GST Dept asking for RBI approval of export write off

Hi Jayanta,

This is a tricky but fairly common issue. Here's a breakdown to help you:

Situation:

• Your bank (Authorized Dealer - AD) has given a write-off approval for outstanding export proceeds.

• GST Department, however, is insisting on seeing the actual RBI approval for this write-off, not just the bank’s certificate.

Can GST Dept force exporter to produce RBI approval copy?

Legally, the RBI is the competent authority for foreign exchange regulation, and banks act as intermediaries authorized by RBI.

• If RBI rules require an exporter to obtain explicit approval for write-off, the department can ask for proof of compliance.

• But practically, the bank's certificate (issued by the AD) usually confirms RBI compliance because banks cannot act beyond their powers.

What can you do?

1. Request the bank to provide a copy of RBI approval or official communication:
   Sometimes, banks may have the approval on file or can obtain it from RBI on your behalf.

2. Check the RBI circular and AD guidelines carefully:
   There may be cases where AD approval is sufficient without separate RBI approval for write-off.

3. Provide the bank’s certificate along with the RBI circular:
   Show the circular stating the bank is authorized to approve write-off to justify your position.

4. Legal / Professional Opinion:
   If GST department still insists, you may get a professional/legal opinion stating that AD certificate suffices under RBI rules.

5. Escalate:
   If necessary, escalate the matter through legal channels or GST appellate authorities.

In summary:

• The bank’s AD certificate is generally accepted as proof of compliance with RBI rules.

• The GST department can ask for RBI approval but may not have full grounds if AD approval is adequate under RBI regulations.

• Best practice is to coordinate with your bank to get all possible supporting documentation.