4.06 — Self-Ratification Scheme

• (i) Where there is no SION/valid Adhoc Norms for an export product or where SION has been notified but exporter intends to use additional inputs in the manufacturing process, eligible exporter can apply for an Advance Authorisation under this scheme on self declaration and self ratification basis. The expression “additional inputs” refers not to additionality in terms of quantity/value of an input specified in a norm, but to another additional input. Say, if the inputs specified in the norm are X1 and X2 only, then input Y would represent an additional input. RA may issue Advance Authorisations and such cases need not be referred to Norms Committees for ratification of norms. Application under this scheme shall be made along with a Certificate from Chartered Engineer in the prescribed format.

• (ii) A Certificate from a Chartered Engineer who has been not been penalised in the last five years under FT(D&R)Act 1992,Customs Act 1962, Central Excise Act 1944, GST Acts and allied acts and rules made there under shall only be accepted for grant of Authorisation under this scheme.

• (iii) Detailed procedure for administering the scheme shall be prescribed in the Handbook of Procedures.

• (iv) An exporter (manufacturer or merchant), who holds AEO Certificate under Common Accreditation Programme of CBEC is eligible to opt for this scheme.

• (iv) A status holder who is a manufacturer cum actual user and holds valid 2-star or above status under para 1.25 of FTP and who has already submitted its application for grant of AEO on CBIC’s AEO portal is also eligible to apply for this scheme subject to following conditions:-

  • a) Status holder submits copy of numbered and dated acknowledgement of its application for grant of AEO.

  • b) Status holder undertakes to the DGFT that –

    • (i) Their application for grant of AEO certification has not yet been rejected;

    • (ii) There is no case of infringement of Customs and allied laws against the status holder in the current year and last three FYs.

    • (iii) Status holder has not been issued show cause notice by Customs or GST authorities in the current year and last three FYs.

    • (v) There are no insolvency, bankruptcy or liquidation proceedings taken against the status holder in the current year and last three FYs.

  • c) If status holder is unable to obtain the AEO certification within 120 days from date of application under this scheme para, the exporter agrees that the facility under this para shall stand withdrawn and he (status holder) will be bound to approach the concerned Norms Committee of DGFT for fixation of norms and to abide by the decision of the said Committee.

  • d) In case of situation as at (c) above, no further authorisation under this scheme para will be issued.

  • e) The DGFT may deny authorisation under this scheme para to two star and above status holder based on its risk management principles.

  • f) Status holder shall be audited by the DGFT as laid down in the Handbook of Procedures.

• (vi) The scheme shall not be available for the following export products:

  • a) All items covered under Chapter-1 to 24 and Chapter-71of ITC(HS) Classification;

  • b) Biotechnology items and related products; and c) SCOMET items.

• (vii) The scheme shall not be available for the following inputs:

  • A. All vegetable / edible oils classified under Chapter15 and all types of oilseeds classified under Chapter-12 of ITC (HS)book;

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

  • C. Horn, hoof and any other organ of animal;

  • D. Wild animal products, organs and waste thereof;

Honey;

• E.

• F. All items with basic customs duty of 30% or more;

• G. All types of fruits/ nuts/ vegetables classified under Chapter-7 and Chapter-8 of ITC (HS) book;

• H. Items covered under heading 2515, 2516, 3301, 3302, 3303, 6801 and 6802 of ITC(HS) Classification;

• I. Items covered under Chapter 50 to 63 of ITC(HS) classification.

• (iv) Status holder has positive net current assets.

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Foreign Trade Policy 2023

• J. Acetic Anhydride, Ephedrine and Pseudoephedrine;

• K. Vitamins;

• L. Biotechnology items and related products;

• J. Insecticides, Rodenticides, Fungicides, Herbicides, Anti sprouting products, and plant growth regulators, disinfectants and similar products of all forms, types and grades;

• K. Waste/Scrap of all types; and

• L. Second hand goods.

• (viii) Inputs imported shall be subject to pre import condition and they shall be physically incorporated in the export product (making normal allowance for wastage). In case of local procurement under invalidation/ARO, the inputs shall be procured prior to manufacture of export item and shall be physically incorporated in the export product.

• (ix) Wherever value of by-products and recoverable wastage generated during manufacturing process is more than 5% of CIF value, corresponding quantity of main input shall be reduced from the entitlement to the extent that value of disallowed quantity is equal to the value of byproducts and recoverable wastage generated during manufacturing process.

• (x) Concerned Norms Committee may conduct audit of the manufacturer. The frequency and manner of audit shall be prescribed by DGFT in Handbook of Procedures. The manufacturer shall be required to provide the necessary facility to verify the books of account/other documents as required, give information and assistance for timely completion of the audit. Non-availability of production and consumption documents/data shall be treated as misdeclaration and indulgence in fraudulent activities and shall be penalised under FT(D&R) Act, as amended and rules made there under.

• (xi) Concerned Norms Committee may initiate special audit, considering the nature and complexity of the case and revenue of government, if he is of the opinion at any stage of scrutiny/enquiry/investigation that the norms have not been claimed correctly or the excess benefit has been availed. Special audit can be conducted even if the manufacturer has already been audited before.

• (xii) If the audit results in detection of mis-declaration and/ or instances of claiming of inputs which are not used

  • in manufacturing process or excess quantity of inputs than consumed, demand and recovery actions will be initiated in addition to initiation of action against the authorisation holder, manufacturer and Chartered Engineer in terms of Foreign Trade Development and Regulation Act 1992 and/or Customs Act 1962, as amended and rules made there under.

• (xiii) In cases where Chartered Engineer has not exercised due diligence or has willfully become party to misdeclaration action will be initiated under against such person under FT(D&R) Act 1992, as amended and rules made there under. In addition, such cases shall also be referred to ‘The Institute of Engineers India’ for taking action as warranted under the bylaws of the institute.

• (xiv) All the provisions applicable for Advance Authorisation Scheme shall be applicable to this scheme also in so far they are not inconsistent with this scheme.