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Square off of amount payable to foreign creditors

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Hemkumar

Hemkumar

(Querist)
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12 August 2021 Dear Sir
We are SEZ Unit in Gujarat, during FY 2020-21 we have write off Rs 40 lakhs amounts payable to our foreign creditor in dollar. Whether this action makes violation of any custom provisions ??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 August 2021 AD Category I banks may close the BoE for such import transactions where write off of import payable is on account of quality issues; short shipment or destruction of goods by the port / Customs / health authorities in terms of extant guidelines on the matter subject to submission of satisfactory documentation by the importer irrespective of the amount involved. AD Bank shall settle and close ORM/BoE with appropriate “Adjustment Indicator” in IDPMS.

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