Chapter 1

Introduction

Notification

1.1

In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March, 2014, except DEPB scheme, which shall continue to be operative till 31st December, 2010 or till a replacement scheme is announced, whichever is earlier.

Objective

1.2

Objective is to implement provisions of FT (D&R) Act, Rules and Orders made there under and FTP (2009-14) by laying down simple, transparent and EDI compatible procedures, which are easy to comply with and administer, for efficacious management of foreign trade.

Definition

1.3

For purpose of this Handbook, definitions and glossary contained in FT (D&R) Act, Rules and Orders made there under and the FTP (2009-14) shall apply.


Chapter 2

General Provisions Regarding Exports and Imports

Policy

2.1

Policy relating to general provisions regarding exports and imports is given in Chapter-2 of FTP.

Countries of Imports / Exports

2.2

Unless otherwise specifically provided, import / export will be valid from / to any country. Above provisions shall, however, be subject to all conditionality, or requirement of Authorisation as required under Schedule I and / or Schedule II of ITC (HS).

Above provisions shall, however, be subject to all conditionality, or requirement of Authorisation as required under Schedule I and / or Schedule II of ITC (HS).

Application Fee

2.3

The scale of fee, mode of payment, procedure for refund of fee and categories of persons exempted from payment of fee are contained in Appendix-21B.

Territorial Jurisdiction of Regional Authorities (RA)

2.4

Every application, unless otherwise specified, shall be submitted to RA concerned, as indicated in Appendix-1 of HBP v1.

Filing of Application

2.5

An incomplete or unauthorised application is liable to be rejected giving specific reason for rejection. In case of manual applications, applicant would furnish a soft copy of the application in MS word format.

Profile of Importer/ Exporter

2.6

Each importer / exporter shall be required to file importer/exporter profile once with RA in ANF 1. RA shall enter such information in database so as to dispense with need for asking information again. In case of any change in information given in ANF 1, importer / exporter shall intimate same to RA.

Self Addressed Stamped Envelope

2.7

Applicant shall furnish a self addressed envelope of 40x15 cm with required postal stamp affixed, for all documents required to be sent by Speed Post.

IEC No: Exempted Categories

2.8

Following categories of importers or exporters are exempted from Categories obtaining IEC number:

(i) Importers covered by clause 3(1) [except sub-clauses (e) and (l)] and exporters covered by clause 3(2) [except sub-clauses (i) and (k)] of Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.

(ii) Ministries / Departments of Central or State Government.

(iii) Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.

(iv) Persons importing / exporting goods from / to Nepal, Myanmar through Indo-Myanmar border areas and China (through Gunji, Namgaya Shipkila and Nathula ports), provided CIF value of a single consignment does not exceed Indian Rs.25, 000. In case of Nathula port, the applicable value ceiling will be Rs. 100,000.

However, exemption from obtaining IEC number shall not be applicable for export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of ITC (HS) except in case of exports by category (ii) above.

(v) Following permanent IEC numbers shall be used by non-commercial PSUs and categories of importers / exporters mentioned against them for import / export purposes:

S.No

Code Number

Categories of Importers / Exporters

1

0100000011

All Ministries / Departments of Central Government and agencies wholly or partially owned by them.

2

0100000029

All Ministries / Departments of any State Government and agencies wholly or partially owned by them.

3

0100000037

Diplomatic personnel, Counselor officers in India and officials of UNO and its specialised agencies.

4

0100000045

Indians returning from / going abroad and claiming benefit under Baggage Rules.

5

0100000053

Persons / Institutions / Hospitals importing or exporting goods for personnel use, not connected with trade or manufacture or agriculture.

6

0100000061

Persons importing / exporting goods from /to Nepal

7

0100000070

Persons importing / exporting goods from /to Myanmar through Indo-Myanmar border areas

8

0100000088

Ford Foundation

9

0100000096

Importers importing goods for display or use in fairs / exhibitions or similar events under provisions of ATA carnet This IEC number can also be used by importers importing for exhibitions/fairs as per Para 2.29 of HBPv1.

10

0100000100

Director, National Blood Group Reference Laboratory, Bombay or their authorized offices.

11

0100000126

Individuals / Charitable Institution /Registered NGOs importing goods, which have been exempted from Customs duty under Notification issued by Ministry of Finance for bonafide use by victims affected by natural calamity.

12

0100000134

Persons importing / exporting permissible goods as notified from time to time, from / to China through Gunji, Namgaya Shipkila and Nathula ports, subject to value ceilings of single consignment as given in Para 2.8(iv) above.

13

0100000169

Non-commercial imports and exports by entities who have been authorized by Reserve Bank of India.

Application for Grant of IEC Number

2.9

An application for grant of IEC Number shall be made by Registered Office, in case of companies and Head Office in case of proprietorship concerns, partnership concerns and HUFs, of applicant, except EOUs and SEZ units, to concerned RA in ANF2A with documents prescribed therein. Only one IEC would be issued / allowed against a single PAN number.

The application (ANF 2 A) for issuance of fresh IEC or modification of IEC shall indicate the name and designation of the person whose photograph has been affixed on the Bank Certificate. A photograph of the person alongwith his/her name and designation shall also be affixed on the IEC No. to be issued (Appendix 18 B).

IEC Format and Statements

2.9.1

RA concerned shall issue an IEC number in prescribed format (Appendix-18B). A copy of such IEC number shall be endorsed to concerned banker (as per details given in ANF 2A).

A consolidated statement (in Appendix 18 C) of IEC numbers issued by RA shall be sent to Exchange Control Department of RBI as given in Appendix-18D.

Validity of IEC No.

2.9.2

An IEC number allotted to an applicant shall be valid for all its branches / divisions / units / factories.

Duplicate Copy of IEC Number

2.9.3

Where an IEC Number is lost or misplaced, issuing authority may consider requests for grant of a duplicate copy of IEC number, on an affidavit.

Surrender of IEC Number

2.9.4

If an IEC holder does not wish to operate allotted IEC number, he may surrender same by informing issuing authority. On receipt of such intimation, issuing authority shall immediately cancel it and electronically transmit it to DGFT and Customs authorities.

Application for Import and Export of Restricted Items

2.10

An application for grant of an Authorisation for import or export of items mentioned as restricted in ITC (HS) may be made to RA as specified under relevant Chapters of this Handbook.

Imports under Indo-US Memorandum of Understanding

2.11

Import of specified capital goods, raw materials and components, from United States of America (USA) is subject to US Export Control Regulations. US suppliers of such items are required to obtain an export authorisation based on import certificate issued in India. The following are designated Import Certificate Issuing Authorities (ICIA):

(i) Department of Electronics (DoE), for computer and computer based systems;

(ii) Department of Industrial Policy and Promotion (DIPP), Technical Support Wing (TSW), for organised sector units registered under it, except for computers and computer based systems;

(iii) Ministry of Defence (MoD), for defence related items;

(iv) DGFT for small scale industries and entities not covered above as well as on behalf of any of the above;

(v) Embassy of India, Washington, DC, on behalf of any of the above.

A request for an import certificate shall be made in ANF 2C. Import certificate in Appendix-31 may be issued by ICIA directly to importer with a copy to

(i) Ministry of External Affairs (MEA) (AMS Section), New Delhi,

(ii) DoE, New Delhi; and

(iii) DGFT. However, this import certificate will not be regarded as a substitute for an import authorisation in respect of items mentioned as restricted in ITC (HS) and an import authorisation will have to be obtained for such items.

2.11A

In case of import of any freely importable item in India, if a foreign Government insists on certification of end user of the item, before permitting export of the same from their country, RA may issue such certificates as per Appendix 31A of HBPv1. The certificate shall be issued based on application made under ANF 2C-1 along with documents prescribed therein.

Validity of Import Licence/Certificate/ Authorisation/Permissions/ CCPs/Export licence

2.12

Validity of import / export Authorisation from date of issue shall be as follows, unless specified otherwise:

(i) Advance Authorisation / DFIA (including Advance Authorisation for annual requirement, and Replenishment Authorisation for Gem & Jewellery per Chapter- 4 of FTP)

24 months

(ii) a For Zero duty EPCG Authorisations (other than spares)

36 months

(ii) b For 3% EPCG Authorisations (other than spares)

36 months

(iii) EPCG Authorisation for Spares, refractories, catalyst and consumables

Co-terminus with EOP of EPCG Authorisation

(iv) Others including CCP and DEPB, unless otherwise specified

24 months

(v) Advance Authorisation / DFIA for deemed export (including Advance Authorisation for annual requirement)

24 months or Co-terminus with contracted duration of project execution, whichever is later.

(vi) Export Licence / Authorisation

12 months (However, EFC may decide to issue Export Authorisation for a longer duration in case of R&D studies based on recommendation of technical authority)

(vi) Export Licence / Authorisation

12 months (However, EFC may decide to issue Export Authorisation for a longer duration in case of R&D studies based on recommendation of technical authority)

2.12.1

Where an Authorisation expires during the month, such Authorisation shall be deemed to be valid until last day of concerned month. This proviso would be applicable even for a revalidated Authorisation.

2.12.2

Validity of an import Authorisation is decided with reference to date of shipment / dispatch of goods from supplying country as given in Paragraph 9.11 A of HBP v1 and not the date of arrival of goods at an Indian port.

2.12.3

Provisions of paragraph 2.12.1 above shall not be applicable to DEPB, Service Providers under SFIS, VKGUY and duty credit scrips issued under FMS and FPS, which are duty credit entitlements and must be valid on date on which actual debit of duty is made.

2.12.4

Similarly, EOP shall be deemed to be valid until month end.

Revalidation of Import Export Licence / Certificate / Authorisation Permissions

2.13

RA concerned may revalidate import Authorisation on merits, for six months from date of expiry of validity. However, Export Licence may only be revalidated by RA concerned on recommendation of DGFT for six months at a time and maximum upto 12 months from date of expiry of validity.

2.13.1

However, revalidation of freely transferable Authorisation / Duty credit scrips and stock and sale Authorisation shall not be permitted unless validity has expired while in custody of Customs authority / RA. [Paragraph 2.13.1 substituted by 39-PN(RE)/03.02.2010].

2.13.2

Such revalidation (under 2.13 and 2.13.1 above) would be permitted under specific orders of Head of concerned Office and would be maximum up to extent of custody period.

2.13.2A

For the purpose of re-credit of 4% Special Additional Duty (SAD) of customs in the freely transferable Duty credit scrips (including DEPB), revalidation for a maximum period of 6 months from the date of endorsement, shall be allowed in case the balance period of validity is less than 6 months on the date of re-credit. [Para2.13.2A inserted by 38-PN(RE)/03.02.2010].

2.13.3

An application for revalidation (including for restricted items), may be made to RA concerned. RA would consider such application as per government rules / notifications. Where DGFT is concerned authority, original application shall be submitted to RA concerned and self-attested copy of same shall be submitted to DGFT.

Duplicate Copies of Export-Import Licence / Certificate / Authorisation / Permissions / CCPs

2.14

Where an Authorisation is lost or misplaced, an application for issue of a duplicate may be made along with an affidavit, as given in Appendix-24, to issuing RA. RA concerned may, on merits to be recorded, issue a duplicate after issuing an order for cancellation of original and informing customs authority where original was registered.

2.15

Duplicate copy of freely transferable Authorisation, may be issued against an application accompanied with following documents:

a. An application with fee equivalent to 10% of duty saved or duty credit (of unutilized balance).

b. A copy of FIR reporting loss.

c. Original affidavit on notorised stamp paper.

d. Indemnity bond on a stamp paper undertaking to indemnify revenue loss, which may be caused on account of issue of such duplicate.

2.15.1

When an Authorisation has been lost by a Government agency and a proof to this effect is submitted, documents at serial nos. (a) to (d) above shall not be required.

In such cases, revalidation shall be for six months from date of endorsement.

2.15.2

RA concerned shall obtain a report regarding utilization of such Authorisation from Custom authority at port of registration before issuing duplicate, for balance unutilized.

2.15.3

Validity of duplicate Authorisation shall be co-terminus with original period. No request shall be entertained if validity has expired.

2.15.4

Provision of paragraph 2.15.2 and 2.15.3 shall be applicable both for cases covered under paragraph 2.14 and 2.15.

Identity Cards

2.16

To facilitate collection of Authorisation and other documents from DGFT Head Quarters and RA, identity cards (as in Appendix 20B, valid for 3 years) may be issued to proprietor/partners / directors and authorised employees (not more than three), of importers and exporters, upon application as in Appendix 20A.

In addition, Identity Card may also be issued by the applicant firms on their letterhead to the concerned employees. These Identity Cards may be countersigned by the concerned RA.

However, application for identity card in Appendix 20B will require to be made by the applicant and all other parameters would need to be met. However, in case of limited companies, RA may approve allotment of more than three identity cards per company.

In case of loss of an identity card, a duplicate card may be issued on the basis of an affidavit. For common directors / partners, of a group company or in any other similar cases, RA may issue multiple identity cards after recording reasons in writing.

Interviews with authorized Officers

2.17

Officers may grant interview at their discretion to authorized representative of importer / exporter. Interviews / clarifications may also be sought through E-mails.

Export of Items Reserved for SSI Sector

2.18

Units other than small scale units are permitted to expand or create new capacities in respect of items reserved for small scale sector, subject to condition that they obtain an Industrial licence under the Industries (Development and Regulation) Act, 1951, with export obligation as may be specified.

Such licensee is required to furnish a LUT to RA and DGFT in this regard. DGFT / RA concerned shall monitor export obligation.

Warehousing Facility

2.19

Public / Private Customs Bonded Warehouses may be set up in DTA as per Chapter-IX of Customs Act, 1962, to import items in terms of paragraph 2.28 of FTP.

On receipt of goods, such warehouses shall keep these goods for one year without payment of applicable customs duties. Goods can be cleared against Bill of Entry for home consumption, on payment of applicable custom duty and on submission of Authorisation wherever required, after an order for clearance of such goods for home consumption is issued by competent customs authorities.

In case of clearance against duty free categories / concessional duty categories, exemption / concession from duty shall be, allowed.

In case of clearance against DEPB and other duty credit scrips customs duty on imports may be adjusted.

Goods can be re-exported without payment of customs duty provided (i) a shipping bill or a bill of export is presented in respect of such goods; and (ii) order for export of such goods has been made by competent customs authorities.

Execution of Bank Guarantee / Legal Undertaking for Advance Authorisation / DFIA and EPCG Authorisation

2.20

Before clearance of goods through Customs, Authorisation holder shall execute a BG/LUT with customs authorities. In such cases, RA shall endorse the following condition on the licence/ Authorisation:

"BG / LUT as applicable, to be executed with concerned Customs Authorities.”

In case of indigenous sourcing, Authorisation holder shall furnish BG / LUT to RA as per Customs Circular No.58/2004 dated 31.10.04, as amended from time to time.

In case, the firm has already executed BG / LUT for the full value of the licence/ certificate / authorization / permission (covering the items indigenously procured) to the Customs and furnishes proof of the same to Regional Authority (RA), no BG / LUT shall be required to be executed with the RA. The RA concerned shall endorse on the authorization that the Customs Authority shall release / redeem BG / LUT only after receipt of NOC or EODC from the RA concerned. RA shall endorse a copy of the same along with a forwarding letter to the Customs Authority at the Port of registration for their information and record.

Execution of Bank Guarantee/Legal Undertaking for DEPB/Freely transferable schemes under Chapter 3

2.20A

At the time of filing application for scrip(s) under DEPB Scheme/freely transferable incentive Scheme under Chapter 3 of FTP, without Bank Realisation Certificate (BRC), the applicant shall execute BG/LUT (as per Customs Circular no. 58/2004) with the RA as per Appendix 25C or Appendix 25D respectively.

Corporate Guarantee

2.20.1

A status holder or a PSU may also submit Corporate Guarantee in lieu of Bank Guarantee/LUT in terms of the provisions of relevant Customs Circular in this regard. In case of a group company, if one company of a Group is a status holder, Corporate Guarantee may be given for another company by this company, which is not a status holder.

Certificate of Origin(CoO)

2.21

Certificate of Origin (CoO) is an instrument to establish evidence on origin of goods imported into any country. There are two categories of CoO viz. (1) Preferential and (2) Non preferential.

Preferential

2.21.1

Free Trade Agreement. These arrangements / agreements prescribe Rules of Origin which have to be met for exports to be eligible for tariff preference.

Authorised agencies shall provide services relating to issue of CoO, including details regarding rules of origin, list of items covered by an agreement, extent of tariff preference, verification and certification of eligibility. Export Inspection Council (EIC) is agency authorised to print blank certificates. Authorised agencies may charge a fee, as approved by DoC, for services rendered.

Generalised System of Preferences (GSP)

(a) GSP is a non-contractual instrument by which industrialized (developed) countries unilaterally and based on non-reciprocity extend tariff concessions to developing countries. Following countries extend tariff preferences under their GSP Scheme:

(i) United States

(ii) New Zealand

(iii) Belarus

(iv) European Union,

(v) Japan

(vi) Russia

(vii) Canada

(viii) Norway

(ix) Australia (only to LDCs)

(x) Switzerland

(xi) Bulgaria

 

GSP schemes of these countries detail sectors / products and tariff lines under which benefits are available, including conditions and procedures governing benefits. These schemes are renewed and modified from time to time. Normally Customs of GSP offering countries require information in Form ‘A’ (prescribed for GSP Rules Of Origin) duly filled by exporters of beneficiary countries and certified by authorised agencies. List of agencies authorised to issue GSP CoO is given in Appendix-4A.

Global System of Trade Preference (GSTP)

(b) Under agreement establishing GSTP, tariff concessions are exchanged among developing countries, who have signed agreement. Presently, 46 countries are members of GSTP and India has exchanged tariff concessions with 12 countries on a limited number of products. EIC is sole agency authorised to issue CoO under GSTP.

SAARC Preferential Trading Agreement (SAPTA)

(c) SAPTA was signed by seven SAARC members namely India, Pakistan, Nepal, Bhutan, Bangladesh, Sri Lanka and Maldives in 1993 and came into operation in 1995. Four rounds of trade negotiations have been completed and more than 3000 tariff lines are under tariff concessions among SAARC countries. List of agencies, authorised to issue CoO under SAPTA are notified under Appendix – 4B.

Asia-Pacific Trade Agreement (APTA)

(d) APTA is a preferential trading arrangement designed to liberalise and expand trade in goods progressively in Economic and Social Commission for Asia and Pacific (ESCAP) region through liberalization of tariff and nontariff barriers. At present, Bangladesh, Sri Lanka, South Korea, India and China are exchanging tariff concessions under APTA. Agencies authorised to issue CoO under APTA are listed in Appendix – 4B.

India-Sri Lanka Free Trade Agreement (ISLFTA)

(e) Free Trade Agreement (FTA) between India and Sri Lanka was signed on 20.12.1998 and was operationalised in March, 2000 following notification of required Customs tariff concessions by Government of Sri Lanka and India. EIC is sole agency to issue CoO under ISLFTA.

India-Afghanistan Preferential Trade Agreement

(f) A Preferential Trade Agreement between Transitional Islamic State of Afghanistan and Republic of India was signed on 6.3.2003 and was operationalised with issuance of Customs Notification No 76/2003 dated 13.5.2003. EIC is sole agency to issue CoO under India Afghanistan Preferential Trade Agreement.

Indo-Thailand Framework Agreement for Free Trade Area

(g) India and Thailand have signed protocol to implement Early Harvest Scheme under India- Thailand Free Trade Agreement on 01.09.2004.Tariff preferences for imports on items of Early Harvest Scheme would be available only to those products, which satisfy Rules of Origin Criteria, notified by Department of Revenue, Ministry of Finance, vide notification No.101/2004- Customs dated 31.08.2004. EIC would be sole agency to issue CoO under Early Harvest Scheme of Framework Agreement on India-Thailand Free Trade Agreement.

Non Preferential

2.21.2

Government has also nominated certain agencies to issue Non Preferential CoO in accordance with Article II of International Convention Relating to Simplification of Customs formalities, 1923. These CoOs evidence origin of goods and do not bestow any right to preferential tariffs. List of notified agencies is provided in Appendix – 4C. In addition, agencies authorized to issue Preferential CoO as per Para 2.21.1 of HBP v1 are also authorized to issue Non-Preferential CoO.

All exporters who are required to submit CoO (Non Preferential) would have to apply to any of agencies enlisted in Appendix–4C with following documents:

(a) Details of quantum / origin of inputs / consumables used in export product.

(b) Two copies of invoices.

(c) Packing list in duplicate for concerned invoice.

(d) Fee not exceeding Rs.100 per certificate as may be prescribed by concerned agency.

The agency would ensure that goods are of Indian origin as per general principles governing rules of origin before granting CoO (non preferential). Certificate would be issued as per Format given in Annexure-II to Appendix–4C. It should be ensured that no correction/re-type is made on certificate.

Any agency desirous of enlistment in Appendix–4C may submit their application as per Annexure I to Appendix 4C to the concerned RA.

In case of tea, all exporters who are required to submit CoO (Non-Preferential) shall apply to Tea Board or any Inspection Agency authorized by Tea Board and enlisted in Appendix-4C of HBP v1 with documents listed above.

Automatic Licence / Certificate / Authorisation / Permission

2.22

Status holders shall be issued Authorisation automatically within stipulated time period. Deficiency, if any, informed through covering letter, shall be required to be rectified by status holders within 10 days from date of communication of deficiency.

Submission of certified copies of documents

2.23

Wherever original documents have been submitted to a different RA / nominated agencies or to a different division of same RA, applicant can furnish photocopy of documents duly certified by him in lieu of original.

Advance Payment

2.24

In case, payment is received in advance and export / deemed exports takes place subsequently, application for an Authorisation shall be filed within specific period following the month during which exports / deemed exports are made, unless otherwise specified.

Payment through ECGC cover

2.25.1

Payment through ECGC cover would count for benefits under ECGC cover FTP.

Payment through General / Private Insurance Companies

2.25.2

Amount of Insurance Cover for transit loss by General Insurance and Private Approved Insurance Companies in India would be treated as payment realized for exports under various export promotion schemes.

Irrevocable Letter of Credit

2.25.3

In case where applicant applies for duty credit scrip / DEPB / DFIA / discharge of EO against confirmed irrevocable letter of credit (or bill of exchange which is unconditionally Avalised / Co-Accepted / Guaranteed by a bank) and this is confirmed and certified by exporter’s bank in relevant Bank Certificate of Export and Realization, payment of export proceeds shall be deemed to be realized. For Status Holders, irrevocable letter of credit would suffice.

RBI write-off on export proceeds realization

2.25.4

Realization of export proceeds shall not be insisted under any of the Export Promotion Schemes under this Foreign Trade Policy, if the Reserve Bank of India (RBI) writes off the requirement of realization of export proceeds on merits and the exporter produces a certificate from the concerned Foreign Mission of India about the fact of non-recovery of export proceeds from the buyer. However, this would not be applicable in self-write off cases.

Export by Post

2.26

In case of export by post, exporter shall submit following documents in lieu of documents prescribed for export by sea / air:

1) Bank Certificate of Export and Realisation as in Appendix-22A.

2) Relevant postal receipt

3) Invoice duly attested by Customs authorities.

Import/ Export through Courier Service

2.26.1

Imports / Exports through a registered courier service is permitted as per Notification issued by DoR. However, importability / exportability of such items shall be regulated in accordance with FTP.

Direct negotiation of export documents

2.26.2

In cases where exporter directly negotiates document (not through authorised dealer) with permission of RBI, he is required to submit following documents for availing of benefits under export promotion schemes:

a. Permission from RBI allowing direct negotiation of documents (not required for status holders),

b. Copy of Foreign Inward Remittance Certificate (FIRC) as per Form 10-H of Income Tax department in lieu of BRC and

c. Statement giving details of shipping bills / invoice against which FIRC was issued.

Import/Export of Samples

2.27

No Authorisation shall be required for Import of bonafide technical and trade samples of items restricted in ITC(HS) except vegetable seeds, bees and new drugs. Samples of tea not exceeding Rs.2000 (CIF) in one consignment shall be allowed without an Authorisation by any person connected with Tea industry.

Duty free import of samples upto Rs 100,000 for all exporters (Rs.300,000 for gems and jewellery sector) shall be allowed as per terms and conditions of Customs notification. Exports of bonafide trade and technical samples of freely exportable item shall be allowed without any limit.

Exports of bonafide trade and technical samples of freely exportable item shall be allowed without any limit.

Import under Lease Financing

2.28

Import under lease financing shall be available under EPCG Scheme, EOU / SEZ scheme. Domestic supplier of capital goods to eligible categories of deemed exports shall be eligible for benefits of deemed exports as in paragraph 8.3 of FTP, even in cases where supplies are under lease financing.

Exhibits Required for National and International Exhibitions or Fairs and Demonstration

2.29

Import / export of exhibits, including construction and decorative materials required for the temporary stands of foreign / Indian exhibitors at exhibitions, fair or similar show or display for a period of six months on re-export / re-import basis, shall be allowed without an Authorisation on submission of a certificate from an officer of a rank not below that of an Under Secretary / Deputy DGFT in DoC / DGFT or an officer of Indian Trade Promotion Organization (ITPO) duly authorised by its Chairman in this behalf, to effect that such exhibition, fair or similar show or display. (i) has been approved or sponsored by DoC or ITPO; and

(ii) is being held in public interest. Extension beyond six months for re-export / re-import will be considered by Customs authorities on merits. Consumables such as paints, printed material, pamphlets, literature etc. pertaining to exhibits need not be re-exported / re-imported.

Import Policy

2.30

Policy relating to general provisions regarding import of capital goods, raw materials, intermediates, components, consumables, spares, parts, accessories, instruments and other goods is given in Chapter 2 of FTP.

General Procedure for Licensing of Restricted Goods

2.31

Wherever an import Authorisation, including CCP, is required under FTP, procedure contained in this chapter shall be applicable.

 

2.32

Import of Metallic Waste and Scrap

2.32.1

Import of any form of metallic waste, scrap will be subject to the condition that it will not contain hazardous, toxic waste, radioactive contaminated waste / scrap containing radioactive material, any type of arms, ammunition, mines, shells, live or used cartridge or any other explosive material in any form either used or otherwise.

2.32.2

Import of following types of metallic waste and scrap will be free subject to conditions detailed below :

Sl. No.

Exim code

Item description

1

720410 00

waste and scrap of cast iron

2

72042190

Other

3

72042920

Of High speed steel

4

72042990

Other

5

72043000

Waste and scrap of tinned iron or steel

6

72044100

Turnings, shavings, chips, milling waste, saw dust, fillings, trimmings and stampings, whether or not in bundles

7

72044900

Other

8

72045000

Remolding scrap ingots

9

74040010

Copper Scrap

10

74040022

Brass scrap

11

75030010

Nickel scrap

12

76020010

Aluminium scrap

13

79020010

Zinc scrap

14

80020010

Tin scrap

15

81042010

Magnesium scrap

Shredded Form: Import of metallic waste and scrap listed above in shredded form shall be permitted through all ports of India subject to following conditions: -

a. Importer shall furnish the following documents to the customs at the time of clearance of goods:

I) Pre-shipment inspection certificate as per the format in Annexure-I to Appendix 5, from any of the Inspection & Certification agencies given in Appendix-5, to the effect that the   consignment was checked for radiation level and scrap does not contain radiation level (gamma and neutron) in excess of natural background.  The certificate shall give the value of background radiation level at that place as also the maximum radiation level on the scrap; and

II) Copy of the contract between the importer and the exporter stipulating that the consignment does not contain any radio active contaminated material in any form. Import from Hodaideh, Yemen and Bandar Abbas, Iran will be in shredded form only.

Unshredded compressed and loose form:

Import of metallic waste, scrap listed in para 2.32.2 above in unshredded compressed and loose form shall be subject to following conditions:-

a. Importer shall furnish the following documents to the Customs at the time of clearance of goods:

I) Pre-shipment inspection certificate as per the format in Annexure-I to Appendix 5 from any Inspection & Certification agencies given in Appendix-5 to the effect that:

i) the consignment does not contain any type of arms, ammunition, mines, shells, cartridges or any other explosive material in any form either used or otherwise,  and that the consignment was checked for radiation level and it does not contain radiation level (gamma and neutron) in excess of natural background.  The certificate shall give the value of background radiation level at that place as also the maximum radiation level on the scrap.

ii) The imported item is actually a metallic waste/ scrap/seconds/defective as per the internationally accepted parameters for such a classification.

II) Copy of the contract between the importer and the exporter stipulating that the consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radio active contaminated, or any other explosive material in any form either used or otherwise.

b Import of scrap would take place only through following designated ports and no exceptions would be allowed even in case of EOUs, SEZs:-

“1.Chennai, 2.Cochin, 3.Ennore, 4.JNPT, 5.Kandla, 6.Mormugao, 7.Mumbai, 8.New Mangalore, 9.Paradip, 10.Tuticorin, 11.Vishakhapatnam, 12. ICD Loni, Ghaziabad, 13.Pipava, 14.Mundra, 15.Kolkata, 16.ICD Ludhiana, 17.ICD Dadri (Greater Noida), 18.ICD Nagpur, 19.ICD Jodhpur, 20.ICD Jaipur, 21.ICD Udaipur, 22.CFS Mulund, 23.ICD Kanpur, 24.ICD Ahmedabad, 25.ICD Pitampur and 26.ICD Malanpur”.

2.32.2.A

In case any agency wishes to be enlisted under Appendix-5, they may furnish an application to the office of Director General of Foreign Trade with the following documents in the format in Appendix-5-A, which will be considered by an Inter-Ministerial Committee.

(a) A brief on the activities of the agency, its history, membership, organisational structure, manpower, etc.

(b) Infrastructural setup, logistics, testing labs etc for carrying out the inspection of metallic scrap.

(c) List of companies / agencies for which testing has been carried out.

[Para 2.32.2 substituted by 17-PN(RE)/13.11.2009].

2.32.3

However, import of other kinds of metallic waste and scrap will be allowed in terms of conditions of ITC (HS).

2.32.4

Import policy for seconds and defective, rags, PET bottles / waste, and ships is given in ITC (HS).

Import of Second Hand Capital Goods

2.33

Import of second hand capital goods including refurbished / reconditioned spares, except those of personal computers/ laptops, shall be allowed freely, subject to conditions for following categories:

Import of second hand computers including personal computers/ laptops and refurbished/reconditioned spares thereof is restricted.

Import of refurbished / reconditioned spares of capital goods, other than those of personal computers/laptops will be allowed on production of a Chartered Engineer certificate that such spares have atleast 80% residual life of original spare.

2.33.1

Notwithstanding provisions of Para 2.33 above, second hand computers, laptops and computer peripherals including printer, plotter, scanner, monitor, keyboard and storage units can be imported freely as donations by following category of donees:

(i) Schools run by Central or State Government or a local body,

(ii) Educational Institution run on non- commercial basis by any organization,

(iii) Registered Charitable Hospital,

(iv) Public Library,

(v) Public funded Research and Development Establishment,

(vi) Community Information Centre run by Central or State Government or local bodies,

(vii) Adult Education Centre run by Central or State Government or a local body,

(viii) Organization of Central or State Government or a Union Territory.

Imports under this sub Para would be subject to the condition that goods shall not be used for any commercial purpose, is non transferable and complies with all terms and conditions of relevant Customs Rules and Regulations.

[Omitted by DGFT Public Notice No. 62(RE)/13.05.2010]

2.33A

Customs or any other Central or State Government authority may avail of services of Inspection and Certification Agencies in Appendix 5 of the HBP v1, for certifying residual life as well as valuation / purchase price of capital good.

Import of Ammunition by Licensed Arms Dealers

2.34

Import of following types of ammunition are allowed against an Authorisation by licensed arms dealers subject to conditions as may be specified:

(i) Shotgun Cartridges 28 bore;

(ii) Revolver Cartridges of .450, .455 and .45 bores;

(iii) Pistol Cartridges of .25, .30 Mauser, .450 and .45 bores;

(iv) Rifle Cartridges of 6.5 mm, .22 savage, .22 Hornet, 300 Sherwood, 32/40, .256, .275, .280, 7m/m Mauser, 7 m/m Man Schoener, 9m/m Mauser, 9 m/m Man Schoener, 8x57, 8x57S, 9.3 m/m, 9.5 m/m, .375 Magnum, .405, .30.06, .270, .30/30 Winch, .318, .33 Winch,.275 Mag., .350 Mag., 400/350, .369 Purdey, .450/400, .470, .32 Win, .458 Win, .380 Rook, .220 Swift and .44 Win. bores.

An import Authorisation shall be issued at 5% of value of annual average sales turnover of ammunition (whether indigenous or imported) during preceding three licensing years subject to a minimum of Rs. 2000.

An application for grant of an Authorisation for items listed above may be made to RA in ANF 2B along with documents prescribed therein.

Restricted Items Required By Hotels, Restaurants, Travel Agents, Tour Operators and other Specified Categories

2.35

Items mentioned as restricted for imports in ITC (HS) required by hotels, restaurants, travel agents and tour operators may be allowed against an Authorisation, based on recommendation of Director General, Tourism, Government of India.

2.35.1

Hotels, including tourist hotels, recognised by Director General of Tourism, Government of India or a State Government shall be entitled to import Authorisation upto a value of 25% of foreign exchange earned by them from foreign tourists during preceding licensing year, for import of essential goods related to hotel and tourism industry.

2.35.2

Travel agents, tour operators, restaurants, and tourist transport operators and other units for tourism, like adventure / wildlife and convention units, recognized by Director General of Tourism, Government of India, shall be entitled to import authorisation up to a value of 10% of foreign exchange earned by them during preceding licensing year, for import of essential goods which are restricted for imports related to travel and tourism industry, including office and other equipment required for their own professional use.

2.35.3

Import entitlement under paragraphs 2.35.1 and 2.35.2 of any one licensing year can be carried forward, either in full or in part, and added to import entitlement of two succeeding licensing years and shall not be transferable except within the group company or to managed hotels.

 

2.35.4

Such imported goods may be transferred after 2 years with permission of DGFT.

No permission for transfer will be required in case the imported goods are re-exported. However, re-export shall be subject to all conditionality, or requirement of licence, or permission, as may be required under Schedule II of ITC (HS).

2.35.5

An application for grant of an Authorisation under paragraphs 2.35.1 and 2.35.2 may be made in ANF 2B to DGFT through Director of Tourism, Government of India who will forward application to RA concerned along with their recommendations.

No permission for transfer will be required in case the imported goods are re-exported. However, re-export shall be subject to all conditionality, or requirement of licence, or permission, as may be required under Schedule II of ITC (HS).

Import of Other Restricted Items

2.36

ITC (HS) contains list of restricted items. An application for import of such items may be made, in ANF 2B along with documents prescribed therein. Original application along with Treasury Receipt (TR) / Demand Draft shall be submitted to RA concerned and self-attested copy of same shall be submitted to DGFT in duplicate along with proof of submission of application to concerned RA.

EXIM Facilitation Committee

2.37

Restricted item Authorisation may be granted by DGFT or Committee any other RA authorised by him in this behalf. DGFT / RA may take assistance and advice of a Facilitation Committee.

The Assistance of technical authorities may also be taken by seeking their comments in writing. Facilitation Committee will consist of representatives of Technical Authorities and Departments / Ministries concerned.

2.37A

Import authorizations for a restricted item, if so directed by the competent authority, shall be issued for import through one of the sea ports or air ports or ICDs or LCS, as per the option indicated, in writing, by the applicant.  However, for import of rough marble, port of registration is mandatory and the applicant must indicate the same in the application itself. Authorization holder shall register the import authorisation at the port specified in the Authorization and thereafter all imports against said authorization shall be made only through that port, unless the authorization holder obtains permission from customs authority concerned to import through any other specified port. [Para 2.37A amended by 51-PN(RE)/30.03.2010]

Gifts of Consumer or Other Goods

2.38

In terms of provisions contained in paragraph 2.19 of FTP, an application for grant of CCP for import as gifts of items appearing as restricted for imports in ITC (HS) shall be made to the DGFT as in ANF 2B along with documents prescribed therein. Where recipient of a gift is a charitable, religious or an educational institution registered under any law in force, and gift sought to be imported has been exempted from payment of customs duty, such import shall be allowed by customs authorities without a CCP.

Import under Govt. to Govt. Agreements

2.39

Import of goods under Government to Government agreements may be allowed without an Authorisation or CCP on production of necessary evidence to satisfaction of Customs authorities.

Import of Cheque Books/ Ticket Forms etc.

2.40

Indian branches of foreign banks, insurance companies and travel agencies may import chequebooks, bank draft forms and travellers cheque forms without a CCP. Similarly, airlines/ shipping companies operating in India, including persons authorised by such airlines / shipping companies, may import passenger ticket forms without a CCP.

Import of Reconditioned/ Second Hand Aircraft Spares

2.41

Import Authorisation for reconditioned / second hand aircraft spares is not needed on recommendation of Director General of Civil Aviation, Government of India (DGCA).

Import of Reconditioned/ Second Hand Aircraft Spares

2.42

Import Authorisation for reconditioned / second hand aircraft spares is not needed on recommendation of Director General of Civil Aviation, Government of India (DGCA).

Import of Replacement Goods

Goods or parts thereof on being imported and found defective or otherwise unfit for use or which have been damaged after import, may be exported without an Authorisation, and goods in replacement thereof may be supplied free of charge by foreign suppliers or imported against a marine insurance or marinecum-erection insurance claim settled by an insurance company. Such goods shall be allowed clearance by the customs authorities without an import Authorisation provided that:

(a) Shipment of replacement goods is made within 24 months from date of clearance of previously imported goods through Customs or within guarantee period in case of machines or parts thereof where such period is more than 24 months; and

(b) No remittance shall be allowed except for payment of insurance and freight charges where replacement of goods by foreign suppliers is subject to payment of insurance and / or freight by importer and documentary evidence to this effect is produced while making remittance.

2.42.1

In case of short-shipment, short-landing or loss in transit, import of replacement goods will be permitted based on certificate issued by customs authorities without an import Authorisation.

This procedure shall also apply to cases in which short-shipment of goods is certified by foreign supplier, who has agreed to replace free of cost.

2.42.2

Cases not covered by above provisions will be considered on merits by DGFT for grant of Authorisation for replacement of goods for which an application may be made.

Transfer of Imported Goods

2.43

Freely importable goods can be transferred by sale or otherwise by importer freely. Transfer of imported goods, which are subject to Actual User condition and have become surplus to needs of Actual User, shall be made only with prior permission of RA concerned.

Following information alongwith supporting documents shall be furnished with request for grant of permission for transfer, to RA concerned:

(i) Reasons for transfer of imported material;

(ii) Name, address, IEC number and industrial Authorisation registration, if any, of transferee;

(iii) Description, quantity and value of goods imported and those sought to be transferred;

(iv) Copies of import Authorisation and bills of entry relating to imports made;

(v) Terms and conditions of transfer as agreed upon between buyer and seller.

2.43.1

Prior permission of RA shall not, however, be necessary for transfer or disposal of goods, which were imported with Actual User condition, provided such goods are freely importable without Actual User condition on date of transfer.

2.43.2

Prior permission of RA shall also not be required for transfer or disposal of imported goods after a period of two years from the date of import. However, transfer of imported firearms by the importer / Authorisation holder shall be permitted only after 10 years of import with approval of DGFT.

“Renowned Shooters” for 3 consecutive years are allowed to sell their imported weapons after three years from date of import of the respective weapon. Other “Renowned Shooters” are allowed to sell their weapons after 5 years from the date of import. The sale shall be subject to approval from DGFT.

Sale of Exhibits

2.44

(i) Sale of exhibits of restricted items, mentioned in ITC (HS), imported for an international exhibition / fair organized / approved / sponsored by ITPO may also be made, without an Authorisation within bond period allowed for re-export, on payment of applicable customs duties, subject to a ceiling limit of Rs.5 lakhs (CIF) for such exhibits for each exhibitor.

However, sale of exhibits of items, which were freely imported shall be made, without an Authorisation, within bond period allowed for re-export on payment of applicable customs duties.

(ii) If goods brought for exhibition are not re-exported or sold within bond period due to circumstances beyond control of importer, customs authorities may allow extension of bond period on merits.

Import of Overseas Office Equipment

2.45

On winding up of overseas offices, set up with approval of RBI, used office equipment and other items may be imported without Authorisation.

Prototypes

2.46

Import of new / second hand prototypes / second hand samples may be allowed on payment of duty without an Authorisation to an Actual User (industrial) engaged in production of or having industrial licence / letter of intent for research in item for which prototype is sought for product development or research, as the case may be, upon a self-declaration to that effect, to satisfaction of customs authorities.

Restricted items for R&D

2.47

All restricted items and items permitted to be imported by STEs, except live animals, required for R&D purpose may be imported without an Authorisation by Government recognized Research and Development units.

Export Policy

2.48

Policy relating to Exports is given in Chapter-2 of FTP. Further, Schedule 2, Appendix-1 of ITC (HS) specifies list of items, which may be exported without an Authorisation but subject to terms and conditions specified.

Application for Grant of Export Licence/Certificate / Permission

2.49

An application for grant of Export Authorisation in respect of items mentioned in Schedule 2 of ITC (HS) may be made in ANF 2D (2E for SCOMET items) to DGFT along with documents prescribed therein. EFC shall consider applications on merits for issue of export Authorisation.

An Inter-Ministerial Working Group in DGFT shall consider applications for export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) as specified in Appendix-3 to Schedule 2 of ITC (HS) based on guidelines given below.

Applications for licences to export items or technology on SCOMET List are considered case-by-case, based inter alia on the following general criteria:

I. Following factors, among others, are taken into account in the evaluation of applications for export of items on SCOMET List:

a. Credentials of end-user, credibility of declarations of end-use of the item or technology, integrity of chain of transmission of item from supplier to end-user, and on potential of item or technology, including timing of its export, to contribute to end-uses that are not in conformity with India’s national security or foreign policy goals and objectives, objectives of global nonproliferation, or its obligations under treaties to which it is a State party.

b. Assessed risk that exported items will fall into hands of terrorists, terrorist groups, and non-State actors;

c. Export control measures instituted by recipient State;

d. The capabilities and objectives of programmes of recipient State relating to weapons and their delivery;

e. Assessment of end-uses of item(s);

f. Applicability to an export licence application of relevant bilateral or multilateral agreements to which India is a party.

A condition for consideration of an application for an export licence is submission of stipulated certifications to effect, inter alia, that:

a. The item will be used only for stated purpose and that such use will not be changed, nor items modified or replicated without consent of Government of India;

b. Neither the items nor replicas nor derivatives thereof will be re-transferred without consent of Government of India;

c. End-user shall facilitate such verifications as are required by Government of India.Government of India may also require additional formal assurances, as appropriate, including on end-use and non-retransfer, from State of recipient.

III. Licensing authority for items in Category 0 in Appendix 3 to Schedule 2 of ITC(HS) is Department of Atomic Energy. Applicable guidelines are notified by that Department under Atomic Energy Act, 1962. For certain items in Category 0, formal assurances from recipient State will include non-use in any nuclear explosive device. Licences for export of certain items in Category 0 will not be granted unless transfer is additionally under adequate physical protection and is covered by appropriate International Atomic Energy Agency (IAEA) safeguards, or any other mutually agreed controls on transferred items.

IV. Additional end-use conditions may be stipulated in licences for export of items or technology that bear possibility of diversion to or use in development or manufacture of, or use as, systems capable of delivery of weapons of mass destruction.

V. Applications for transfer of “Technology” for any item on the List will be considered as an application for export of item itself.

VI. Licences for export of items in this List (other than those under Category 0, 1 and 2) solely for purposes of display or exhibition shall not require any end-use or end-user certifications. No export licence for display or exhibition shall be issued for ‘Technology’ in any category or for items under Categories 0, 1, and 2. Export of items not on SCOMET List may also be regulated under provisions of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005.

Note 1: Export or attempt to export in violation of any of conditions of licence shall invite civil and/or criminal prosecution.

Note 2: Licences for export of items in this List for display or exhibition abroad are subject to a condition of re-import within a period not exceeding six months. Exporters are entitled to apply for an export licence for such items exhibited abroad if exhibitor intends to offer that item for sale during exhibition abroad. Such sale shall not take place without a valid licence.

Note 3: Export of items in Category 2 of this list may also be controlled by other applicable guidelines issued from time-to-time. Exporters of items in this category are advised to seek guidance from DGFT.

Note 4: Exporters are entitled to apply for a ‘destination licence’ for countries and / or groupings of countries for export to which only re-transfer conditions need be imposed.

Note 5: Exporters are entitled to request that only such conditions need be imposed as are subject of government-to-government instruments of accord over export of items on SCOMET List.

Note 6: ‘Technology’ (see also entry ‘Technology’ in glossary in Appendix-3 to Schedule 2 of ITC (HS)): Approval of export of an item on the SCOMET List also authorizes the export to same end-user of minimum ‘technology’ required for installation, operation, maintenance and repair of the item. DGFT in association with Administrative Ministries / Departments and Trade Associations will organize Industry Outreach Programme on regular basis for an effective awareness among the exporters /importers dealing with trade, in particular, in SCOMET items.

RAs may also issue, on application, Free Sale and Commerce Certificate for export of items not covered under Drugs & Cosmetics Act, 1940, which have usage in hospitals, nursing homes and clinics, for medical and surgical purposes and are not prohibited for export.

Validity of such certificate shall be two years from date of issue unless otherwise specified. An application for grant of Free Sale and Commerce Certificate may be made to RA concerned as per format in Appendix 39 of HBP Vol.I, along with Annexure A therein. RA shall issue Free Sale and Commerce Certificate as per Annexure B of Appendix 39.

PROCEDURE/GUIDELINES FOR FILING/EVALUATION OF APPLICATIONS FOR ENTERING INTO AN ARRANGEMENT OR UNDERSTANDING FOR SITE VISITS, ON-SITE VERIFICATION AND ACCESS TO RECORDS/DOCUMENTATION

An application for entering into an arrangement or understanding involving site visit, on-site verification or access to records/documentation by a foreign government or a foreign third party either acting directly or through an Indian party as mentioned in Appendix 3 of Schedule 2 of ITC(HS) shall be made in ANF 2EE to DGFT(Hqrs.), New Delhi along with documents prescribed therein.

These applications shall be considered by an Inter-Ministerial Working Group (IMWG) in DGFT based on following guidelines/general criteria:

I.    Following factors, among others, will be taken into account in the evaluation of applications for entering into an arrangement or understanding for site visits, on-site verification and access to records/documentation:

(a) Purpose for which arrangement / understanding is proposed under which site visit or     on-site verification or access to records/documentation is to be undertaken.

(b) Credentials and details of the parties involved.

(c)   Credentials of end-user, credibility of declarations of end-use of the items or  technology, the integrity of chain of transmission of the item from the supplier to the  end-user, and on the potential of the item or technology, including the timing of its export, to contribute to end-uses that are not in conformity with India’s national security or foreign policy goals and objectives, the objectives of global non-proliferation, or its obligations under treaties to which it is a State party.

(d) The assessed risk that the arrangement/understanding could lead to dual-use items and technology falling into the hands of terrorists, terrorist groups and non-State actors.

(e) In case site visit, on-site verification or access to records/documentation is to be carried out by a foreign government or its representative(s), the following shall be taken into consideration :-

i.     Export control measures instituted by the foreign government;

ii.    Capabilities and objectives of programs of the foreign government relating to  weapons and their delivery.

(f)   Applicability of relevant bilateral and multilateral agreements to which India  is a  party

(g) Assessment of any threat that such site visit, on-site verification or access to records/documentation may pose to India’s national security, and relations with any other country.

(h) Assessment of possible links of the foreign parties with terrorist organizations and non-state actors within their own country or in any other country.

II.   Permission for arrangement or understanding involving site visit, on-site verification or access to records/documentation  will be subject to the following conditions:-

(a) Site visit, on-site verification or access to records/documentation will be confined to the purpose, sites and activity for which permission given/which have been mentioned in the authorization.

(b) Site visit, on-site verification or access to records/documentation will be allowed only to individuals mentioned in the authorization.

(c)   Site visit, on-site verification or access to records/documentation shall be concluded during the period mentioned in the authorization.

(d) Exporter/Importer will keep a record of site visit, on-site verification or access to records/documentation alongwith detail of individuals who visited the premises during this visit and produce the same as and when required to do so by the GOI.

(e) No exchange of goods, services and technologies and any documentation including drawings, specification sheets etc. will take place during the visit.

(f)   Exporter/importer may be required to give any additional assurance that the Government of India may require.

(g) Any other condition that may be stipulated in the permission.

III. Provisions of Weapons of Mass Destruction Act, 2005 shall also apply to an arrangement or understanding that involves site visit, on-site verification or access to records/documentation.

IV. Any violation of any condition of the license shall invite civil/ criminal prosecution as per law.

[The paragraph inserted by 50-PN(RE)/29.03.2010]

Export of Items under State Trading Regime (STR)

2.50

An application for export of items mentioned in ITC (HS) under STR regime may be made to DGFT.

Exports of Samples / Exhibits

2.51

An application for export of samples or exhibits, which are restricted for export, may be made to DGFT.

Free of Cost

2.52.

Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakh or 2% of average annual export realization during preceding three licensing years whichever is higher.

Gifts / Spares / Replacement Goods

2.53

For export of gifts, indigenous / imported warranty spares and replacement goods in excess of ceiling / period prescribed in paragraphs 2.32, 2.33 and 2.37 respectively of FTP, an application may be made to DGFT.

Furnishing of Returns in respect of Exports in non Physical form

2.54

All exports made in non physical form by using communication links including high speed data communication links, internet, telephone line or any other channel which do not involve Customs authorities has to be compulsorily reported on quarterly basis to concerned EPC (Para 3.12 of FTP) as given in Appendix 19C.

These provisions shall be applicable to all exporting units located anywhere in country including those located in STP, SEZ, EHTP and under 100% EOU scheme.

Duty Free Import of R&D Equipment for Pharmaceuticals and Bio-technology Sector

2.55

Duty free import of goods (as specified in list 28 of Customs notification No.21/2002 dated 1.3.2002, as amended from time to time) upto 25% of FOB value of exports during preceding licensing year, shall be allowed.

The eligible unit may furnish an application given in Appendix- 15A to RA concerned duly countersigned by Chartered Accountant.

In respect of duty free import of R&D equipment, units not registered with Central excise shall be allowed to give Installation Certificate issued by an independent Chartered Engineer.

2.55.1

Duty free imports of goods as specified in list 28A of Customs notification No. 21/2002 dated 1.3.2002, upto 1% of FOB value of exports made during preceding licensing year, shall be allowed to agro chemicals sector unit having export turnover of Rs. 20 crore or above during preceding licensing year.

The eligible unit shall apply in form given in Appendix-15B to RA concerned duly countersigned by Chartered Accountant.

In respect of duty free import of R&D equipment, units not registered with Central excise shall be allowed to give Installation Certificate issued by an independent Chartered Engineer.

Conversion of E.P. copy of shipping bill from one Scheme To Another

2.56

If Customs Authorities, after recording reasons in writing, permit conversion of an E.P. copy of any scheme-shipping bill on which benefit of that scheme has not been availed, exporter would be entitled to benefit under scheme in which shipment is subsequently converted.

Offsetting of Export Proceeds

2.57

Subject to specific approval of RBI, any payables, or equity investment made by an Autorisation holder under any export promotion scheme, can be used to offset receipts of his export proceeds. In such cases, offsetting would be equal to realization of export proceeds and exporter would have to submit following additional documents:

a) Appendix-22D in lieu of Bank Realisation Certificate.

b) Specific permission of RBI.

Quality Certification

2.58

It has been a constant endeavor to promote quality standards in export product / units manufacturing export product.

2.58.1

One of salient features incorporated in FTP as per paragraph 3.10.3 for promotion of quality standards is grant of Export / Trading House status on achievement of a lower threshold limit for units having ISO-9000 (series), ISO-14000 (Series) or HACCP certification or WHOGMP or SEI CMM level-2 & above status / certification.

2.58.2

List of such agencies authorised to grant quality certification is given in Appendix-6.

For ISO 9000 (Series) and for ISO 14000 (Series), the Agencies accredited with National Accreditation Board for Certification Bodies (NABCB) under Quality Council of India shall be deemed to be authorized under this Policy. List of such accredited agencies is available on the web site www.qcin.org and also provided under Appendix 6.

Any agency desirous of enlistment in Appendix –6 may submit their application as per Annexure I to Appendix 6 to concerned RA.

Procedure for import under the Tariff Rate Quota Scheme

2.59

Attention is invited to Government of India, Ministry of Finance (Department of Revenue), Notification No. 21/2002-Customs  dated 01.03 2002 and Notification No. 33/2010-Customs dated 12.03.2010. As per these, import of four items viz., (1) Skimmed and whole milk powder, milk food for babies etc. (0402.10 or 0402.21) and White Butter, Butter oil, Anhydrous Milk Fat (0405) (2) Maize (corn): other (1005.90) (3) Crude sunflower seed or safflower oil or fractions thereof (1512.11) and (4) Refined rape, colza or mustard oil, other (1514.19 or 1514.99) is allowed in a financial year, up to quantities as well as such concessional rates of customs duty as indicated below:

 

S.No

ITC Code No. & Item

Quantity of Quota

Con-cessional Duty

1 (i)

Tariff Code No. 0402.10 or 0402.21 Skimmed and whole Milk Powder. Milk Food for babies etc.

30,000 MTs

0% 15%

1(ii)

Tariff Code No. 0405 White Butter, Butter oil, Anhydrous Milk Fat

15,000 MTs

0%

2

Tariff Code No. 1005.90 Maize (Corn): other

5,00,000 MTs

15%

3

Tariff Code No. 1512.11 Crude Sunflower seed or safflower oil or fractions thereof

150,000 MTs

50%

4

Tariff Code No. 1514.19 & 1514.99 Rape, Colza, Canola or Mustard Oil, Other (Refined)

150,000 MTs

45%

Para 2.59 substituted by 49-PN(RE)/18.03.2010]

Eligible entities for allocation of quota

2.59.1

(a) Milk Powder (Tariff Code No. 0402.10 or 0402.21) and White Butter, Butter oil, Anhydrous Milk Fat (0405): National Dairy Development Board (NDDB), State Trading Corporation (STC), National Cooperative Dairy Federation (NCDF), National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), Minerals and Metals Trading Corporation (MMTC), Projects & Equipment Corporation of India Limited (PEC) and Spices Trading Corporation Limited (STCL). Para 2.59.1 substituted by 49-PN(RE)/18.03.2010]

(b) Maize (corn)(Tariff Code No. 1005.90): National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED), State Trading Corporation (STC), Minerals and Metals Trading Corporation (MMTC), Projects & Equipment Corporation of India Limited(PEC), Spices Trading Corporation Limited (STCL) and State Cooperative Marketing Federations

(c) Crude sunflower seed or safflower oil or fractions thereof (Tariff Code No. 1512.11) and Refined rape, colza, canola or mustard oil, other (Tariff Code No. 1514.19 or 1514.99): National Dairy Development Board (NDDB), State Trading Corporation (STC), National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED) Spices Trading Corporation Limited (STCL) and Central Warehousing Corporation (CWC) State Cooperative Marketing Federation & State Cooperative Civil Supplies Corporation All eligible entities are eligible to avail quotas as per request of applicants received.

All eligible entities desiring availment of quota as mentioned above, may make application to EFC in ANF to DGFT, Udyog Bhavan, New Delhi – 110 011. Completed application forms along with prescribed documents must reach on or before 1st March of each financial year preceding to the year of quota e.g. Applications for TRQ for 2010-2011 must reach DGFT by 01.03. 2010.

Imports have to be completed before 31st March of financial year i.e. consignments must be cleared by customs authorities before this date.

Since import of maize (corn) is through STEs, the allottes of quota i.e. designated agencies in para 1 (b) above for this item shall also be granted an import Authorisation for allotted quantities as indicated at Sl. No. 21(b) of Customs Notification No. 21/2002 dated 1.3.2002 in terms of para 2.11 of FTP, 2009-2014, if they do not wish to make imports through FCI.

Application fee for these applications shall be paid according to procedure contained in Appendix 21 B to HBP-v1. EFC in DGFT will evaluate and allot quota among applicants by 31st March of each financial year preceding to year of quota e.g. for 2010-11, EFC will allot quota by 31st March 2010.

Issuance of scrips against lost EP copy of the Shipping Bills and / or original Bank Realisation Certificate

2.60

In case where EP copy of Shipping Bill / original BRC has been lost, claim under VKGUY/ FMS/ FPS can be considered subject to submission of following documents: -

a) A duplicate / certified copy of concerned document issued by Customs Authority / Bank in lieu of original;

b) An application fee equivalent to 2% of relevant entitlement. However, no fee shall be charged when such document is lost by Government agencies and a documentary proof to this effect is submitted;

c) An affidavit by exporter about loss of document and an undertaking to surrender it immediately to concerned RA, if found subsequently;

d) An indemnity bond by exporter to effect that he would indemnify Government for financial loss if any on account of duty credit issued against lost Shipping Bills/ BRC.

Customs Authority, before allowing clearance, shall ensure that benefit / duty credit against such shipping bill has not been availed.

2.60.1

Claim against lost Shipping Bill / BRC shall be preferred within a period of six months from date of release of duplicate copy of Shipping Bill / on date of realization of export proceeds. Any application received thereafter shall be rejected.

Export Promotion Council (EPC)/ Commodity Boards (CB)

2.61

A list and product category of EPCs, including CB is given Appendix-2. Commodity Boards function as EPCs for products allotted to them. EPC is authority issuing RCMC

Non-Profit, Autonomous and Professional Bodies

2.62

EPCs are non-profit organizations registered under Companies Act or Societies Registration Act.

2.62.1

EPCs shall be autonomous and shall regulate their own affairs. However, if Central Government frames uniform bylaws for constitution and / or for transaction of business for EPCs, they shall adopt the same with such modifications as Central Government may approve having regard to special nature or functioning of such EPC.

Concerned Administrative Ministry would interact with Managing Committee of EPC concerned at least twice a year.

Registering Authorities issuing RCMC

2.63

(i) While obtaining RCMC, an exporter has to declare his main line of business in the application. The exporter is required to obtain RCMC from the Council which is concerned with the product of his main line of business.

(ii) Irrespective of para (i) above, A status holder has an option to obtain RCMC from Federation of Indian Exporters’ Organisation (FIEO). [Paragraph amended by 16-PN(RE)/10.11.2009].

(iii) In case an export product is not covered by any Export Promotion Council/Commodity Board, etc.  RCMC in respect thereof is to be obtained from FIEO.  Further, in case of multi product exporters, not registered with any EPC, where main line of business  is not discernible, the exporter has an option to obtain RCMC from Federation of Indian Exporters Organization (FIEO). [Paragraph amended by 44-PN(RE)/22.02.2010].

(iv) Exporters of minor forest produce and their value added products shall obtain RCMC from SHEFEXIL, EPC. Software exporters shall register themselves with Electronic and Software EPC.

(v) Exporters of 14 specific services as listed in Appendix- 2 of HBPv1, are required to register themselves with

Services EPC. Other service exporters shall register themselves with FIEO.

(vi) In respect of exporters having their head office / registered office in State of Orissa, RCMC may be obtained from FIEO office in Bhubaneswar irrespective of product being exported by them. However, exporters of minor forest product from the State can also obtain RCMC from SHEFEXIL, EPC.

(vii) In respect of multi product exporters having their head office/ registered office in the North Eastern States, RCMC may be obtained from Shellac & Forest Products Export Promotion Council (except for the products looked after by APEDA, Spices Board and Tea Board).

Registration cum Membership Certificate (RCMC)

2.64

An exporter may, on application given in Appendix-19A, register and become a member of EPC. On being admitted to membership, applicant shall be granted forthwith Registration cum- Membership Certificate (RCMC) of EPC concerned, in format given in Appendix-19B. In case an exporter desires to get registration as a manufacturer exporter, he shall furnish evidence to that effect.

Prospective / potential exporters may also, on application, register and become an associate member of an EPC.

Validity Period of RCMC

2.64.1

RCMC shall be deemed to be valid from 1st April of licensing year in which it was issued and shall be valid for five years ending 31st March of licensing year, unless otherwise specified.

Intimation Regarding Change In Constitution

2.65

In case of change in ownership, constitution, name or address of an exporter, it shall be obligatory on part of RCMC holder to intimate such change to registering authority within a period of one month from date of such change. Registering authority, however, may condone delays on merits.

Furnishing Of Returns

2.66

Exporter shall furnish quarterly returns / details of his exports of different commodities to concerned registering authority. However, status holders shall also send quarterly returns to FIEO in format specified by FIEO.

De-Registration

2.67

Registering authority may de-register an RCMC holder for a specified period for violation of conditions of registration. Before such de-registration, RCMC holder shall be given a show cause notice by registering authority, and an adequate and reasonable opportunity to make a representation against the proposed de-registration. Upon de–registration, concerned EPC shall intimate the same to all RAs.

Appeal Against De-registration

2.68

A person aggrieved by a decision of registering authority in respect of any matter connected with issue of RCMC may prefer an appeal to DGFT or an officer designated in this behalf within 45 days against said decision and decision of appellate authority shall be final.

Directives of DGFT

2.69

DGFT may direct any registering authority to register or deregister an exporter or otherwise issue such other directions to them consistent with and in order to implement provisions of FT (D&R) Act, Rules and Orders made there under, FTP or this Handbook.

2.70

Electronic Data Interchange

Eligibility

2.70.1

Facility of electronic filing of applications shall be available to all exporters.

Procedure

2.70.2

An exporter would be able to file his application on DGFT website at http://dgft.gov.in/. Application will then be processed in accordance with prevalent rules and regulations.

Applicant will have to visit concerned office to hand-over hard copy of application along with requisite documents including application fee. Authorisation shall be issued on receipt of hard copies of documents as mentioned above after due scrutiny as prescribed in HBP v1.

Fiscal Incentives for EDI

2.70.3

Following deductions in Application Fee would be admissible for applications signed digitally and / or where application fee is paid electronically through EFT (electronic fund transfer)

Sr. No.

Mode of Application

Fee Deduction (as a % of normal application fee)

1

Digitally signed

25%

2

Application fee payment vide EFT

25%

3

Both digitally signed as well as use of EFT for payment of application fee.

50%

Benefits

2.70.4

Facility will reduce unnecessary physical interface with DGFT. It will enable faster processing, speedier communication of deficiencies, if any, and on-line availability of application processing status.

2.70.5

Authorisation issued using DGFT Electronic Application System shall be transmitted electronically to Customs through EDI Mode. This shall also obviate need for verification of Authorisations before allowing clearance.

New EDI Initiatives

2.70.6

To further improve quality of services some new EDI initiatives are being taken by DGFT:

Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under Chapter 3 will become operational by 31st December, 2009.


Chapter - 3

Promotional Measures

Status Certificates

3.1

Policy for status holder is given in Chapter 3 of FTP.

Application for Grant of Status

3.2

Application for grant of status shall be filed by 31st March, in ANF 3A. An existing status holder shall be automatically treated to be an equivalent status holder as given in Para 3.10 of FTP.

3.2.1

Application shall be filed with jurisdictional RA / Development Commissioner (DC). However, in cases where export performance of EOUs / SEZs is clubbed together with company / firm / Group Company in DTA, the same will be considered by jurisdictional RA (in DGFT) only.

3.2.2

All newly issued Status certificates shall be valid from 1st April of the year during which application for recognition was filed. For renewals, application filed before expiry of current validity, renewals shall have a validity commencing from 1st April of next licensing year; otherwise validity period shall be 1st April of year during which application was filed. All Status Certificates shall be valid for a period of 5 years reckoned from the 1st April of the relevant year. All Status Certificates valid beyond 31.3.2014 shall continue to remain in force, in case provisions of Foreign Trade Policy (2014-19) continue to recognize the status. Pending the finalization of the applications for grant of recognition, existing status holders who have applied for recognition before the expiry of their status, shall have a grace period of 6 months. During this grace period of 6 months such status holders shall continue to be recognized as Status holders even after the expiry of earlier Status Certificate i.e. till September end, unless their applications are finally rejected or status recognition is granted once again, as the case may be.

Maintenance of Accounts

3.3

Status Holder shall maintain true and proper accounts of its exports and imports based on which such recognition has been granted. Record shall also be maintained during validity period and for a minimum period of three years thereafter. These accounts shall be made available for inspection to RA concerned or any authority nominated by DGFT.

Refusal / Suspension / Cancellation of Certificate

3.4

Status certificate may be refused or suspended or cancelled by RA concerned, if status holder or any agent or employee or authorized representative acting on his behalf:

(a) Fails to discharge export obligation imposed;

(b) Tampers with Authorisations;

(c) Misrepresents or has been a party to any corrupt or fraudulent practice in obtaining any Authorisation;

(d) Commits a breach of FT (D& R) Act, or Rules, Orders made there under and FTP; or

(e) Fails to furnish information required by this Directorate

3.4.1

A reasonable opportunity shall be given to status holder before taking any action under above paragraph.

Appeal

3.5

An applicant, who is not satisfied with decision taken to suspend or cancel status certificate, may file an appeal to DGFT within 45 days. Decision of DGFT shall be final thereon.

3.6

Served from India Scheme (SFIS)

(a)

Policy for SFIS is given in Chapter 3 of FTP.

(b)

For foreign exchange earned during current financial year, application for Duty Credit Scrip shall be filed on monthly/quarterly/half-yearly/annual basis, at the option of the applicant to be exercised along with first application for the current financial year, with jurisdictional RA, in ANF 3B along with documents prescribed therein, for which the last date for filing application on time shall be 12 months from the end of relevant month / quarter / half-year /year periodicity.

(c)

Service provider shall within one month of completion of imports made or expiry of validity of Duty Credit scrip whichever is earlier, submit a statement of imports made under it to jurisdictional RA with a copy to jurisdictional Excise authorities (service tax cell) wherever applicable.

Ineligible Remittances and Services for SFIS scheme

3.6.1

Foreign exchange remittances other than those that are earned for rendering of services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible. For calculation of entitlement, following shall not be taken into account.

Proof of Landing for FMS and MLFPS

(a) Foreign Exchange remittances:

I. related to Financial Services Sector

1. Raising of all types of foreign currency Loans;

2. Export proceeds realization of clients;

3. Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;

4. Issuance of foreign currency Bonds;

5. Sale of securities and other financial instruments;

6. Other receivables not connected with services rendered by financial institutions; and

II. earned through contract/regular employment abroad (e.g. labour remittances);

(b) Payments for services received from EEFC Account;

(c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc. (However, remittances received on account of medical treatment, surgery, testing, consultancy and health care provided by the institution shall be eligible.);

(d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc. (However remittances received on account of the course fees and consultancy provided by the institution shall be eligible.);

(e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units;

(f) Clubbing of turnover of services rendered by SEZ /EOU / EHTP / STPI/ BTP units with turnover of DTA Service Providers;

(g) Service Providers in Telecom Sector (Sr. No 2C of Appendix 10);

 

h) Foreign Exchange earnings for Services provided by Airline and Shipping Lines Service providers for routes plying from any country X to any country Y only, not touching India at all; and

 

i) Exports of Goods.

3.7

Vishesh Krishi and Gram Udyog Yojana (VKGUY)

3.7.1

Policy pertaining to VKGUY is given in Chapter 3 of FTP. Appendix 37A contains the list of VKGUY items along with the admissible date of export. Application for grant of Duty Credit scrip under VKGUY for exports made from 27.8.2009 onwards shall be made to RA concerned in ANF3C along with documents prescribed therein. Listed products shall be eligible for Duty Credit Scrip upon exports on or after the Date of Export indicated in the relevant Appendix.

3.7.2

Policy pertaining to the Agri. Infrastructure Incentive Scrip under VKGUY is given in Para 3.13.4 of Chapter 3 of FTP.

All Status Holders may apply for grant of Duty Credit scrip for export made during current year to RA, CLA, New Delhi in ‘ANF 3D - ANF for Policy Para 3.13.4.’ along with documents prescribed therein.

Applicants may file one application before the last date prescribed for each half year period (Apr-Sep / Oct-Mar).

Applications for exports during Apr-Sept period shall be filed from 15th January till 15th February of current year and for exports during Oct-Mar period, applications shall be filed from 1st May till 31st May of the next licensing year.

Applications received after the last date shall be summarily rejected, as Para 9.3 and Para 9.4 shall not be applicable. The allocation of duty credit scrips by RA, CLA, New Delhi, under Para 3.13.4 of FTP, shall be done proportionate to the eligible claims of individual applications, vis-à-vis the total eligible claims of all the status holders put together, received for each half year (Apr-Sep / Oct-Mar) periods, in such a way that the total benefits granted for all status holders put together does not exceed the limit prescribed for each half year in Para 3.13.4 of FTP. Accordingly if the total eligible claim of all the status holders put together is, say, Rs 200 Cr, each applicant status holder would be granted one-fourth of the claim an applicant is eligible for

Focus Market Scheme (FMS)

3.8

Policy pertaining to FPS is given in Chapter 3 of FTP. Notified Products are listed in Appendix 37D.

3.8.1

An application for exports made from 27.8.2009 onwards shall be filed, with RA concerned in ANF3C along with documents prescribed therein. Eligibility of Focus Product (as in Appendix 37C) shall be determined from date of export as per Para 9.12 of HBP v1.

3.8.2

Applicant shall be required to submit proof of landing of export for FMS and MLFPS consignment in specified market. Any one of the following documents should suffice, as a proof of landing of export consignment in specified Focus Market: (i) A self attested copy of import bill of entry filed by importer in specified market, or (ii) Delivery order issued by port authorities, or (iii) Arrival notice issued by goods carrier, or (iv) Tracking report from the goods carrier (Shipping Line/ Airline etc. or his accredited agent in India) duly certified by them, evidencing arrival of export cargo to destination Focus Market, or (v) For Land locked Focus Market, Rail/Lorry receipts of transportation of goods from Port to Land locked Focus Market, or (vi) Any other documents that may satisfactorily prove to RA concerned that goods have landed in / reached the Focus Market. In case of (iv) and (vi) above, the accredited agent of the Goods Carrier must certify that he is the accredited agent of the concerned Goods Carrier on the date of issuance of the tracking report / document. Further, in the case of issuance of any other document under (vi) above, the accredited agent must state that he has verified that this proof of landing of goods in relevant Focus Market is given based on information available in the Goods Carrier’s backup database and he has issued this document accordingly.

 

Focus Product Scheme (FPS)

3.9

Policy pertaining to FPS is given in Chapter 3 of FTP. Notified Products are listed in Appendix 37D.

3.9.1

An application for exports made from 27.8.2009 onwards shall be filed, with RA concerned in ANF3C along with documents prescribed therein. Eligibility of Focus Product (as in Appendix 37D) shall be determined from date of export as per Para 9.12 of HBP v1.

3.9.2

The procedure for filing applications against export of Market Linked Focus Products under FPS (Para 3.15.3 of FTP) will be the same as laid down for Focus Product Scheme in Para 3.9.1 above. In case of applications for grant of benefit under Market Linked Focus Product scheme, for proof of landing of export consignment in specified market, Para 3.8.2 of HBP Vol.1 shall apply.

3.10

Procedure for Status Holders Incentive Scrip

3.10.1

Policy pertaining to Status Holders Incentive Scrip is given in Para 3.16 of Chapter 3 of FTP.

3.10.2

ANF3E and other conditions for claiming Status Holders Incentive Scrip shall be notified separately.

3.10.2

Application for grant of Duty Credit Scrip under SHIS (Para 3.16 of FTP) for exports made during 2009-10 or for exports made during 2010-11, as the case may be, shall be made to jurisdictional RA concerned in ANF3E along with documents prescribed therein.

3.10.3

The last date of filing the application shall be 31st March 2011 for SHIS Application on exports made during 2009-10 (and 31st March 2012 for SHIS Application on exports made during 2010-11).

3.10.4

As Para 3.17.8 of FTP does not apply to SHIS, shipments where VKGUY, FMS, FPS (including MLFPS) benefits have been claimed/will be claimed by applicant or by the supporting manufacturer (based on disclaimer by the exporter) shall be entitled for SHIS benefits to the exporter Status Holder. SHIS is entitled for shipments where foreign exchange realisation is in the name of applicant Status Holder.

3.10.5

Merchant Status Holders shall have the facility to list the supporting manufacturer till the date of filing of the Application for claiming the SHIS benefits.

To list the supporting manufacturer, proof of supporting manufacturer may be given to RA concerned by giving any of the export documents (Shipping Bill/Bill of Export/ARE forms/Customs/Bank attested Invoices) evidencing the same.

Listed Supporting Manufacturers shall be co-licensee of the SHIS Scrip.

3.10.6

SHIS scrip can be used for payment of applicable duties on import of Capital Goods (as defined in FTP) relating to the sectors specified in Para 3.16.4 of FTP. The Scrip / the goods so imported shall be with Actual User Condition. Imports of Capital Goods shall be related to any of the sectors listed in Para 3.16.4 of FTP, without any sector wise value limitation; even by the listed supporting manufacturers.

3.10.7

Para 3.11.8 of this HBP shall not apply to this Scheme. Further, Monitoring the realization of export proceeds shall be in terms of 3.11.12 & 3.11.13 of this HBP.

[Para 3.10.2 to 3.10.7 inserted by 54-PN(RE)/08.04.2010]

3.11

Common Procedural Features for Promotional Schemes, Applicable to all Schemes in this Chapter, Unless Specifically Provided for: Schemes In This Chapter, Unless Specifically Provided For:

Jurisdictional RA/RA Concerned

3.11.1

Applicant shall have option to choose Jurisdictional RA on the basis of Corporate Office, Registered Office, Branch Office address endorsed on IEC. However, once opted, no change would be allowed.

3.11.2

Provisions contained in Chapter 2 and 9 of this HBP shall apply to all Promotional Schemes.

However, it is clarified that in case the importer wants to use a specific permission/license for import of a restricted item as well as pay the duty using Duty Credit Scrip, then Duty Credit Scrip shall be allowed to be used only if the item is also importable under the respective paras of Duty Credit Scrip (reference FTP Paras 3.12.6, 3.13.4, 3.16.4, and 3.17.5). (Sub-para inserted by DGFT Public Notice No. 03/2009-14 New Delhi, Dated: 31st August, 2009).

Port of Registration

3.11.3

Duty Credit Scrip (including splits) shall be issued with a single port of registration which shall be the port of export. After issue of Duty Credit Scrip, but before registration with Customs, the Applicant can change the port of registration from RA concerned. Before registration, authorities shall verify genuineness of Duty Credit scrip, from RA concerned, until EDI system of message exchange is put in place.

However, applicant may use Duty Credit Scrip for imports from any other port (that includes ICD/LCS) after obtaining TRA from authorities at port of registration. The above procedure shall be applicable only in respect of EDI enabled ports. In case of exports through non-EDI ports, the port of registration shall be the port of exports.

However, applicant may use Duty Credit scrip for imports from any other port (that includes ICD/LCS) after obtaining TRA from authorities at port of registration. The above procedure shall be applicable only in respect of EDI enabled ports. In case of exports through non-EDI ports, the port of registration shall be the port of exports.

Facility for Split Scripts

3.11.4

Split certificates of Duty Credit Scrip subject to a minimum of Rs 5 Lakh each and multiples thereof may also be issued, on request at the time of application with different port of registration.

After issue, request of splits shall be permitted with same port of registration as appearing on the original scrip. The above procedure shall be applicable only in respect of EDI enabled ports.

In case of exports through non-EDI ports, the facility of splits shall not be allowed, after issue of scrip.

Import from private / public bonded warehouses

3.11.5

Entitlement can be used for import from private / public bonded warehouses subject to fulfillment of paragraph 2.28 of FTP and terms and conditions of DoR notification.

Re-export of defective/unfit goods

3.11.6

Goods imported which are found defective or unfit for use, may be re-exported, as per DoR guidelines. Where Duty Credit scrip has been used for imports, Customs shall issue a certificate containing particulars of scrip used, date of import of re exported goods and amount debited while importing such goods. Based on this certificate, upon application, a fresh Scrip shall be issued by concerned RA to extent of 98% of debited amount, with same port of registration and valid for a period equivalent to balance period available on date of import of the defective / unfit goods.

Validity Period & Revalidation

3.11.7

Duty Credit Scrip shall be valid for a period of 24 months and Revalidation of Duty Credit Scrip shall not be permitted unless covered under paragraph 2.13.1 or paragraph 2.13.2 A of HBP v1. [Paragraph substituted by 38-PN(RE)/03.02.2010].

Declaration of Intent on Free Shipping Bills

3.11.8

For export shipments filed under Free Shipping Bill category, for exports of products / to markets eligible under Chapter 3 of FTP (Appendix 37A, 37C, 37D), the exporter shall state the intention to claim benefits under Chapter 3 of FTP by declaring on the Free Shipping Bills as under:

‘I/We, hereby, declare that I/We shall claim the benefits, as admissible, under Chapter 3 of FTP’.

This declaration shall not be required for export shipments under any of the schemes of Chapter 4 (including drawback) or Chapter 5 of FTP.

Further for products, markets notified during the year, this declaration shall be necessary for exports under Free Shipping Bills, only after a grace period of one month from the date of relevant public notice.

Moreover for exports made prior to date of notification of products / markets, such a declaration will not be required, since export shipments under Free Shipping Bills have already taken place.

Last date of filing of application for Duty Credit Scrips, except for FTP Para 3.13.4 and FTP Para 3.16

3.11.9

Applications for obtaining Duty Credit Scrip shall be filed within a period of twelve months from the date of export or within six months from the date of realization or three months from the date of printing / release of shipping bill, whichever is later, in respect of shipments for which claim is being filed. Further, for shipments already made prior to the inclusion/modification of the items / markets in relevant appendices by various Public Notices issued from time to time; the last date for filing applications shall be six months from the end of the month of the relevant Public Notice that included/
modified the items/markets, or the time period permitted in the first sentence of this Para, whichever is later. For SFIS for current financial year, the last date shall be 12 months from the end of application frequency period.

3.11.10

Shipments from EDI Ports and Non-EDI Ports cannot be clubbed in one application. Port of registration for EDI enabled ports shall be the port of export. In case of exports through non-EDI port, the port of registration shall be the relevant non EDI port of exports. Accordingly separate application shall be filed for each non EDI port.

 

3.11.11

Freely Transferable Duty Credit Scrip shall be granted on FOB value of exports. FOB Value of Exports shall be taken from the Shipping Bill (FOB value in free foreign exchange declared on the Shipping Bill and converted into Indian Rupees at the Monthly Customs Rate of Exchange on the date of LEO).

Date of export is determined as per Para 9.12 of HBPv1. Multiple Applications can be filed and supplementary cut shall not be applicable. However, an application shall contain a maximum of upto 50 shipping bills.

 

3.11.12

All the pre-realization cases are to be monitored by RA concerned with respect to realization of export proceeds. The procedure prescribed in Para 4.45 shall apply, mutatis mutandis, to freely transferable Duty Credit Scrips issued under Chapter 3 on the pre-realization basis. However for adjustment of excess / short realisation, procedure in Para 3.11.13 is to be followed.

 

3.11.13

(i) In case there is no pending claim and there is no cash deposit towards the amount immediately after the expiry of 12 months time period from the date of issuance of the Scrip, the RA shall initiate necessary action. If the Scrip holder does not pay the amount within 60 days of the expiry of aforesaid 12 months time period, the scrip holder shall be required to pay the said amount along with 15% interest per annum from the date of issuance of the Scrip(s) for the Duty Credit for which BRC or Documentary evidence (evidencing realisation of export proceeds as required under FTP or the Procedure laid thereunder) could not be produced. In case the Scrip holder surrenders the unutilized / partially unutilized Duty Credit Scrip, then unutilized / partially unutilized credit shall be deduced from the payable amount.

(ii) In case the FOB value realized in free foreign exchange is higher as per BRC, when compared to the FOB value in free foreign exchange as declared on the Shipping Bill(s) on which the original duty credit scrip was issued, supplementary claim shall be filed within a period of six months from the date of realization.


Chapter-4

Duty Exemption / Remission Scheme

Policy

4.1

Policy relating to Duty Exemption / Remission Scheme is prescribed in Chapter 4 of FTP.

General Provision

4.2

An application for grant of an Advance Authorisation / Advance Authorisation for Annual Requirement / DEPB / DFIA may be made by Registered office or Head office or a branch office or manufacturing unit of eligible exporter, to RA concerned.

4.3

Where applicant is branch office or manufacturing unit(s) of an exporter, it shall furnish self certified copy of valid RCMC where name of branch office or manufacturing unit is given.

Advance Authorisation

4.4

Where SION have been published, an application in ANF 4A, along with documents prescribed therein, shall be submitted to RA concerned.

4.4.1

In case of export of gold /silver / platinum jewellery and articles thereof, quantity, wastage and value addition norms shall be as prescribed in paragraph 4A of FTP and HBP v1.

4.4.2

In case where norms have not been published, an application in ANF 4B, along with prescribed documents, shall be furnished to concerned Norms Committee (NC) at DGFT Headquarters for fixation of Norms.

In such cases, original copy of application along with prescribed fee shall be filed with RA concerned and a self attested copy of same shall be filed with NC.

Authorisation in such cases shall be issued by RA as per NC recommendation.

NC shall also function as a recommendatory authority for SION. DGFT may notify such norms.

4.4.3

Where import of Acetic Anhydride, Ephedrine and Pseudoephedrine is required as an input, applications shall be filed with RA concerned.

Copies of such applications shall also be simultaneously endorsed to the Drug Controller of India, Nirman Bhawan, New Delhi, Narcotics Commissioner, Central Bureau of Narcotics, Gwalior and respective Zonal Director of Narcotics Control Bureau, alongwith a declaration that applicant will maintain prescribed records and also submit prescribed returns.

4.4.4

RA, while issuing Advance Authorisation for import of Acetic Anhydride, Ephedrine and Pseudo- ephedrine, shall endorse a condition that before effecting imports, NOC shall be obtained from Narcotics Commissioner of India, Central Bureau of Narcotics, Gwalior and shall also endorse a copy of Authorisation to Drug Controller, Nirman Bhawan, New Delhi and concerned Zonal Director of Narcotics Control Bureau.

Advance Authorisation for applicants with multiple units

4.5

Transfer of any duty free material imported or procured against Advance Authorisation from one unit of company to another for manufacturing purpose shall be done with prior intimation to jurisdictional Excise Authorities with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. However, such transfers shall not be allowed to units located in areas covered by Central Excise Notification No. 39/2003 and 50/2003 (i.e. Himachal Pradesh / Uttaranchal). In case of non-excisable company / products, units should maintain a proper record. However to avail facility, all such units should be available in IEC certificate and follow rules and regulation of Central Excise for job work. Large Taxpayer Units (LTUs) having multiple units, may not follow above job work procedure, after fulfillment of EO. Duty Free material imported or procured against advance authorization can be taken from the port directly to the project site of the project authority as per provision stated in ANF 4A and DOR guide lines.

Advance Authorisation for Free of Cost and Paid Material

4.6

For policy in paragraph 4.1.8, a specific endorsement shall be made on exchange control copy of Advance Authorisation disallowing remittances for material being supplied free of cost. All inputs imported shall be utilised in manufacturing of product except wastage.

Self Declared Authorisations where SION does not exist

4.7

RA may also issue Advance Authorisations, where SION are not fixed, based on self declaration and an undertaking by applicant for a final adjustment as per Adhoc / SION fixed by NC.

However, no Advance Authorisation shall be issued under this paragraph for import of following products:-

i. All vegetable / edible oils classified under Chapter - 15 and all types of oilseeds classified under Chapter - 12 of ITC (HS) book;

ii. All types of cereals classified under Chapter – 10 of ITC (HS) book;

iii. All spices other than light black pepper (light berries) having a duty of more than 30%, classified under Chapter-9 and 12 of ITC (HS) book;

iv. All types of fruits/vegetables having a duty of more than 30%, classified under Chapter 7 and 8 of ITC (HS) book; and

v. Horn, hoof and any other organ of animal.

vi. Honey.

vii. Rough Marble Blcks/slabs

For export of perfumes, perfumery compounds and various feed ingredients containing vitamins, no Authorisation shall be issued by RA and applicants may apply under Para 4.4.2 above. Where export and/or import of biotechnology items are involved, Authorisation under this paragraph shall be issued by RA only on submission of a “No Objection Certificate” from Department of Biotechnology.

Entitlement

4.7.1

CIF value of one or more such authorisations shall be maximum 500% of FOB and / or FOR value of preceding year’s exports and / or supplies in case of status holders and Rs. 5 crore or 500% of the FOB and / or FOR value of preceding year exports and / or supply, whichever is more, for others.

However, in cases where NC has already ratified norms for same export and import products in respect of an authorization obtained under paragraph 4.7, such norms shall be valid for a period of one year reckoned from the date of ratification.

In such cases Authorisations shall be issued by RA concerned under “Adhoc Norms Fixed” category and application copies need not be forwarded to NC for fixation / ratification of norms.

Authorisation holder in such cases shall be entitled for further authorisation (s) as per norms ratified by NC without need for subsequent ratification by NC. In such cases, applicant would file application under Adhoc Norms Fixed category.

However, NC should ensure that such adhoc norm(s), if not notified already, are notified within six months of the ratification of such adhoc norm(s).

4.7.2

Once norms are fixed by NC, value limits mentioned in above paragraph would not be applicable to advance authorisations issued under this paragraph. Such authorisations, subsequent to fixation of norms by NC, may be enhanced.

It is mandatory for industry to provide production data etc. as may be required by DGFT / EPC for fixation of SION. Otherwise, applicant shall not be allowed to take benefit of Advance Authorization scheme for taking repeat advance authorizations on self-declared basis.

Authorisation in Excess of Entitlement

4.7.3

An applicant shall be entitled for authorisation in excess of entitlement mentioned in paragraph 4.7.1 subject to furnishing of 100% Bank Guarantee to Customs authority to cover exemption from customs duties. A specific endorsement to this effect shall be made on authorisation.

Application

4.7.4

Original application with prescribed documents shall be submitted to concerned RA. RA shall forward a copy of application within 7 days from Authorisation issue date to NC for fixation of norms within prescribed time.

Undertaking

4.7.5

Applicant shall give an undertaking that he shall abide by norms fixed by NC and accordingly pay duty, together with interest, on unutilised inputs as per norms fixed by NC. However, Authorisation holder has option to undertake additional EO in proportion to excess unutilized inputs. In case application is rejected by NC, authorization holder shall pay customs duty saved along with interest on imported inputs, as notified.

However in such cases where the NC decides adhoc norms based on information available to it and the exporter represents against the decision of the NC, time limit for filing representation, if any, before the Norms Committee shall be four months from the date of communication of decision of the fixation of adhoc norms by NC.

In addition, an amount as per Para 4.28(i)(b) below has to be deposited.

For project supplies, the time limit for filing representations, if any, against the decision of Norms Committee shall be one year from the date of communication of decision of the Norms Committee.

[Last sentence inserted by DGFT Public Notice No. 12(RE)/ 22.09.2009].

4.7.6

In such cases, where norms are not finalised by NC within four months from Authorisation issue date, norms as applied for shall be treated as final and no adjustment will be made.

However, where application for fixation of adhoc / SION is rejected on account of non-furnishing of required documents/information, Authorisation holder shall be liable for penalty as stated in above paragraph. In case SION for the said product is notified, SION would be made applicable for deciding wastage norm and EO. In such cases where export obligation is completed pending fixation of norms by NC, entitlement for authorisation as given in paragraph 4.7.1 may be re-credited upon production of documentary evidence (copies of Shipping bill / bill of export / Central Excise certified copies of invoices) showing fulfillment of export obligation in respect of previous authorisations. However, bond waiver / redemption shall not be allowed pending fixation of norms in such cases.

Standardisation of Adhoc Norms

4.8

For standardization of norms, an application may be made by manufacturer exporter or merchant exporter tied to supporting manufacturer, duly filled in with complete data. Such applications shall be made to NC in ANF 4B. Import of fuel may also be allowed under SION by NC subject to following: -

(a) Facility of import of fuel shall be allowed only to manufacturer having captive power plant.

(b) In cases where SION specifically allows fuel, same shall be permitted under advance Authorisation. However,

If fuel is not covered specifically under SION, it may be allowed as per General Fuel Policy for products covered under SION or under paragraph 4.7 above.

(c) Fuel should be allowed only against an actual user Authorisation. However in case of DFIA, fuel can only be transferred to agencies granted marketing rights by the Ministry of Petroleum and Natural Gas.

(d) Applications of fixation for fuel entitlement for new sectors and modification of the existing entitlement as per General Note for Fuel in HBP v2 would be made to NC along with requisite data in ANF 4B.

Modification of SION

4.9

An application for modification of existing SION may be filed before the NC by manufacturer exporter or merchant-exporter, tied to supporting manufacturer, in form given in ANF 4B.

Amendment of Export item and inputs

4.10

An application for amendment of an export item or inputs SION or under Adhoc Norms may be filed by manufacturer or merchant exporter as per ANF 4B.

Applicant would give justification for seeking amendment and same would be considered by Regional Authority with specific approval of Head of office. In case of any major change in input or request for more wastage to that allowed under SION or adhoc norm, same should be referred to NC for ratification.

Revision of SION by NC

4.10.1

NC may identify SIONs which in its opinion are required be reviewed. Exporters are required to submit revised ANF 4B for such revision. It is mandatory for industry exporter(s) to provide production and consumption as may be required by DGFT / EPC for revision of Otherwise, applicant shall not be allowed to take benefit Advance Authorization scheme.

Description of an Advance Authorisation

4.11

An Advance Authorisation shall specify:

(a) names and description of items to be imported and exported / supplied;

(b) quantity of each item to be imported or wherever quantity cannot be indicated, value of item shall be indicated. However, if in SION, quantity and value of individual inputs is a limiting factor, same shall be applicable.

(c) aggregate CIF value of imports; and

(d) FOB / FOR value and quantity of exports / supplies.

Exports in Anticipation of Authorisation

4.12

Exports / supplies made from the date of EDI generated file number for an Advance Authorisation, may be accepted towards discharge of EO. Shipping / Supply document(s) should be endorsed with File Number or Authorisation Number to establish co-relation of exports / supplies with Authorisation issued. The requirement of endorsement of file number or authorisation number on the shipping bill would be dispensed with once the EDI Data Transmission System for the shipments becomes operational.

If application is approved, authorisation shall be issued based on input / output norms in force on the date of receipt of application by RA in proportion to provisional exports/supplies already made till any amendment in norms is notified.

For remaining exports, Policy / Procedures in force on authorisation issue date shall be applicable.

4.12.1

Exports / supplies made in anticipation of grant of an Advance Authorisation shall be entirely on risk and responsibility of exporter.

4.12.2

Conversion of duty free shipping bills to drawback shipping bills may also be permitted by customs authorities in case application for an Advance Authorisation is rejected or modified by RA.

Advance Authorisation or DFIA for Intermediate Supplies

4.13

Application for grant of Advance Authorisation or DFIA for Intermediate supply may be made on the basis of a tie-up agreement with exporter (physical / deemed) holding an Advance Authorisation or DFIA. RA concerned shall consider such requests.

Advance Authorisation or DFIA for Intermediate supply shall be issued after making Authorisation invalid for direct import of items, to be supplied by intermediate manufacturer. In such cases, a copy of the invalidation letter will be given to Authorisation holder and copy thereof will be sent to intermediate supplier as well as RA of intermediate supplier.

Authorisation holder in such case has an option either to supply intermediate product to the holder of Advance Authorisation or DFIA or to export (physical / deemed) directly. Intermediate supplier can also supply the product(s) directly to the port for export by the ultimate exporter (holder of Advance Authorisation or DFIA). In such cases, shipping bill shall be in the name of the ultimate exporter with the name of intermediate supplier endorsed on it. However, once Electronic message transfer facility among the RAs becomes fully operational, sending copy of invalidation letter / ARO to jurisdictional RA shall not be required.

Facility of Advance Authorisation shall be available even in cases where intermediate supplier has supplied or intend to supply material subsequent to fulfilment of EO by exporter holding Advance Authorisation / DFIA from where invalidation letter was issued.

Advance Release Order (ARO)

4.14

An application may be made to RA concerned for grant of ARO to procure inputs from indigenous sources / STEs.

4.14.1

Application shall specify:

(i) name, description and quantity of items and

(ii) individual value of items to be procured. An ARO may be issued along with Advance Authorisation / DFIA or subsequently, and its validity shall be co-terminus with validity of Advance Authorisation / DFIA.

An ARO issued for procurement of an individual item shall be automatically valid for procurement from one or more indigenous sources.

Back to Back Inland Letter of Credit (L/C)

4.15

Exporter may alternatively avail facility of a back to back inland letter of credit from banks. An Advance Authorisation / DFIA holder may approach a bank for opening an inland letter of credit (L/C) in favour of an indigenous supplier.

4.15.1

Before opening the L/C, bank will ensure that necessary BG LUT has been executed by Advance Authorisation / Non Transferable DFIA holder and an endorsement to that effect has been made on the Authorisation.

However, execution of BG / LUT shall not be required against transferable DFIA. After opening inland L/C, bank shall make following endorsement on Exchange Control and Customs copy of Advance Authorisation / DFIA:

Value of this Advance Authorisation / DFIA stands reduced by a sum of Rs. __________, being value of inland L/C No.________ opened today by authorisation holder in favour of M/s _____________ (name and address of indigenous supplier).

4.15.2

Authorisation shall be invalidated by bank for direct import only in respect of full quantity and value of item being sourced indigenously.

4.15.3

Original Letter of credit (L/C) may be retained by bank for negotiation and only non-negotiable copy of L/C may be given to indigenous supplier.

4.15.4

Responsibility of bank shall be confined to making endorsement. Bank shall not be liable for any misrepresentation or false statement made by authorisation holder while requesting bank to make endorsement. Inland L/C opened by bank in favour of indigenous supplier shall not be cancelled for any reason whatsoever.

4.15.5

Non negotiable copy of inland L/C together with photocopy of Advance Authorisation / DFIA duly carrying endorsements made by bank shall be sufficient for indigenous supplier to claim deemed export benefits. L/C issued shall be entitled to benefits given in paragraph 8.3 (b) and (c) of FTP, as applicable.

4.15.6

Where import is permitted as an input under this scheme, gold/silver can be sourced through nominated agencies as given in FTP (Chapter 4) for supply against the Advance Authorisations/DFIA issued. Before supply of material, nominated agencies should follow same procedure as given in paragraph 4.15.1 above.

Facility of Supporting Manufacturer(s)/Jobber/co-licensee

4.16

Imported material may be used in any unit of holder of Advance Authorisation or Non Transferable DFIA (subject to condition of paragraph 4.5 of this Handbook) or jobber / supporting manufacturer provided same is endorsed on authorisation by RA. If applicant desires to have name of any manufacturer or jobber added to authorisation, he may apply. Such endorsement shall be mandatory where prior import before export is a condition for availing Advance Authorisation / DFIA scheme and authorisation holder desires to have material processed through any other manufacturer or jobber.

Upon such endorsement made by RA, authorisation holder and co- authorisation holder shall jointly and severally be liable for completion of EO. Any one of co-authorisation holders may import goods in his name or in joint names. BG/LUT shall also be furnished in their joint names.

However if authorisation holder is registered with Central Excise, he has an option of getting names of jobber endorsed by Central Excise as per Central Excise Rules in lieu of RA’s endorsement. In case manufacturer exporter holding authorisation is not registered / not required to be registered with Central Excise authority, job work may be allowed as per Central Excise Rules and regulations without insisting for endorsement of supporting manufacturer’s name. However, authorisation holder shall be solely responsible for imported items and fulfillment of EO.

 

4.17

In case BG / LUT has been redeemed, advance authorization holder can get duty free inputs processed from any manufacturer under Actual User condition as per job work regulations prescribed under Central Excise Rules. However such restriction shall not be applicable in case of transferable DFIA holder.

Acceptance of BG/LUT

4.18

At the time of issue of authorisation, acceptance of undertaking given by applicant to RA concerned in relevant ANF will be endorsed on the reverse of Advance Authorisation. Authorisation holder shall execute Bank Guarantee / Legal Undertaking, as the case may be, in terms of para 2.20 of HBP v1.

Port of Registration

4.19

Advance Authorisation shall be issued for purpose of import and export through one of sea ports or airports or ICDs or LCS specified below. Authorisation holder shall register authorisation at the port specified in authorisation and thereafter all imports against said authorisation shall be made only through that port, unless the authorisation holder obtains permission from customs authority concerned to import through any other specified port. However, exports may be made through any of the specified ports.

Sea Ports

Mumbai, Kolkata, Cochin, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Paradeep, Pipavav, Sikka, Tuticorin Vishakhapatnam, Dahej, Nagapattinam, Okha, Mundhra, Surat (Magdalla), Jamnagar, Nhava Sheva, Haldia, Krishnapatnam, Bedi (including Rozi-Jamnagar), Dharamtar, Muldwarka, Porbander, Vadinar.

Airports

Ahmedabad, Bangalore, Bhubaneshwar, Mumbai, Kolkata Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur, Chennai, Indore, Dabolim (Goa), Lucknow (Amausi), Rajasansi (Amritsar).

ICDs

Agra, Bangalore, Coimbatore, Delhi, Faridabad, Guwahati (Amingaon), Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik, Rudrapur(Nainital), Dighi (Pune), Vadodara, Daulatabad, (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anaparthy, Salem Mallanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar, Chheharata (Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri, Tuticorin, Babarpur, Bhadohi, Durgapur (Export Promotion Industrial Park), Kundli, Loni (District Ghaziabad), Mandideep (District Raisen), Raipur, Talegoan (District Pune), Dhannad Rau (District Indore), Kheda (Pithampur, District Dhar), Patli (Gurgaon).

LCS

Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Hilly, Chengrabanda, Dawki, Atari, Ghojadanga, Agartala, Amritsar Rail Cargo, Nepalganj Road, Sutarkhandi.

[New Ports in bold letters inserted by 25-PN(RE)/09.12.2009].

SEZ

As notified by Central Government, any SEZ can be a specified port for import and export.

4.19.1

Commissioner of Customs may permit imports and exports from any other seaport / airport / ICD or LCS.

4.19.2

For imports from Airport / Seaport / ICD / LCS other than port of registration, a TRA shall be issued by the customs authority at the port of registration to customs authority at port of import.

Facility of Clubbing

4.20

Facility of clubbing shall be available only for redemption / regularisation of cases and no further import or export shall be allowed. For this facility, authorisations are required to have been issued under similar Customs notification even pertaining to different financial years. However in case of Authorisations issued in 2004-09 period or thereafter, Advance Authorisations with different customs notification can be clubbed.

4.20.1

RA, under whose jurisdiction authorisation is issued or DGFT (HQ) in other cases, shall consider a request in ANF 4D for clubbing all imports and exports of more than one Advance Authorisation provided imported inputs are properly accounted for as per norms. Value addition of the authorisations so clubbed shall be average of minimum value addition prescribed in FTP and Procedure laid thereunder, imposed on individual authorisations. Upon clubbing, authorisations shall, for all purposes, be deemed to be one Authorisation and thereafter shortfall, if any, shall be regularized in terms of para 4.28 of HBP v1.

4.20.2

Accountability of imports and exports shall be restricted in relation to individual categories of Advance Authorisations including Advance Authorisation for annual requirements.

4.20.3

Facility is available only for Advance Authorisation(s) where there is shortfall in fulfillment of EO, and which is sought to be clubbed with an advance Authorisation(s) which is valid for imports. For expired Authorisation(s) with EO shortfall and which is sought to be clubbed with an advance Authorisation(s) which is valid for imports, applicant shall pay composition fee for EO period extension as per paragraph 4.22 below.

4.20.4

Wherever exports are effected beyond EO extension period (allowed vide paragraph 4.22 below) of earlier authorisation, no clubbing shall be permitted.

4.20.5

Notwithstanding provisions of para 4.20.3 and 4.20.4 above, Clubbing of all expired Authorisations may also be permitted provided all expired Authorisations have been issued during Exim Policy period 1992-1997 & 1997-2002 i.e., 1st April 1992 to 31st March, 2002. However clubbing of erstwhile Value Based Advance licences shall not be allowed.

Enhancement/Reduction in the value of Authorisation

4.21

In respect of an Advance Authorisation, RA concerned (as per their financial powers) may consider a request for:

(a) enhancement / reduction in CIF value of advance authorisation;

(b) enhancement / reduction in CIF value, quantity of inputs, FOB value and quantity of exports of an advance authorization;

provided VA after such enhancement does not fall below minimum VA stipulated in FTP and HBP v1 laid thereunder and there is no change in input-output norms and FTP under which advance authorisation was issued.

[However, in case of advance authorisations issued prior to 27.8.09 under the FTP, 2004-09, the following conditions shall apply for any enhancement in the value of the authorisation:

(i)    Wherever, exports are subsequent to 27.8.09, enhancement in CIF/FOB values shall be subject to a minimum value addition (VA) of 15% for that component of exports. 

(ii)   Wherever, the exports are prior to 27.8.09, enhancement of CIF/ FOB value shall be subject to a minimum Value addition of 15% or the V.A. declared in the original Advance Authorization application, whichever is lower.]

[Sub para inserted by 15-PN(RE)/27.10.2009].

 

4.21.1

Request for prorata enhancement in value and quantity may be made either before or after exports. In such cases where there is a change in SION prior to export of said product, pro-rata enhancement shall be given after calculating entitlement on revised SION.

4.21.2

The application for the enhancement/ reduction in the value of Authorisation shall be made in ANF 4E.

Application fee for enhancement

4.21.3

Application fee leviable for enhancement would be on the difference in CIF values of original and final Authorisation. However, no application fee would be charged if value of Authorisation is being reduced or applicant has paid maximum fee of Rs 100,000 (for manual applications) and Rs 50,000 (for digitally signed applications) respectively in original application for Advance Authorisation/DFIA.

Export Obligation (EO) Period its Extension

4.22

Fulfillment Period of EO under an Advance Authorisation shall commence from Authorisation issue date, unless otherwise specified. EO shall be fulfilled within 36 months except in case of supplies to projects / turnkey projects in India / abroad under deemed exports category, where EO must be fulfilled during contracted duration.

EO period for Advance Authorizations issued with input (s) as mentioned in Appendix 30A shall be as per the period stipulated against each entry therein. Facility of extension of EOP shall not be allowed in case of Advance Authorisation issued for these inputs. RA shall make an endorsement in Advance Authorisation to this effect.

 

4.22.1

Whenever a ban / restriction is imposed on export of any product, export obligation period in respect of Advance Authorisation already issued prior to imposition of ban, would stand automatically extended for a period equivalent to the duration of ban, without any composition fee.

For the Advance Authorisation (erstwhile licences) where raw sugar has been imported between 21.09.04 and 15.4.08, but the export obligation is yet to be fulfilled, the export obligation period stands automatically extended upto 31.03.2011 without payment of composition fee.  Advance licence / authorisation holder has the option to pay the customs duty as applicable, on the date of import for the quantity of import proportionate to unfulfilled E.O. and get the case regularized accordingly [Paragraph 4.22.1 amended by 29-PN(RE)/07.01.2010].

4.22.2

Customs may allow provisional clearance of export consignment as and when Authorisation holder produces documentary evidence of having applied for EO extension to concerned RA.

Revalidation of Authorisation

4.23

RA may consider a request of original Authorisation holder and grant one revalidation for six months from expiry date. Request(s) for revalidation of Authorisation shall be made in ANF 4E.

Monitoring of Obligation

4.24

RA, with whom undertaking is executed by Advance Authorisation holder, shall maintain a proper record in a master register indicating starting and closing dates of obligation period and other particulars to monitor EO.

Within two months from date of expiry of period of obligation, Authorisation holder shall submit requisite evidence in discharge of export obligation in accordance with paragraph 4.25 below.

However, in respect of shipments where six months period (one year in case of status certificate holder and others as per RBI guidelines) for realisation of foreign exchange has not become due, RA shall not take action for non submission of bank certificate of exports and realisation, provided other document substantiating fulfillment of EO have been furnished.

 

4.24.1

In case Authorisation holder fails to complete EO or fails to submit relevant information / documents, RA shall take action by refusing further Authorisations, enforce condition of Authorisation and Undertaking and also initiate penal action as per law.

Advance Authorisation for Annual Requirement

4.24A

Exporters eligible for such Authorisations shall file an application in ANF 4A to RA concerned. All provisions as to Advance Authorisation given above would apply except the following:

(i) RA while issuing Authorisation shall mention technical characteristics quality and specifications in respect of following inputs:-Alloy steel including stainless steel, copper alloy, synthetic rubber, bearings, solvents, perfumes/ essential oils/aromatics chemicals, surfactants, relevant fabrics and marble.

(ii) Authorisation holder shall have flexibility to export any product falling under export product group using duty exempted material.

(iii) Within eligible entitlement, an exporter may apply for one or more than one authorisations in a licensing year, subject to condition that against one port of registration only one authorisation can be issued for same product group. One time enhancement / reduction of the authorisation shall be available in terms of paragraph 4.21 above.

(iv) On completion of EO against one or more authorisations, all issued in same licensing year, entitlement of an exporter for that licensing year shall be deemed to be revived by an amount equivalent to EO completed against authorisation(s).

(v) In respect of export product for which Standard Input Output Norms (SION) does not exist, the authorization holder shall submit an application in “Aayaat-Niryaat Form” along with prescribed documents to NC before making the shipment. The applicant shall also furnish Advance Authorisation for Annual Requirement No. and date along with the File No. from which the same was issued in the covering letter to the application.

Fulfillment of Export Obligation

4.25

Authorisation holder shall furnish prescribed documents in ANF 4F in support of fulfillment of EO.

Discharge of export obligation against advance licences issued prior to 1.4.2002

4.25A

Quantity Based Advance licences issued prior to 1.4.2002 shall be disposed off as per Public Notice No. 79 dated 2.1.2006, PN 151 dated 26.2.09, as amended from time to time.

Redemption / No Bond Certificate

4.26

In case EO has been fulfilled, RA shall redeem the case. After redemption, RA shall forward a copy of redemption letter indicating shipping bill number(s), date(s), FOB value in Indian rupees as per shipping bill(s) and description of export product in respect of shipment which were taken into account for the purpose of fulfillment of EO to Customs authority at port of registration. Such details shall also be placed by the Zonal Offices in their website immediately after issuance of export obligation discharge/redemption letter/No Bond Certificate (in case of “No BG / LUT” facility) and by DGFT Hqr in DGFT website on monthly basis for customs authority to access it from website.

Cancellation/ redemption of BG / LUT would be undertaken by Customs within 30 days of issue of Export Obligation Discharge Certificate (EODC) / bond waiver by RA.

Ordinarily, redemption of BG / LUT shall not preclude customs authority from conducting random checks and from taking action against Authorisation holder for any misrepresentation, mis-declaration and default detected subsequently.

Further RA shall also take action against authorisation holder in case of non-submission of Appendix 23, duly filled in, as stipulated in Paragraph 4.30 below or for any misrepresentation, misdeclaration and default detected subsequently in details declared and furnished in Appendix 23. An endorsement to this effect shall be made by RA in the redemption certificate.

Transitional Arrangement for Authorisations issued upto 26.08.2009

4.27

Advance Licences including Advance Licences for Annual Requirement issued upto 26.08.2009 shall be governed by provisions contained in Chapter-7 of HBP v1 (RE-2001),Chapter 4 of HBP v1 (2002-2007) as Notified on 31.3.2002 and Chapter 4 of HBP v1 (2004-2009) as notified on 31.8.2004 respectively as amended from time to time,excepting provisions relating to clubbing and extension in E.O. period, which shall be governed by provisions of paragraphs 4.20 and 4.22.1 respectively above and any other provision, as notified by DGFT.

However, wherever Customs duty is to be paid on unutilised material, same shall be paid alongwith interest thereon as notified.

Regularisation of Bonafide Default

4.28

Cases of bonafide default in fulfillment of EO may be regularized by RA as under:

(i) If EO is fulfilled in terms of value, but there is a shortfall in terms of quantity, the Authorisation holder shall, for regularization, pay:-

a) to customs authorities, customs duty on unutilized value of imported/ indigenously procured material along with interest as notified; however, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB; and

b) an amount equivalent to 3% of the CIF value of unutilised imported material through a TR in authorised branch of Central Bank of India indicating the “Head Account: 1453, Foreign Trade and Export Promotion and Minor Head 102”. Authorisation holder shall also be required to obtain a separate authorisation for regularisation of excess imported input. However, provisions of this sub paragraph shall not be applicable if unutilised imported material was freely importable on the date of import.

ii) If the EO is fulfilled in quantity but there is shortfall in value, no penalty shall be imposed if Authorisation holder has achieved minimum value addition prescribed. However, if value addition falls below the minimum value addition prescribed Authorisation holder shall be required to deposit an amount equal to 1% of shortfall in FOB value in Indian Rupee through TR in authorised branch of Central Bank of India as above or through EFT mode.

Value wise shortfall shall be calculated with reference to actual quantity of exports and FOB value of realisation with reference to prorata quantity of imports and CIF value. For example, if export performance is only 50% quantitywise but import has been for complete CIF value permitted, then value addition would be calculated on a prorata basis, i.e with reference to 50% of CIF value of imports. This would accordingly imply that where Authorisation holder is unable to export, no penalty on valuewise shortfall shall be imposed.

(iii) If EO is not fulfilled both in terms of quantity and value, the Authorisation holder shall, for the regularisation, pay as per (i) and (ii) above.

(iv) In case an exporter is unable to complete EO undertaken in full and he has not made any import under Authorisation, Authorisation holder will also have an option to get the Authorisation cancelled and apply for drawback after obtaining permission from Customs authorities for conversion of shipping bills to Drawback Shipping Bills.

(v) RA shall compare relevant portion of Appendix-23 duly verified and certified by Chartered Accountant with that of norms allowed in Authorisation(s) and actual quantity imported against Authorisation(s) in the beginning of licensing year for all such Authorisations redeemed in preceding licensing year. In this verification process, in case it is found that Authorisation holder has consumed lesser quantity of inputs than imported, Authorisation holder shall be liable to pay customs duty on unutilized value of imported material, alongwith interest thereon as notified, or effect additional export within the EO period. However, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB.

Time Period For Depositing Fines Customs Duty, Etc.

4.29

Customs duty with interest to be recovered from Authorisation holder on account of regularisation or enforcement of BG LUT, shall be deposited by Authorisation holder in relevant Head of Account of Customs Revenue i.e., “Major Head 0037 - Customs and minor head 001- Import Duties” in prescribed T.R. Challan within 30 days of demand raised by regional customs authority and documentary evidence shall be produced to this effect to RA / customs authority immediately. However, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB.

On receipt of such documentary evidence from Authorisation holder, RA shall intimate details of recovery/ deposits made to Customs Authority at port of registration under intimation to Joint Secretary (Drawback), Department of Revenue, Ministry of Finance, Jeevan Deep Building, New Delhi.

Payment of amount of duty, interest and any dues for regularisation shall, however, be without prejudice to any other action that may be taken by Customs Authorities at any stage under Customs Act, 1962.

Maintenance of Proper Accounts

4.30

Every Advance Authorisation holder shall maintain a true and proper account of consumption and utilisation of duty free imported / domestically procured goods against each authorisation as prescribed in Appendix-23. These records are required to be sent to the concerned RA at the beginning of each licensing year for all those authorisations, which have been redeemed in previous licencing year. However, these records in said format are required to be submitted for authorisations issued on or after 13-05-2005. Such records should be preserved for a period of at least three years from date of redemption.

Consideration of cases against lost EP copy of the Shipping Bills and / or Bank Realisation Certificate

4.30A

In case where Original EP copy of Shipping Bill / original BRC has been lost, request for EODC, "No BG / LUT condition" under Advance Authorisation / DFIA scheme or endorsement of transferability under DFIA scheme can be considered, subject to submission of following documents in lieu of those original documents:

a) A duplicate / Customs Certified / Self-attested copy of the shipping Bill in lieu of the original; Duplicate / Bank certified copy of BRC in lieu of original;

b) An application fee equivalent to 1% of duty saved amount. However, no fee shall be charged when such document is lost by Government agencies and a documentary proof to this effect is submitted;

c) An affidavit by exporter about loss of document and an undertaking to surrender it immediately to concerned RA, if found subsequently;

d) An indemnity bond by exporter to the effect that he would indemnify Government for financial loss, if any, on account of duty free import entitlement availed /allowed against lost Shipping Bills / BRC. Customs Authority, before allowing redemption of BG / LUT or clearance after endorsement of “No BG / LUT condition” or endorsement of transferability, shall verify the genuineness of such shipping bill (s) and ensure that no double benefit against such shipping bill has been availed. This specific condition shall be endorsed by RA concerned on the EODC.

Duty Free Import Authorisation (DFIA) Scheme

Duty Free Import Authorisation (DFIA) Scheme

4.31

Policy relating to the Duty Free Import Authorisation (DFIA) Scheme is prescribed in Chapter 4 of FTP.

Application

4.32

An application in ANF 4H along with documents therein, shall be submitted to RA concerned.

 

4.32.1

Guidelines as in paragraph 4.4.1 and 4.4.3 above would be adhered to.

 

4.32.3

However in respect of following items, exporter shall be required to give declaration with regard to technical characteristics, quality and specification in shipping bill. RA while issuing DFIA shall mention technical characteristics,quality and specification in respect of such inputs:

Alloy steel including Stainless Steel, Copper Alloy, Synthetic Rubber, Bearings, Solvent, Perfumes/ Essential Oil/ Aromatic Chemicals, Surfacatants, Relevant Fabrics, Marble, Articles made of polypropylene, Articles made of Paper and Paper Board, Insecticides, Lead Ingots, Zinc Ingots, Citric Acid, Relevant Glass fibre reinforcement (Glass fibre, Chopped / Stranded Mat, Roving Woven Surfacing Mat), Relevant Synthetic Resin (unsaturated polyester resin, Epoxy Resin, Vinyl Ester Resin, Hydroxy Ethyl Cellulose), Lining Material.

Facility for Split DFIA

4.32.4

Split Authorisations of DFIA subject to a minimum of CIF value of Rs. 10 lakhs each and multiples thereof may also be issued, on request at the time of seeking transferability. A fee of Rs. 1000/- each shall be paid for each split authorization.

Split-up DFIAs shall be permitted with same Port of Registration as appearing on the original DFIA.

 

4.33

Provisions of paragraphs 4.6, 4.11, 4.12, 4.12.1, 4.18, 4.19, 4.21, 4.22, 4.23, 4.24, 4.26 and 4.28 of this Handbook shall also be applicable for DFIA Scheme.

DFIA for applicants with multiple units

4.34

Transfer of any duty free material imported or procured against actual user DFIA shall be governed by provisions of paragraph 4.5 above.

Re-export of goods imported under DFIA Scheme

4.35

Goods imported against transferable DFIA, which are found defective or unfit for use, may be re-exported, as per DoR guidelines. In such cases 95% of CIF value debited against DFIA for export of such goods, shall be generated by concerned Commissioner of Customs as an Authorisation, containing amount generated and the details of original DFIA.Based on the certificate, a fresh DFIA shall be issued by concerned RA.Fresh DFIA, so issued, shall have same port of registration and shall be valid for a period equivalent to balance period available on date of import of such defective/ unfit goods.

Fulfillment of Export Obligation and maintenance of proper accounts of imports

4.36

Provision of paragraph 4.25 above shall apply.Original DFIA holder shall maintain a true and proper account of consumption and utilisation of duty free imported / domestically procured goods against each authorisation as as prescribed in Appendix-23. These records are required to be sent to concerned RA along with request for bond waiver /redemption / discharge of export obligation/ transferability. Such records should be preserved for a period of at least three years from date of redemption.

Transferability of DFIA

4.36A

Once export obligation is fulfilled and required documents as stipulated in Paragraph 4.36 above have been furnished, RA shall make authorisation transferable subject to conditions stipulated for this scheme including an endorsement on the authorisation itself as to liability of additional customs duty / excise duty in respect of imported / indigenously procured inputs, as the case may be, which have already been imported under Actual User DFIA and are sought to be transferred after fulfillment of E.O. DFIA holder shall deposit additional customs duty / excise duty alongwith applicable interest as per Customs Notification in relevant Head of Account of Customs Revenue i.e., “Major Head 0037 – Customs and Minor Head 001 – Import Duties” in prescribed T.R. Challan and furnish a documentary evidence to RA alongwith the application for endorsement of transferability.