Procedure for Registration of Contracts for Fresh 10 Lakh Bales of Cotton Export

[Ref: DGFT Public Notice No. 55-(RE) dated 17 June 2011

Subject: Conditions and modalities for registration of contracts for additional quantity of 10 lakh bales (1,70,000 MTs ) of cotton with DGFT.

In exercise of the powers conferred under Paragraph 2.4 of the Foreign Trade Policy, 2009-14, as amended from time to time, the Director General of Foreign Trade hereby notifies the following procedure for export of 10 lakh bales (1,70, 000 MTs) of cotton. Notification No. 57(RE-2010)/2009-2014 dated 9^th June, 2011 has now permitted export of 65 lakh bales of cotton during the current Cotton Year 2010-11 (01.10.2010 to 30.09.2011) subject to registration of contracts with Directorate General of Foreign Trade for export of cotton under ITC(HS) Code 5201 & 5203.

2. Out of the above quantity of 65 lakh bales, allocation of 55 lakh bales has already been made by the Textile Commissioner, Mumbai in October, 2010 and subsequently by DGFT in January, 2011. Accordingly, for balance export of 10 lakh bales (1,70,000 MTs) of cotton, applications are invited for grant of registration certificates, as per the procedure prescribed below.

3. Application for registration certificate may be sent (through email only). The address for sending the emails is:cottonexport-dgft@nic.in

,. Such applications may be sent between 12 noon of Monday 20^th June 2011 and 5 pm of Saturday 25^th June 2011. The format of email is given in Annexure-I.

4. Allocation will be made as per the following criteria:-

(i) An applicant must have exported cotton in either of the two previous cotton years (1^st October to 30^thSeptember) 2008-09, 2009-10;

(ii) Allocation will be done on a pro-rata basis with a ceiling of 4,250 MTs per IEC (equal to 25, 000 bales) and floor of 100 MTs per IEC. (100 MTs would come to 4 container load; if a standard bale of cotton contains 170 kgs, then 150 such bales would constitute approximately 25 MTs or 1 container load; so 600 bales would be 4 container load);

(iii) An applicant can apply for a quantity which is the higher of its export of cotton in the two previous cotton years(2008-09 and 2009-10) subject to a quantity ceiling of 4,250 MTs. All applications must be in Metric Tons (MTs) only.

5. Procedure to obtain registration from Regional Authorities:

After the allocation is made (as described at para 4 above), the applicants shall have to submit the following documents to the concerned Regional Authority of DGFT (RAs) for issue of Registration Certificate:

(a) Copy of Export Contract along with

A copy of confirmed and irrevocable Letter of Credit (LC). (It may be noted that once LC is opened in the name of a particular firm, the same cannot be transferred or amended in the name of other firm),

FIRC from Bank showing receipt of remittance from the concerned foreign buyer as proof of having received 100% Advance Payment

a minimum of 25% Advance Payment and balance Cash Against Delivery(CAD),

(b) Declaration/Undertaking in the format given in Annexure-II, on the letter head of the firm

(c) Copy of IEC

These documents would need to be submitted within period specified in Annexure-III.

6. Issue of Registration Certificate:

After scrutinizing the documents so received, and if found eligible, the applicant shall be issued a Registration Certificate by the concerned Regional Authority (RAs). Export against such registered contracts shall be completed by 15^th September 2011.

7. Failure to submit the documents

Applicants who fail to submit the stipulated documents within prescribed time or where documents are found to be incorrect, that applicant shall be declared ineligible. They will forfeit their right to seek further allocation.

8. Name of the applicant firm should not be in the DEL

The firms whose name appear in the Denied Entity List (DEL) shall have to get their name removed from DEL before the stipulated date failing which registration certificate will not be issued to them.

9. Failure to Export: penalty:

Failure to export the allocated quantity within the stipulated time would invite debarment from further allocation. In addition, penal action as per Section 11(2) of the Foreign Trade (D&R) Act would also be initiated. For ready reference Section 11(2) is extracted below:-

“11(2). Where any person makes or abets or attempts to make any export or import in contravention of any provisions of this Act or any rules or order made there under or the Foreign Trade Policy, he shall be liable to a penalty of not less than ten thousand rupees and not more than five times the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more.”

10. Calendar of events

Calendar for process of applications, issue of RC and export is provided in Annexure-III

11. Effect of this Public Notice:

Through Notification No.57 of 09.06.2011, the cap on export of cotton in the current cotton year has been increased to 65 lakh bales from 55 lakh bales. For allocation of this additional quantity of 10 lakh bales, the above procedure has been prescribed.

Annexure-I to Public Notice No. (RE-2010)/2009-14 Dated June, 2011

SAMPLE FORMAT FOR SENDING APPLICATION BY E-MAIL TO cottonexport-dgft@nic.in

Subject header of E-mail : IE Code- Name of the Firm/Applicant-Quantity applied for

(Example : 050003 0001-ABC Exports-1000 MTs)

(Fill this in the “Subject” field)

Message Body (Content of E-mail)

Line 1 : IE Code (Example : 0500030001)

Line 2 : Name (Example : ABC Exports)

Line 3 : Quantity applied for (In MTs, both in figure and words). (Example 1000 MTs, One Thousand Metric Tonnes)

Line 4 : ITC(HS) Code (Example : 5201 or 5203)

Lines 6-13 : Details of past performance of cotton in the Cotton years, 2008-09 & 2009-10

Line 6 : Export performance in Cotton Year, 2008-09 (Example: 1,000 MTs)

Line 7 : Export performance in Cotton Year, 2009-10 (Example: 1,500 MTs)

Line 8 : Higher quantity between Line 6 and Line 7 above (Example: 1,500 MTs)

Lines 9-14 : Any information that the applicant wishes to submit.

Lines 15-24: Details of Applicant

Line 15 : Name of the Applicant (in whose name IEC has been issued)

(Example : ABC Exports)

Line 16 : l Exact Postal Address

Line 17 : l (Example: D-402, 1^st Floor,

Line 18 : l Karim Nagar, New Delhi- 110010)

Line 19 : Phone Number(s) with STD Code (Example: 011-23456789)

Line 20 : Fax Number (Example: 011-23456793)

Line 21 : E-mail (Example : abcexports@yahoo.com)

Line 22 : Alternative E-mail (Example : ashokbhalla@gmail.com)

(Application must be from one of these two E-mails)

Line 23 : Name of the authorized person sending the application

(Example : Ashok Bhalla)

Line 24 : Phone No of the authorized person (Landline & Cell phone)

_____________________________________________________________

_____________________________________________________________

Note 1 : After allocation, eligible applicant shall submit hard copies of above application, duly signed by authorized person along with declaration on the official letter head of applicant firm as per Annexure II.

Annexure-II to Public Notice No. (RE-2010)/2009-14 Dated June, 2011

Declaration / Undertaking

1. I / We hereby declare that the particulars and the statements made in this application are true and correct to the best of my / our knowledge and belief and nothing has been concealed or held there from.

2. I / We fully understand that any information furnished in the application if found incorrect or false will render me / us liable for any penal action or other consequences as may be prescribed in law or otherwise warranted.

3. I / We undertake to abide by the provisions of the FT (D & R) Act, 1992, as amended, the Rules and Orders framed there under, FTP, HBP v 1 and HBP v2 and ITC (HS). I also undertake that in the event of non-performance after grant of Registration Certificate for export of cotton by the Directorate General of Foreign Trade, I shall be liable to Penal Action under Section 11(2) of Foreign Trade(Development & Regulation) Act, 1992, (as amended), including debarment from future allocations.

4. I hereby certify that I am authorized to verify and sign this declaration.

Signature of the Applicant Place

Official Address

Residential Address

________________________________________________________________________

Note 2 : Required documents for submission by eligible applicants for obtaining RC (In addition to documents prescribed in Note 1 above)

(a) Copy of Export Contract along with

(i) A copy of confirmed and irrevocable Letter of Credit(LC), or

(ii) FIRC from Bank showing receipt of remittance from the concerned foreign buyer as proof of having received 100% Advance Payment

(iii) a minimum of 25% Advance Payment and balance Cash Against Delivery(CAD).

(b) Copy of IEC

(c) Self-declaration countersigned by a Chartered Accountant evidencing quantity of cotton exported in each of the two previous Cotton Years, 2008-09 and 2009-10

Annexure- III to Public Notice No. (RE-2010)/2009-14 Dated June, 2011

Calendar of Events