In the course of international trade, there may arise situations where exporters are unable to realize payments from overseas buyers for various reasons. These scenarios necessitate the need to write off the unrealized export bills as per the guidelines issued by the Reserve Bank of India (RBI). Chartered Accountants (CAs) play a crucial role in assisting exporters in drafting applications for the write-off of such bills, ensuring compliance with the regulations and protecting the interests of their clients.
This article provides a step-by-step guide on how Chartered Accountants can draft effective write-off applications, along with a versatile template that can be adapted for various clients.
Key Considerations for Drafting a Write-Off Application
-
Understand the Applicable Guidelines:
- Refer to the RBI Master Direction on Export of Goods & Services, particularly the provisions regarding the write-off of unrealized export bills.
- Ensure that the reasons for the write-off align with the permissible conditions outlined by the RBI.
-
Detail the Specifics of the Bills:
- Accurately list all the relevant bill numbers, shipping details, and amounts to be written off.
- Provide a clear and concise explanation for why each bill is being written off.
-
Supporting Documentation:
- Gather and attach all necessary documents that support the claim for the write-off. This might include certificates of insolvency, auction reports, or other relevant evidence depending on the reason selected.
-
Use Formal and Precise Language:
- The language used in the application should be formal, clear, and free of ambiguity.
- Avoid using any company-specific jargon or abbreviations that might not be universally understood.
-
Client-Specific Adjustments:
- While a general format can be used, always ensure that the application is tailored to the specific circumstances and requirements of your client.
Template for Write-Off Application
Below is a generic template that can be used by Chartered Accountants to draft write-off applications for their clients.
[Client's Company Letterhead]
Date: [Insert Date]
To,
The Branch Head,
[Bank Name]
[Branch Address]
Subject: Application for Write-Off of Unrealized Export Bills
Dear Sir/Madam,
We hereby submit this application for the write-off of unrealized export bills as per paragraph C.23 of the RBI Master Direction on Export of Goods & Services.
Details of the Bills:
| Bill ID |
Shipping Bill No. |
Amount (INR) |
Date of Invoice |
Date of Shipment |
Remarks (Reason for Write-Off) |
| [ID1] |
[SBN1] |
[Amount1] |
[Date1] |
[Shipment Date1] |
[Reason1] |
| [ID2] |
[SBN2] |
[Amount2] |
[Date2] |
[Shipment Date2] |
[Reason2] |
| [ID3] |
[SBN3] |
[Amount3] |
[Date3] |
[Shipment Date3] |
[Reason3] |
Reason for Write-Off:
We request you to write off the above-mentioned bills due to the following reason(s) [select and tick one or more as applicable]:
(a) The overseas buyer has been declared insolvent, and a certificate from the official liquidator indicating that there is no possibility of recovery of export proceeds is attached.
(b) The goods exported have been auctioned or destroyed by the Port/Customs/Health authorities in the importing country. Relevant documentation is attached for reference.
(c) [Any other applicable reason as per RBI guidelines.] must read
https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=9145
Supporting Documents:
Please find enclosed the following documents to support our application:
- [Document Name 1] – [Description]
- [Document Name 2] – [Description]
- [Document Name 3] – [Description]
Declaration:
We declare that the information provided above is true and correct to the best of our knowledge. We request you to process this application at the earliest and confirm the write-off of the mentioned export bills.
Thank you for your attention to this matter.
Yours faithfully,
[Authorized Signatory]
[Name]
[Designation]
[Client's Company Name]
[Contact Information]
[CA’s Firm Name & Logo]
[CA's Address]
[Contact Information: Phone, Email]
Date: [Insert Date]
To,
The Branch Head,
[Bank Name]
[Branch Address]
Subject: Request for Write-Off of Unrealized Export Bills
Dear Sir/Madam,
We, [CA's Firm Name], are writing on behalf of our client, [Client's Company Name], to request the write-off of unrealized export bills in accordance with paragraph C.23 of the RBI Master Direction on Export of Goods & Services.
Details of the Bills:
| Bill ID |
Shipping Bill No. |
Amount (INR) |
Date of Invoice |
Date of Shipment |
Remarks (Reason for Write-Off) |
| [ID1] |
[SBN1] |
[Amount1] |
[Date1] |
[Shipment Date1] |
[Reason1] |
| [ID2] |
[SBN2] |
[Amount2] |
[Date2] |
[Shipment Date2] |
[Reason2] |
| [ID3] |
[SBN3] |
[Amount3] |
[Date3] |
[Shipment Date3] |
[Reason3] |
Reason for Requesting Write-Off:
Our client requests that the above-mentioned bills be considered for write-off due to the following reason(s) [select and tick one or more as applicable]:
(a) The overseas buyer has been declared insolvent, and a certificate from the official liquidator indicating that there is no possibility of recovery of export proceeds is attached.
(b) The goods exported have been auctioned or destroyed by the Port/Customs/Health authorities in the importing country. Relevant documentation is attached for reference.
(c) [Any other applicable reason as per RBI guidelines.] Must Read : https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=9145
Supporting Documents:
Attached are the following documents to support this request:
- [Document Name 1] – [Description]
- [Document Name 2] – [Description]
- [Document Name 3] – [Description]
Declaration:
As Chartered Accountants for [Client's Company Name], we hereby declare that the information provided by our client is true to the best of our knowledge and belief. We request that you consider this application for the write-off of the mentioned export bills in accordance with the applicable guidelines.
Thank you for your attention to this matter.
Yours faithfully,
[CA’s Signature]
[Name of Chartered Accountant]
[CA’s Firm Name]
[CA Membership Number]
[Client’s Company Name]
[Client’s Contact Information]
Notes for the CA:
- Ensure that the firm’s letterhead includes the firm’s name, logo, and contact information.
- The template should be customized with the client’s details and the specific reasons for the write-off request.
- Attach all necessary supporting documents when submitting the application to the bank.
- Retain a copy of the signed application and all supporting documents for your record
This template provides a structured and compliant way for Chartered Accountants to assist their clients in requesting the write-off of unrealized export bills while ensuring the proper authorities are approached for final approval.
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