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Q12: An Indian exporter ships goods to a buyer in France, but fails to collect the payment within the time period prescribed by the RBI. The exporter claims that since the goods have left India, FEMA no longer applies. Is this correct?

A
Yes, FEMA only applies to money leaving India, not money coming in.
B
No, the exporter is liable for a contravention of FEMA, for failing to realize and repatriate export proceeds within the specified time.
C
Yes, this is a private contract dispute, and the government has no role.
D
No, but the only penalty is a small surcharge on GST.
✅ Correct Answer: B
A key objective of FEMA is to ensure that foreign exchange earnings due to India are actually received.
Therefore, regulations mandate that exporters must "realize and repatriate" (bring back) the full value of export proceeds within a specific time frame prescribed by the RBI.
Failure to do so without a valid extension is a violation of FEMA.
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