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Circular No. 1058/07/2017-CX

F. No.201/08/2010-CX 6
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

New Delhi, the 16
th
August, 2017
To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners of
Central Tax & Central Excise (All)

Web-master, CBEC

Madam/Sir,

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– reg.

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.

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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. Hindi version will follow.


(Shankar Prasad Sarma)
Under Secretary to the Government of India
circulars no 1058 07 2017 cx | iKargos