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CA Intermediate · Corporate and Other Laws · The Foreign Exchange Management Act, 1999

Kaveri Textiles Ltd. exported goods worth USD 50,000 to a buyer in Dubai. The export proceeds were not realised within the prescribed time. Under FEMA, which statement best describes the legal position regarding the duty of an exporter?

The exporter must take all reasonable steps to realise and repatriate the full export value to India within the period and manner specified by the RBI. The duty rests on the exporter, not just the bank, and does not depend on the buyer's nationality or a value threshold.

  1. AThe exporter must take all reasonable steps to realise and repatriate the export proceeds to India within the period prescribed by RBICorrect
  2. BThe exporter may retain the proceeds abroad indefinitely if the buyer is a foreign company
  3. COnly the authorised dealer, not the exporter, is responsible for realisation of proceeds
  4. DRealisation is needed only for exports above USD 1,000,000

Explanation

FEMA requires an exporter to furnish export information and to take all reasonable steps to realise and repatriate to India the full export value within the period and manner specified by RBI. The other options misstate who is responsible or add thresholds not in the rule.

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