In a recent email from PayPal, they claim to say that they have sorted out some issues with RBI and will begin remitting to India very soon. However, this remittance will be only for those who have an export code. Now, PayPal has not really clarified much about the “Export Code”, but I assume that it is Importer Exporter Code (IEC) which is issued by the Government of India, for people who Import or Export goods or services outside India.
As part of the changes, you will be required to fill out a new field entitled ‘Export Code’ when you request a withdrawal. This information is required under the current laws of India in order to identify the nature of cross-border merchant transactions. Moving forward, the RBI has told us that PayPal needs specific approvals to allow personal remittances to India, which we currently do not have. Until we get these approvals, personal payments into India will remain suspended.
Getting an IEC code is not an easy option, but can get this done through an agent or directly approaching the nearest Director General of Foreign Trade. Now the question is whether I am doing a foreign trade?
Let’s take a scenario where I develop web contents and publish the same online. I have been paid by advertisers for the advertisements or by the users for accessing it. Though I am not exporting anything, but offering a web based service. The subscribers can be from India or from anywhere in the world. For getting payments of this service, why should I get an export / Import license?
Many of the professional bloggers are not into export / import business, but just blogging.
There are only three reasons which came upto my thoughts.
- National Security
- Tax evasion
- Anti-Money Laundering
But how is this different from Payments from Middle East or NRI worldwide? What about Western Union? How is it accounted? While the PayPal payments are from the PayPal account to a Verified bank account in India, Western Union is directly to the end user.
It would have been better for the 90% of Indian PayPal users, if RBI allows to have personal withdrawals based on the PAN card.
What are your thoughts on this?