Export under bond to Bhutan where payment is in freely convertible currency:

Export under bond to Bhutan where payment is in freely convertible currency, shall be subject to following conditions, namely: –

(i) the importer of the goods in Bhutan, as the case may be, shall make full payment for said goods to the exporter thereof by furnishing Foreign Inward Remittance Certificate for such payment from any bank authorized to deal with foreign exchange by Reserve Bank of India or shall open an irrevocable letter of credit in favour of such exporter in India, before the export of such goods takes place.

(ii) condition (i) shall not apply if the excisable goods other than consumer goods, but excluding motor vehicles, are exported without payment of duty as: –

(a) supplies to projects financed by any United Nations agency, the International Bank for Reconstruction and Development, International Development Association, the Asian Development Bank or any other multilateral agency of like nature;

(b) to all diplomatic missions in Bhutan provided the Indian Embassy or the Ministry of External Affairs certifies that the import is for the personnel of the diplomatic community;

(iii) the exporter shall furnish a bond in the prescribed form before the Assistant/Deputy Commissioner of Central Excise having jurisdiction over the factory, warehouse, or the approved premises or such other officer as authorized by the Board on this behalf, from where the goods are removed for export to Bhutan;

(iv) where the export is against an irrevocable letter of credit, the exporter shall furnish a certificate in the prescribed form from the Reserve Bank of India or any other bank authorized to deal in foreign exchange by the Reserve Bank of India, showing that full payment for the goods has been duly received in freely convertible currency. On receipt of such a certificate and on the satisfaction that the goods have been exported in terms of the bond, the Assistant/Deputy Commissioner of Central Excise or such other officer as authorized by the Board on this behalf shall discharge the exporter of his liabilities under the bond.

(v) Raw materials can be procured without the payment of duty for the manufacture of goods which are for export to Bhutan provided the payment is in freely convertible currency.