relating to currency with regard to export
of commodities to Bhutan for the said Hydroelectric projects shall be considered
to have been discharged in cases where payment has been received in Indian currency
through the banking channels.
5. Any difficulty
in the implementation of this circular may be brought to the notice of the Board.
F.
No.201/08/2010-CX 6