DGFT Regulatory Doc

Handbook of Procedures-(Vol. I) 1st September 2004-31st March 2009 w.e.f. 1.4.2006 Ministry of Commerce and Industry Department of commerce Government of India Website: http://dgft.gov.in

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3 TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY (PART-I, SECTION-1) GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY

PUBLIC NOTICE No 1(RE-2006) /2004-09 NEW DELHI, DATED THE 7th April, 2006

In exercise of powers conferred under Paragraph 2.4 of the Foreign Trade Policy, 2004-09, the Director General of Foreign Trade hereby notifies annual supplement of the Handbook of Procedures (Volume I) incorporating Annual Supplement as updated on 7th April 2006 as contained in annexure to this Public Notice and the Appendices to the Handbook of Procedures (Vol.I) as available on the website of Directorate General of Foreign Trade at http://dgft.gov.in. This shall come into force from 1st April, 2006. This issues in Public interest. ( K.T. CHACKO ) Director General of Foreign Trade and Ex Officio Additional Secretary to the Government of India

(Issued from File No: 01/94/180/Handbook/AM07/ PC-I)

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5 CONTENTS CHAPTER SUBJECT Page 1 INTRODUCTION 7 2 GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS 8 3 PROMOTIONAL MEASURES 48 4 DUTY EXEMPTION / REMISSION SCHEMES 63 5 EXPORT PROMOTION CAPITAL GOODS SCHEME 125 6 EXPORT ORIENTED UNITS (EOUs), ELECTRONICS 139 HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) AND BIO-TECHNOLOGY PARKS (BTPs) 7 SPECIAL ECONOMIC ZONES 161 8 DEEMED EXPORTS 162 9 MISCELLANEOUS MATTERS 165

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, ELECTRONICS 139 HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) AND BIO-TECHNOLOGY PARKS (BTPs) 7 SPECIAL ECONOMIC ZONES 161 8 DEEMED EXPORTS 162 9 MISCELLANEOUS MATTERS 165

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7 CHAPTER-1 INTRODUCTION Notification 1.1 In exercise of the powers conferred under Section 5 of The Foreign Trade (Development and Regulation Act), 1992 (No. 22 of 1992), the Central Government has notified the Foreign Trade Policy for the period 2004-2009 incorporating the Export and Import Policy for the period 2002-2007, as modified. This Policy shall come into force with effect from 1st September 2004 and shall remain in force upto 31st March, 2009, unless as otherwise specified. In pursuance of the provisions of paragraph 2.4 of the Policy, the Director General of Foreign Trade hereby notifies the compilation known as Handbook of Procedures (Vol.1), Handbook of Procedures (Vol.2) and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March, 2009.

Objective 1.2 The objective of this Handbook is to implement the provisions of the Foreign Trade (Development and Regulation) Act, 1992, the Rules and Orders made thereunder and the Foreign Trade Policy (2004-09) incorporating the Export and Import Policy (2002-07) by laying down simple, transparent and EDI (Electronic Data Interchange) compatible procedures which are easy to comply with and administer for efficacious management of foreign trade. Definition 1.3 For the purpose of this Handbook, the definitions contained in

erchange) compatible procedures which are easy to comply with and administer for efficacious management of foreign trade. Definition 1.3 For the purpose of this Handbook, the definitions contained in the Foreign Trade (Development and Regulation) Act, 1992, the Rules and Orders made thereunder and the Foreign Trade Policy (2004-09) shall apply.

8 CHAPTER-2 GENERAL PROVISIONS REGARDING EXPORTS AND IMPORTS Policy 2.1 The Policy relating to the general provisions regarding exports and imports is given in Chapter-2 of the Policy. Countries of Imports/ 2.2 Unless otherwise specifically provided, import/ export will be Exports valid from/to any country. However, import/exports of arms and related material from/to Iraq shall be prohibited. The above provisions shall, however, be subject to all conditionality, or requirement of licence/ Authorisation, or permission, as may be required under Schedule II of ITC (HS). Application Fee 2.3 Unless otherwise exempted, specified fee shall be paid for making an application under any provision of the Policy and this Handbook.

ay be required under Schedule II of ITC (HS). Application Fee 2.3 Unless otherwise exempted, specified fee shall be paid for making an application under any provision of the Policy and this Handbook. The scale of fee, mode of payment, procedure for refund of fee and the categories of persons exempted from the payment of fee are contained in Appendix-21B Territorial Jurisdiction 2.4 Every application, unless otherwise specified, shall be of Regional Authorities submitted to the Regional Authority concerned, as per the territorial jurisdiction of the Regional authorities indicated in Appendix-1 Filing of Application 2.5 Every application for an Import/Export licence/ certificate/ Authorisation/ permission or any other purpose should be complete in all respects as required under the relevant provisions of the Policy/Procedures and shall be signed by the applicant as defined in paragraph 9.9 of the Policy. An incomplete application is liable to be rejected giving specific reason for rejection. However in case of manual applications, the applicant would furnish a soft copy of the application in MS word format. Profile of Importer/ 2.6 Each importer/exporter shall be required to file importer/ Exporter exporter profile once with the Regional Authority in Part 1 of ‘Aayaat Niryaat Form’. Regional Authority shall enter the information furnished in Part 1 of ‘Aayaat Niryaat Form’ in their database so as to dispense with the need for asking the repetitive information.

aat Niryaat Form’. Regional Authority shall enter the information furnished in Part 1 of ‘Aayaat Niryaat Form’ in their database so as to dispense with the need for asking the repetitive information. In case of any change in the information given in Part 1 of ‘Aayaat Niryaat Form’, importer/exporter shall intimate the same to the Regional Authority.

9 Self Addressed 2.7 The applicant shall furnish a self addressed envelope of 40 x Stamped Envelope 15 cm with postal stamp affixed on the envelope as follows for all documents required to be sent by Speed Post:

(a) Within local area Rs. 20.00

(b) Up to 200 Kms. Rs. 25.00

(c) Between 200 to 1000 Kms Rs. 30.00

(d) Beyond 1000 Kms. Rs. 50.00 IEC No: Exempted 2.8 The following categories of importers or exporters are exempted Categories from obtaining Importer - Exporter Code (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 the Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.

(ii) Ministries/Departments of the 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 provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

(v) Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

exceed Indian Rs.25,000.

(v) Persons importing/exporting goods from/to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rs.25,000.

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

(vi) The following permanent IEC numbers shall be used by the categories of importers/ exporters mentioned against them for import/ export purposes.

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S.No Code Number Categories of Importers/ Exporters

0100000011 All Ministries/Departments of the Central Government and agencies wholly or partially owned by them.

0100000029 All Ministries/Departments of the State Government and agencies wholly or partially owned by them.

0100000037 Diplomatic personnel, Counselor officers in India and the officials of the UNO and its specialised agencies.

0100000045 Indians returning from/going abroad and claiming benefit under the Baggage Rules.

0100000053 Persons/ Institutions/ Hospitals importing or exporting goods for personnel use, not connected with trade or manufacture or agriculture.

0100000061 Persons importing/ exporting goods from/ to Nepal provided the CIF value of a single consignment does not exceed Indian Rupees 25000/-.

0100000070 Persons importing/ exporting goods from/ to Myanmar through Indo-Myanmar border

ds from/ to Nepal provided the CIF value of a single consignment does not exceed Indian Rupees 25000/-.

0100000070 Persons importing/ exporting goods from/ to Myanmar through Indo-Myanmar border areas provided the CIF value of a single consignment does not exceed Indian Rupees 25000/-.

0100000088 Ford Foundation

0100000096 Importers importing goods for display or use in fairs/exhibitions or similar events under the provisions of ATA carnet.

0100000100 Director, National Blood Group Reference Laboratory, Bombay or their authorized offices.

0100000126 Individuals/Charitable Institutions/ Registered NGOs importing goods, which have been exempted from Customs duty under the Notification issued by Ministry of Finance for bonafide use by the victims affected by natural calamity.

11 Note: Commercial Public Sector Undertaking (PSU) who have obtained PAN will however be required to obtain Importer Exporter Code number. The permanent IEC number as mentioned above, shall be used by non-commercial PSUs. Application for Grant 2.9 An application for grant of IEC number shall be made by the of IEC Number Registered/Head Office of the applicant to the Regional Authority under whose jurisdiction, the Registered office in case of company and Head office in case of others, falls in the ‘Aayaat Niryaat Form’ and shall be accompanied by documents prescribed therein.

rity under whose jurisdiction, the Registered office in case of company and Head office in case of others, falls in the ‘Aayaat Niryaat Form’ and shall be accompanied by documents prescribed therein. In case of STPI/ EHTP/ BTP units, the Regional Offices of the DGFT having jurisdiction over the district in which the Registered/ Head Office of the STPI unit is located shall issue or amend the IECs. Only one IEC would be issued against a single PAN number. Any proprietor can have only one IEC number and in case there are more than one IECs allotted to a proprietor, the same may be surrendered to the Regional Office for cancellation. IEC Format and Statements 2.9.1 The Regional Authority concerned shall issue an IEC number in the format as given in Appendix-18B. A copy of such IEC number shall be endorsed to the concerned banker (as per the details given in the IEC application form). A consolidated statement of IEC numbers issued by the Regional Authority shall be sent to the offices of the Exchange Control Department of the RBI as given in Appendix-18D as per the statement given in Appendix-18C. Validity of IEC No. 2.9.2 An IEC number allotted to an applicant shall be valid for all its branches/divisions/units/factories as indicated in the format of IEC given in Appendix- 18B. Duplicate Copy of 2.9.3 Where an IEC Number is lost or misplaced, the issuing IEC Number authority may consider requests for grant of a duplicate copy of IEC number, if accompanied by an affidavit. Surrender of IEC Number 2.9.4 If an IEC holder does not wish to operate the allotted IEC

r authority may consider requests for grant of a duplicate copy of IEC number, if accompanied by an affidavit. Surrender of IEC Number 2.9.4 If an IEC holder does not wish to operate the allotted IEC number, he may surrender the same by informing the issuing authority. On receipt of such intimation, the issuing authority shall immediately cancel the same and electronically transmit it to DGFT for onward transmission to the Customs and Regional Authorities.

12 Mandatory returns 2.9.5 Deleted Application for Import 2.10 An application for grant of a licence/certificate/ and Export of permission for import or export of items mentioned as restricted Restricted Items in ITC(HS) may be made in the form and to the Regional authorities specified under the relevant chapters of this Handbook. Imports under Indo-US 2.11 Import of specified capital goods, raw materials, components, Memorandum of etc. from the United States of America is subject to US Export Understanding Control Regulations. US suppliers of such items are required to obtain an export licence/ certificate/Authorisation/ permission based on the import certificate furnished by the Indian importer to the US supplier.

ations. US suppliers of such items are required to obtain an export licence/ certificate/Authorisation/ permission based on the import certificate furnished by the Indian importer to the US supplier. The following are the designated Import Certificate Issuing Authorities (ICIA):

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

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

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

(iv) The Director General of Foreign Trade for small scale industries and entities not covered above as well as on behalf of any of the above;

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

A request for an import certificate shall be made in the ‘Aayaat Niryaat Form’. The import certificate in Appendix-31 may be issued by the ICIA directly to the importer with a copy to (i) Ministry of External Affairs (AMS Section), New Delhi, (ii) Department of Electronics, New Delhi; and (iii) Directorate General of Foreign Trade, New Delhi. However, this import certificate will not be regarded as a substitute for an import licence/certificate/ permission in respect of the items mentioned as restricted in ITC(HS) and an import

ew Delhi. However, this import certificate will not be regarded as a substitute for an import licence/certificate/ permission in respect of the items mentioned as restricted in ITC(HS) and an import

13 licence/certificate/permission will have to be obtained wherever required for such items. Validity Of Import 2.12 The validity of import licence/certificate/ Authorisation/ Licence/Certificate/ permission from the date of issue of licence/ certificate/ Authorisation/ Permissions/ Authorisation/ permission shall be as follows: CCPs/ Export licence

(i) Advance Authorisation / 24 months DFIA (including Advance Authorisation / DFIA for Annual Requirement), DFRC and Replenishment licence for Gem & Jewellery as per Chapter- 4 of the Policy.

(ii) EPCG Authorisation (other 36 months than spares).

(iii) EPCG Authorisation for Co-terminus with the Spares, refractories, catalyst Export Obligation and consumables. Period of the EPCG Authorisation.

(iv) Others including CCP and 24 months Duty Entitlement Passbook Scheme, unless otherwise specified.

(v) Advance Authorisation / 24 months or Co- DFIA for deemed export terminus with the (including Advance contracted duration of Authorisation / DFIA for execution of the Annual Requirement). project whichever is later.

sation / 24 months or Co- DFIA for deemed export terminus with the (including Advance contracted duration of Authorisation / DFIA for execution of the Annual Requirement). project whichever is later.

2.12.1 Where the date of expiry of the licence/ certificate/ Authorisation/ permission/ duty credit certificates falls before the last day of the month, the licence/certificate/ Authorisation/ permission/ duty credit certificate shall be deemed to be valid until the last day of the month. This proviso would be applicable even for a revalidated licence/ certificate/ Authorisation/ permission/ duty credit certificates.

2.12.2 “The period of validity means the period for shipment/ dispatch

14 of goods covered under the licence/certificate/ Authorisation/ permission. The validity of an import licence/ certificate/ Authorisation/ permission is decided with reference to the date of shipment/ dispatch of the goods from the supplying country as given in Paragraph 9.11 A of this Handbook and not the date of arrival of the goods at an Indian port.”

2.12.3 The provisions of paragraph 2.12.2 above shall not be applicable to DEPB, Duty Free Entitlement Certificate for Service Providers, Vishesh Krishi and Gram Udyog Yojana and duty credit scrips issued under Focus Market scheme and Focus Product scheme.

be applicable to DEPB, Duty Free Entitlement Certificate for Service Providers, Vishesh Krishi and Gram Udyog Yojana and duty credit scrips issued under Focus Market scheme and Focus Product scheme. DEPB, Duty Free Entitlement Certificate for Service Providers, Vishesh Krishi and Gram Udyog Yojana and duty credit scrips issued under Focus Market scheme and Focus Product scheme which are in the nature of duty credit entitlement and must be valid on the date on which actual debit of duty is made.

2.12.4 Similarly, where the date of expiry of either original or extended export obligation period falls before the last day of the month, such export obligation period shall be deemed to be valid until the last day of the month. The original validity of export licence for restricted items shall be 12 months from the date of issuance unless otherwise specified. Revalidation of Import/ 2.13 The licence/certificate/ Authorisation/ permission may be Export Licence/ revalidated on merits by the Regional Authority concerned, Certificate/ Authorisation/ which has issued the licence/ certificate/ Authorisation/ Permissions permission, for a period of six months reckoned from the date of expiry of the validity period.

2.13.1 However, revalidation of freely transferable licence/certificate/ Authorisation/ permissions and stock and sale licence/ certificate/ Authorisation/ permission shall not be permitted unless the licence/ certificates/ Authorisation/ permissions have expired while in custody of the Customs authority/ Regional Authority.

2.13.2

ate/ Authorisation/ permission shall not be permitted unless the licence/ certificates/ Authorisation/ permissions have expired while in custody of the Customs authority/ Regional Authority.

2.13.2 In case the licence/ certificates/ Authorisation/ permissions expires in the custody of the concerned Regional Authority, revalidation would be permitted under the specific orders of the Head of the Office for a period for which the Licence/ Certificate/ Authorisation/ Permissions has remained in Custody with the concerned Regional Authority.

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2.13.3 Notwithstanding the provisions of para 2.13 and in cases covered under paras 2.13.1 and 2.13.2 above, the revalidation would be for a period for which the Licence/ Certificate/ Authorisation/ Permissions remains in the custody of the Customs or Regional Authority. An application for revalidation, including application for revalidation of licence for import of restricted items, may be made to the Regional Authority concerned in the ‘Aayaat Niryaat Form’. The Regional Authority would consider the application for revalidation of restricted list licence as per the government rules/ notifications governing the import of the items mentioned in the license existing as on date of request for revalidation.

tion for revalidation of restricted list licence as per the government rules/ notifications governing the import of the items mentioned in the license existing as on date of request for revalidation. However, in such cases where revalidation of the licence/ certificate/ Authorisation/ permissions is to be considered by DGFT, the original application along with Treasury Receipt (TR) /Demand Draft shall be submitted to the Regional Authorities concerned and self-attested copy of the same shall be submitted to DGFT. Duplicate Copies of 2.14 Where a licence/certificate/authorisation/permission or an actual Export-Import Licence/ user duty credit certificate is lost or misplaced, an application Certificate/ Authorisation/ for grant of a duplicate copy thereof may be made along with Permissions/ CCPs a copy of an affidavit, as given in Appendix-24, to the Regional Authority which has issued the original licence/ certificate/ Authorisation/ permission. The Regional Authority concerned may, on merits, issue a duplicate copy of the same after issuing an order for cancellation of the original licence/certificate/ Authorisation/ permission and after informing the customs authority where the original licence/ certificate/ Authorisation/ permission was registered.

2.15 Duplicate copy of freely transferable licence/ certificate/ Authorisation/ permissions, may be issued against an application accompanied by the following documents:

a. An application with a fee equivalent to 10% of duty saved or duty credit.

b. A copy of FIR reporting the loss.

s, may be issued against an application accompanied by the following documents:

a. An application with a fee equivalent to 10% of duty saved or duty credit.

b. A copy of FIR reporting the loss.

c. A copy of the original affidavit on notorised stamp paper.

d. Indemnity bond on a stamp paper undertaking to indemnify the revenue loss to the Government which

16 may be caused on account of issue of duplicate licenses covering the duty saved/ duty credit amount.

2.15.1 However, when the licence/certificate/ Authorisation/ permission has been lost by the Government agency and a proof to this effect is submitted, the documents at serial nos. (a) to (d) shall not be asked for. In such cases, licence/certificate/ Authorisation/ permissions shall be revalidated for a period for six months from the date of endorsement, not withstanding anything stated below.

2.15.2 The Regional Authority, before issuing the licenses/certificate/ authorisation/permission, shall obtain the report regarding utilization of the licence/ certificate/ Authorisation/ permissions from the Custom authority at the port of registration mentioned in the original licence/ certificate/ Authorisation/ permission. The duplicate licence/ certificate/ Authorisation/ permission shall be issued only for the balance, which remained unutilized as per the report furnished by the Customs authority at the port of registration.

2.15.3 The validity of duplicate licence/certificate/ Authorisation/ permission shall be co-terminus with the original license and

rt furnished by the Customs authority at the port of registration.

2.15.3 The validity of duplicate licence/certificate/ Authorisation/ permission shall be co-terminus with the original license and therefore no request shall be entertained if the validity of the original licence/ certificate/ Authorisation/ permission has expired. However, in case when DEPB/ DFRC, Vishesh Krishi and Gram Udyog Yojana scrips/DFCE issued under Served from India/scrips issued under Focus Market scheme/scrips issued under Focus Product scheme/Transferable DFIA is lost by Customs/Regional Authority, duplicate licence/ certificate/ Authorisation/ permission shall be issued for a validity of six months. However, in the case of loss of DEPB/Vishesh Krishi and Gram Udyog Yojana scrips/DFCE issued under Served from India/scrips issued under Focus Market scheme/scrips issued under Focus Product scheme/Transferable DFIA not involving either the Customs or the Regional Authorities, the duplicate issued would have a validity equivalent to the balance period of validity of the original on the date of application for the duplicate.

2.15.4 The 10% duty saved as given in para 2.15(a) is applicable for

ould have a validity equivalent to the balance period of validity of the original on the date of application for the duplicate.

2.15.4 The 10% duty saved as given in para 2.15(a) is applicable for

17 DFRC/Transferable DFIA and would be the duty saved amount for the balance quantity and proportionate CIF value as per the information available in serial no 6 of sub section V of ‘Aayaat Niryaat Form’. However in case of duty credit certificates such as DEPB, Vishesh Krishi and Gram Udyog Yojana scripts/DFCE issued under Served from India/scripts issued under Focus Market scheme/scripts issued under Focus Product scheme/Transferable DFIA 10% duty credit as given in para 2.15 (a) will be equivalent to 10% of the available credit balance on the lost duty credit certificate.

2.15.5 The 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 licence/ certificate/ Authorisation/ permissions and other documents from DGFT Head Quarters and Regional Authorities, identity cards may be issued to the proprietor/ partners/ directors and the authorised employees (not more than three), of the importers and exporters. However in case of limited companies, the Head of the Regional Office may approve the allotment of more than three identity cards per company.

s (not more than three), of the importers and exporters. However in case of limited companies, the Head of the Regional Office may approve the allotment of more than three identity cards per company. An application for issuance of an Identity Card may be made in the form given in Appendix- 20A. The documents/licence/ certificate/ Authorisation/ permissions may be delivered to the identity card holder and the officials of the DGFT shall not be responsible for any loss etc. of the documents/ licence /certificate/ Authorisation/ permissions thereafter. In case of loss of an identity card, a duplicate card may be issued on the basis of an affidavit. The identity card shall be issued in the format as given in Appendix-20B and shall be valid for a period of three years from the date of issuance. In the normal circumstances, one authorized employee is allotted one identity card pertaining to the company he represents. However, to take care of cases like common directors/ partners, group company or any other similar issues, Head of the Regional Office may issue multiple identity cards to authorized employee after recording the reasons in writing. Interviews with 2.17 Importer/Exporter and their employees shall have free access authorised Officers. to the offices of the Regional authorities and to the officers authorised to grant interviews. Such officers may also grant

r/Exporter and their employees shall have free access authorised Officers. to the offices of the Regional authorities and to the officers authorised to grant interviews. Such officers may also grant

18 interview at their discretion to authorised representative of the importer/exporter for making specific representation. Interviews/ clarifications may also be sought through E-mails with the officer concerned. Export of Items Reserved 2.18 Units other than small scale units are permitted to expand or for SSI Sector create new capacities in respect of items reserved for the small scale sector, subject to the condition that they obtain an Industrial licence under the Industries (Development and Regulation), Act, 1951. It is a condition of such licence that the manufacturer shall undertake export obligation as may be specified by the Ministry of Industry and the licensee is required to furnish a Legal Undertaking to the Directorate General of Foreign Trade in this behalf. The Directorate General of Foreign Trade shall monitor the export obligation. Warehousing Facility 2.19 Public/Private Customs Bonded Warehouses may be set up in Domestic Tariff Area by following the procedure envisaged in Chapter-IX of the Customs Act, 1962. Such warehouses shall be permitted to import the items in terms of paragraph 2.28 of the Policy. On receipt of goods, such warehouses shall keep the goods for a period of one year without payment of applicable customs duties.

ermitted to import the items in terms of paragraph 2.28 of the Policy. On receipt of goods, such warehouses shall keep the goods for a period of one year without payment of applicable customs duties. Goods can be cleared against the Bill of Entry for home consumption, on payment of applicable custom duty and on submission of licence/certificate/ Authorisation/ permission wherever required, provided the competent customs authorities have made an order for clearance of such goods for home consumption. In case of clearance against duty free categories/ concessional duty categories, exemption/ concession from duty, as the case may be, allowed. In case of clearance against DEPB, customs duty on imports may be adjusted against DEPB credit. The 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. Import, storage, clearance or re-export are subject to the provisions of the Customs Act, 1962 and the Rules, Orders,

) order for export of such goods has been made by competent customs authorities. Import, storage, clearance or re-export are subject to the provisions of the Customs Act, 1962 and the Rules, Orders,

19 Notifications or Instructions issued in respect of these provisions. Execution of Bank 2.20 In cases of direct import before clearance of goods through Guarantee/ Legal customs, the licence/ Authorisation holder shall execute a legal Undertaking for Advance undertaking (LUT)/Bank Guarantee(BG) with the customs Authorisation / DFIA authorities in the manner as prescribed by them. and EPCG Authorisation For cases of direct imports, the Regional Authority shall endorse the following condition on the licence/ Authorisation: “Bank Guarantee/ LUT as applicable to be executed as per relevant Customs Notification/ Circular” However, in case of indigenous sourcing, the licence/certificate/ Authorisation/ permission holder shall furnish Bank Guarantee/ LUT to the Regional Authority as prescribed below before sourcing the material from the nominated agencies or indigenous supplier:-

S. Category of Exporter Relevant provisions of No. Bank Guarantee/ LUT

1 All Status holders (both Legal Undertaking merchandise exporter and (LUT). service providers)/Public Sector Undertaking (PSUs) .

2 Manufacturer exporter Legal Undertaking (except Proprietorship and (LUT). Partnership firms) (a) Registered with Central Excise authority and (b) Having a minimum export turn- over of Rs.1 Crore and above in the preceding year.

Undertaking (except Proprietorship and (LUT). Partnership firms) (a) Registered with Central Excise authority and (b) Having a minimum export turn- over of Rs.1 Crore and above in the preceding year. and (c) Having exported during the previous two financial years.

3 Manufacturer Exporter Legal Undertaking (LUT) (a) Registered with Central Excise Authority and

20 (b) Having paid Central Excise Duty of Rs.1 Crore or more during the preceding financial year. The exporter must submit a Certificate issued by Jurisdictional Superintendent of Central Excise where the factory is located validating clause (b) above.

4 All exporters Legal Undertaking (LUT) (a) having an export turnover of at least Rupees 5 crore in the preceding licensing year and (b) have a good track record and three years of export performance

5 Other Manufacturer Exporter Bond supported by not covered under 1, 2, 3 & Bank Guarantee to the 4 above (except Proprietorships extent of 15% of duty and Partnership firms) saved on excise and education cess, if (a) exporting for last 3 years, or applicable. (b) exporting in any of the last 3 years and satisfying the following conditions: Registered with Excise Authorities, Or Registered with State Sales Tax Authorities; Shall be required to furnish: (i) A Central Excise certificate certifying preceding years exports as per customs Circular

red with Excise Authorities, Or Registered with State Sales Tax Authorities; Shall be required to furnish: (i) A Central Excise certificate certifying preceding years exports as per customs Circular

21 No.74/2003 dated 21.8.2003, and (ii) Registration Certificate and Excise Control Code (E.C.C.) Number issued by Central Excise Authorities or Registration Certificate issued by State Sales Tax Authorities, as the case may be. This provision is not required for category (a) above.

6 Manufacturing companies Bond supported by (as distinguished from Bank Guarantee to the Proprietorship and Partnership extent of 15% of duty firm, who may also be saved on excise duty manufacturers) having not and education cess, if exported in each of the applicable. preceding three licensing years but fulfilled the following criterion: (i) The company is registered with Central Excise Authorities and has paid Central Excise duty (unless exempted); and (ii) The company is registered with State Sales Tax Authorities and has paid sales tax (unless exempted); and (iii) The company furnishes copy of their audited balance sheet; and the minimum investment in plant and machinery must be Rs 50 lakhs.

7 Merchant Exporter, all Bond supported by types of Proprietorship and Bank Guarantee to the

f their audited balance sheet; and the minimum investment in plant and machinery must be Rs 50 lakhs.

7 Merchant Exporter, all Bond supported by types of Proprietorship and Bank Guarantee to the

22 Partnership firms (Other than extent of 100% of the Status Holders/ PSUs and duty saved on excise category 4 above) and education cess if applicable.

8 Service providers other Bond supported by than those in category Bank Guarantee to the 1and 4 above. extent of 100% of the duty saved on excise and education cess if applicable.

However, Manufacturer / Merchant Exporters falling under any of the following two categories based on risk profile of the exporter are required to execute bond supported by Bank Guarantee to the extent of 100% of the duty saved amount on excise and education cess if applicable. This can be prescribed by the Head of the office not being below the rank of Deputy Director General of Foreign Trade by recording the reasons in writing. (a) Have come under the adverse notice of Customs/ DGFT/ Central Excise for serious irregularities; (b) Having adverse track record in terms of fulfillment of pending export obligation In cases where the Excise Duty is nil on the items of indigenous procurement, the Bank Guarantee furnished would be for 25% of the basic Customs Duty on the same product. The Bank Guarantee and LUT should be valid as per the terms and conditions incorporated in the Appendix-25A & 25B respectively. The validity of the Bank Guarantee/LUT is required to be extended in case of extension in export obligation period.

s per the terms and conditions incorporated in the Appendix-25A & 25B respectively. The validity of the Bank Guarantee/LUT is required to be extended in case of extension in export obligation period. Specific endorsement to this effect shall be made in the licence/ Authorisation by the Regional Authority. In respect of categories 3, 4 & 5 above, if the exporter has not exported for all the 3 preceding years, 15% Bank Guarantee condition shall be imposed on the duty saved amount provided the CIF value does not exceed 200% of the domestic turnover or 200% of FOB/FOR value of supplies of the preceding licensing year, whichever is higher. Licence/ Authorisation beyond 200% entitlement shall be subject to 100% BG on the duty saved amount for the CIF value exceeding 200%

23 entitlement. However the entitlement may be re-credited on production of documentary evidence showing fulfillment of export obligation and realization of export/ supply proceed. In respect of categories at S No.

However the entitlement may be re-credited on production of documentary evidence showing fulfillment of export obligation and realization of export/ supply proceed. In respect of categories at S No. 2 and 4, the licensee/ Authorisation holder would be required to submit the Export Performance Certificate issued by a Chartered Accountant as per Appendix 26. However, for import/domestic procurement of car under EPCG scheme, 100% Bank Guarantee will be required to be furnished except in case of status holders/ PSUs who will furnish Bank Guarantee/LUT as per aforesaid conditions. Bank Guarantee exemption/relaxation as mentioned above shall also be available in respect of past licences/ Authorisations where licence/ Authorisation holder had earlier filed Bank Guarantee but as on date the licence/ Authorisation holder is entitled for Bank Guarantee exemption. In case, the firm has already executed BG/ LUT for the full value of the licence/ certificate/ Authorisation/ permission covering the items indigenously procured, to the Customs and furnishes proof of the same, no BG/ LUT shall be required to be executed with the Regional Authority. 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.

uthority. 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 2.21 Certificate of Origin is the instrument to establish evidence on the origin of goods imported into any country. There are two categories of Certificate of Origin viz. (1) Preferential and (2) Non preferential. Preferential 2.21.1 The preferential arrangement/schemes under which India is receiving tariff preferences for its exports are Generalised System of Preferences (GSP), Global System Of Trade Preferences (GSTP), SAARC Preferential Trading Agreement (SAPTA), Bangkok Agreement, India–Srilanka Free Trade Agreement (ISLFTA) and Indo- Thailand Free Trade Agreement. These arrangements/ agreements prescribe Rules of origin which have to be fulfilled for the exports to be eligible for the tariff preference.

eement (ISLFTA) and Indo- Thailand Free Trade Agreement. These arrangements/ agreements prescribe Rules of origin which have to be fulfilled for the exports to be eligible for the tariff preference.

24 The authorised agencies shall provide services relating to issuance of certificate of origin, including details regarding the rules of origin, list of items covered by an agreement, extent of tariff preference, verification and certification of eligibility etc. Export Inspection Council (EIC) is the sole agency authorised to print blank certificates. The authorised agencies may charge a fee, as approved by Ministry of Commerce and Industry, for services rendered. Generalised System (a) GSP is a non contractual instrument by which of Preferences (GSP) industrialized (developed) countries unilaterally and on the basis of non reciprocity extend tariff concessions to developing countries. The 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 details the sectors/ products and tariff lines under which these benefits are available, besides the conditions and the procedures governing the benefits. These schemes are renewed and modified from time to time.

ectors/ products and tariff lines under which these benefits are available, besides the conditions and the procedures governing the benefits. These schemes are renewed and modified from time to time. Normally the Customs of GSP offering countries require information in Form ‘A’ (prescribed for GSP Rules Of Origin) duly filled by the exporters of the beneficiary countries and certified by authorised agencies. List of agencies authorised to issue GSP Certificate of Origin is given in Appendix-4A. Global System of Trade
(b) Under the agreement establishing Global System of Preference (GSTP) Trade Preference (GSTP), tariff concessions are exchanged among developing countries, who have signed the agreement. Presently, there are 46 member countries of GSTP and India has exchanged tariff concessions with 12 countries on a limited number of products. Export Inspection Council (EIC) is the sole agency authorised to issue Certificate of Origin under GSTP.

and India has exchanged tariff concessions with 12 countries on a limited number of products. Export Inspection Council (EIC) is the sole agency authorised to issue Certificate of Origin under GSTP.

25 SAARC Preferential Trading
(c) The Agreement establishing SAPTA was signed by Agreement (SAPTA) 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 the SAARC countries. The list of agencies, which are authorised to issue Certificate of Origin under SAPTA are notified under Appendix – 4B. Bangkok Agreement (d) The Bangkok agreement is a preferential trading arrangement designed to liberalise and expand trade in goods progressively in the Economic and Social Commission for Asia and Pacific (ESCAP) region through liberalization of tariff and non tariff barriers. At present , Bangladesh, Sri Lanka, South Korea, India and China are exchanging tariff concessions. The agencies authorised to issue Certificate of Origin under Bangkok agreement are listed in Appendix – 4B. India-Sri Lanka Free Trade
(e) A Free Trade Agreement (FTA) between India and Sri Agreement (ISLFTA) Lanka was signed on 20th December, 1998. The agreement was operationalised in March, 2000 following notification of the required Customs tariff concessions by the Government of Sri Lanka and India in February, and March, 2000 respectively.

The agreement was operationalised in March, 2000 following notification of the required Customs tariff concessions by the Government of Sri Lanka and India in February, and March, 2000 respectively. Export Inspection Council is the sole agency to issue the Certificate of Origin under ISLFTA. India Afghanistan Preferential
(f) A Preferential Trade Agreement between the Transitional Trade Agreement Islamic State of Afghanistan and Republic of India was signed on 6th March, 2003 and was operationalised with the issuance of the Customs Notification No 76/2003 dated 13th May, 2003. Export Inspection Council is the sole agency to issue the Certificate of Origin under India Afghanistan Preferential Trade Agreement . Indo – Thailand Framework
(g) India and Thailand have signed the protocol to implement Agreement for Free Trade Area Early Harvest Scheme under India- Thailand Free Trade Agreement on 1st September 2004.The tariff preferences for imports on the items of Early Harvest Scheme would be available only to those products, which satisfy the Rules of Origin Criteria, which have been notified by Department of Revenue, Ministry of Finance, vide

the items of Early Harvest Scheme would be available only to those products, which satisfy the Rules of Origin Criteria, which have been notified by Department of Revenue, Ministry of Finance, vide

26 notification No.101/2004-Customs dated 31st August 2004. Export Inspection Council of India would be the sole agency to issue the Certificate of Origin under the Early Harvest Scheme of the Framework Agreement on the India-Thailand Free Trade Agreement. Non Preferential 2.21.2 The Government has also nominated certain authorised agencies to issue Non Preferential Certificate of Origin in accordance with Article II of International Convention Relating to Simplification of Customs formalities, 1923. These Certificates of Origin evidence the origin of goods and do not bestow any right to preferential tariffs. The list of these agencies is provided in Appendix – 4C. All the exporters who are required to submit Certificate of Origin (Non Preferential) would have to apply to any of the agencies enlisted in Appendix–4C with the following documents:

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

(b) Two copies of invoices.

(c) Packing list in duplicate for the concerned invoice.

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

The agency would ensure that the goods are of Indian origin as per the general principles governing the rules of origin before granting the Certificate of Origin(non preferential).

cerned agency.

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

Any of the agencies desirous of enlistment in Appendix–4C may submit their application as per Annexure I to Appendix 4C to the concerned Regional Authority under whose Jurisdiction the applicant falls as given in Appendix 1.

In case of tea, all exporters who are required to submit Certificate of Origin (Non-Preferential) shall apply to the Tea Board or any Inspection Agency authorized by the Tea Board

27 and enlisted in Appendix-4C of the Handbook of Procedures, (Vol.I) with the documents listed above. Automatic Licence/ 2.22 The status holders shall be issued licence/ certificate/ Certificate/ Authorisation/ Authorisation/ permissions automatically within the stipulated Permission time period.

ve. Automatic Licence/ 2.22 The status holders shall be issued licence/ certificate/ Certificate/ Authorisation/ Authorisation/ permissions automatically within the stipulated Permission time period. Deficiency, if any, shall be informed in the covering letter which shall be required to be rectified by the status holders within 10 days from the date of communication of deficiency. Submission of Certified 2.23 Wherever the original documents have been submitted to a Copies of Documents different Regional Authority/ nominated agencies or to a different division of the same Regional Authority, the applicant can furnish photocopy of the documents duly certified by him in lieu of the original. Advance Payment 2.24 In case, payment is received in advance and export/ deemed exports takes place subsequently, the application for a licence/ certificate/ Authorisation/ permission shall be filed within specific period following the month during which the exports/ deemed exports are made, unless otherwise specified. Payment through 2.25.1 In cases where the export has been completed but the payment ECGC cover has not been realised from the buyer, such exports shall be taken into account for the purpose of benefits under the Policy provided the payment has been realised by the Indian exporter through ECGC cover. Payment through 2.25.2 In cases where exports have been made and payment realized General Insurance through the General Insurance Cover on account of transit loss or other circumstances, the amount of the insurance cover paid

cases where exports have been made and payment realized General Insurance through the General Insurance Cover on account of transit loss or other circumstances, the amount of the insurance cover paid would be treated as payment realized on account of exports under the various export promotion schemes. Export by post 2.26 In case of export by post, the exporter shall submit the following documents in lieu of documents prescribed for export by sea/air.

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

Relevant postal receipt.

Invoice duly attested by the Customs. Import/ Export through 2.26.1 Imports/Exports through a registered courier service is permitted Courier Service as per the Notification issued by the Department of Revenue.

28 However, importability/ exportability of such items shall be regulated in accordance with the Policy. Direct negotiation of 2.26.2 In cases where the exporter directly negotiates the document ( export documents not through the authorised dealer) with the permission of the RBI, he is required to submit the following documents for availing of the benefits under the export promotion schemes: a. Permission from RBI allowing direct negotiation of documents (however this is not required for status holders who have been granted a general permission), b. Copy of the Foreign Inward Remittance Certificate (FIRC) as per Form 10-H of the Income Tax department in lieu of the BRC and

c. Statement giving details of the shipping bills/ invoice against which the FIRC was issued. Import/Export of Samples 2.27

IRC) as per Form 10-H of the Income Tax department in lieu of the BRC and

c. Statement giving details of the shipping bills/ invoice against which the FIRC was issued. Import/Export of Samples 2.27 No licence/certificate/ Authorisation/ permission shall be required for Imports of bonafide technical and trade samples of items mentioned as restricted in ITC(HS) except vegetable seeds, bees and new drugs by any importer. However, samples of tea not exceeding Rs.2000 (CIF) in one consignment shall be allowed without a licence/certificate/ Authorisation/ permission by any person connected with Tea industry. Duty free import of samples upto Rs 60000 for all exporters barring those in the gems and jewellery sector and Rs.300,000 for those in the gems and jewellery sector shall be allowed as per the terms and conditions of Customs notification. Exports of bonafide trade and technical samples of freely exportable item shall be allowed without any limit. Import under Lease 2.28 Permission of the Regional Authority is not required for import Financing of capital goods under lease financing. However, the condition of actual user or licence/ certificate/ Authorisation/ permission, wherever required under the Policy or this Handbook, shall be applicable in case of import of capital goods under such lease financing. The facility shall also be available under EPCG Scheme, EOU/ SEZ scheme.

required under the Policy or this Handbook, shall be applicable in case of import of capital goods under such lease financing. The facility shall also be available under EPCG Scheme, EOU/ SEZ scheme. The domestic supplier of capital goods to eligible categories of deemed exports shall be eligible for the benefits of deemed exports as given in paragraph 8.3 of the Policy even in such cases where the supplies are under lease financing.

29 Exhibits Required for 2.29 Import/export of exhibits, including construction and decorative National and International materials required for the temporary stands of the foreign/ Indian Exhibitions or Fairs exhibitors at the exhibitions, fair or similar show or display for and Demonstration a period of six months on re-export/re-import basis, shall be allowed without a licence/certificate/ Authorisation/ permission on submission of a certificate from an officer of a rank not below that of an Under Secretary/Deputy Director General of Foreign Trade to the Government of India in the Department of Commerce/ Directorate General of Foreign Trade or an officer of the Indian Trade Promotion Organization duly authorised by its Chairman in this behalf, to the effect that such exhibition, fair or similar show or display, as the case may be,

(i) has been approved or sponsored by the Government of India in the Department of Commerce or the India Trade Promotion Organization; and

(ii) is being held in public interest.

Extension beyond six months for re-export/re-import will be considered by the Customs authorities on merits.

the India Trade Promotion Organization; and

(ii) is being held in public interest.

Extension beyond six months for re-export/re-import will be considered by the Customs authorities on merits. Consumables such as paints, printed material, pamphlets, literature etc. pertaining to the exhibits need not be re-exported/re-imported. Import Policy 2.30 The Policy relating to the 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 the Policy. General Procedure for 2.31 Wherever an import licence/certificate/ permission, Licensing of Restricted including Customs Clearance Permit (CCP), is required Goods under the Policy, the 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.

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.

30 2.32.2 Import of the following types of metallic waste and scrap will be free subject to certain 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 Remelting 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 in

para 2.32.2 above in shredded form shall be permitted through

all ports of India. 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 the following conditions : a. Import will be allowed only from overseas suppliers who are registered with the Directorate General of Foreign

31 Trade and are listed under Appendix – 5B of the Handbook of Procedures. Registration will be required only for those suppliers that directly contract with suppliers located in India. b. All applications will be filed in Appendix-5A of the Handbook of Procedures, Vol-I along with supporting documents (wherever required). The details are available on the DGFT website. c. There will be no application fee for registration. d. The initial registration will be for a period of two years. e. Only direct imports from registered suppliers against letter of credit will be allowed.

will be no application fee for registration. d. The initial registration will be for a period of two years. e. Only direct imports from registered suppliers against letter of credit will be allowed. No high seas sale would be allowed. f. Import of scrap would take place only through the 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 Tughlakabad (New Delhi), 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”. g. In case of any violation, the overseas supplier would be deregistered. Action will also be taken against the Indian firm which is importing the scrap under the Foreign Trade (Development & Regulation) Act, 1992. The last date for filing the applications will be 30th April, 2006. Applications can be sent by e-mail, courier, or in person to the Directorate General of Foreign Trade, H- wing, Udyog Bhavan, Maulana Azad Road, New Delhi- 110011. The new system of import from registered sources will come into effect from 1st April, 2006. However, upto

ate General of Foreign Trade, H- wing, Udyog Bhavan, Maulana Azad Road, New Delhi- 110011. The new system of import from registered sources will come into effect from 1st April, 2006. However, upto

32 30th June, 2006 imports will also be allowed on the basis of the pre-shipment inspection certificate regime in terms of Para 2.32 of the Handbook of Procedures (Vol.1), notified vide Public Notice No. 1 dated 8th April, 2005 and as amended from time to time. 2.32.3 However, import of other kinds of metallic waste and scrap will be allowed in terms of the conditions of the ITC (HS) Classification of Export and Import Items, 2004-2009. 2.32.4 The import policy for seconds and defective, rags, PET bottles/ waste, and ships is given in the ITC(HS) Classification of Export and Import items, 2004-09. Import of Second Hand 2.33 Import of second hand capital goods including refurbished/ Capital Goods reconditioned spares, shall be allowed freely, subject to conditions for the following categories: The Import of second hand computers including personal computers and laptops are restricted for imports. The import of refurbished/ reconditioned spares will be allowed on production of a Chartered Engineer certificate that such spares have a residual life not less than 80% of the life of the original spare.

2.33.1 Notwithstanding the 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 the following category of donees:

(i)

d computers, laptops and computer peripherals including printer, plotter, scanner, monitor, keyboard and storage units can be imported freely as donations by the following category of donees:

(i) School 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 the Central or State Government or local bodies

33

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

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

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

2.33A Customs or any other Central or State Government authority may avail of the services of the Inspection and Certification Agencies in Appendix 5 of the Handbook, for certifying both the residual life as well as the valuation/ purchase price of the capital good. Import of Ammunition 2.34 Import of following types of ammunition are allowed against by Licensed Arms Dealers a licence/certificate/permission by licensed arms dealers subject to the conditions as may be specified:

(i) Shotgun Cartridges 28 bore;

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

(iii)

/certificate/permission by licensed arms dealers subject to the 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 licence/certificate/permission shall be issued at 5% of the value of the annual average sales turnover of ammunition (whether indigenous or imported) during the preceding three licensing years subject to a minimum of Rs. 2000. An application for grant of a licence/ certificate/ permission for items listed above may be made to the Regional Authority in the ‘Aayaat Niryaat Form’ along with the documents prescribed therein.

An application for grant of a licence/ certificate/ permission for items listed above may be made to the Regional Authority in the ‘Aayaat Niryaat Form’ along with the documents prescribed therein.

34 Restricted Items Required 2.35 Items mentioned as restricted for imports in ITC(HS) required By Hotels, Restaurants, by hotels, restaurants, travel agents and tour operators may be Travel Agents, Tour allowed against a licence/ certificate/ permission. Import Operators And Other licence/ certificate/ permission shall be granted on the Specified Categories recommendation of the Director General, Tourism, Government of India.

2.35.1 Hotels, including tourist hotels, recognised by the Director General of Tourism, Government of India or a State Government shall be entitled to import licence/ certificate/ permissions upto a value of 25% of the foreign exchange earned by them from foreign tourists during the preceding licensing year. Such licence/certificate/ permissions shall be granted for the import of essential goods related to the 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 the Director General of Tourism, Government of India, shall be entitled to import licence/ certificate/ permissions up to a value of 10% of the foreign exchange earned by them during the preceding licensing year. Such licence/ certificate/ permissions shall be granted for the import of essential goods which are restricted for imports related

foreign exchange earned by them during the preceding licensing year. Such licence/ certificate/ permissions shall be granted for the import of essential goods which are restricted for imports related to the travel and tourism industry, including office and other equipment required for their own professional use.

2.35.3 The 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 the import entitlement of the two succeeding licensing years.

2.35.4 The import licence/certificate/permission granted under paragraphs 2.35.1 and 2.35.2 shall not be transferable. However, transferability of such licence/ certificate/ permission granted to hotels/ restaurants/ travel agents/ tour operators may be allowed within their respective groups or to managed hotels as defined in Chapter 9 of Foreign Trade Policy.

2.35.5 The goods imported against such licence/ certificate/ permission shall not be transferred to anyone within a period of 2 years

anaged hotels as defined in Chapter 9 of Foreign Trade Policy.

2.35.5 The goods imported against such licence/ certificate/ permission shall not be transferred to anyone within a period of 2 years

35 from the date of their import without the prior permission of the Director General of Foreign Trade. No permission for transfer will be required in case the imported goods are re-exported. However, the re-export shall be subject to all conditionality, or requirement of licence, or permission, as may be required under Schedule II of ITC(HS) Classification

2.35.6 An application for grant of a licence/ certificate/ permission under paragraphs 2.35.1 and 2.35.2 may be made in the ‘Aayaat Niryaat Form’ to the Director General of Foreign Trade through Director of Tourism, Government of India who will forward the application to the Regional Authority concerned along with the recommendations on the import entitlement and the goods to be imported. Import of Other 2.36 ITC (HS) contains the list of restricted items. An application Restricted Items for import of such items may be made, in the ‘Aayaat Niryaat Form’ along with the documents prescribed therein.

er 2.36 ITC (HS) contains the list of restricted items. An application Restricted Items for import of such items may be made, in the ‘Aayaat Niryaat Form’ along with the documents prescribed therein. Original application along with Treasury Receipt (TR) /Demand Draft shall be submitted to the regional authority concerned and self- attested copy of the same shall be submitted to DGFT in duplicate along with proof of submission of the application to concerned Regional Authority. EXIM Facilitation 2.37 Restricted item licence/certificate/permission may be granted Committee by the Director General of Foreign Trade or any other Regional Authority authorised by him in this behalf. The DGFT/ Regional Authority may take the assistance and advice of a Facilitation Committee. The Facilitation Committee will consist of representatives of Technical Authorities and Departments/ Ministries concerned. Gifts of Consumer 2.38 In terms of the provisions contained in paragraph 2.19 of the or Other Goods Policy, an application for grant of Customs Clearance Permit for import as gifts of items appearing as restricted for imports in ITC(HS) shall be made to the Director General of Foreign Trade in the form given in ‘Aayaat Niryaat Form’ along with documents prescribed therein. However, where the recipient of a gift is a charitable, religious or an educational institution registered under a law relating to the registration of societies or trusts or otherwise approved by the Central or a State Government and the gift sought to be

eligious or an educational institution registered under a law relating to the registration of societies or trusts or otherwise approved by the Central or a State Government and the gift sought to be

36 imported has been exempted from payment of customs duty by the Ministry of Finance, such import shall be allowed by the customs authorities without a Customs Clearance Permit. Import under Govt. to 2.39 Import of goods under Government to Government agreements Govt. Agreements may be allowed without a licence/ certificate/permission or Customs Clearance Permit on production of necessary evidence to the satisfaction of the Customs authorities Import of Cheque 2.40 Indian branches of foreign banks, insurance companies and Books/ Ticket Forms etc. travel agencies may import cheque books, bank draft forms and travellers cheque forms without a Customs Clearance Permit. Similarly, airlines/shipping companies operating in India, including persons authorised by such airlines/shipping companies, may import passenger ticket forms without a Customs Clearance Permit. Import of Reconditioned/ 2.41 Air India, Indian Airlines, Vayudoot, Pawan Hans Ltd.

thorised by such airlines/shipping companies, may import passenger ticket forms without a Customs Clearance Permit. Import of Reconditioned/ 2.41 Air India, Indian Airlines, Vayudoot, Pawan Hans Ltd. and Second Hand Aircraft scheduled domestic private airlines, private sector/public sector Spares companies and State Governments operating executive/ training aircraft or those engaged in the aerial spraying of crops and non scheduled airlines and charter service operators will be eligible to import, without a licence/ certificate/permission, reconditioned/ second hand aircraft spares on the recommendation of the Director General of Civil Aviation, Government of India. Foreign airlines shall also be eligible to import without a licence/ certificate/ permission, reconditioned/second hand aircraft spares on the recommendation of the Director General of Civil Aviation, Government of India. Import of Replacement 2.42 Goods or parts thereof on being imported and found defective Goods or otherwise unfit for use or which have been damaged after import may be exported without a licence/ certificate/ Authorisation/ permission, and goods in replacement thereof may be supplied free of charge by the foreign suppliers or imported against a marine insurance or marine-cum-erection insurance claim settled by an insurance company. Such goods shall be allowed clearance by the customs authorities without an import licence/certificate/ Authorisation/ permission provided that:

(a) The shipment of replacement goods is made within 24 months from the date of clearance of the previously

rities without an import licence/certificate/ Authorisation/ permission provided that:

(a) The shipment of replacement goods is made within 24 months from the date of clearance of the previously

37 imported goods through the Customs or within the guarantee period in the 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 the replacement of goods by foreign suppliers is subject to payment of insurance and/or freight by the importer and documentary evidence to this effect is produced at the time of making the remittance.

The importer shall also have the option to claim refund of payment, if any, already made to the foreign supplier, instead of obtaining replacement of goods referred to above.

2.42.1 In such cases where the goods have been found short-shipped, short-landed or lost in transit prior to actual import and/or detected as such at the time of customs clearance, import of replacement goods will be permitted on the strength of the certificate issued by the customs authorities without an import licence/ certificate/ Authorisation/ permission. This procedure shall also apply to cases in which short-shipment of goods is certified by the foreign supplier and he has agreed to replace the goods free of cost.

2.42.2 Cases not covered by the above provisions will be considered on merits by the DGFT for grant of licence/certificate/ Authorisation/ permissions for replacement of goods for which

e of cost.

2.42.2 Cases not covered by the above provisions will be considered on merits by the DGFT for grant of licence/certificate/ Authorisation/ permissions for replacement of goods for which an application may be made in the ‘Aayaat Niryaat Form’. Transfer of Imported 2.43 Goods, which are importable without restriction, can be Goods transferred by sale or otherwise by the importer freely. Transfer of imported goods, which are subject to Actual User condition under the Policy and have become surplus to the needs of the Actual User, shall be made only with the prior permission of the Regional Authority concerned. The following information alongwith supporting documents shall be furnished with the request for grant of permission for transfer, to the Regional Authority concerned:

(i) Reasons for transfer of imported material;

(ii) Name, address, IEC number and industrial licence/ certificate/ Authorisation/ permission/registration, if any, of the transferee;

ncerned:

(i) Reasons for transfer of imported material;

(ii) Name, address, IEC number and industrial licence/ certificate/ Authorisation/ permission/registration, if any, of the transferee;

38

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

(iv) Copies of import licence/ certificate/ Authorisation/ permission and bills of entry relating to the imports made;

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

2.43.1 Prior permission of the Regional Authority 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 the date of transfer.

2.43.2 Prior permission of the Regional Authority 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/licensee/ Authorisation holder shall be permitted only after 10 years of the date of import with the approval of the DGFT. Sale of Exhibits 2.44 (i) Sale of exhibits of restricted items, mentioned in ITC(HS), imported for an international exhibition/ fair organised/ approved/ sponsored by the India Trade Promotion Organisation (ITPO) may also be made, without a licence/certificate/ Authorisation/ permission, within the bond period allowed for re-export, on payment of the applicable customs duties, subject to a ceiling limit of Rs.5 lakhs (CIF) for such exhibits for each exhibitor.

horisation/ permission, within the bond period allowed for re-export, on payment of the 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 a licence/ certificate/ Authorisation/ permission, within the 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 the bond period due to circumstances beyond the control of the importer, the customs authorities may allow extension of the bond period on merits. Import of Overseas 2.45 On the winding up of overseas offices, set up with the approval Office Equipment of the Reserve Bank of India, used office equipment and other items may be imported without a licence/ certificate/ permission.

39 Labels, Price Tags And 2.46 Supplies, made by foreign buyers or procured by the exporters Like Articles For Export on the advice of foreign buyers, of labels, price tags, hangers Products sizers, PVC boxes, inlay cards, printed bags, stickers and trimming materials like buttons, belts shoulder pads, buckles, eyelets, hooks and eyes and rivets to be attached to the goods against specific orders placed by foreign buyers on Indian exporters, may be imported without a licence/certificate/ Authorisation/ permission. Prototypes 2.47 Import of new/second hand prototypes/ second hand samples may be allowed on payment of duty without a licence/ certificate/ Authorisation/ permission to an Actual User

/ permission. Prototypes 2.47 Import of new/second hand prototypes/ second hand samples may be allowed on payment of duty without a licence/ certificate/ Authorisation/ permission to an Actual User (industrial) engaged in the production of or having industrial licence/letter of intent for research in the item for which prototype is sought for product development or research, as the case may be, upon a self – declaration to that effect, to the satisfaction of the Customs Authorities. Restricted items for R&D 2.48 All restricted items and items permitted to be imported by State Trading Enterprises (STEs), except live animals, required for R&D purpose may be imported without a licence/ certificate/ Authorisation/ permission by Government recognized Research and Development units. Export Policy 2.49 The policy relating to Exports is given in Chapter-2 of the Policy. Further, Schedule 2, Appendix-1 of the ITC (HS) specifies the list of items which may be exported without a licence/certificate/ Authorisation/ permission but subject to terms and conditions specified in this behalf. Application for Grant 2.50 An application for grant of Export licence/ certificate/ of Export Licence/ permission in respect of items mentioned in Schedule 2 of Certificate/ Permission ITC(HS) may be made in the ‘Aayaat Niryaat Form’, to the Director General of Foreign Trade and shall be accompanied by the documents prescribed therein.

ioned in Schedule 2 of Certificate/ Permission ITC(HS) may be made in the ‘Aayaat Niryaat Form’, to the Director General of Foreign Trade and shall be accompanied by the documents prescribed therein. The Foreign Trade Facilitation Committee shall consider applications on merits for issue of export licence/certificate/permissions. 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) on the basis of guidelines given below. Applications for licences to export items or technology on the

40 SCOMET List are considered case-by-case , based inter alia on the following general criteria :- I. The following factors, among others, are taken into account in the evaluation of applications for export of items on the SCOMET List: a. Credentials of the end-user, credibility of declarations of end-use of the item or technology, the integrity of the 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. b. The assessed risk that the exported items will fall into the hands of terrorists, terrorist groups, and non-State actors; c. Export control measures instituted by the recipient State; d.

te party. b. The assessed risk that the exported items will fall into the hands of terrorists, terrorist groups, and non-State actors; c. Export control measures instituted by the recipient State; d. The capabilities and objectives of the programmes of the recipient State relating to weapons and their delivery; e. The assessment of the end-uses of the item(s); f. The applicability to an export licence application of relevant bilateral or multilateral agreements to which India is a party. II. A condition for the consideration of an application for an export licence is the submission of stipulated certifications to the effect, inter alia, that: a. The item will be used only for the purpose stated and that such use will not be changed, nor the items modified or replicated without the consent of the Government of India; b. Neither the items nor replicas nor derivatives thereof will be re-transferred without the consent of the Government of India;

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

41 c. The end-user shall facilitate such verifications as are required by the Government of India. The Government of India may also require additional formal assurances, as appropriate, including on end-use and non-retransfer, from the State of the recipient. III. The Regional Authority for items in Category 0 below is the Department of Atomic Energy. The applicable guidelines are notified by that Department under the Atomic Energy Act, 1962. For certain items in Category 0, formal assurances from the 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 the 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 the export of items or technology that bear the possibility of diversion to or use in the development or manufacture of, or use as, systems capable of delivery of weapons of mass destruction. V. Applications for the transfer of “Technology” for any item on the List will be considered as an application for the export of the item itself. VI. Licences for the export of items in this List (other than those under Category 0, 1 and 2) solely for the purposes

the List will be considered as an application for the export of the item itself. VI. Licences for the export of items in this List (other than those under Category 0, 1 and 2) solely for the 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. No licence for display or exhibition shall be issued for items under Categories 0, 1, and 2.) VII. Export of items not on the SCOMET List may also be regulated under the 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 the conditions of licence shall invite civil and/or criminal prosecution.

42 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 the exhibitor intends to offer that item for sale during the exhibition abroad. Such sale shall not take place without a valid licence. Note 3: The export of items in Category 2 of this list may also be controlled by other applicable guidelines issued from time-to-time.

abroad. Such sale shall not take place without a valid licence. Note 3: The 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 the 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 the subject of government-to-government instruments of accord over export of items on the SCOMET List. Note 6: ‘Technology’ (see also entry ‘Technology’ in the glossary in Appendix-3 to Schedule 2 of ITC(HS) ). The approval of export of an item on the SCOMET List also authorizes the export to the same end-user of the minimum ‘technology’ required for the installation, operation, maintenance and repair of the item.

DGFT in association with the Administrative Ministries/ Departments and the Trade Associations will organize Industry Outreach Programme on regular basis for an effective awareness among the exporters/importers dealing with the trade, in particular, in SCOMET items.

DGFT 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, etc.

T 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, etc. for medical and surgical purposes and are not prohibited for export. The validity of such certificate shall be two years from the date of issue unless otherwise specified. Export Of Items under 2.51 An application for export of items mentioned in ITC(HS) under State Trading Regime STR regime may be made to the Director General of Foreign (STR) Trade.

43 Exports Of Samples/ 2.52 An application for the export of samples or exhibits, which are Exhibits restricted for export, may be made to the Director General of Foreign Trade. Free of Cost Exports 2.52.1 The 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 the average annual export realisation during the preceding three licensing years whichever is higher. Gifts/Spares/Replacement 2.53 For export of gifts, indigenous/imported warranty spares and Goods replacement goods in excess of the ceiling/ period prescribed in paragraphs 2.32, 2.33 and 2.37 respectively of the Policy, an application may be made to the Director General of Foreign Trade. Furnishing of Returns 2.54 All the exports made in non physical form by using in respect Of Exports communication links including high speed data communication in non Physical form links, internet, telephone line or any other channel which do

made in non physical form by using in respect Of Exports communication links including high speed data communication in non Physical form links, internet, telephone line or any other channel which do not involve the Customs authorities has to be compulsorily reported on quarterly basis to the Electronic and Software Export Promotion Council in the proforma given in Appendix- 19C. These provisions shall be applicable to all the exporting units located anywhere in the country including those located in STP, SEZ, EHTP and under 100% EOU scheme. Duty Free Import of 2.55 Duty free import of goods (as specified in the list 28 of Customs R&D Equipment for notification No.21/2002 dated 1.3.2002, as amended from time Pharmaceuticals and to time) upto 25% of the FOB value of exports during the Bio-technology Sector preceding licensing year, shall be allowed to the manufacturer exporters having Research and Development wing which is registered with the Department of Scientific and Industrial Research in the Ministry of Science and Technology subject to fulfillment of condition number 53(ii) of the said notification. The eligible unit may furnish an application given in Appendix- 15A to the Regional Authorities under whose jurisdiction the registered office of company or head office of the firm is located. The Regional Authority shall verify the application on the basis of the declaration given by the unit and countersigned by Chartered Accountant.

ice of company or head office of the firm is located. The Regional Authority shall verify the application on the basis of the declaration given by the unit and countersigned by Chartered Accountant.

44

2.55.1 Duty free imports of goods as specified in list 28A of Customs notification No. 21/2002 dated 1.3.2002, (as amended from time to time) upto 1% of the FOB value of exports made during the preceding licensing year, shall be allowed to agro chemicals sector unit having export turnover of Rs. 20 crore or above during preceding licensing year. Such facility shall be available only to a manufacturer having a research and development wing registered with Department of Scientific and Industrial Research in Ministry of Science and Technology subject to fulfilment of condition no.53A of the said notification. The eligible unit shall apply in the form given in Appendix- 15B to the Regional Authorities under whose jurisdiction the registered office of company or head office of the firm is located. The Regional authority shall verify the application on the basis of the declaration given by the unit and countersigned by Chartered Accountant. Conversion of E.P. copy 2.56 If the Customs Authorities, after recording reasons in writing, of shipping bill from one permit conversion of an E.P.

the unit and countersigned by Chartered Accountant. Conversion of E.P. copy 2.56 If the Customs Authorities, after recording reasons in writing, of shipping bill from one permit conversion of an E.P. copy of any scheme shipping bill scheme to another on which the benefit of that scheme has not been availed, the exporter would be entitled to the benefit under the scheme in which shipment is subsequently converted. Relocation of Industries 2.57 Plant and machineries would be permitted for import without a licence provided the depreciated value of such relocation plant exceeds Rs. 25 crore. Offsetting of Export 2.58 Subject to the specific approval of the Reserve Bank of India, Proceeds any payables, or equity investment made by a licence/ Authorisation holder under any export promotion scheme, can be used to offset receipts of his export proceeds. In such cases, the offsetting would be equal to the realisation of the export proceeds and the exporter would have to submit the following additional documents:

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

b) Specific permission of the Reserve Bank of India. Quality Certification 2.59 It has been a constant endeavor to promote quality standards in the export product/units manufacturing the export product.

pecific permission of the Reserve Bank of India. Quality Certification 2.59 It has been a constant endeavor to promote quality standards in the export product/units manufacturing the export product.

45

2.59.1 One of the salient features incorporated in the Foreign Trade Policy as per paragraph 3.5.2 Note.1 for the promotion of quality standards is the grant of Star Export 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.

2.59.2 The list of such agencies authorised to grant quality certification is given in Appendix-6. Any of the agencies desirous of enlistment in Appendix –6 may submit their application as per Annexure I to Appendix 6 to the concerned Regional Authority under whose Jurisdiction the applicant falls as given in Appendix 1.

2.59.3 Deleted. Grievance Redressal 2.60 The provisions pertaining to the Grievance Redressal Mechanism Mechanism is given in para 2.49 of the Foreign Trade Policy. Procedure for import 2.61 Attention is invited to Government of India, Ministry of Finance Under the Tariff Rate (Department of Revenue ), Notification No. 21/2002-Customs Quota Scheme dated 1st March, 2002. As per the notification, import of four items viz., (1) Skimmed and whole milk powder, milk food for babies etc.

nt of Revenue ), Notification No. 21/2002-Customs Quota Scheme dated 1st March, 2002. As per the notification, import of four items viz., (1) Skimmed and whole milk powder, milk food for babies etc. (0402.10 or 0402.21) (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 the quantities as well as such concessional rates of customs duty as indicated below: S.No. ITC Code No. & Quantity Concess- Item of Quota ional duty 1. Tariff Code No. 10,000 MTs 15% 0402.10 or 0402.21 Skimmed and whole Milk Powder. Milk Food for babies etc. 2. Tariff Code No. 5,00,000 MTs 15% 1005.90 Maize (Corn): other

46 3. Tariff Code No. 150,000 MTs 50% 1512.11 Crude Sunflower seed or safflower oil or fractions thereof 4. Tariff Code No. 150,000 MTs 45% 1514.19 & 1514.99 Rape, Colza or Mustard Oil, Other (Refined) Eligible entities for 2.61.1 (a) Milk Powder (Tariff Code No. 0402.10 or 0402.21): allocation of quota: 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) are eligible to avail the quota. (b) Maize(corn)(Tariff Code No.

etals Trading Corporation (MMTC), Projects & Equipment Corporation of India Limited(PEC) and Spices Trading Corporation Limited (STCL) are eligible to avail the quota. (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 are eligible to avail the quota. (c) Crude sunflower seed or safflower oil or fractions thereof(Tariff Code No. 1512.11): 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 are eligible to avail the quota. (d) Refined rape, colza or mustard oil, other(Tariff Code No. 1514.19 or 1514.99): National Dairy Development Board(NDDB), State Trading Corporation (STC),

poration are eligible to avail the quota. (d) Refined rape, colza or mustard oil, other(Tariff Code No. 1514.19 or 1514.99): National Dairy Development Board(NDDB), State Trading Corporation (STC),

47 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 are eligible to avail the quota. All the eligible entities are eligible to avail the quotas as per the request of the applicants received. All eligible entities desiring availment of the quota as mentioned above, may make application to Exim Facilitation Committee (EFC) in the Aayaat-Niryaat Form of the Handbook of Procedures in the office of Directorate General of Foreign Trade (DGFT), Udyog Bhavan, New Delhi – 110 011. The completed application forms along with the required / prescribed documents must reach this office on or before 1st March of each financial year preceding to the year of the quota e.g.
Applications for TRQ for 2007-2008 must reach DGFT by 1st March, 2007. The imports have to be completed before 31st March of the financial year i.e. the consignments must be cleared by the customs authorities before this date. Since import of maize (corn) is under State Trading Regime (STR), the allottes of quota i.e. designated agencies in para 1 (b) above for this item shall also be granted an import licence/ Authorisation for the allotted quantities as indicated at Sl. No. 21(b) of Customs Notification No.

i.e. designated agencies in para 1 (b) above for this item shall also be granted an import licence/ Authorisation for the 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 Foreign Trade Policy, 2004-2009, if they do not wish to make the imports through Food Corporation of India (FCI). The application fee for these applications shall be paid according to the procedure contained in Appendix 21 B to Handbook of Procedures, Vol.I, 2004-2009. The Exim Facilitation Committee (EFC) in the DGFT will evaluate and allot the quota among the applicants by 31st March of each financial year preceding to the year of the quota e.g. For 2007-08, EFC will allot quota by 31st March, 2007.

48 CHAPTER-3 PROMOTIONAL MEASURES Status Certificates 3.1 The Policy relating to the status holder is given in Chapter- 3 of the Policy. Application for Grant 3.2 For grant of any status, the application shall be filed before of Status Certificate 31st March.

e Policy relating to the status holder is given in Chapter- 3 of the Policy. Application for Grant 3.2 For grant of any status, the application shall be filed before of Status Certificate 31st March. The application by exporters of goods and services for grant of One to Five Star Export House status shall be filed in ‘Aayaat Niryaat Form’. An existing status holder shall be automatically treated to be an equivalent star export house as per the table given herein under:

Erstwhile status under Exim Converted Status as per the Policy 2002-07 Foreign Trade Policy 2004-09

Export House One Star Export House

Trading House Three Star Export House

Star Trading House Four Star Export House

Super Star Trading House Five Star Export House

However, any exporter irrespective of whether he is a status holder or not can apply afresh in ‘Aayaat Niryaat Form’ for grant of status or upgradation of his existing status.

3.2.1 Application for grant of certificate for One to Five Star Export House shall be filed with the concerned regional authority headed by Joint DGFT. Provided further that, application for grant of status certificate in respect of EOU/ SEZ units, shall be filed with the concerned Development Commissioner if it does not involve clubbing of FOB value of exports of its other company(ies) in the DTA. However in case of clubbing, the application shall be filed with Joint DGFT.

3.2.2 Such application shall be made by the Registered Office/Head Office/Corporate Office in the case of a Company and Head Office in case of others.

he application shall be filed with Joint DGFT.

3.2.2 Such application shall be made by the Registered Office/Head Office/Corporate Office in the case of a Company and Head Office in case of others. Where the applicant is the Registered Office/Head Office/Corporate Office in case of a Company, it shall furnish (a) Self certified copy of valid RCMC where the name of the Registered Office or Head Office or Corporate

49 Office is given and (b) A disclaimer from the Head Office and Corporate Office (or Registered Office and Corporate Office or Registered Office and Head Office as the case may be) that no such application has been filed by the Company earlier against the period of entitlement for the status certificate.

3.2.3 Deleted Target Plus Scheme 3.2.5 Deleted Maintenance of Accounts 3.3 The status holder shall maintain true and proper accounts of its exports and imports based on which such recognition has been granted and the exports and imports made during the validity period of such recognition certificate. The record shall be maintained for a minimum period of three years from the expiry of the validity of such certificate.

ts and imports made during the validity period of such recognition certificate. The record shall be maintained for a minimum period of three years from the expiry of the validity of such certificate. These accounts shall be made available for inspection to the regional authority or any authority nominated by the Director General of Foreign Trade. Refusal/ Suspension/ 3.4 The status certificate may be refused or suspended or cancelled Cancellation of Certificate by the authority which is competent to issue/renew such certificate, if the certificate holder / applicant or any agent or employee acting on his behalf:

(a) Fails to discharge the export obligation imposed;

(b) Tampers with authorisations/licences;

(c) Misrepresents or has been a party to any corrupt or fraudulent practice in obtaining any authorisation/licence; (d) Commits a breach of the Foreign Trade (Development and Regulation) Act, 1992, or the Rules and Orders made there under; or

(e) Fails to furnish the information required by the Director General of Foreign Trade or any person or authority authorized by him.

3.4.1 A reasonable opportunity shall be given to the status holder before taking any action under paragraph 3.4 of Handbook of Procedures (Vol. I). Appeal 3.5 An applicant, who is not satisfied with the decision taken to suspend or cancel the certificate, may file an appeal to the

y action under paragraph 3.4 of Handbook of Procedures (Vol. I). Appeal 3.5 An applicant, who is not satisfied with the decision taken to suspend or cancel the certificate, may file an appeal to the

50 Director General of Foreign Trade within 45 days of the date of the said decision. The decision of the DGFT shall be final. Export Promotion Council 3.6 The general policy relating to the Export Promotion Councils (EPCs) is given in Chapter-2 of the Policy. A list and product category of Export Promotion Councils/ Commodity Boards is given in Appendix-2.

3.7 The major functions of the EPCs are:

(a) To provide commercially useful information and assistance to their members in developing and increasing their exports;

(b) To offer professional advice to their members in areas such as technology up gradation, quality and design improvement, standards and specifications, product development, innovation etc;

(c) To organise visits of delegations of its members abroad to explore overseas market opportunities;

(d) To organise participation in trade fairs, exhibitions and buyer-seller meets in India and abroad;

(e) To promote interaction between the exporting community and the Government both at the Central and State levels;

ipation in trade fairs, exhibitions and buyer-seller meets in India and abroad;

(e) To promote interaction between the exporting community and the Government both at the Central and State levels; and

(f) To build a database on the exports and imports of their members. Non-Profit, Autonomous 3.8 The EPCs are non-profit organizations registered under the and Professional Bodies Companies Act or the Societies Registration Act, as the case may be.

3.9 The EPCs shall be autonomous and regulate their own affairs. However, if the Central Government frames uniform bylaws for the constitution and/or for the transaction of business for EPCs, they shall adopt the same with such modifications as Central Government may approve having regard to the special nature or functioning of such EPC. The EPCs shall not be required to obtain the approval of the Central Government for participation in trade fairs, exhibitions etc. and for sending sales teams/delegations abroad.

ioning of such EPC. The EPCs shall not be required to obtain the approval of the Central Government for participation in trade fairs, exhibitions etc. and for sending sales teams/delegations abroad.

51 The Ministry of Commerce and Industry/ Ministry of Textiles of the Government of India, as the case may be, would interact with the Managing Committee of the Council concerned, twice a year, once for approving their annual plans and budget and again for a mid-year appraisal and review of their performance.

3.10 In order to give a boost and impetus to exports, it is imperative that the EPCs function as professional bodies. For this purpose, executives with a professional background in commerce, management and international marketing and having experience in government and industry should be brought into the EPCs. Government Support 3.11 The EPCs may be provided financial assistance by the Central Government. Authorities Issuing RCMC 3.12 An exporter desiring to obtain a Registration-cum-Membership Certificate (RCMC) shall declare his main line of business in the application, which shall be made to the Export Promotion Council (EPC) relating to that line of business.

Registration-cum-Membership Certificate (RCMC) shall declare his main line of business in the application, which shall be made to the Export Promotion Council (EPC) relating to that line of business. However, a status holder has the option to obtain RCMC from Federation of Indian Exporters Organization (FIEO). Notwithstanding anything stated above, exporters of Drugs & Pharmaceuticals shall obtain RCMC from Pharmexcil only. Further, exporters of minor forest produce and their value added products shall obtain RCMC from Shellac Export Promotion Council. The service exporters (except software service exporters) shall be required to obtain RCMC from FIEO. In respect of exporters having their head office/registered office in the State of Orissa, RCMC may be obtained from FIEO office in Bhubaneshwar irrespective of the product being exported by them. In order to give proper guidance and encouragement to the Services Sector, an exclusive Export Promotion Council for Services shall be set up.

3.12.1 In addition, an exporter has the option to obtain an RCMC from FIEO or any other relevant EPC if the products exported by him relate to those EPC’s.

on Council for Services shall be set up.

3.12.1 In addition, an exporter has the option to obtain an RCMC from FIEO or any other relevant EPC if the products exported by him relate to those EPC’s.

52

3.12.1.1 If the export product is such that it is not covered by any EPC, RCMC in respect thereof may be issued by FIEO. Registration cum- 3.12.2 An exporter may, on application given in Appendix-19A, Membership register and become a member of Export Promotion Council. On being admitted to membership, the applicant shall be granted forthwith Registration-cum-Membership Certificate (RCMC) of the EPC concerned, in the format given in Appendix-19B subject to such terms and conditions as may be specified in this behalf. 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 export promotion council. Validity Period of RCMC 3.12.3 The RCMC shall be deemed to be valid from 1st April of the licensing year in which it was issued and shall be valid for five years ending 31st March of the licensing year, unless otherwise specified. Intimation Regarding 3.12.4 In case of change in ownership, constitution, name or address Change In Constitution of an exporter, it shall be obligatory on the part of RCMC holder to intimate such change to the registering authority within a period of one month from the date of such change.

hange In Constitution of an exporter, it shall be obligatory on the part of RCMC holder to intimate such change to the registering authority within a period of one month from the date of such change. The registering authority, however, may condone delays on merits. Furnishing Of Returns 3.13 The exporter shall furnish quarterly returns/ details of his exports of different commodities to the concerned registering authority. This will be in addition to any other returns as may be prescribed by the registering authority. However, status holders shall also send quarterly returns to FIEO in the format specified by FIEO. De-Registration 3.14 The registering authority may de-register an RCMC holder for a specified period for violation of the conditions of registration. Before such de-registration, the RCMC holder shall be given a show cause notice by the registering authority, and an adequate and reasonable opportunity to make a representation against the proposed de-registration. Upon de– registration, the concerned export promotion council shall intimate the same to all the regional authorities.

able opportunity to make a representation against the proposed de-registration. Upon de– registration, the concerned export promotion council shall intimate the same to all the regional authorities.

53 Appeal Against 3.15 A person aggrieved by a decision of the registering authority De-registration in respect of any matter connected with the issue of RCMC may prefer an appeal to the Director General of Foreign Trade or an officer designated in this behalf within 45 days against the said decision and the decision of the appellate authority shall be final. Directives of DGFT 3.16 The Director General of Foreign Trade may direct any registering authority to register or de-register an exporter or otherwise issue such other directions to them consistent with and in order to implement the provisions of the Act, the Rules and Orders made there under, the Policy or this Handbook.

3.17 Electronic Data Interchange Electronic Data 3.17.1 The role and functions of EDI are defined in Para 2.45 of the Interchange Foreign Trade Policy. The basic purpose of EDI Initiatives is to improve the services for DGFT user community thereby achieving greater transparency of operations and reducing transaction costs by decreasing the processing time for obtaining authorisations/licences/permission/ certificate from the DGFT.

nity thereby achieving greater transparency of operations and reducing transaction costs by decreasing the processing time for obtaining authorisations/licences/permission/ certificate from the DGFT. These EDI initiatives have made our exports competitive in international markets. Eligibility 3.17.2 The facility of electronic filing of applications shall be available to all exporters. Procedure 3.17.3 Under this scheme, an exporter would be able to file his application on the DGFT website at http://dgft.gov.in. The application will then be processed in accordance with the prevalent rules and regulations. The applicant will have to visit the concerned office to hand- over the hard copy of the application along with the requisite documents including the application fee. The authorisation/ license shall be issued on receipt of the hard copies of the documents as mentioned above after due scrutiny as prescribed in this Handbook. Fiscal Incentives for EDI 3.17.4 The following deductions in Application Fee would be admissible for applications signed digitally or/ and where application fee is paid electronically through EFT (electronic fund transfer)

I 3.17.4 The following deductions in Application Fee would be admissible for applications signed digitally or/ and where application fee is paid electronically through EFT (electronic fund transfer)

54

Sr. Mode of Application Fee Deduction (as a % No. of normal application fee)

1 Digitally signed 25%

2 Application fee payment vide 25% EFT

3 Both digitally signed as well 50% as use of EFT for payment of application fee Benefits 3.17.5 The 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.

3.17.6 Authorisation/license issued using DGFT Electronic Application System shall be transmitted electronically to the Customs through EDI Mode. This shall also obviate the need for verification of authorisations/licences before allowing clearance. New EDI Initiatives 3.17.7 To further improve the quality of services some new EDI Initiatives are being taken by DGFT. In order to reduce documentation, a multiple purpose common application form ‘Aayaat Niryaat Form’ has been introduced. 3.18 SERVED FROM INDIA SCHEME a) The Policy for the Served From India Scheme is given in Chapter 3 of Foreign Trade Policy.

b) A single consolidated application for the duty credit entitlement certificate shall be filed with the jurisdictional regional authority in ‘Aayaat Niryaat Form’ by the Registered office in case of a company and Head Office in case of others.

duty credit entitlement certificate shall be filed with the jurisdictional regional authority in ‘Aayaat Niryaat Form’ by the Registered office in case of a company and Head Office in case of others. The last date for filing of such application shall be 31st December.

c) deleted

d) For each duty credit certificate, split certificates, subject to a minimum of Rs 5 lakh each and multiples thereof, may also be issued. A fee of Rs 1000/- each shall be paid for each split certificate. However, a request for

55 issuance of split certificate(s) shall be made at the time of application only and shall not be considered at a later stage. The duty credit certificate shall normally be issued with a single port of registration. However the applicant may choose different ports of registration for each split certificate.

e) deleted

f) The entitlement can be used for import from private/public bonded warehouses subject to the fulfillment of provision of paragraph 2.28 of Foreign Trade Policy and the terms and conditions of the notification issued by Department of Revenue from time to time in respect of private/public bonded warehouses.

g) The duty credit entitlement certificate shall be valid for a period of 24 months. Revalidation of duty credit certificate shall not be allowed. The service provider shall within one month of the completion of imports made or the expiry of the validity of the duty credit entitlement certificate whichever is earlier, submit a statement of imports made under the certificate as per ‘Aayaat Niryaat Form’ to the

mports made or the expiry of the validity of the duty credit entitlement certificate whichever is earlier, submit a statement of imports made under the certificate as per ‘Aayaat Niryaat Form’ to the jurisdictional Regional Authority with a copy to the jurisdictional Excise authorities (service tax cell) wherever applicable.

h) All the applicants under this scheme who are hotels (1 star and above, heritage hotels) and stand alone restaurants would ensure that they pass on the benefit of the duty credit entitlement to the consumer.

(i) Only such foreign exchange remittances as are earned as amounts in lieu of the services rendered by the service exporter would be counted for computation of the entitlement under this scheme. Other sources of foreign exchange earnings such as equity or debt participation, donations, repayment of loans and any other inflow of foreign exchange unrelated to

56 the service rendered would not be counted for the computation of entitlement under the scheme. Ineligible Remittances 3.18.1 (a) The following Foreign Exchange remittances shall not and Services be eligible for entitlement under this scheme: I. Remittances related to Financial Services Sector

1. Raising of all types of foreign currency Loans.
2. Export proceeds realisation 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 the services rendered by the financial institutions. II.

ruments. 4. Issuance of foreign currency Bonds. 5. Sale of securities and other financial instruments. 6. Other receivables not connected with the services rendered by the financial institutions. II. Remittances earned through contract/regular employment abroad (e.g. labour remittances).

(b) Payments received from Export Earners Foreign Currency (EEFC) Account shall not be counted for benefits under the scheme. (c) The foreign exchange turnover for 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 not be ineligible.) (d) The foreign exchange turnover for Educational Institutions like equity participation, donations etc. (However remittances received on account of the course fees and consultancy provided by the institution shall not be ineligible.) (e) Export turnover of units operating under SEZ/EOU/ EHTP/STPI/ BTP Schemes or supplies made to such units or products manufactured by them and exported through DTA units (f) Moreover, the clubbing of turnover of services rendered

ating under SEZ/EOU/ EHTP/STPI/ BTP Schemes or supplies made to such units or products manufactured by them and exported through DTA units (f) Moreover, the clubbing of turnover of services rendered

57 by these units with the turnover of the DTA units shall also not be allowed. Re-export of goods 3.18.2 Goods imported under the scheme, which are found imported under the defective or unfit for use, may be re-exported, as per the Scheme guidelines issued by the Department of Revenue. In such cases, 98% of the credit amount debited against the scrip for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original Scrip. Based on the certificate, a fresh Scrip shall be issued by the concerned Regional Authority. The fresh Scrip, so issued, shall have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/unfit goods. Vishesh Krishi and 3.19 The Policy pertaining to the Vishesh Krishi and Gram Udyog Gram Udyog Yojana Yojana is given in Chapter 3 of the Foreign Trade Policy.

3.19.1 The application for grant of credit under Vishesh Krishi and Gram Udyog Yojana for export made from 01.04.2006 onwards shall be made to the regional authority concerned in the Aayaat Niryaat Form along with the documents prescribed therein. The applicant may file one or more applications subject to the condition that each application shall contain not more than 25 shipping bills.

iryaat Form along with the documents prescribed therein. The applicant may file one or more applications subject to the condition that each application shall contain not more than 25 shipping bills. All the shipping bills in any one application must relate to exports made from one Customs House only. This procedure will equally apply to the exports made from 01.04.2005 till 31.03.2006 under the then Vishesh Krishi Upaj Yojana. The application for obtaining credit shall be filed within a period of twelve months from the date of exports or within six months from the date of realization or within three months from the date of printing/ release of shipping bill, whichever is later, in respect of shipments for which the claim have been filed. However, in respect of the exports made from 01.04.2005 till 31.03.2006, application for grant of credit for products eligible under the Vishesh Krishi Upaj Yojana, the last date for filing such applications shall be 30th September 2006 or within six months from the date of realization or within three months from the date of printing/ release of shipping bill, which ever is later.

ling such applications shall be 30th September 2006 or within six months from the date of realization or within three months from the date of printing/ release of shipping bill, which ever is later.

58

3.19.2 The application in the ‘Aayaat Niryaat Form’ shall be accompanied by Export Promotion copy of the shipping bill and bank realization certificate as per Appendix-22A.

3.19.3 For direct as well as third party exports, the Export documents viz Export Order, Invoice, GR form, Bank Realization Certificate should be in the name of applicant only.

3.19.4 In cases where the applicant applies for the credit entitlement certificate after realization or shipments are made against irrevocable letter of credit or bill of exchange is unconditionally Avalised/ Co-Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank and certified by the bank in the relevant Bank certificate of export and Realization, the credit entitlement certificate shall be issued with transferable endorsement. In other cases, the credit entitlement certificate shall be initially issued with non-transferable endorsement. Upon realization of export proceeds, such credit entitlement certificates can be endorsed as transferable, if the applicant so desires.

3.19.5 The duty credit certificate shall be issued with a single port of registration and this will be the port from which the exports have been made.

as transferable, if the applicant so desires.

3.19.5 The duty credit certificate shall be issued with a single port of registration and this will be the port from which the exports have been made. However, the applicant may use this duty credit for imports from any other port after obtaining TRA from the port of registration that includes ICD/LCS.

3.19.6 For each duty credit certificate, split certificates subject to a minimum of Rs 5 lakh each and multiples thereof may also be issued. A fee of Rs 1000/- each shall be paid for each split certificate. However, a request for issuance of split certificate(s) shall be made at the time of application only and shall not be considered at a later stage. The split certificate will have the same port of registration for the purposes of imports as appearing in the main certificate.

3.19.7 The entitlement can be used for import from private/public bonded warehouses subject to the fulfillment of provision of

paragraph 2.28 of Foreign Trade Policy and the terms and

conditions of the notification issued by Department of Revenue from time to time in respect of private/public bonded warehouses. 3.19.8 The duty credit entitlement certificate shall be valid for a period of 24 months.

59 Revalidation of duty credit entitlement certificate shall not be allowed. Re-export of goods 3.19.9 Goods imported under the scheme, which are found imported under the defective or unfit for use, may be re-exported, as per the Scheme guidelines issued by the Department of Revenue. In such cases 98% of the credit amount debited against the scrip for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original Scrip. Based on the certificate, a fresh Scrip shall be issued by the concerned Regional Authority. The fresh Scrip, so issued, shall have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/unfit goods. FOCUS MARKET SCHEME 3.20 The policy pertaining to Focus Market Scheme is given in Chapter 3 of the Foreign Trade Policy. 3.20.1 The application for grant of credit under Focus Market Scheme shall be made to the regional authority concerned in the Aayaat Niryaat Form along with the documents prescribed therein. The application shall be filed on a six monthly basis i.e. April – September and October – March.

regional authority concerned in the Aayaat Niryaat Form along with the documents prescribed therein. The application shall be filed on a six monthly basis i.e. April – September and October – March. However, each application within the same six monthly period shall include shipping bills from the same customs port only and separate applications shall be made for exports made from different custom ports. The application for claiming duty credit under the scheme shall be submitted within a period of six months from the end of the period of the application or within a period of six months of the date of realization of the last export covered by the said application, which ever is later. 3.20.2 For direct as well as third party exports, the Export documents viz Export Order, Invoice, GR form, Bank Realization Certificate should be in the name of applicant only. 3.20.3 In cases where the applicant applies for the credit entitlement certificate after realization or shipments are made against irrevocable letter of credit or bill of exchange is unconditionally Avalised/ Co-Accepted/ Guaranteed by a bank and the same

t entitlement certificate after realization or shipments are made against irrevocable letter of credit or bill of exchange is unconditionally Avalised/ Co-Accepted/ Guaranteed by a bank and the same

60 is confirmed by the exporters bank and certified by the bank in the relevant Bank certificate of export and Realization, the credit entitlement certificate shall be issued with transferable endorsement. In other cases, the credit entitlement certificate shall be initially issued with non-transferable endorsement. Upon realization of export proceeds, such credit entitlement certificates can be endorsed as transferable, if the applicant so desires. Port of Registration 3.20.4 The duty credit entitlement certificate shall be issued with a single port of registration and this will be the port from which the exports have been made. However, the applicant may use this duty credit for imports from any other port after obtaining TRA from the port of registration that includes ICD/LCS. Facility for Split Scrips 3.20.5 For each duty credit certificate, split certificates subject to a minimum of Rs 5 lakh each and multiples thereof may also be issued. A fee of Rs 1000/- each shall be paid for each split certificate. However, a request for issuance of split certificate(s) shall be made at the time of application only and shall not be considered at a later stage.

00/- each shall be paid for each split certificate. However, a request for issuance of split certificate(s) shall be made at the time of application only and shall not be considered at a later stage. The split certificate will have the same port of registration for the purposes of imports as appearing in the main certificate. Import from private/ 3.20.6 The entitlement can be used for import from private/public public bonded warehouses bonded warehouses subject to the fulfillment of provision of

paragraph 2.28 of Foreign Trade Policy and the terms and

conditions of the notification issued by Department of Revenue from time to time in respect of private/public bonded warehouses. Re-export of goods 3.20.7 Goods imported under the scheme, which are found defective imported under the or unfit for use, may be re-exported, as per the guidelines issued Scheme by the Department of Revenue. In such cases 98% of the credit amount debited against the scrip for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original Scrip. Based on the certificate, fresh Scrip shall be issued by the concerned Regional Authority. The fresh Scrip, so issued, shall have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/ unfit goods.

61 Validity Period 3.20.8 The duty credit entitlement certificate shall be valid for a period of 24 months. Revalidation of duty credit entitlement certificate shall not be allowed. FOCUS PRODUCT SCHEME 3.21 The policy pertaining to Focus Product Scheme is given in Chapter 3 of the Foreign Trade Policy 3.21.1 The application for grant of credit under Focus Product Scheme shall be made to the regional authority concerned in the Aayaat Niryaat Form along with the documents prescribed therein. The application shall be filed on a six monthly basis i.e. April – September and October – March.

regional authority concerned in the Aayaat Niryaat Form along with the documents prescribed therein. The application shall be filed on a six monthly basis i.e. April – September and October – March. However, each application within the same six monthly period shall include shipping bills from the same customs port only and separate applications shall be made for exports made from different custom ports. The application for claiming duty credit under the scheme shall be submitted within a period of six months from the end of the period of the application or within a period of six months of the date of realization of the last export covered by the said application, which ever is later. 3.21.2 For direct as well as third party exports, the Export documents viz Export Order, Invoice, GR form, Bank Realization Certificate should be in the name of applicant only. 3.21.3 In cases where the applicant applies for the credit entitlement certificate after realization or shipments are made against irrevocable letter of credit or bill of exchange is unconditionally Avalised/ Co-Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank and certified by the bank in the relevant Bank certificate of export and Realization, the credit entitlement certificate shall be issued with transferable endorsement.

confirmed by the exporters bank and certified by the bank in the relevant Bank certificate of export and Realization, the credit entitlement certificate shall be issued with transferable endorsement. In other cases, the credit entitlement certificate shall be initially issued with non-transferable endorsement. Upon realization of export proceeds, such credit entitlement certificates can be endorsed as transferable, if the applicant so desires. Port of Registration 3.21.4 The duty credit certificate shall be issued with a single port of registration and this will be the port from which the exports

62 have been made. However, the applicant may use this duty credit for imports from any other port after obtaining TRA from the port of registration that includes ICD/LCS. Facility for Split Scrips 3.21.5 For each duty credit entitlement certificate, split certificates subject to a minimum of Rs 5 lakh each and multiples thereof may also be issued. A fee of Rs 1000/- each shall be paid for each split certificate. However, a request for issuance of split certificate(s) shall be made at the time of application only and shall not be considered at a later stage. The split certificate will have the same port of registration for the purposes of imports as appearing in the main certificate. Import from private/ 3.21.6 The entitlement can be used for import from private/public public bonded warehouses bonded warehouses subject to the fulfillment of provision of

paragraph 2.28 of Foreign Trade Policy and the terms and

conditions of the notification issued by Department of Revenue from time to time in respect of private/public bonded warehouses. Re-export of goods 3.21.7 Goods imported under the scheme, which are found defective imported under the or unfit for use, may be re-exported, as per the guidelines issued Scheme by the Department of Revenue. In such cases 98% of the credit amount debited against the scrip for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original Scrip. Based on the certificate, fresh Scrip shall be issued by the concerned Regional Authority. The fresh Scrip, so issued, shall have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/ unfit goods. Validity Period 3.21.8 The duty credit entitlement certificate shall be valid for a period of 24 months. Revalidation of duty credit entitlement certificate shall not be allowed.

ctive/ unfit goods. Validity Period 3.21.8 The duty credit entitlement certificate shall be valid for a period of 24 months. Revalidation of duty credit entitlement certificate shall not be allowed.

63 CHAPTER-4 DUTY EXEMPTION/ REMISSION SCHEME Policy 4.1 The Policy relating to the Duty Exemption/Remission Scheme is prescribed in Chapter 4 of the Policy. General Provision 4.2 An application for grant of an Advance Authorisation/ Advance Authorisation for Annual Requirement/DFRC/ DEPB/DFIA may be made by the Registered office or Head office or a branch office or manufacturing unit of the eligible exporter, to the Regional Authority (RA) concerned.

4.3 Where the applicant is the branch office or manufacturing unit(s) of an exporter, it shall furnish (a) Self certified copy of valid RCMC where the name of the branch office or manufacturing unit is given. Advance Authorisation 4.4 Where the SION have been published, an application in ‘Aayaat Niryaat Form’, along with documents prescribed therein, shall be submitted to the Regional Authority concerned.

4.4.1 In case of export of gold /silver / platinum jewellery and articles thereof, the quantity, wastage and the value addition norms shall be as prescribed in paragraph 4A of the Policy and Handbook of Procedure (Vol.1).

4.4.2 In case where norms have not been published, an application in ‘Aayaat Niryaat Form’, along with prescribed documents, shall be furnished to the concerned Norms Committee (NC) at DGFT Headquarter for fixation of Norms. In such cases, the original copy of the application along with

m’, along with prescribed documents, shall be furnished to the concerned Norms Committee (NC) at DGFT Headquarter for fixation of Norms. In such cases, the original copy of the application along with prescribed fee shall be filed with the Regional Authority concerned and a self attested copy of the same shall be filed with NC. The authorisations in such cases shall be issued by the RA on the basis of recommendation of NC.

The Committee shall also function as a recommendatory authority for SION. The Director General of Foreign Trade may notify such norms as recommended by the NC. 4.4.3 Applications, where Acetic Anhydride, Ephedrine and Pseudo- ephedrine is required as an input for import, either in such cases where norms are fixed or in such cases where norms are not fixed, shall be filed with the Regional Authorities concerned.

64 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 the respective Zonal Director of the Narcotics Control Bureau, alongwith a declaration that the applicant will maintain the prescribed records and also submit the prescribed returns. Duty free import of spices (covered by Chapter 9 of the ITC(HS) Classifications of Export & Import items, 2004-09) for export under Advance Authorisation scheme shall be permitted only for value addition purposes like crushing/ grounding/sterilization or for manufacture of oils and oleoresins and not for simple cleaning, grading, re-packing etc. 4.4.4

scheme shall be permitted only for value addition purposes like crushing/ grounding/sterilization or for manufacture of oils and oleoresins and not for simple cleaning, grading, re-packing etc. 4.4.4 The Regional Authority, while issuing the Advance Authorisation for the import of Acetic Anhydride, Ephedrine and Pseudo- ephedrine, shall endorse a condition that before effecting imports, NOC shall be obtained from the Narcotics Commissioner of India, Central Bureau of Narcotics, Gwalior and shall also endorse a copy of the authorisation to the Drug Controller, Nirman Bhawan, New Delhi and the concerned Zonal Director of the Narcotics Control Bureau.

4.4.5 Exports made against the Government of India/EXIM Bank Line of Credit would be entitled for benefits under the Advance Authorisation Scheme. Further, exports made under Deferred Payment/Suppliers Line of Credit Contract backed by ECGC Cover would also be entitled for the benefit under the Scheme. Advance Authorisation 4.5 Transfer of any duty free material imported or procured against for applicants with advance authorisation from one unit of the company to another multi units unit of the same company for manufacturing purpose shall be done with the prior intimation to the jurisdictional Excise Authorities with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. In case of non excisable company/products, the units should maintain a proper record of the same.

vailable only for Advance Authorisation(s) where there is shortfall in fulfillment of export obligation, 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, the applicant shall pay the composition fee for E.O. period extension as per the provision of paragraph 4.22. 4.20.4 In such cases, the exports effected beyond the E.O. extension period (allowed in terms of paragraph 4.22) after the issuance of the earliest authorisation shall not be considered for clubbing. 4.20.5 Notwithstanding the provisions of para 4.20.3 and 4.20.4 above, Clubbing of all expired licences may also be permitted provided all the expired licences have been issued during the 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/ 4.21 In respect of an Advance Authorisation, the Regional Authority Reduction in the concerned (as per their financial powers) may consider a request Value of Authorisation for enhancement/ reduction in the CIF value of the authorisation, provided the value addition after such enhancement does not fall below the stipulated minimum value addition (as per the policy and the procedure laid thereunder) and provided there is no change in the input-output norms and the Policy under which the authorisation was issued. 4.21.1 The Regional Authority concerned (as per their financial

ure laid thereunder) and provided there is no change in the input-output norms and the Policy under which the authorisation was issued. 4.21.1 The Regional Authority concerned (as per their financial powers) may also consider the request for enhancement/ reduction in CIF value, quantity of inputs, FOB value of export obligation and quantity of exports of an Advance Authorisation provided there is no change in the input output norms and value

78 addition after such enhancement does not fall below the minimum value addition stipulated in the Policy and the Procedure laid thereunder . 4.21.2 The 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 the SION prior to the export of the said product, the prorata enhancement shall be given after calculating the entitlement on the revised SION. 4.21.3 The application for the enhancement/ reduction in the value of the authorisation shall be made in ‘Aayaat Niryaat Form’ of the Handbook of Procedure (Vol. 1). Application fee for 4.21.4 The application fee leviable for enhancement would be on the enhancement difference in the CIF values of the original and final authorisation.

ndbook of Procedure (Vol. 1). Application fee for 4.21.4 The application fee leviable for enhancement would be on the enhancement difference in the CIF values of the original and final authorisation. However, no application fee would be charged if the value of the authorisation is being reduced or the applicant has paid the maximum fee of Rs 150,000 ( for manual applications) and Rs 75,000 (for digitally signed applications) respectively in the original application for Advance Authorisation. Export Obligation 4.22 The period of fulfillment of export obligation under an Advance Period and its Extension Authorisation shall commence from the date of issuance of authorisation. The export obligation shall be fulfilled within a period of 24 months except in the case of supplies to the projects/turnkey projects in India/abroad under deemed exports category where the export obligation must be fulfilled during the contracted duration of execution of the project/ turnkey project. In case of Spices (covered by chapter 9 of the ITC (HS) Classifications of Export & Import Items, 2004-09), the export obligation shall be fulfilled within a period of 90 days from the date of receipt of the first import consignment i.e.

9 of the ITC (HS) Classifications of Export & Import Items, 2004-09), the export obligation shall be fulfilled within a period of 90 days from the date of receipt of the first import consignment i.e. the date on which the first import consignment is cleared by the customs authorities against the authorisation. However, in case of Advance Authorisations for drugs, which have been issued against a specific export order and with pre- import condition, the period of fulfillment of export obligation shall commence from the date of import of the first consignment and shall be fulfilled within a period of 6 months. Similarly in

79 the case of advance authorisation for tea, the period of fulfillment of export obligation shall commence from the date of import of first consignment and should be fulfilled within a period of six months. 4.22.1 The request for extension in export obligation period may be made in the form given in ‘Aayaat Niryaat Form’. The Regional Authority shall grant one extension for a period of six months from the date of expiry of the original export obligation period to the authorisation holder subject to payment of composition fee of 2% of the duty saved on all the unutilized imported items as per authorisation. Request for a further extension of six months may be considered by the Regional Authorities subject to payment of composition fee of 5% of the duty saved on all the unutilized imported items as per authorisation. For all the cases of export obligation extension above, the composition fee on the duty saved on all the unutilized imported

the duty saved on all the unutilized imported items as per authorisation. For all the cases of export obligation extension above, the composition fee on the duty saved on all the unutilized imported items would be computed with reference to the actual exports and imports made by the Authorisation holder. However, the facility of extension of export obligation period shall not be allowed in case of Advance Authorisation wherein import of penicillin and its salts (ITC(HS) Code No. 29411010) and 6 – APA (ITC(HS) Code No. 29411 050) have been allowed as an input. The Regional Authority shall make an endorsement in the Advance Authorisation to this effect. However, such extensions would not be permitted in the case of the erstwhile Value Based Advance licences (VABALs) . Additionally, no extension in export obligation would be allowed in respect of authorisations where misrepresentation/ fraud has come to the notice of the Regional Authorities. Further, in respect of authorisations/licences where adjudication orders have already been passed, no extension in export obligation period shall be admissible. 4.22.2 The Customs may allow provisional clearance of export consignment as and when the Authorisation holder produces documentary evidence of having applied for EO extension to the concerned RA.

e. 4.22.2 The Customs may allow provisional clearance of export consignment as and when the Authorisation holder produces documentary evidence of having applied for EO extension to the concerned RA.

80 Revalidation Of 4.23 The Regional Authority may consider a request of the Authorisation original authorisation holder and grant one revalidation for a period of six months from the date of expiry of the original authorisation. The request(s) for revalidation of authorisation shall be made in the form given in ‘Aayaat Niryaat Form’. Monitoring of Obligation 4.24 The Regional Authority, with whom the Undertaking is executed by the Advance Authorisation holder, shall maintain a proper record in a master register indicating the starting and closing dates of obligation period and other particulars to monitor the export obligation. Within two months from the date of expiry of the period of obligation, the authorisation holder shall submit requisite evidence in discharge of the export obligation in accordance with paragraph 4.25 of the Handbook. However, in respect of shipments where six months period (one year in case of status certificate holder) for realisation of foreign exchange has not become due, the Regional Authority shall not take action for non submission of bank certificate of exports and realisation provided the other document substantiating fulfillment of Export Obligation have been furnished. 4.24.1 In case the Authorisation holder fails to complete the export obligation or fails to submit the relevant information/

ument substantiating fulfillment of Export Obligation have been furnished. 4.24.1 In case the Authorisation holder fails to complete the export obligation or fails to submit the relevant information/ documents, the Regional Authority shall take action by refusing further authorisations, enforce the condition of the authorisation and undertaking and also initiate penal action as per law. Advance Authorisation for 4.24A (a) The exporters eligible for such authorisations shall file Annual Requirement an application in ‘Aayaat Niryaat Form’ to the Regional Authority under whose jurisdiction the manufacturing unit of the applicant is located. The Head office/Registered office of the company can also file an application on behalf of the manufacturing unit. In such cases, the Head office/Registered office shall furnish full address of the factory where the inputs shall be used in the resultant product for exports. In case of merchant exporters, the application shall be made by the Head office/ Registered office mentioning the name and address of the supporting manufacturer

n the resultant product for exports. In case of merchant exporters, the application shall be made by the Head office/ Registered office mentioning the name and address of the supporting manufacturer

81 which shall be endorsed on the condition sheet attached to the authorisation. (b) The applicant shall have the flexibility to import any input in respect of items mentioned in the authorisation. Items reserved for imports by State Trading Enterprises cannot be imported against Advance Authorisation. However those items can be procured from State Trading Enterprises against ARO issued to Advance Authorisation holder. The Authorisation holder shall have to account for the inputs as per SION/ individual norms fixed by Norms Committee within the time period prescribed in this regard. In respect of export products for which Standard Input Output Norms does not exist, the authorisation holder shall submit an application in ‘Aayaat Niryaat Form’ alongwith prescribed documents to NC before making the shipment.

ts for which Standard Input Output Norms does not exist, the authorisation holder shall submit an application in ‘Aayaat Niryaat Form’ alongwith prescribed documents to NC before making the shipment. The applicant shall also furnish Advance Authorisation for Annual Requirement number and date alongwith the file number from which the same was issued in the covering letter to the application. In such cases where there is a change in SION/ individual norms fixed by Norms Committee during the validity period of the authorisation, the Authorisation holder shall account for raw material in respect of the exports made prior to the date of amendment, as per pre-revised norms and for exports made on or after the date of amendment as per revised norms. However, in respect of following inputs, the exporter shall be required to give declaration with regard to technical characteristics, quality and specifications in the application for Advance Authorisation for annual requirement and in the shipping bills. The Regional Authority while issuing the authorisation shall mention the technical characteristics, quality and specifications in respect of such inputs:- Alloy steel including stainless steel, copper alloy, synthetic rubber, bearings, solvents, perfumes/ essential oils/aromatics chemicals, surfactants, relevant fabrics and marble.

ct of such inputs:- Alloy steel including stainless steel, copper alloy, synthetic rubber, bearings, solvents, perfumes/ essential oils/aromatics chemicals, surfactants, relevant fabrics and marble.

82 (c) At the time of imports, the Authorisation holder shall furnish the details of inputs to the Customs Authorities for making entries in the imports column. The Authorisation holder shall maintain the nexus in the imported inputs and the resultant product. (d) The applicant shall furnish details of the export product group, CIF value of authorisation and FOB value of the export obligation. However, the Authorisation holder shall have the flexibility to export any product falling under the export product group using the duty exempted material. (e) The authorisation shall be valid for 24 months for imports and exports from the date of its issuance. Revalidation shall be governed by paragraph 4.23 of this handbook. Each authorisation will have one port of registration for imports.

24 months for imports and exports from the date of its issuance. Revalidation shall be governed by paragraph 4.23 of this handbook. Each authorisation will have one port of registration for imports. Exports can take place from any port mentioned in paragraph 4.19. The request(s) for revalidation of authorisation shall be made in ‘Aayaat Niryaat Form’. (f) Within the eligibility, an exporter may apply for one or more than one authorisations in a licensing year, subject to the condition that against one port of registration only one authorisation can be issued for the same product group. On completion of export obligation against one or more authorisations, all issued in the same licensing year, the entitlement of an exporter for that licensing year shall be deemed to be revived by an amount equivalent to the export obligation completed against the authorisation(s). (g) After expiry of the export obligation period, including the extended export obligation period, if any, the Authorisation holder shall furnish proof of having fulfilled export obligation by submitting the documents prescribing in

paragraph 4.25. In case of bonafide default in fulfillment

of export obligation, the Authorisation holder can apply for regularization in terms of paragraph 4.28. 4.24B The provisions contained in paragraph 4.24A shall also be applicable to “for intermediate supplies” so far as they are not inconsistent with the following:

83 The facility is also available for intermediate supplies for the cases where the intermediate supplier intends to supply the material against invalidation letters issue to the holders of Advance Authorisation. In such cases, a copy of the invalidation letter which makes the authorisation invalid for direct import of items to be supplied by the intermediate manufacturer will be given to the Authorisation holder and copy thereof will be sent to the intermediate supplier as well as the Regional Authority of the intermediate supplier. However, once the Electronic message transfer facility among the Regional Authorities becomes fully operational, the requirement of sending a copy of the invalidation letter/ARO to the jurisdictional Regional Authority shall not be required. Further the invalidation letters should also contain the Authorisation number and date of ‘Advance Authorisation for annual Requirement’ to enable proper accounting of the invalidation letters. These would be submitted to the Regional Authority concerned by the intermediate supplier for the purpose of closure of Authorisation. Fulfillment Of Export 4.25 The Authorisation holder shall furnish the following documents Obligation in support of having fulfilled the export obligation:- A.

the purpose of closure of Authorisation. Fulfillment Of Export 4.25 The Authorisation holder shall furnish the following documents Obligation in support of having fulfilled the export obligation:- A. For physical exports:- (i) Bank Certificate of Exports and Realisation in the form given at Appendix-22A or Foreign Inward Remittance Certificate (FIRC) in the case of direct negotiation of documents or Appendix –22B in case of offsetting of export proceeds. However, realisation of export proceeds shall not be insisted if the shipments are made against : (a) confirmed irrevocable letter of credit or (b) bill of exchange is unconditionally Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank. The stipulations at (a) or (b) above must be certified by the bank in column 14/15 of Appendix- 22A. (ii) EP copy of the shipping bill(s) containing details of shipment effected or bill of export in case of export to SEZ.

or (b) above must be certified by the bank in column 14/15 of Appendix- 22A. (ii) EP copy of the shipping bill(s) containing details of shipment effected or bill of export in case of export to SEZ.

84 (iii) A statement of exports giving details of shipping bill wise exports indicating the shipping bill number, date, FOB value as per shipping bill and description of export product. (iv) A statement of imports indicating bill of entry wise item of imports, quantity of imports and its CIF value. B. For deemed exports (including intermediate supplies): (i) A copy of the invoice or a statement of invoices duly signed by the unit receiving the material and their jurisdictional excise authorities certifying the item of supply, its quantity, value and date of such supply. However in case of supply of items which are non excisable or supply of excisable items to a unit producing non excisable product(s), a project authority certificate (PAC) certifying quantity, value and date of supply would be acceptable in lieu of excise certification. However, in respect of supplies to EOU/EHTP/ STP/ BTP, the supplier has the additional option to furnish a copy of CT-3/ARE-3 duly signed by the jurisdictional excise authorities/Bond Officer certifying the item of supply, its quantity, value and date of such supply in lieu of the excise attested invoice (s) or statement of invoices as given above. (ii) Payment certificate from the project authority in the form given in Appendix-22C.

alue and date of such supply in lieu of the excise attested invoice (s) or statement of invoices as given above. (ii) Payment certificate from the project authority in the form given in Appendix-22C. In the case of supplies to EOUs/ EHTPs/ STPs / BTPs, deemed exports (including Intermediate Supplies), documentary evidence from the bank substantiating the realisation of proceeds from the Authorisation holder or EOUs/EHTPs/ STPs/ BTPs or the Project Authority, as the case may be, through the normal banking channel, shall be furnished in the form given at Appendix-22B. However realisation of proceeds shall not be insisted upon if the shipments are made against: (a) confirmed irrevocable inland letter of credit or (b) inland bill of exchange is unconditionally Avalised/

85 Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank. The stipulations at (a) or (b) above must be certified by the bank in column 5/6/7 of Appendix- 22B. (iii) A statement of supplies giving details of supply invoices and indicating the invoice number, date, FOR value as per invoices and description of product. (iv) A statement of imports indicating bill of entry wise item of imports, quantity of imports and its CIF value. Redemption 4.26 In case the export obligation has been fulfilled, the Regional Authority shall redeem the case. After redemption, the Regional Authority shall forward a copy of the redemption letter indicating the shipping bill number(s), date(s), FOB value in Indian rupees as per shipping bill(s) and

he case. After redemption, the Regional Authority shall forward a copy of the redemption letter indicating the shipping bill number(s), date(s), FOB value in Indian rupees as per shipping bill(s) and description of export product to the Customs Authority at the port of registration. Such details shall also be placed by the zonal offices in their website immediately after issuance of the export obligation discharge/redemption letter/No Bond Certificate and by DGFT Hqr in DGFT website on monthly basis for the Customs Authority to access it from the website. Before discharging BG/LUT against Physical Exports, the Customs shall verify that the details of the exports as given in the “Redemption Certificate”, are as per their records. However before discharging BG/LUT against Intermediate Supplies and Deemed Exports, the Customs shall verify the details of the supplies from the Central Excise Authorities/Bond Officer. Ordinarily, redemption of BG/LUT shall not preclude the customs authority from taking action against the Authorisation holder for any misrepresentation, mis-declaration and default detected subsequently. Further the Regional Authority shall also take action against the Authorisation holder in case of non-submission of Appendix 23, duly filled in, as stipulated in Paragraph 4.30 of this Handbook or for any misrepresentation, misdeclaration and default detected subsequently in the details declared and furnished in Appendix 23. An endorsement to this effect shall be made by the Regional Authority in the redemption certificate.

claration and default detected subsequently in the details declared and furnished in Appendix 23. An endorsement to this effect shall be made by the Regional Authority in the redemption certificate.

86 Transitional Arrangement 4.27 The Advance Licence including Advance Licence for Licences issued for Annual Requirement issued upto 31.8.2004 shall be upto 31.8.2004 governed by the provisions contained in Chapter-7 of the Handbook (Vol.1) (RE-2001) and Chapter 4 of the Handbook (2002-2007 as Notified on 31.3.2002) respectively as amended from time to time, excepting the provisions relating to clubbing and extension in E.O. period which shall be governed by the provisions of paragraphs 4.20 and 4.22.1 respectively of this Handbook and any other provision, as notified by DGFT. However, wherever Customs duty is to be paid on unutilised material, the same shall be paid alongwith interest @15% per annum thereon. This facility shall be available to all pending cases of regularisation of bonafide default against Advance Licences, irrespective of the date of its issuance including erstwhile Advance Licence for physical exports, Annual Advance Licence, Advance Licence for deemed exports or Special Imprest Licence and Advance Licence for Intermediate supply or Intermediate Licence. Regularisation Of 4.28 The cases of a bonafide default in fulfillment of export Bonafide Default. obligation may be regularised by the Regional Authority in the manner indicated below: (i) If the export obligation is fulfilled in terms of value, but

ault in fulfillment of export Bonafide Default. obligation may be regularised by the Regional Authority in the manner indicated below: (i) If the export obligation is fulfilled in terms of value, but there is a shortfall in terms of quantity, the Authorisation holder shall, for the regularisation, pay:- a) To the Customs Authority, customs duty on the unutilised value of the imported material alongwith interest at the rate of 15% per annum thereon; and b) An amount equivalent to 3% of the CIF value of unutilised imported material through a TR in the authorised branch of Central Bank of India indicating the “Head of Account: 1453, Foreign Trade and Export Promotion and Minor Head 102”. The Authorisation holder shall also be required to obtain a separate import licence for regularisation of the excess imported input. However, the provisions of this sub paragraph shall not be applicable if the unutilised imported material was freely importable on the date of import.

or regularisation of the excess imported input. However, the provisions of this sub paragraph shall not be applicable if the unutilised imported material was freely importable on the date of import.

87 (ii) If the export obligation is fulfilled in terms of quantity but there is shortfall in terms of value, no penalty shall be imposed if the Authorisation holder has achieved the minimum value addition prescribed in the policy and the procedure laid thereunder. However, if the value addition falls below the minimum value addition prescribed in the policy and the procedure laid thereunder, the Authorisation holder shall be required to deposit an equivalent amount through TR in the authorised branch of Central Bank of India indicating the “Head of Account-1453 Foreign Trade and Export Promotion- Minor Head –102” so that the 100 times the deposited amount and the FOB value realised in Indian rupees together account for prescribed minimum value addition over the CIF value. This 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 the export performance is only 50% quantitywise but import has been for the complete CIF value permitted, then the value addition would be calculated on a prorata basis, i.e with reference to 50% of the CIF value of imports.

only 50% quantitywise but import has been for the complete CIF value permitted, then the value addition would be calculated on a prorata basis, i.e with reference to 50% of the CIF value of imports. This would accordingly imply that where the Authorisation holder is unable to export, no penalty on valuewise shortfall shall be imposed. (iii) If the export obligation 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 the export obligation undertaken in full and he has not made any import under the Authorisation, the Authorisation holder will also have an option to get the Authorisation canceled and apply for drawback after obtaining permission from the Customs Authorities for conversion of shipping bills to Drawback Shipping Bills. (v) The Regional Authority shall compare the relevant portion of Appendix-23 duly verified and certified by Chartered Accountant with that of norms allowed in the Authorisation(s) and the actual quantity imported against

rity shall compare the relevant portion of Appendix-23 duly verified and certified by Chartered Accountant with that of norms allowed in the Authorisation(s) and the actual quantity imported against

88 the Authorisation(s) in the beginning of the financial year for all such Authorisations redeemed in the preceeding licensing year. In this verification process, in case if it is found that the Authorisation holder has consumed lesser quantity of inputs than imported, the authorisation holder shall be liable to pay customs duty on the unutilized value of imported material alongwith interest @ 15% per annum thereon or effect additional export within the export obligation period. Time Period For 4.29 The customs duty with interest to be recovered from the Depositing Fines, Authorisation holder on account of regularisation or Customs Duty, etc. enforcement of BG/LUT, as the case may be, shall be deposited by the 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.

as the case may be, shall be deposited by the 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 the demand raised by the Regional/Customs Authority and documentary evidence shall be produced to this effect to the Regional/Customs Authority immediately. On receipt of such documentary evidence from the Authorisation holder, the Regional Authority shall intimate the details of the recovery/ deposits made to the Customs Authority at the port of registration under intimation to Joint Secretary (Drawback), Department of Revenue, Ministry of Finance, Jeevan Deep Building, New Delhi. The 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 the Customs Authorities at any stage under the Customs Act, 1962. Maintenance of 4.30 Every Advance Authorisation holder shall maintain a true and Proper Accounts. 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 Regional Authority(ies) at the beginning of each licensing year for all those authorisations, which have been redeemed in the previous licencing year. However, these records in the said format are required to be submitted for authorisations issued on or after 13-05-2005.

those authorisations, which have been redeemed in the previous licencing year. However, these records in the 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 the date of redemption.

89 Duty Free Replenishment 4.31 The Policy of Duty Free Replenishment Certificate (DFRC) Certificate (DFRC) is given in Chapter 4 of the Policy. The exporter exporting under DFRC shall be required to give a declaration in the EP copy of the Shipping Bill indicating the serial number and product group of SION of the export product.
In case of export of gold/silver/platinum jewellery and articles thereof, the wastage norms as per paragraph 4A.2 of the Handbook of Procedures (Vol.1) may be indicated on the EP copy of the shipping bill. However in respect of the following items, the exporter shall be required to give declaration with regard to technical characteristics, quality and specification in the shipping bill. The Regional Authority while issuing Duty Free Replenishment Certificate shall mention the 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, Surfactants, Relevant Fabrics, Marble. The DFRC and the specific inputs procured against it are subject to actual user condition under the following circumstances: i. the export proceeds have not been realised and the exports

ics, Marble. The DFRC and the specific inputs procured against it are subject to actual user condition under the following circumstances: i. the export proceeds have not been realised and the exports have not been made under an irrevocable letter of credit or the bill of exchange is not avalised/co-accepted/ guaranteed, or ii. the DFRC is issued against a SION with actual user condition , or iii. specific inputs under a SION are subject to actual user condition. Under all other circumstances, the inputs procured against DFRC are freely transferable . However, in case of fuel , the same can only be transferred to agencies granted marketing rights by the Ministry of Petroleum and Natural Gas. Items reserved for imports by State Trading Enterprises cannot be imported against DFRC. However those items can be procured from State Trading Enterprises against ARO issued to DFRC holder.

90 4.31A DFRC shall also be available for supplies mentioned in Chapter 8 of the Policy except for supplies made to DFRC holders. Such DFRC shall be issued with a single port of registration mentioned in paragraph 4.19 of the Handbook (Vol.1) as per option of the applicant. The CIF value of DFRC shall be arrived at after discounting 20% from the FOR value of supply. The FOR shall be calculated on the basis of the document mentioned in sub- paragraph ii) below.

pplicant. The CIF value of DFRC shall be arrived at after discounting 20% from the FOR value of supply. The FOR shall be calculated on the basis of the document mentioned in sub- paragraph ii) below. The application shall be accompanied by the following:- i) A copy of the Invoice duly signed by the unit receiving the material and their jurisdictional Excise Authorities certifying the item of supply, its quantity, value and date of such supply. However in case of supply of items which are non excisable or supply of excisable items to a unit producing non excisable product(s), a Project Authority Certificate (PAC) certifying quantity, value and date of supply would be acceptable in lieu of excise certification. Notwithstanding the above, in respect of supplies to EOU/ EHTP/ STP/ BTP, the supplier has the additional option to furnish a copy of CT-3/ARE-3 duly signed by the jurisdictional Excise Authorities/Bond officer certifying the item of supply, its quantity, value and date of such supply shall be furnished. ii) Payment certificate from the project authority in the form given in Appendix-22C.

ities/Bond officer certifying the item of supply, its quantity, value and date of such supply shall be furnished. ii) Payment certificate from the project authority in the form given in Appendix-22C. In the case of Intermediate Supplies/ deemed exports, supplies to the EOUs/ EHTPs/ STPs/ BTPs, documentary evidence from the bank substantiating the realisation of proceeds from the Authorisation holder or EOUs/ EHTPs/ STPs/ BTPs, as the case may be, through the normal banking channel, shall be furnished in the form given at Appendix- 22B. However realisation of export proceeds shall not be insisted upon if the shipments are made against confirmed irrevocable inland letter of credit or inland bill of exchange is unconditionally Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank and the same is certified by the bank in column 5/6/7 of Appendix-22B. Exports made against the Government of India/EXIM Bank Line of Credit

by a bank and the same is confirmed by the exporters bank and the same is certified by the bank in column 5/6/7 of Appendix-22B. Exports made against the Government of India/EXIM Bank Line of Credit

91 and exports made under Deferred Payment/Suppliers Line of Credit Contract backed by ECGC Cover would also be entitled for the benefit under DFRC Scheme. Export/ Imports 4.32 Export shipments under DFRC can be effected from any port under DFRC mentioned in paragraph 4.19 of the Handbook and to any of the SEZs. The DFRC shall be issued with single port of registration, which will be the port from where the exports have been effected. However for import from a port other then the port of export, TRA shall be issued by the Customs Authority at the port of export to the Customs Authority to the port of import. Filing of Application 4.33 An application for grant of DFRC may be made to the Regional Authority concerned in the form given in ‘Aayaat Niryaat Form’ alongwith the documents prescribed therein. An application for DFRC shall be filed only after realisation of export/supply proceeds. However, in case of exports/supplies against: (a) confirmed irrevocable letter of credit or confirmed irrevocable inland letter of credit or (b) bill of exchange is unconditionally Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank, the application may be filed after exports/supplies. The FOB value shall be calculated on the basis of the Bank Realisation Certificate.

eed by a bank and the same is confirmed by the exporters bank, the application may be filed after exports/supplies. The FOB value shall be calculated on the basis of the Bank Realisation Certificate. However in case of exports of gold/ silver/ platinum jewellery and articles thereof, the CIF value would be computed from the FOB value as per the value addition given in paragraph 4A.2.1 of Handbook of Procedures (Vol.1). Time Period 4.34 The application for DFRC shall be filed within six months from the date of realisation in respect of all shipments/supply for which DFRC is being claimed.

4.34.1 In case of exports against confirmed irrevocable Letter of Credit/ supply against confirmed irrevocable inland letter of credit or bill of exchange is unconditionally Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed by the

92 exporters bank, the DFRC shall be filed within six months from the date of exports/supply for all shipments in respect of which DFRC is being claimed.

4.34.2 For exports/supply against advance payment, DFRC shall be filed within six months from the date of exports against advance payment.

4.34.3 Wherever provisional shipment has been allowed by the customs authorities, DFRC against such exports shall be issued only after the release of the shipping bill by the Customs.

ance payment.

4.34.3 Wherever provisional shipment has been allowed by the customs authorities, DFRC against such exports shall be issued only after the release of the shipping bill by the Customs. The time limit for filing of application in such cases shall be six months from the date of release/ date of printing of shipping bill or three months from date of realisation, whichever is later. Frequency of Application 4.35 The applicant shall file one application relating to one export product group from one port of export. Where export product falling under one product group have been exported from different ports, the exporter shall file more than one application for the same export product group. Split up facility 4.35.1 For each duty credit certificate, split certificates subject to a minimum of Rs 5 lakh each and multiples thereof may also be issued. A fee of Rs 1000/- each shall be paid for each split certificate. However, a request for issuance of split certificate(s) shall be made at the time of application only and shall not be considered at a later stage. The duty credit certificate shall be issued with a single port of registration. Verification by Customs 4.36 The Regional Authority shall ensure that while issuing the DFRC, the Shipping Bill no(s) and date(s), FOB value in Indian rupees as per Shipping Bill(s) and description of export product are endorsed on the reverse of DFRC.

hall ensure that while issuing the DFRC, the Shipping Bill no(s) and date(s), FOB value in Indian rupees as per Shipping Bill(s) and description of export product are endorsed on the reverse of DFRC. Before allowing the imports against DFRC, the Customs shall verify that the details of the exports as given on the DFRC are as per their records. The Regional Authority while issuing DFRC for deemed exports shall endorse a copy of the same to the Customs at the port of registration and a copy to Excise Authorities having jurisdiction over recipient unit of the deemed exports alongwith details of invoice giving item of supply, its quantity, value and date of such supply. In case there is any variation in the details furnished by the Regional Authority and the record verified by the Excise

93 authority, the Excise Authority shall intimate to the Regional Authority and Customs at the port of registration immediately. The customs authority at the port of registration shall get the details of the supplies verified from the jurisdictional Excise Authority before allowing clearance against the certificate. Re-export of goods 4.36A Goods imported under DFRC scheme, which are found imported under defective or unfit for use, may be re-exported, as per the DFRC Scheme guidelines issued by the Department of Revenue. In such cases 95% of the CIF value debited against DFRC for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original DFRC.

inst DFRC for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original DFRC. Based on the certificate, a fresh DFRC shall be issued by the concerned Regional Authority. The fresh DFRC, so issued, shall have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/unfit goods. Duty Entitlement 4.37 The Policy relating to Duty Entitlement Passbook Scheme Passbook Scheme (DEPB) (DEPB) Scheme is given in Chapter-4 of the Policy. The duty credit under the scheme shall be calculated by taking into account the deemed import content of the said export product as per SION and the basic custom duty payable on such deemed imports. The value addition achieved by export of such product shall also be taken into account while determining the rate of duty credit under the scheme. Fixation of DEPB Rate 4.38 ‘Aayaat Niryaat Form’ prescribes the form regarding fixation of DEPB rates. All applications for fixation of DEPB rates shall be routed through the concerned Export Promotion Council which shall verify the FOB value of exports as well as the international price of inputs covered under SION. Provisional DEPB Rate 4.38A To encourage diversification and to promote export of new products, the DEPB Committee would be empowered to notifying provisional DEPB rates.

f inputs covered under SION. Provisional DEPB Rate 4.38A To encourage diversification and to promote export of new products, the DEPB Committee would be empowered to notifying provisional DEPB rates. However, such DEPB rates would be valid for a limited period of time during which the exporter would furnish the data on export and import for the regular fixation of rates. Exports in anticipation 4.39 No exports shall be allowed under DEPB scheme unless the of DEPB Rate DEPB rate of the concerned export product is notified.

94 Port of Registration 4.40 The exports/imports made from the specified ports given shall be entitled for DEPB. Sea Ports Mumbai, Kolkata, Cochin, Dahej, Kakinada, Kandla, Mangalore, Marmagoa, Mundra, Chennai, Paradeep, Pipavav, Sikka, Tuticorin, Vishakhapatnam, Surat (Magdalla), Nagapattinam, Okha , Dharamtar, Jamnagar and Nhava Sheva Airports Ahmedabad, Bangalore, Bhubaneshwar, Mumbai, Kolkata, Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur and Chennai. ICDs Agra, Ahmedabad, Bangalore, Bhiwadi, Coimbatore, Daulatabad, (Wanjarwadi and Maliwada), Delhi, Dighi (Pune), Faridabad, Guntur, Hyderabad, Jaipur, Jallandhar, Jodhpur, Kanpur, Kota, Ludhiana, Madurai and the land Customs station at Ranaghat Mallanpur, Moradabad, Meerut, Nagpur, Nasik, Gauhati (Amingaon), Pimpri (Pune), Pitampur (Indore), Rudrapur (Nainital), Salem, Singanalur, Surat, Tirupur, Udaipur, Vadodara, Varanasi, Waluj, Bhilwara, Pondicherry ,Garhi-Harsaru, Bhatinda, Dappar, Chheharata ( Amritsar), Karur, Miraj,

pur (Indore), Rudrapur (Nainital), Salem, Singanalur, Surat, Tirupur, Udaipur, Vadodara, Varanasi, Waluj, Bhilwara, Pondicherry ,Garhi-Harsaru, Bhatinda, Dappar, Chheharata ( Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri and Tuticorin. LCS Ranaghat, Singhabad , Raxaul , Jogbani, Nautanva ( Sonauli), Petrapole, Mahadipur and Dawki. SEZ Exports made to any Special Economic Zone (SEZ), notified by the Central Government, are also entitled to DEPB and the port of registration in such cases will be the respective SEZ only. Provided further that the Commissioner of Customs may, either by a public notice or on the written request of the exporter/ DEPB holder, by special orders and subject to such conditions as may be specified by him permit imports or exports from any

95 other sea port, airport, inland container depot or through a Land Customs Station.

4.40.1 The DEPB shall be issued with single port of registration, which will be the port from where the exports have been effected. Maintenance of Record 4.40.2 Each Custom House at the ports shall maintain a separate record of the details of the exports made under the DEPB shipping bill. Credit under DEPB 4.41 In respect of products where the rate of credit entitlement under and Present Market DEPB Scheme comes to 10% or more, the amount of credit Value against each such export product shall not exceed 50% of the Present Market Value (PMV) of the export product.

nt under and Present Market DEPB Scheme comes to 10% or more, the amount of credit Value against each such export product shall not exceed 50% of the Present Market Value (PMV) of the export product. At the time of export, the exporter shall declare on the shipping bill that the benefit under DEPB Scheme against the export product would not exceed 50% of the PMV of the export product. However, PMV declaration shall not be applicable for products for which value cap exists irrespective of the DEPB rate of the product. Utilisation of DEPB credit 4.42 The credit under DEPB shall be utilised for payment of customs duty on any item which is freely importable. Application for DEPB 4.43 An application for grant of credit under DEPB may be made to the Regional Authority concerned in the form given in ‘Aayaat Niryaat Form’ alongwith the documents prescribed therein. The agency commission shall be allowed for the DEPB entitlement upto the limit of 12.5% of FOB value only. The FOB value in free foreign exchange shall be converted into Indian rupees as per the exchange rate for exports, notified by Ministry of Finance, as applicable on the date of order of “Let Export” by the Customs. 4.43A In respect of consignment exports wherein the exporter has declared the FOB value of the product on a provisional basis, the exporter shall be eligible for final assessment of such shipping bill based on the actual FOB realised upon sale of such goods in freely convertible currency. The agency commission shall be allowed for the DEPB entitlement upto the limit of 12.5% of FOB value only.

ill based on the actual FOB realised upon sale of such goods in freely convertible currency. The agency commission shall be allowed for the DEPB entitlement upto the limit of 12.5% of FOB value only. However, the FOB value of foreign exchange shall be converted into Indian rupees as per the exchange rate for exports, notified by Ministry of

96 Finance, as applicable on the date of order of “Let Export” by the Customs. 4.43B An application for grant of credit for supplies from DTA to SEZ can be made by the DTA unit or the SEZ unit. The DTA unit may claim the benefits either from the Regional Authority or the Development Commissioner concerned. In case claim have been filed with the Regional Authority, the Regional Authority while allowing the benefits to the DTA unit will simultaneously endorse a copy of the communication to the concerned Development Commissioner alongwith the details of export documents against which benefits have been allowed for confirmation of the transaction involved. In case the DTA supplier prefers claim with the Development Commissioner, the Development Commissioner shall verify the Denied Entity List (DEL) status of the supplier from the DGFT website before allowing DEPB benefits.

ier prefers claim with the Development Commissioner, the Development Commissioner shall verify the Denied Entity List (DEL) status of the supplier from the DGFT website before allowing DEPB benefits. The SEZ unit will file application with the Development Commissioner concerned in ‘Aayaat Niryaat Form’ along with the following documents: 1. Bank receipt (in duplicate)/ demand draft evidencing payment of application fee in terms of Appendix 21B. 2. A copy of bill of exports issued by Customs in the SEZ. 3. A copy of invoice showing FOR value of supply, DEPB entitlement on such supply and total value realised from such sale. 4. Bank certificate of realisation in the form given in Appendix 22B. 5. In case SEZ unit opts to apply for the DEPB benefit for such supplies received, a disclaimer (along with the IEC of DTA Unit endorsed on it) certificate from DTA unit declaring that the DTA unit shall not claim any benefit on such supplies and authorising SEZ units to claim DEPB benefit on such supplies.

4.44 In cases where the applicant applies for DEPB after realisation or shipments are made against confirmed irrevocable letter of credit or bill of exchange is unconditionally Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank and certified by the bank in the relevant Bank certificate of export and Realisation, the DEPB shall be

y Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank and certified by the bank in the relevant Bank certificate of export and Realisation, the DEPB shall be

97 issued with transferable endorsement. In other cases, the DEPB shall be initially issued with non-transferable endorsement. Upon realisation of export proceeds, such DEPBs can be endorsed as transferable, if the applicant so desires. Monitoring of Realisation 4.45 The Regional Authorities shall monitor the cases where the DEPB has been granted prior to realisation of export proceeds (except the cases where shipments are made against confirmed irrevocable letter of credit or bill of exchange is unconditionally Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank) so as to ensure that realisation takes place within the prescribed time failing which they shall initiate action for recovery of an amount equivalent to DEPB credit with 15% interest. The recovered amount in such cases shall be deposited in the head of account of Customs as stated in paragraph 4.29.

4.45.1 If the export proceeds is not realised within six months or such extended period as may be allowed by RBI, the DEPB holder shall pay in cash an amount equivalent to the duty free credit utilised on imports, against such exports with 15% interest from the date of import till the date of deposit.

ed by RBI, the DEPB holder shall pay in cash an amount equivalent to the duty free credit utilised on imports, against such exports with 15% interest from the date of import till the date of deposit. In such cases, where the amount realised in foreign exchange is less than the amount on which DEPB credit has been obtained, the holder of DEPB shall pay, in cash, an amount proportionate to the duty free credit utilised on imports, with 15% interest from the date of imports till the date of deposit. Time Period 4.46 The application for obtaining credit shall be filed within a period of twelve months from the date of exports or within six months from the date of realization or within three months from the date of printing/ release of shipping bill , whichever is later, in respect of shipments for which the claim have been filed.

4.47 Wherever provisional shipment has been allowed by the customs authorities, DEPB against such exports shall be issued only after the release of the shipping bill by the Customs. In such cases, application for DEPB shall be filed within six months from the date of release of such shipping bill or six months from the date of realisation, whichever is later. Frequency of Application 4.48 All the shipping bills in any one application must relate to exports made from one Custom House only. There is no limit on the number of shipping bills which can be filed through EDI mode in a single application.

ng bills in any one application must relate to exports made from one Custom House only. There is no limit on the number of shipping bills which can be filed through EDI mode in a single application.

98 Verification by Customs 4.49 In case of EDI shipping bills before 1.10.2005 and non-EDI shipping bills, the Regional Authority shall ensure that while issuing the DEPB, the Shipping Bill No(s). and date(s), FOB value in Indian rupees as per Shipping Bill(s) and description of export product are endorsed on the DEPB. Before allowing the imports against such DEPB, the Customs shall verify that the details of the exports, as given on the DEPB, are as per their records. However, in case of EDI shipping bills issued on or after 1-10-2005 from EDI ports which are being transmitted electronically by Customs to DGFT, the DEPBs issued shall be sent to Customs at the port of registration through an electronic message exchange system and the DEPB shall be registered at the port of registration electronically. No verification of shipping bills against which such DEPBs have been issued, will be required before allowing imports against these DEPBs. Revalidation 4.50 No revalidation shall be granted beyond the original period of validity of DEPB unless it expires in the custody of the Regional/ Customs Authorities as per the provisions under para 2.13 of the Handbook. Re-export of goods 4.51 Goods imported under DEPB scheme, which are found imported under DEPB defective or unfit for use, may be re-exported, as per the Scheme guidelines issued by the Department of Revenue.

t of goods 4.51 Goods imported under DEPB scheme, which are found imported under DEPB defective or unfit for use, may be re-exported, as per the Scheme guidelines issued by the Department of Revenue. In such cases 98% of the credit amount debited against DEPB for the export of such goods, shall be generated by the concerned Commissioner of Customs in the form of a Certificate, containing the amount generated and the details of the original DEPB. Based on the certificate, a fresh DEPB shall be issued by the concerned Regional Authority. The fresh DEPB, so issued, shall have the same port of registration and shall be valid for a period equivalent to the balance period available on the date of import of such defective/unfit goods. Issuance of DEPB and 4.52 In case where EP copy of the Shipping Bill has been lost, the other duty credit DEPB and other duty credit certificates /DFRC claim can be certificates/ DFRC against considered subject to submission of the following documents:- lost EP copy of the Shipping Bills a) A duplicate/certified copy of the Shipping Bill issued by the Customs Authority in lieu of original; b) An application fee equivalent to 2% of the DEPB or other duty credit entitlement or 1% of DFRC entitlement,

ertified copy of the Shipping Bill issued by the Customs Authority in lieu of original; b) An application fee equivalent to 2% of the DEPB or other duty credit entitlement or 1% of DFRC entitlement,

99 as the case may be, in respect of lost Shipping Bills. However, no fee shall be charged when the Shipping Bill is lost by the Government agencies and a documentary proof to this effect is submitted; c) An affidavit by the exporter about the loss of Shipping Bills and an undertaking to surrender it immediately to the concerned Regional Authorities, in case the same is found subsequently. d) An indemnity bond by the exporter to the effect that he would indemnify the Government for the financial loss if any on account of DEPB or other duty credit certificate /DFRC issued against lost Shipping Bills. The Customs Authority, before allowing clearance, shall ensure that no DEPB/DFRC benefit has been availed against the same shipping bill. 4.52.1 The claim against the lost Shipping Bill shall be preferred within a period of six months from the date of release of duplicate copy of shipping bill and any application received thereafter will be rejected.

m against the lost Shipping Bill shall be preferred within a period of six months from the date of release of duplicate copy of shipping bill and any application received thereafter will be rejected. However, if a provisionally assessed DEPB shipping bill is lost, the time period for filing an application for DEPB would be six months from the date of release of the finally assessed shipping bill. Loss Of Original 4.53 In such cases where original bank certificate has been lost, the Bank Certificate DEPB/DFRC claim can be considered subject to submission of following documents: a) A duplicate copy of the Bank Certificate issued by the bank authority in lieu of original loss. b) An application fee equivalent to 2% of the DEPB entitlement or 1% of DFRC entitlement, as the case may be, in respect of lost Bank Realisation Certificate. c) An affidavit by the exporter about the loss of Bank Certificate and an undertaking to surrender it immediately to the concerned Regional Authorities, in case the same is found subsequently. d) An indemnity bond by the exporter to the effect that he would indemnify the Government for the financial loss

iately to the concerned Regional Authorities, in case the same is found subsequently. d) An indemnity bond by the exporter to the effect that he would indemnify the Government for the financial loss

100 if any on account of DEPB/DFRC issued against lost Bank Certificate.

The claim against the lost Bank Certificate shall be preferred within a period of six months from the date of realisation and application received thereafter will be rejected.

In such cases, where both the documents have been lost, the exporter shall follow the procedure laid down in paragraph 4.51 and 4.52. Duty Free Import 4.54 The Policy relating to the Duty Free Import Authorisation Authorisation (DFIA) Scheme Scheme is prescribed in Chapter 4 of the Policy. Application 4.55 An application in ‘Aayaat Niryaat Form’ with the import entitlement as per SION, along with documents prescribed in the application form, shall be submitted to the Regional Authority concerned.

4.55.1 In case of export of gold /silver / platinum jewellery and articles thereof, the quantity, wastage and the value addition norms shall be as prescribed in paragraph 4A of the Policy and Handbook of Procedure(vol.1). 4.55.2 Applications, where Acetic Anhydride, Ephedrine and Pseudo- ephedrine is required as an input for import and prescribed in SION, shall be filed with the Regional Authorities 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 the respective Zonal Director of the

shall also be simultaneously endorsed to the Drug Controller of India, Nirman Bhawan, New Delhi, Narcotics Commissioner, Central Bureau of Narcotics, Gwalior and the respective Zonal Director of the Narcotics Control Bureau, alongwith a declaration that the applicant will maintain the prescribed records and also submit the prescribed returns. Duty free import of spices (covered by Chapter 9 of the ITC(HS) Classifications of Export & Import items, 2004-09) for export under DFIA scheme shall be permitted only for value addition purposes like crushing/grounding/sterilization or for manufacture of oils and oleoresins and not for simple cleaning, grading, re-packing etc. The Regional Authority, while issuing the DFIA for the import of Acetic Anhydride, Ephedrine and Pseudo- ephedrine, shall endorse a condition that before effecting imports, NOC shall

101 be obtained from the Narcotics Commissioner of India, Central Bureau of Narcotics, Gwalior and shall also endorse a copy of the Authorisation to the Drug Controller, Nirman Bhawan, New Delhi and the concerned Zonal Director of the Narcotics Control Bureau. 4.55.3 However in respect of the following items, the exporter shall be required to give declaration with regard to technical characteristics, quality and specification in the shipping bill. The Regional Authority while issuing DFIA shall mention the 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

nical 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, Surfactants, 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.

4.55.4 Exports made against the Government of India/EXIM Bank Line of Credit would be entitled for benefits under the DFIA Scheme. Further, exports made under Deferred Payment/ Suppliers Line of Credit Contract backed by ECGC Cover would also be entitled for the benefit under the Scheme. DFIA for applicants 4.56 Transfer of any duty free material imported or procured against with multi units non-transferable DFIA from one unit of the company to another unit of the same company for manufacturing purpose shall be done with the prior intimation to the jurisdictional Excise Authorities with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. In case of non-excisable company/products, the units should maintain a proper record of the same.

ies with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. In case of non-excisable company/products, the units should maintain a proper record of the same. However to avail the facility, all such units should be available in the IEC certificate and follow the rules and regulations of Central Excise for jobwork. DFIA for Free of Cost 4.57 An exporter may apply for a DFIA for import of items as per and Paid Material SION, some or all of which may also include items that are supplied free of cost.

102 In such cases, for calculation of value addition, the notional value of free of cost inputs along with value of other duty-free inputs shall be taken into consideration. However, if all the inputs are supplied free of cost, the exporter shall also have the option to follow the provision prescribed in paragraph 4.2.7 of the Policy.

In such cases, a specific endorsement shall be made on the exchange control copy of the DFIA disallowing remittances for the material being supplied free of cost. All inputs imported shall be utilised in the manufacturing of the product except the wastage. The value addition in the case of such DFIAs would be computed by adding the notional value of the free of cost material to both the CIF value of imports and FOB value of exports. Financial Powers 4.58 The financial powers under DFIA scheme shall be as per

paragraph 4.8 of this Handbook.

Description of a DFIA 4.59 A DFIA shall specify: (a) the names and description of items to be imported and exported / supplied; (b) the quantity of each item to be imported or wherever the quantity cannot be indicated, the value of the item shall be indicated. However, if in Standard input output norms, the quantity and value of individual inputs is a limiting factor, the same shall be applicable. (c) the aggregate CIF value of imports; and (d) the FOB/FOR value and quantity of exports/ supplies. Exports in Anticipation 4.60 Exports/supplies made from the date of EDI generated file of DFIA number for a DFIA, may be accepted towards discharge of export obligation. Shipping/Supply document(s) should be endorsed with the File Number or the Authorisation Number to establish co-relation of the exports/supplies with the authorisation issued. If the application is approved, the authorisation shall be issued based on the input-output norms in force on the date of receipt of the application by the Regional Authority in proportion to the provisional exports/ supplies already made till any amendment in the norms is notified. For

ut norms in force on the date of receipt of the application by the Regional Authority in proportion to the provisional exports/ supplies already made till any amendment in the norms is notified. For

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

4.60.1 The exports/supplies made in anticipation of the grant of a DFIA shall be entirely on the risk and responsibility of the exporter.

4.60.2 The conversion of duty free shipping bills to drawback shipping bills may also be permitted by the Customs Authorities in case the application for a DFIA is rejected or modified by the Regional Authority. Port of Registration 4.61 The DFIA shall be issued for the purpose of import and export through port(s) as specified in paragraph 4.19 of this Handbook. Acceptance of BG/LUT 4.62 At the time of issue of the non transferable DFIA, the acceptance of the undertaking given by the applicant to the Regional Authority concerned in the form given in ‘Aayaat Niryaat Form’ will be endorsed on the reverse of the DFIA. Note: - No BG/LUT will be required where the specified export obligation has been fulfilled before making any import.

form given in ‘Aayaat Niryaat Form’ will be endorsed on the reverse of the DFIA. Note: - No BG/LUT will be required where the specified export obligation has been fulfilled before making any import. In case of partial fulfillment of export obligation before effecting any imports, the BG/ LUT may be reduced proportionately. Enhancement/ Reduction 4.63 In respect of a DFIA, the Regional Authority concerned (as In the Value of DFIA per their financial powers) may consider a request for enhancement/ reduction in the CIF value, FOB value, quantities of import or export of the certificate, provided the value addition after such amendment does not fall below the stipulated minimum value addition (as per the policy and the procedure laid thereunder) and provided there is no change in the input- output norms and the Policy under which the authorisation was issued. The request for pro-rata enhancement in value and quantity may be made either before or after exports. In such cases where there is a change in the SION prior to the export of the said product, the pro-rata enhancement shall be given after calculating the entitlement on the revised SION. The application for the enhancement/ reduction in the value or quantity of the authorisation shall be made in ‘Aayaat Niryaat Form’ of the Handbook of Procedure (Vol. 1) Export Obligation period 4.64 The period of fulfillment of export obligation and its extension and its extension shall be governed as per the provision contained in paragraph

k of Procedure (Vol. 1) Export Obligation period 4.64 The period of fulfillment of export obligation and its extension and its extension shall be governed as per the provision contained in paragraph

104 4.22 of this Handbook. However, any extension beyond 36 months from the date of issuance of the authorisation shall not be allowed. Revalidation of DFIA 4.65 Facility of revalidation