Expert opinion · Imports

Import payment timelines: the contract, the Bill of Entry and IDPMS

Short answer. From 1 October 2026 the AD bank follows an import payment within the period in the contract, and may extend it. The regulations set no six-month limit. An advance that does not become an import in that period, or in an extension, is brought back; if it is not, later advances need a standby letter of credit or a guarantee. Only the bank closes the IDPMS entry, once the import has been paid.

The six-month import rule is what many banks still say out of habit. The regulations that took effect on 1 October 2026 point at the contract instead, and leave the extension with the authorised dealer.

CA Abhay JaiswalChartered Accountant · FEMA, RBI reporting and cross-border tax 8 min read Updated Last reviewed
  1. ContractThe period the bank will follow
  2. AdvanceSame bank, unless both are told
  3. Bill of EntryEvidence the goods arrived
  4. Paid and marked offThe bank closes IDPMS

Contract period, then any extension the bank allows

An import, counted from the contract rather than from a single statutory month

Key points

  • Regulation 9 follows the period in the import contract. It does not state a universal number of months.
  • The bank may extend the time for payment if it is satisfied with the reasons.
  • The Master Direction on import of goods and services was superseded on 1 October 2026, so a six-month period in that direction is not restated here as current law.
  • An advance and the later payments use the same AD bank unless the importer tells both banks of a change. Gold and silver cannot be paid in advance.
  • If the goods do not come within the contract period or an extension, the advance is repatriated. If it is not, the next advance needs a standby letter of credit or a guarantee.

The period the regulations actually set

Regulation 9 of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 says the authorised dealer shall monitor its IDPMS entries and follow up with the importer for payment within the period specified in the underlying contract. The dealer may, on a request that cites the reasons, allow more time beyond that period if it is satisfied of the reasons.

There is no "six months from shipment" in this regulation. That period was part of the import practice under the Master Direction on import of goods and services. A.P. (DIR Series) Circular No. 20 of 16 January 2026 superseded that Master Direction from 1 October 2026. A bank may still write a period into its own policy: regulation 19 requires every authorised dealer to keep a documented policy, including timelines, and to disclose the policy and the main points of its procedure on its website. The statutory follow-up, though, is the contract plus any extension the bank grants. Ask the bank which period it is applying, and get an extension in writing before the contract period ends.

Paying against a Bill of Entry

IDPMS holds the outward remittance and the Bill of Entry. The bank marks the entry off after it has ensured that the payment for the import has been made. It can also close an entry at a reduced value, on the importer's request, when it is satisfied of the reasons. Where the Bill of Entry is up to ₹10 lakh, or its equivalent, the entry may be closed on the importer's declaration that the payment has been made in full or otherwise, and those declarations may be sent quarterly for a bulk closure. That ₹10 lakh route is in regulation 4, and it was also the subject of the circular of 1 October 2025 on reconciling small entries.

The regulations do not set a separate number of days for lodging the Bill of Entry with the bank. The bank's own list of documents and timelines, which its policy must include, is the place that period will be written. Give the bank the Bill of Entry number, date and port as soon as customs clears the goods, so the remittance and the bill can be matched. A payment that settles an import invoice is purpose code S0102. An advance against the import is S0101. A mismatch of AD code or of amount is the usual reason an entry stays open after you have paid. The advance-payment guide covers the papers for a payment made before the goods move.

Advances that do not become imports

The bank may permit an advance after it is satisfied the advance is genuine. It may set a threshold of its own, above which the advance needs a standby letter of credit or a guarantee. The regulations do not publish one rupee threshold for every bank. No advance remittance is permitted for the import of gold or silver.

The advance and any later payment go through the same authorised dealer. They may go through another dealer only if the importer has told both dealers. If the importer cannot import within the contract period or the extended period, the advance is repatriated. If it is not repatriated within that period, or if the IDPMS entry has not been closed under regulation 18(1)(j), any future advance requires an unconditional, irrevocable standby letter of credit or a guarantee from an international bank of repute, or a guarantee of an authorised dealer in India issued against the counter-guarantee of such a bank.

Where no import took place and the advance cannot be brought back, the bank may close the IDPMS entry on a request, after it is satisfied of the reasons. Interest on a delayed import payment, if any is payable, must not exceed the all-in-cost ceiling of trade credit under the borrowing and lending regulations.

Set-off, third parties and the bank's charges

The bank may allow export receivables to be set off against import payables of the same overseas buyer or supplier, or of their overseas group or associate companies, inside the export realisation period or an extension. A third party may pay or be paid when the bank is satisfied the transaction is genuine. Neither of those is a way to leave an IDPMS entry open: the bank still updates the entry when it is satisfied.

Regulation 19(3) says the bank shall not levy any charge or penalty on the importer for a regulatory delay or violation by the importer. Charges for the bank's own handling have to be reasonable and proportional. If a bill is disputed, use the escalation in the bank's published procedure; the appeal is decided at a higher level inside the bank.

On the FxLayer platform an import advance stays on the proforma until the Bill of Entry is linked, and the request letter to the bank is prepared from that record. The platform does not close IDPMS. The bank does.

Questions

Not in the regulations in force from 1 October 2026. Regulation 9 follows the period in the contract, and the authorised dealer may extend it. The Master Direction that used to carry the detailed import timelines was superseded on that date. A bank may still apply a period in its own published policy.
The authorised dealer, after it has ensured the import was paid, or on a reduction or an unrealised advance that it accepts. You cannot close it yourself.
Bring the advance back within the contract period or the extension. If that is impossible, ask the bank to close the entry under regulation 18(1)(j). Until it is repatriated or closed, a later advance needs a standby letter of credit or a guarantee.
Only if you tell both banks. Otherwise the advance and the later payments stay with the same authorised dealer.

Sources

This article is general information on Indian foreign exchange and tax rules as they stood on the date shown. It is not legal or tax advice. Rules and limits change; confirm the current position with your AD bank, the relevant RBI Master Direction or your adviser before acting.

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