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Hand Book of Procedures (Vol. I)

27th August 2009 - 31st March 2014

w.e.f. 23.08.2010

Government of India Ministry of Commerce and Industry Department of Commerce

Website: http://dgft.gov.in

iii TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY (PART-I, SECTION-1)

GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE

PUBLIC NOTICE No. 1 (RE-2010)/ 2009-2014 NEW DELHI, DATED THE 23rd August, 2010

In exercise of powers conferred under paragraph 2.4 of the Foreign Trade Policy, 2009-14, the Director General of Foreign Trade hereby notifies the Handbook of Procedures (Volume 1) incorporating Annual Supplement as updated on 23rd August, 2010 as contained in Annexure to this Public Notice. This shall come into force from 23rd August, 2010.

This issues in Public interest.

(P. K. Chaudhery) Director General of Foreign Trade and Additional Secretary to the Government of India

(Issued from F.No. 01/ 91 / 180 / 954 / AM-11/PC-3)

est.

(P. K. Chaudhery) Director General of Foreign Trade and Additional Secretary to the Government of India

(Issued from F.No. 01/ 91 / 180 / 954 / AM-11/PC-3)

v CONTENTS

CHAPTER SUBJECT

Page

GLOSSARY

1 1 INTRODUCTION

5 2 GENERAL PROVISIONS REGARDING
IMPORTS AND EXPORTS

7 3 PROMOTIONAL MEASURES

43 4 DUTY EXEMPTION / REMISSION SCHEMES

57 5 EXPORT PROMOTION CAPITAL GOODS SCHEME

95 6 EXPORT ORIENTED UNITS (EOUs), ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) AND BIO- TECHNOLOGY PARKS (BTPs)

107 7 SPECIAL ECONOMIC ZONES

137 8 DEEMED EXPORTS

139 9 MISCELLANEOUS MATTER

143

1 GLOSSARY (ACRONYMS)

Acronym
Explanation

ACC Assistant Commissioner of Customs ACU Asian Clearing Union AEZ Agri Export Zone ANF Aayaat Niryaat Form
ARO Advance Release Order ASIDE Assistance to States for Infrastructure Development of Exports BG Bank Guarantee BIFR Board of Industrial and Financial Reconstruction BOA Board of Approval BOT Board of Trade BRC Bank Realisation Certificate BTP Biotechnology Park CBEC Central Board of Excise and Customs CCP Customs Clearance Permit CEA Central Excise Authority CEC Chartered Engineer Certificate CIF Cost, Insurance & Freight CIS Commonwealth of Independent States CoD Cash on Delivery CoO Certificate of Origin CVD Countervailing Duty DA Document against Acceptance DoBT Department of Bio Technology DC Development Commissioner DEPB Duty Entitlement Passbook Scheme

very CoO Certificate of Origin CVD Countervailing Duty DA Document against Acceptance DoBT Department of Bio Technology DC Development Commissioner DEPB Duty Entitlement Passbook Scheme
DFIA Duty Free Import Authorisation DFRC Duty Free Replenishment Certificate DGCI&S Director General, Commercial Intelligence & Statistics. DGFT Director General of Foreign Trade DIPP Department of Industrial Policy & Promotion DoC Department of Commerce DoE Department of Electronics DoIT Department of Information Technology DoR Department of Revenue DoT Department of Tourism DTA Domestic Tariff Area EDI Electronic Data Interchange EEFC Exchange Earners’ Foreign Currency
EFC Exim Facilitation Committee EFT Electronic Fund Transfer EH Export House EHTP Electronic Hardware Technology Park EIC Export Inspection Council EO Export Obligation

2 EODC Export Obligation Discharge Certificate EOP Export Obligation Period EOU Export Oriented Unit EPC Export Promotion Council EPCG
Export Promotion Capital Goods
EPO Engineering Process Outsourcing FDI Foreign Direct Investment FIEO Federation of Indian Export Organisation FIRC Foreign Exchange Inward Remittance Certificate FMS Focus Market Scheme FOB Free On Board FPS Focus Product Scheme FT (D&R) Act Foreign Trade ( Development & Regulation) Act, 1992 (22 of 1992) FTDO Foreign Trade Development Officer FTP Foreign Trade Policy GATS General Agreement on Trade in Services GRC Grievance Redressal Committee HACCP Hazard Analysis and Critical Control Process

O Foreign Trade Development Officer FTP Foreign Trade Policy GATS General Agreement on Trade in Services GRC Grievance Redressal Committee HACCP Hazard Analysis and Critical Control Process HBP v1 Handbook of Procedures (Vol.1) HBP v2 Handbook of Procedures (Vol.2) ICD Inland Container Depot ICM Indian Commercial Mission IEC Importer Exporter Code
ISO International Standards Organisation ITC (HS) Indian Trade Classification (Harmonised System) Classification for Export & Import Items, 2004-2009 ITPO India Trade Promotion Organisation LoC Line of Credit LoI Letter of Intent LoP Letter of Permit LUT Legal Undertaking MAI Market Access Initiative MDA Market Development Assistance MEA Ministry of External Affairs MoD Ministry of Defence MoF Ministry of Finance NC Norms Committee NFE Net Foreign Exchange NOC No Objection Certificate PRC Policy Relaxation Committee PTH Premier Trading House PSU Public Sector Undertaking R&D Research and Development RA Regional Authority RBI Reserve Bank of India REP Replenishment RCMC Registration-cum-Membership Certificate RSCQC Regional Sub-Committee on Quality Complaints

Research and Development RA Regional Authority RBI Reserve Bank of India REP Replenishment RCMC Registration-cum-Membership Certificate RSCQC Regional Sub-Committee on Quality Complaints

3 S/B Shipping Bill SHE Star Export House
SEI CMM Software Engineers Institute’s Capability Maturity Model SEZ Special Economic Zone SFIS Served from India Scheme SIA Secretariat for Industrial Assistance SION Standard Input Output Norms SSI Small Scale Industry STE State Trading Enterprise STH Star Trading House STP Software Technology Park TEE Towns of Export Excellence TH Trading House TRA TRQ Telegraphic Release Advice Tariff Rate Quota VA Value Addition VKGUY Vishesh Krishi and Gram Udyog Yojana
WHOGMP World Health Organisation Good Manufacturing Practices

5 CHAPTER 1

INTRODUCTION

Notification 1.1 In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March, 2014, except DEPB scheme, which shall continue to be operative till 30th June, 2011.

Objective 1.2 Objective is to implement provisions of FT (D&R) Act, Rules and Orders made thereunder and FTP (2009-14) by laying down simple, transparent and EDI compatible procedures, which are easy to comply with and administer, for efficacious management of foreign trade.

rders made thereunder and FTP (2009-14) by laying down simple, transparent and EDI compatible procedures, which are easy to comply with and administer, for efficacious management of foreign trade.

Definition 1.3 For the purpose of this Handbook, definitions and glossary contained in FT (D&R) Act, Rules and Orders made thereunder and the FTP (2009-14) shall apply.

7 CHAPTER 2

GENERAL PROVISIONS REGARDING EXPORTS AND IMPORTS

Policy 2.1 Policy relating to general provisions regarding exports and imports is given in Chapter-2 of FTP.
Countries of Imports / Exports 2.2 Unless otherwise specifically provided, import / export will be valid from / to any country. Above provisions shall, however, be subject to all conditionality, or requirement of Authorisation as required under Schedule I and / or Schedule II of ITC (HS).
Application Fee 2.3 The scale of fee, mode of payment, procedure for refund of fee and categories of persons exempted from payment of fee are contained in Appendix-21B. Territorial Jurisdiction of Regional Authorities (RA) 2.4 Every application, unless otherwise specified, shall be submitted to RA concerned, as indicated in Appendix-1 of HBP v1. Filing of Application
2.5 An incomplete or unauthorised application is liable to be rejected giving specific reason for rejection. In case of manual applications, applicant would furnish a soft copy of the application in MS word format.

or unauthorised application is liable to be rejected giving specific reason for rejection. In case of manual applications, applicant would furnish a soft copy of the application in MS word format.
Profile of Importer/ Exporter 2.6 Each importer / exporter shall be required to file importer / exporter profile once with RA in ANF 1. RA shall enter such information in database so as to dispense with need for asking information again. In case of any change in information given in ANF 1, importer / exporter shall intimate same to RA. Self Addressed Stamped Envelope 2.7 Applicant shall furnish a self-addressed envelope of 40 x 15 cm with required postal stamp affixed, for all documents required to be sent by Speed Post. IEC No: Exempted Categories 2.8 Following categories of importers or exporters are exempted from obtaining IEC number:

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

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

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

(iv) Persons importing / exporting goods from / to Nepal, Myanmar through Indo-Myanmar border areas and China (through Gunji, Namgaya Shipkila and Nathula ports), provided CIF value of a single consignment does

porting / exporting goods from / to Nepal, Myanmar through Indo-Myanmar border areas and China (through Gunji, Namgaya Shipkila and Nathula ports), provided CIF value of a single consignment does

8 not exceed Indian Rs.25, 000. In case of Nathula port, the applicable value ceiling will be Rs. 100,000.

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

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

S.No Code Number Categories of Importers / Exporters

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

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

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

0100000045 Indians returning from / going abroad and claiming benefit under 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

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

0100000061 Persons importing / exporting goods from / to Nepal

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

0100000088 Ford Foundation

0100000096 Importers importing goods for display or use in fairs / exhibitions or similar events under provisions of ATA carnet. This IEC number can also be used by importers importing for exhibitions/fairs as per Para 2.29 of HBPv1.

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

0100000126 Individuals / Charitable Institution / Registered NGOs importing goods, which have been

9 exempted from Customs duty under Notification issued by Ministry of Finance for bonafide use by victims affected by natural calamity.

0100000134 Persons importing / exporting permissible goods as notified from time to time, from / to China through Gunji, Namgaya Shipkila and Nathula ports, subject to value ceilings of single consignment as given in Para 2.8(iv) above.

13 0100000169 Non-commercial imports and exports by entities who have been authorized by Reserve Bank of India.

ubject to value ceilings of single consignment as given in Para 2.8(iv) above.

13 0100000169 Non-commercial imports and exports by entities who have been authorized by Reserve Bank of India. Application for Grant of IEC Number
2.9 An application for grant of IEC Number shall be made
by Registered Office, in case of companies and Head Office in case of proprietorship concerns, partnership concerns and HUFs, of applicant, except EOUs and
SEZ units, to concerned RA in ANF2A with documents prescribed therein. Only one IEC would be issued / allowed against a single PAN number.
The application (ANF 2 A) for issuance of fresh IEC or modification of IEC shall indicate the name and designation of the person whose photograph has been affixed on the Bank Certificate. A photograph of the person alongwith his/her name and designation shall also be affixed on the IEC No. to be issued (Appendix 18 B). IEC Format and Statements 2.9.1 RA concerned shall issue an IEC number in prescribed format (Appendix-18B). A copy of such IEC number shall be endorsed to concerned banker (as per details given in ANF 2A).
A consolidated statement (in Appendix 18 C) of IEC numbers issued by RA shall be sent to Exchange Control Department of RBI as given in Appendix-18D. Validity of IEC No. 2.9.2 An IEC number allotted to an applicant shall be valid for all its branches / divisions / units / factories.

Exchange Control Department of RBI as given in Appendix-18D. Validity of IEC No. 2.9.2 An IEC number allotted to an applicant shall be valid for all its branches / divisions / units / factories.
Duplicate Copy of IEC Number 2.9.3 Where an IEC Number is lost or misplaced, issuing authority may consider requests for grant of a duplicate copy of IEC number, on an affidavit. Surrender of IEC Number
2.9.4 If an IEC holder does not wish to operate allotted IEC number, he may surrender the same by informing issuing authority. On receipt of such intimation, issuing authority

10 shall immediately cancel it and electronically transmit it to DGFT and Customs authorities.
Application for Import and Export of Restricted Items
2.10 An application for grant of an Authorisation for import or export of items mentioned as restricted in ITC (HS) may be made to RA as specified under relevant Chapters of this Handbook. Imports under Indo-US Memorandum of Understanding 2.11 Import of specified capital goods, raw materials and components, from United States of America (USA) is subject to US Export Control Regulations.
US suppliers of such items are required to obtain an export authorisation based on import certificate issued in India.

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

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

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

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

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

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

A request for an import certificate shall be made in ANF 2C. Import certificate in Appendix-31 may be issued by ICIA directly to importer with a copy to (i) Ministry of External Affairs (MEA) (AMS Section), New Delhi, (ii) DoE, New Delhi; and (iii) DGFT.
However, this import certificate will not be regarded as a substitute for an import authorisation in respect of items mentioned as restricted in ITC (HS) and an import authorisation will have to be obtained for such items.

2.11A In case of import of any freely importable item in India, if a foreign Government insists on certification of end user of the item, before permitting export of the same from their country, RA may issue such certificates as per Appendix 31A of HBPv1.

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

11 Validity of import / export Authorisation from date of issue shall be as follows, unless specified otherwise: Validity Of Import Licence / Certificate / Authorisation / Permissions / CCPs / Export licence

2.12

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

(ii) a For Zero duty EPCG Authorisations (other than spares) 9 months

(ii) b For 3% EPCG Authorisations (other than spares) 36 months

(iii) EPCG Authorisation for Spares, refractories, catalyst and consumables
Co-terminus with EOP of EPCG Authorisation.

ii) b For 3% EPCG Authorisations (other than spares) 36 months

(iii) EPCG Authorisation for Spares, refractories, catalyst and consumables
Co-terminus with EOP of EPCG Authorisation.

(iv) Others including CCP and DEPB, unless otherwise specified 24 months

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

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

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

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

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

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

2.12.4 Similarly, EOP shall be deemed to be valid until month end.
Revalidation of Import / Export Licence / Certificate / Authorisation / Permissions 2.13

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

2.13.1 However, revalidation of freely transferable Authorization / Duty credit scrips and stock and sale Authorization shall not be permitted unless validity has expired while in custody of Customs authority / RA.

2.13.2

2.13.2A Such revalidation (under 2.13 and 2.13.1 above) would be permitted under specific orders of Head of concerned Office and would be maximum up to the extent of custody period.

2.13.2

2.13.2A Such revalidation (under 2.13 and 2.13.1 above) would be permitted under specific orders of Head of concerned Office and would be maximum up to the extent of custody period. For the purpose of re-credit of 4% Special Additional Duty (SAD) of customs in the freely transferable Duty credit scrips (including DEPB), revalidation for a maximum period of 6 months from the date of endorsement, shall be allowed in case the balance period of validity is less than 6 months on the date of re-credit.

2.13.3 An application for revalidation (including for restricted items), may be made to RA concerned. RA would consider such application as per government rules / notifications. Where DGFT is concerned authority, original application shall be submitted to RA concerned and self-attested copy of same shall be submitted to DGFT.
Duplicate Copies of Export-Import Licence / Certificate / Authorisation / Permissions / CCPs 2.14 Where an Authorization is lost or misplaced, an application for issue of a duplicate may be made along with an affidavit, as given in Appendix-24, to issuing RA. RA concerned may, on merits to be recorded, issue a duplicate after issuing an order for cancellation of original and informing customs authority where original was registered.

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

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

uthorisation, may be issued against an application accompanied with following documents:

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

b. A copy of FIR reporting loss.

c. Original affidavit on notorised stamp paper.

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

2.15.1 When an Authorisation has been lost by a Government agency and a proof to this effect is submitted, documents at serial nos. (a) to (d) above shall not be required.
In such cases, revalidation shall be for six months from date of endorsement.

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

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

2.15.4 Provision of paragraph 2.15.2 and 2.15.3 shall be applicable both for cases covered under paragraph 2.14 and 2.15. Identity Cards 2.16 To facilitate collection of Authorisation and other documents from DGFT Head Quarters and RA, identity cards (as in Appendix 20B, valid for 3 years) may be issued to proprietor / partners / directors and authorised employees (not more than three), of importers and exporters, upon application as in Appendix 20A.

Appendix 20B, valid for 3 years) may be issued to proprietor / partners / directors and authorised employees (not more than three), of importers and exporters, upon application as in Appendix 20A. In addition, Identity Card may also be issued by the applicant firms on their letterhead to the concerned employees. These Identity Cards may be countersigned by the concerned RA. However, application for identity card in Appendix 20B will require to be made by the applicant and all other parameters would need to be met. However, in case of limited companies, RA may approve allotment of more than three identity cards per company.
In case of loss of an identity card, a duplicate card may be issued on the basis of an affidavit.
Common directors / partners, of a group company or in any other similar cases, RA may issue multiple identity cards after recording reasons in writing. Interviews with authorised Officers 2.17 Officers may grant interview at their discretion to authorised representative of importer / exporter. Interviews / clarifications may also be sought through E-mails.

thorised Officers 2.17 Officers may grant interview at their discretion to authorised representative of importer / exporter. Interviews / clarifications may also be sought through E-mails.

14 Export of Items Reserved for SSI Sector 2.18 Units other than small scale units are permitted to expand or create new capacities in respect of items reserved for small scale sector, subject to condition that they obtain an Industrial licence under the Industries (Development and Regulation) Act, 1951, with export obligation as may be specified. Such licensee is required to furnish a LUT to RA and DGFT in this regard. DGFT / RA concerned shall monitor export obligation.

Warehousing Facility 2.19 Public / Private Customs Bonded Warehouses may be set up in DTA as per Chapter-IX of Customs Act, 1962, to import items in terms of paragraph 2.28 of FTP. On receipt of goods, such warehouses shall keep these goods for one year without payment of applicable customs duties. Goods can be cleared against Bill of Entry for home consumption, on payment of applicable custom duty and on submission of Authorisation wherever required, after an order for clearance of such goods for home consumption is issued by competent customs authorities.
In case of clearance against duty free categories / concessional duty categories, exemption / concession from duty shall be allowed.
In case of clearance against DEPB and other duty credit scrips customs duty on imports may be adjusted.

egories / concessional duty categories, exemption / concession from duty shall be allowed.
In case of clearance against DEPB and other duty credit scrips customs duty on imports may be adjusted.
Goods can be re-exported without payment of customs duty provided (i) a shipping bill or a bill of export is presented in respect of such goods; and (ii) order for export of such goods has been made by competent customs authorities. Execution of Bank Guarantee / Legal Undertaking for Advance Authorisation / DFIA and EPCG Authorisation 2.20

Before clearance of goods through Customs, Authorisation holder shall execute a BG/LUT with customs authorities. In such cases, RA shall endorse the following condition on the licence/ Authorisation: " BG / LUT as applicable, to be executed with concerned Customs Authorities.”
In case of indigenous sourcing, Authorisation holder shall furnish BG / LUT to RA as per Customs Circular No.58/2004 dated 31.10.04, as amended from time to time.

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

15 In case, the firm has already executed BG / LUT for the full value of the licence/ certificate / authorization / permission (covering the items indigenously procured) to the Customs and furnishes proof of the same to Regional Authority (RA), no BG / LUT shall be required to be executed with the RA. The RA concerned shall endorse on the authorization that the Customs Authority shall release / redeem BG / LUT only after receipt of NOC or EODC from the RA concerned. RA shall endorse a copy of the same along with a forwarding letter to the Customs Authority at the Port of registration for their information and record.
Execution of Bank Guarantee/Legal Undertaking for DEPB/Freely transferable schemes under Chapter 3 2.20A At the time of filing application for scrip(s) under DEPB Scheme/Freely transferable incentive Scheme under Chapter 3 of FTP without Bank Realisation Certificate (BRC), the applicant shall execute BG/LUT (as per Customs circular no. 58/2004) with the RA as per Appendix 25C or Appendix 25D respectively.
Corporate Guarantee

2.20.1 A status holder or a PSU may also submit Corporate Guarantee in lieu of Bank Guarantee/LUT in terms of the provisions of relevant Customs Circular in this regard.

Corporate Guarantee

2.20.1 A status holder or a PSU may also submit Corporate Guarantee in lieu of Bank Guarantee/LUT in terms of the provisions of relevant Customs Circular in this regard. In case of a group company, if one company of a Group is a status holder, Corporate Guarantee may be given for another company by this company, which is not a status holder.
Certificate of Origin (CoO) 2.21 Certificate of Origin (CoO) is an instrument to establish evidence on origin of goods imported into any country. There are two categories of CoO viz. (1) Preferential and (2) Non preferential.
Preferential 2.21.1 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), Asia-Pacific Trade Agreement (APTA), India–Sri Lanka Free Trade Agreement (ISLFTA) and Indo- Thailand Free Trade Agreement. These arrangements / agreements prescribe Rules of Origin which have to be met for exports to be eligible for tariff preference.
Authorised agencies shall provide services relating to issue of CoO, including details regarding rules of origin, list of items covered by an agreement, extent of tariff preference, verification and certification of eligibility. Export Inspection Council (EIC) is the agency authorised to print blank certificates. Authorised agencies may charge a fee, as approved by DoC, for services rendered.

certification of eligibility. Export Inspection Council (EIC) is the agency authorised to print blank certificates. Authorised agencies may charge a fee, as approved by DoC, for services rendered. Generalised System of Preferences (GSP)

(a) GSP is a non-contractual instrument by which industrialized (developed) countries unilaterally and based on non-reciprocity extend tariff concessions to

16 developing countries. Following countries extend tariff preferences under their GSP Scheme:

(i) United States of America
(ii) New Zealand (iii) Belarus (iv) European Union (v) Japan (vi) Russia (vii) Canada (viii) Norway (ix) Australia (only to LDCs) (x) Switzerland (xi) Bulgaria

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

(b) Under agreement establishing GSTP, tariff concessions are exchanged among developing countries, who have signed agreement. Presently, 46 countries are members of GSTP and India has exchanged tariff concessions with 12 countries on a limited number of products.

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

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

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

ff barriers. At present, Bangladesh, Sri Lanka, South Korea, India and China are exchanging tariff concessions under APTA. Agencies authorised to issue CoO under APTA are listed in Appendix – 4B.

17 India-Sri Lanka Free Trade Agreement (ISLFTA)

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

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

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

of Finance, vide notification No.101/2004-Customs dated 31.08.2004. EIC would be sole agency to issue CoO under Early Harvest Scheme of Framework Agreement on India-Thailand Free Trade Agreement. Non Preferential 2.21.2 Government has also nominated certain agencies to issue Non Preferential CoO in accordance with Article II of International Convention Relating to Simplification of Customs formalities, 1923. These CoOs evidence origin of goods and do not bestow any right to preferential tariffs. List of notified agencies is provided in Appendix – 4C. In addition, agencies authorized to issue Preferential CoO as per

Para 2.21.1 of HBP v1 are also authorized to issue Non-

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

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

(b) Two copies of invoices.

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

The agency would ensure that goods are of Indian origin as per general principles governing rules of origin before granting CoO (non preferential). Certificate would be issued as per Format given in Annexure-II to Appendix–4C. It

18 should be ensured that no correction/re-type is made on certificate.

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

In case of tea, all exporters who are required to submit CoO (Non-Preferential) shall apply to Tea Board or any Inspection Agency authorized by Tea Board and enlisted in Appendix- 4C of HBP v1 with documents listed above. Automatic Licence / Certificate / Authorisation / Permission
2.22 Status holders shall be issued Authorisation automatically within stipulated time period. Deficiency, if any, informed through covering letter, shall be required to be rectified by status holders within 10 days from date of communication of deficiency.

y within stipulated time period. Deficiency, if any, informed through covering letter, shall be required to be rectified by status holders within 10 days from date of communication of deficiency. Submission of Certified Copies of Documents 2.23 Wherever original documents have been submitted to a different RA / nominated agencies or to a different division of same RA, applicant can furnish photocopy of documents duly certified by him in lieu of original.
Advance Payment 2.24 In case, payment is received in advance and export / deemed exports takes place subsequently, application for an Authorisation shall be filed within specific period following the month during which exports / deemed exports are made, unless otherwise specified.
Payment through ECGC cover 2.25.1 Payment through ECGC cover would count for benefits under FTP.
Payment through General/Private Insurance Companies 2.25.2 Amount of Insurance Cover for transit loss by General Insurance and Private Approved Insurance Companies in India would be treated as payment realized for exports under various export promotion schemes. Irrevocable Letter of Credit
2.25.3 In case where applicant applies for duty credit scrip / DEPB / DFIA / discharge of EO against confirmed irrevocable letter of credit (or bill of exchange which is unconditionally Avalised / Co-Accepted / Guaranteed by a bank) and this is confirmed and certified by exporter’s bank in relevant Bank Certificate of Export and Realization, payment of export proceeds shall be deemed to be realized.

ed / Guaranteed by a bank) and this is confirmed and certified by exporter’s bank in relevant Bank Certificate of Export and Realization, payment of export proceeds shall be deemed to be realized. For Status Holders, irrevocable letter of credit would suffice. RBI write-off on export proceeds realization 2.25.4 Realization of export proceeds shall not be insisted under any of the Export Promotion Schemes under this Foreign Trade Policy, if the Reserve Bank of India (RBI) writes off the requirement of realization of export proceeds on merits and the exporter produces a certificate from the concerned Foreign Mission of India about the fact of non-recovery of export proceeds from the buyer. However, this would not be applicable in self-write off cases.

19 Export by post 2.26 In case of export by post, exporter shall submit following documents in lieu of documents prescribed for export by sea / air:

Bank Certificate of Export and Realisation as in Appendix-22A.
Relevant postal receipt
Invoice duly attested by Customs authorities. Import/ Export through Courier Service 2.26.1 Imports / Exports through a registered courier service is permitted as per Notification issued by DoR. However, importability / exportability of such items shall be regulated in accordance with FTP.

ports / Exports through a registered courier service is permitted as per Notification issued by DoR. However, importability / exportability of such items shall be regulated in accordance with FTP. Direct negotiation of export documents
2.26.2 In cases where exporter directly negotiates document (not through authorised dealer) with permission of RBI, he is required to submit following documents for availing of benefits under export promotion schemes:

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

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

c. Statement giving details of shipping bills / invoice against which FIRC was issued.
Import/Export of Samples 2.27 No Authorisation shall be required for Import of bonafide technical and trade samples of items restricted in ITC(HS) except vegetable seeds, bees and new drugs . Samples of tea not exceeding Rs.2000 (CIF) in one consignment shall be allowed without an Authorisation by any person connected with Tea industry. Duty free import of samples upto Rs 100,000 for all exporters (Rs.300,000 for gems and jewellery sector) shall be allowed as per terms and conditions of Customs notification. Exports of bonafide trade and technical samples of freely exportable item shall be allowed without any limit. Import under Lease Financing
2.28 Import under lease financing shall be available under EPCG Scheme, EOU / SEZ scheme.

cal samples of freely exportable item shall be allowed without any limit. Import under Lease Financing
2.28 Import under lease financing shall be available under EPCG Scheme, EOU / SEZ scheme. Domestic supplier of capital goods to eligible categories of deemed exports shall be eligible for benefits of deemed exports as in paragraph 8.3 of FTP, even in cases where supplies are under lease financing.

20 Exhibits Required for National and International Exhibitions or Fairs and Demonstration 2.29 Import / export of exhibits, including construction and decorative materials required for the temporary stands of foreign / Indian exhibitors at exhibitions, fair or similar show or display for a period of six months on re-export / re-import basis, shall be allowed without an Authorisation on submission of a certificate from an officer of a rank not below that of an Under Secretary / Deputy DGFT in DoC / DGFT or an officer of Indian Trade Promotion Organization (ITPO) duly authorised by its Chairman in this behalf, to effect that such exhibition, fair or similar show or display.

(i) has been approved or sponsored by DoC or ITPO; and

(ii) is being held in public interest.

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

e-import will be considered by Customs authorities on merits. Consumables such as paints, printed material, pamphlets, literature etc. pertaining to exhibits need not be re-exported / re-imported. Import Policy 2.30 Policy relating to general provisions regarding import of capital goods, raw materials, intermediates, components, consumables, spares, parts, accessories, instruments and other goods is given in Chapter 2 of FTP.
General Procedure for Licensing of Restricted Goods 2.31 Wherever an import Authorisation, including CCP, is required under FTP, procedure contained in this chapter shall be applicable.

2.32 Import of Metallic Waste and Scrap

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

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

Sl.No. Exim code Item description

1 720410 00 Waste and scrap of cast iron

72042190 Other

72042920 Of High speed steel

72042990 Other

72043000 Waste and scrap of tinned iron or steel

1 720410 00 Waste and scrap of cast iron

72042190 Other

72042920 Of High speed steel

72042990 Other

72043000 Waste and scrap of tinned iron or steel

72044100 Turnings, shavings, chips, milling waste, saw dust, fillings, trimmings and stampings, whether or not in bundles

72044900 Other

72045000 Remelting scrap ingots

74040010 Copper scrap

74040022 Brass scrap

75030010 Nickel scrap

76020010 Aluminium scrap

79020010 Zinc scrap

80020010 Tin scrap

81042010 Magnesium scrap

Shredded form:
Import of metallic waste and scrap listed above in shredded form shall be permitted through all ports of India subject to following conditions: -
a.
Importer shall furnish the following documents to the customs at the time of clearance of goods: I) Pre-shipment inspection certificate as per the format in Annexure I to Appendix 5 from any of the Inspection & Certification agencies given in Appendix-5, to the effect that the consignment was checked for radiation level and scrap does not contain radiation level (gamma and neutron) in excess of natural background. The certificate shall give the value of background radiation level at that place as also the maximum radiation level on the scrap; and
II) Copy of the contract between the importer and the exporter stipulating that the consignment does not contain any radio active contaminated material in any form.

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

22 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. Importer shall furnish the following documents to the Customs at the time of clearance of goods: I) Pre-shipment inspection certificate as per the format in Annexure-I to Appendix 5 from any of the Inspection & Certification agencies given in Appendix-5 to the effect that: i) The consignment does not contain any type of arms, ammunition, mines, shells, cartridges, or any other explosive material in any form either used or otherwise, and that the consignment was checked for radiation level and it does not contain radiation level (gamma and neutron) in excess of natural background. The certificate shall give the value of background radiation level at that place as also the maximum radiation level on the scrap. ii) The imported item (s) is actually a metallic waste/scrap/seconds/defective as per the internationally accepted parameters for such a classification.

maximum radiation level on the scrap. ii) The imported item (s) is actually a metallic waste/scrap/seconds/defective as per the internationally accepted parameters for such a classification. II) Copy of the contract between the importer and the exporter stipulating that the consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radio active contaminated, or any other explosive material in any form either used or otherwise.

b Import of scrap would take place only through following designated ports and no exceptions would be allowed even in case of EOUs, SEZs:- “1.Chennai, 2.Cochin, 3.Ennore, 4.JNPT, 5.Kandla, 6.Mormugao, 7.Mumbai, 8.New Mangalore, 9.Paradip, 10.Tuticorin, 11.Vishakhapatnam, 12. ICD Loni, Ghaziabad, 13.Pipava, 14.Mundra, 15.Kolkata, 16.ICD Ludhiana, 17.ICD Dadri (Greater Noida), 18.ICD Nagpur, 19.ICD Jodhpur, 20.ICD Jaipur, 21.ICD Udaipur, 22.CFS Mulund, 23.ICD Kanpur, 24.ICD Ahmedabad, 25.ICD Pitampur and 26.ICD Malanpur”.

16.ICD Ludhiana, 17.ICD Dadri (Greater Noida), 18.ICD Nagpur, 19.ICD Jodhpur, 20.ICD Jaipur, 21.ICD Udaipur, 22.CFS Mulund, 23.ICD Kanpur, 24.ICD Ahmedabad, 25.ICD Pitampur and 26.ICD Malanpur”.

2.32.2.A In case any agency wishes to be enlisted under Appendix- 5, they may furnish an application to the Office of Director General of Foreign Trade with the following documents in the format in Appendix-5A, which will be considered by an Inter-Ministerial Committee: (a) A brief on the activities of the agency, its history, membership, organizational structure, manpower, etc. (b) Infrastructural setup, logistics, testing labs etc. for carrying out the inspection of metallic scrap. (c) List of companies/ agencies for which testing has been carried out.

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

2.32.4 Import policy for second and defective, rags, PET bottles / waste, and ships is given in ITC (HS). Import of Second Hand Capital Goods 2.33 Import of second hand capital goods including refurbished / reconditioned spares, except those of personal computers / laptops, shall be allowed freely, subject to conditions for following categories: Import of second hand computers including personal computers / laptops and refurbished/reconditioned spares thereof is restricted.

allowed freely, subject to conditions for following categories: Import of second hand computers including personal computers / laptops and refurbished/reconditioned spares thereof is restricted.
Import of refurbished / reconditioned spares of capital goods, other than those of personal computers/laptops will be allowed on production of a Chartered Engineer certificate that such spares have atleast 80% residual life of original spare.

2.33A Customs or any other Central or State Government authority may avail of services of Inspection and Certification Agencies in Appendix 5 of the HBP v1, for certifying residual life as well as valuation / purchase price of capital goods. Import of Ammunition by Licensed Arms Dealers 2.34 Import of following types of ammunition are allowed against an Authorisation by licensed arms dealers subject to conditions as may be specified:

(i) Shotgun Cartridges 28 bore;

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

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

(iv) Rifle Cartridges of 6.5 mm, .22 savage, .22 Hornet, 300 Sherwood, 32/40, .256, .275, .280, 7m/m Mauser, 7 m/m Man Schoener, 9m/m Mauser, 9 m/m Man Schoener,

auser, .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,

24 8x57, 8x57S, 9.3 m/m, 9.5 m/m, .375 Magnum, .405, .30.06, .270, .30/30 Winch, .318, .33 Winch,.275 Mag., .350 Mag., 400/350, .369 Purdey, .450/400, .470, .32 Win, .458 Win, .380 Rook, .220 Swift and .44 Win. bores.

An import Authorisation shall be issued at 5% of value of annual average sales turnover of ammunition (whether indigenous or imported) during preceding three licensing years subject to a minimum of Rs. 2000. An application for grant of an Authorisation for items listed above may be made to RA in ANF 2B along with documents prescribed therein. Restricted Items Required By Hotels, Restaurants, Travel Agents, Tour Operators And Other Specified Categories 2.35 Items mentioned as restricted for imports in ITC (HS) required by hotels, restaurants, travel agents and tour operators may be allowed against an Authorisation, based on recommendation of Director General, Tourism, Government of India.

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

ort Authorisation upto a value of 25% of foreign exchange earned by them from foreign tourists during preceding licensing year, for import of essential goods related to hotel and tourism industry.

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

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

2.35.4 Such imported goods may be transferred after 2 years with permission of DGFT. No permission for transfer will be required in case the imported goods are re-exported. However, re-export shall be subject to all conditionality, or requirement of licence, or permission, as may be required under Schedule II of ITC (HS).

in case the imported goods are re-exported. However, re-export shall be subject to all conditionality, or requirement of licence, or permission, as may be required under Schedule II of ITC (HS).

2.35.5 An application for grant of an Authorisation under paragraphs 2.35.1 and 2.35.2 may be made in ANF 2B to DGFT through Director of Tourism, Government of India who will forward application to RA concerned along with their recommendations.
Import of Other Restricted Items
2.36 ITC (HS) contains list of restricted items. An application for import of such items may be made, in ANF 2B along with documents prescribed therein. Original application along with Treasury Receipt (TR) / Demand Draft shall be submitted to RA concerned and self-attested copy of same shall be submitted to DGFT in duplicate along with proof of submission of application to concerned RA. EXIM Facilitation Committee
2.37 Restricted item Authorisation may be granted by DGFT or any other RA authorised by him in this behalf. DGFT / RA may take assistance and advice of a Facilitation Committee. The Assistance of technical authorities may also be taken by seeking their comments in writing. Facilitation Committee will consist of representatives of Technical Authorities and Departments / Ministries concerned.

2.37A Import authorizations for a restricted item, if so directed by the competent authority, shall be issued for import through one of the sea ports or air ports or ICDs or LCS, as per the option indicated, in writing, by the applicant.

ted item, if so directed by the competent authority, shall be issued for import through one of the sea ports or air ports or ICDs or LCS, as per the option indicated, in writing, by the applicant. However, for import of rough marble, port of registration is mandatory and the applicant must indicate the same in the application itself. Authorization holder shall register the import authorisation at the port specified in the Authorization and thereafter all imports against said authorization shall be made only through that port, unless the authorization holder obtains permission from customs authority concerned to import through any other specified port. Gifts of Consumer or Other Goods
2.38 In terms of provisions contained in paragraph 2.19 of FTP, an application for grant of CCP for import as gifts of items appearing as restricted for imports in ITC (HS) shall be made to the DGFT as in ANF 2B along with documents prescribed therein. Where recipient of a gift is a charitable, religious or an educational institution registered under any law in force, and gift sought to be imported has been exempted from payment of customs duty, such import shall be allowed by customs authorities without a CCP. Import under Govt. to Govt. Agreements
2.39 Import of goods under Government to Government agreements may be allowed without an Authorisation or CCP on production of necessary evidence to satisfaction of Customs authorities

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

26 Import of Cheque Books / Ticket Forms etc. 2.40 Indian branches of foreign banks, insurance companies and travel agencies may import chequebooks, bank draft forms and travellers cheque forms without a CCP. Similarly, airlines / shipping companies operating in India, including persons authorised by such airlines / shipping companies, may import passenger ticket forms without a CCP. Import of Reconditioned/ Second Hand Aircraft Spares 2.41 Import Authorisation for reconditioned / second hand aircraft spares is not needed on recommendation of Director General of Civil Aviation, Government of India (DGCA).

Import of Replacement Goods
2.42 Goods or parts thereof on being imported and found defective or otherwise unfit for use or which have been damaged after import, may be exported without an Authorisation, and goods in replacement thereof may be supplied free of charge by foreign suppliers or imported against a marine insurance or marine-cum-erection insurance claim settled by an insurance company.

and goods in replacement thereof may be supplied free of charge by 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 Authorisation provided that:

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

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

2.42.1 In case of short-shipment, short-landing or loss in transit, import of replacement goods will be permitted based on certificate issued by customs authorities without an import Authorisation.
This procedure shall also apply to cases in which short- shipment of goods is certified by foreign supplier, who has agreed to replace free of cost.

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

Transfer of Imported Goods
2.43 Freely importable goods can be transferred by sale or otherwise by importer freely. Transfer of imported goods, which are

or which an application may be made.

Transfer of Imported Goods
2.43 Freely importable goods can be transferred by sale or otherwise by importer freely. Transfer of imported goods, which are

27 subject to Actual User condition and have become surplus to needs of Actual User, shall be made only with prior permission of RA concerned. Following information alongwith supporting documents shall be furnished with request for grant of permission for transfer, to RA concerned:

(i) Reasons for transfer of imported material;

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

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

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

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

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

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

a period of two years from the date of import. However, transfer of imported firearms by the importer / Authorisation holder shall be permitted only after 10 years of import with approval of DGFT.
“Renowned Shooters” for 3 consecutive years are allowed to sell their imported weapons after three years from date of import of the respective weapon. Other “Renowned Shooters” are allowed to sell their weapons after 5 years from the date of import. The sale shall be subject to approval from DGFT. Sale of Exhibits 2.44 (i) Sale of exhibits of restricted items, mentioned in ITC (HS), imported for an international exhibition / fair organized / approved / sponsored by ITPO may also be made, without an Authorisation within bond period allowed for re-export, on payment of applicable customs duties, subject to a ceiling limit of Rs.5 lakhs (CIF) for such exhibits for each exhibitor.
However, sale of exhibits of items, which were freely imported shall be made, without an Authorisation, within bond period allowed for re-export on payment of applicable customs duties.

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

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

28 Import of Overseas Office Equipment 2.45 On winding up of overseas offices, set up with approval of RBI, used office equipment and other items may be imported without Authorisation. Prototypes
2.46 Import of new / second hand prototypes / second hand samples may be allowed on payment of duty without an Authorisation to an Actual User (industrial) engaged in production of or having industrial licence / letter of intent for research in item for which prototype is sought for product development or research, as the case may be, upon a self-declaration to that effect, to satisfaction of customs authorities. Restricted items for R&D 2.47 All restricted items and items permitted to be imported by STEs, except live animals, required for R&D purpose may be imported without an Authorisation by Government recognized Research and Development units. Export Policy
2.48 Policy relating to Exports is given in Chapter-2 of FTP. Further, Schedule 2, Appendix-1 of ITC (HS) specifies list of items, which may be exported without an Authorisation but subject to terms and conditions specified.
Application for Grant of Export Licence / Certificate / Permission 2.49 An application for grant of Export Authorisation in respect of items mentioned in Schedule 2 of ITC (HS) may be made in ANF 2D (2E for SCOMET items) to DGFT along with documents prescribed therein.

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

An Inter-Ministerial Working Group in DGFT shall consider applications for export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) as specified in Appendix-3 to Schedule 2 of ITC (HS) based on guidelines given below. Applications for licences to export items or technology on SCOMET List are considered case-by-case, based inter alia on the following general criteria: - I. Following factors, among others, are taken into account in the evaluation of applications for export of items on SCOMET List: a. Credentials of end-user, credibility of declarations of end-use of the item or technology, integrity of chain of transmission of item from supplier to end-user, and on potential of item or technology, including timing of its export, to contribute to end-uses that are not in conformity with India’s national security or foreign policy goals and objectives, objectives of global non-proliferation, or its obligations under treaties to which it is a State party.

e not in conformity with India’s national security or foreign policy goals and objectives, objectives of global non-proliferation, or its obligations under treaties to which it is a State party.

29 b. Assessed risk that exported items will fall into hands of terrorists, terrorist groups, and non-State actors; c. Export control measures instituted by recipient State; d. The capabilities and objectives of programmes of recipient State relating to weapons and their delivery; e. Assessment of end-uses of item(s); f. Applicability to an export licence application of relevant bilateral or multilateral agreements to which India is a party.
II. A condition for consideration of an application for an export licence is submission of stipulated certifications to effect, inter alia, that:
a. The item will be used only for stated purpose and that such use will not be changed, nor items modified or replicated without consent of Government of India; b. Neither the items nor replicas nor derivatives thereof will be re-transferred without consent of Government of India; c. End-user shall facilitate such verifications as are required by Government of India. Government of India may also require additional formal assurances, as appropriate, including on end-use and non- retransfer, from State of recipient. III. Licensing authority for items in Category 0 in Appendix 3 to Schedule 2 of ITC(HS) is Department of Atomic Energy. Applicable guidelines are notified by that Department under Atomic Energy Act, 1962.

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

30 possibility of diversion to or use in development or manufacture of, or use as, systems capable of delivery of weapons of mass destruction. V. Applications for transfer of “Technology” for any item on the List will be considered as an application for export of item itself. VI. Licences for export of items in this List (other than those under Category 0, 1 and 2) solely for purposes of display or exhibition shall not require any end-use or end-user certifications. No export licence for display or exhibition shall be issued for ‘Technology’ in any category or for items under Categories 0, 1, and 2. VII. Export of items not on SCOMET List may also be regulated under provisions of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005.

and 2. VII. Export of items not on SCOMET List may also be regulated under provisions of the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005. Note 1: Export or attempt to export in violation of any of conditions of licence shall invite civil and/or criminal prosecution. Note 2: Licences for export of items in this List for display or exhibition abroad are subject to a condition of re-import within a period not exceeding six months. Exporters are entitled to apply for an export licence for such items exhibited abroad if exhibitor intends to offer that item for sale during exhibition abroad. Such sale shall not take place without a valid licence. Note 3: Export of items in Category 2 of this list may also be controlled by other applicable guidelines issued from time-to- time. Exporters of items in this category are advised to seek guidance from DGFT. Note 4: Exporters are entitled to apply for a ‘destination licence’ for countries and / or groupings of countries for export to which only re-transfer conditions need be imposed.
Note 5: Exporters are entitled to request that only such conditions need be imposed as are subject of government-to- government instruments of accord over export of items on SCOMET List. Note 6: ‘Technology’ (see also entry ‘Technology’ in glossary in Appendix-3 to Schedule 2 of ITC (HS)): Approval of export of an item on the SCOMET List also authorizes the export to same end-user of minimum ‘technology’ required for

Technology’ in glossary in Appendix-3 to Schedule 2 of ITC (HS)): Approval of export of an item on the SCOMET List also authorizes the export to same end-user of minimum ‘technology’ required for

31 installation, operation, maintenance and repair of the item.

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

RAs may also issue, on application, Free Sale and Commerce Certificate for export of items not covered under Drugs & Cosmetics Act, 1940, which have usage in hospitals, nursing homes and clinics, for medical and surgical purposes and are not prohibited for export. Validity of such certificate shall be two years from date of issue unless otherwise specified. An application for grant of Free Sale and Commerce Certificate may be made to RA concerned as per format in Appendix 39 of HBP Vol.I, along with Annexure A therein. RA shall issue Free Sale and Commerce Certificate as per Annexure B of Appendix 39.

ertificate may be made to RA concerned as per format in Appendix 39 of HBP Vol.I, along with Annexure A therein. RA shall issue Free Sale and Commerce Certificate as per Annexure B of Appendix 39. PROCEDURE/GUIDELINES FOR FILING/ EVALUATION OF APPLICATIONS FOR
ENTERING INTO AN ARRANGEMENT OR
UNDERSTANDING FOR SITE VISITS, ON-SITE VERIFICATION AND ACCESS TO RECORDS / DOCUMENTATION

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

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

(a) Purpose for which arrangement / understanding is proposed under which site visit or on-site verification or access to records/documentation is to be undertaken. (b) Credentials and details of the parties involved.

ment / understanding is proposed under which site visit or on-site verification or access to records/documentation is to be undertaken. (b) Credentials and details of the parties involved.

32 (c) Credentials of end-user, credibility of declarations of end-use of the items or technology, the integrity of chain of transmission of the item from the supplier to the end-user, and on the potential of the item or technology, including the timing of its export, to contribute to end-uses that are not in conformity with India’s national security or foreign policy goals and objectives, the objectives of global non- proliferation, or its obligations under treaties to which it is a State party. (d) The assessed risk that the arrangement / understanding could lead to dual-use items and technology falling into the hands of terrorists, terrorist groups and non-State actors. (e) In case site visit, on-site verification or access to records/documentation is to be carried out by a foreign government or its representative(s), the following shall be taken into consideration :- i. Export control measures instituted by the foreign government; ii. Capabilities and objectives of programs of the foreign government relating to weapons and their delivery. (f) Applicability of relevant bilateral and multilateral agreements to which India is a party (g) Assessment of any threat that such site visit, on-site verification or access to records/documentation may pose to India’s national security, and relations with any other country.

a party (g) Assessment of any threat that such site visit, on-site verification or access to records/documentation may pose to India’s national security, and relations with any other country. (h) Assessment of possible links of the foreign parties with terrorist organizations and non-state actors within their own country or in any other country.

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

(a) Site visit, on-site verification or access to records / documentation will be confined to the purpose, sites and activity for which permission given/which have been mentioned in the authorization. (b) Site visit, on-site verification or access to records / documentation will be allowed only to individuals mentioned in the authorization. (c) Site visit, on-site verification or access to records/documentation shall be concluded during the period mentioned in the authorization. (d) Exporter/Importer will keep a record of site visit, on-

e visit, on-site verification or access to records/documentation shall be concluded during the period mentioned in the authorization. (d) Exporter/Importer will keep a record of site visit, on-

33 site verification or access to records/documentation alongwith detail of individuals who visited the premises during this visit and produce the same as and when required to do so by the GOI. (e) No exchange of goods, services and technologies and any documentation including drawings, specification sheets etc. will take place during the visit. (f) Exporter/importer may be required to give any additional assurance that the Government of India may require. (g) Any other condition that may be stipulated in the permission.

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

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

ssue unless otherwise specified. An application for grant of Free Sale and Commerce Certificate may be made to RA concerned as per format in Appendix 39 of HBPVol.1, along with Annexure A therein. RA shall issue Free Sale and Commerce Certificate as per Annexure B of Appendix 39. RAs may also issue, on application, Free Sale and Commerce Certificate for export of any other item which is not restricted or prohibited for export. Validity of such certificate shall be two year from date of issue unless otherwise specified. An application for grant of Free Sale and Commerce Certificate for these items may be made to RA concerned as per format in Appendix 39-A of HBP Vol. I along with Annexure A therein. RA shall issue Free Sale and Commerce Certificate as per Annexure B of Appendix 39-A.

34 Export Of Items under State Trading Regime (STR)
2.50 An application for export of items mentioned in ITC (HS) under STR regime may be made to DGFT.
Exports Of Samples / Exhibits 2.51 An application for export of samples or exhibits, which are restricted for export, may be made to DGFT. Free of Cost Exports
2.52 Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakh or 2% of average annual export realisation during preceding three licensing years whichever is higher.

le items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakh or 2% of average annual export realisation during preceding three licensing years whichever is higher.
Gifts / Spares / Replacement Goods 2.53 For export of gifts, indigenous / imported warranty spares and replacement goods in excess of ceiling / period prescribed in paragraphs 2.32, 2.33 and 2.37 respectively of FTP, an application may be made to DGFT. Furnishing of Returns in respect of Exports in non Physical form 2.54 All exports made in non physical form by using communication links including high speed data communication links, internet, telephone line or any other channel which do not involve Customs authorities has to be compulsorily reported on quarterly basis to concerned EPC (Para 3.12 of FTP) as given in Appendix 19C.
These provisions shall be applicable to all exporting units located anywhere in country including those located in STP, SEZ, EHTP and under 100% EOU scheme. Duty Free Import of R&D Equipment for Pharmaceuticals and Bio-technology Sector
2.55 Duty free import of goods (as specified in list 28 of Customs notification No.21/2002 dated 1.3.2002, as amended from time to time) upto 25% of FOB value of exports during preceding licensing year, shall be allowed.
The eligible unit may furnish an application given in Appendix-15A to RA concerned duly countersigned by Chartered Accountant.

value of exports during preceding licensing year, shall be allowed.
The eligible unit may furnish an application given in Appendix-15A to RA concerned duly countersigned by Chartered Accountant.
In respect of duty free import of R&D equipment, units not registered with Central excise shall be allowed to give Installation Certificate issued by an independent Chartered Engineer.

2.55.1 Duty free imports of goods as specified in list 28A of Customs notification No. 21/2002 dated 1.3.2002, upto 1% of FOB value of exports made during preceding licensing year, shall be allowed to agro chemicals sector unit having export turnover of Rs. 20 crore or above during preceding licensing year. The eligible unit shall apply in form given in Appendix-15B to RA concerned duly countersigned by Chartered Accountant.

35 In respect of duty free import of R&D equipment, units not registered with Central excise shall be allowed to give Installation Certificate issued by an independent Chartered Engineer. Conversion of E.P. copy of shipping bill from one Scheme To Another 2.56 If Customs Authorities, after recording reasons in writing, permit conversion of an E.P. copy of any scheme-shipping bill on which benefit of that scheme has not been availed, exporter would be entitled to benefit under scheme in which shipment is subsequently converted.

on of an E.P. copy of any scheme-shipping bill on which benefit of that scheme has not been availed, exporter would be entitled to benefit under scheme in which shipment is subsequently converted.
Offsetting of Export Proceeds
2.57 Subject to specific approval of RBI, any payables, or equity investment made by an Autorisation holder under any export promotion scheme, can be used to offset receipts of his export proceeds. In such cases, offsetting would be equal to realisation of export proceeds and exporter would have to submit following additional documents:

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

b) Specific permission of RBI. Quality Certification 2.58 It has been a constant endeavor to promote quality standards in export product / units manufacturing export product.

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

2.58.2 List of such agencies authorised to grant quality certification is given in Appendix-6.
For ISO 9000 (Series) and for ISO 14000 (Series), the Agencies accredited with National Accreditation Board for Certification Bodies (NABCB) under Quality Council of India shall be deemed to be authorized under this Policy.

or ISO 14000 (Series), the Agencies accredited with National Accreditation Board for Certification Bodies (NABCB) under Quality Council of India shall be deemed to be authorized under this Policy. List of such accredited agencies is available on the web site www.qcin.org and also provided under Appendix 6.
Any agency desirous of enlistment in Appendix –6 may submit their application as per Annexure I to Appendix 6 to concerned RA. Procedure for import under the Tariff Rate Quota Scheme 2.59 Attention is invited to Government of India, Ministry of Finance (Department of Revenue), Notification No. 21/2002- Customs dated 01.03 2002 and Notification No. 33/2010- Customs dated 12.03.2010. As per these, import of four items viz., (1) Skimmed and whole milk powder, milk food for babies etc. (0402.10 or 0402.21) and White Butter, Butter oil, Anhydrous Milk Fat (0405) (2) Maize (corn): other (1005.90)

36 (3) Crude sunflower seed or safflower oil or fractions thereof (1512.11) and (4) Refined rape, colza or mustard oil, other (1514.19 or 1514.99) is allowed in a financial year, up to quantities as well as such concessional rates of customs duty as indicated below:

S.No ITC Code No. & Item Quantity of Quota Concessio nal Duty 1(i) Tariff Code No. 0402.10 or 0402.21 Skimmed and whole Milk Powder. Milk Food for babies etc.

30,000
MTs 0% (ii) Tariff Code No. 0405 White Butter, Butter oil, Anhydrous Milk Fat 15,000
MTs 0% 2 Tariff Code No. 1005.90 Maize (Corn): other

5,00,000 MTs 15% 3 Tariff Code No.

000
MTs 0% (ii) Tariff Code No. 0405 White Butter, Butter oil, Anhydrous Milk Fat 15,000
MTs 0% 2 Tariff Code No. 1005.90 Maize (Corn): other

5,00,000 MTs 15% 3 Tariff Code No. 1512.11 Crude Sunflower seed or safflower oil or fractions thereof

150,000
MTs

50% 4 Tariff Code No. 1514.19 & 1514.99 Rape, Colza, Canola or Mustard Oil, Other (Refined)

150,000
MTs

45%

Eligible entities for allocation of quota: 2.59.1 (a)
Milk Powder (Tariff Code No. 0402.10 or 0402.21) and White Butter, Butter oil, Anhydrous Milk Fat (0405): National Dairy Development Board (NDDB), State Trading Corporation (STC), National Cooperative Dairy Federation (NCDF), National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), Minerals and Metals Trading Corporation (MMTC), Projects & Equipment Corporation of India Limited (PEC) and Spices Trading Corporation Limited (STCL).

(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),

aize (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),

37 Projects & Equipment Corporation of India Limited(PEC), Spices Trading Corporation Limited (STCL) and State Cooperative Marketing Federations

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

All eligible entities are eligible to avail quotas as per request of applicants received.

All eligible entities desiring availment of quota as mentioned above, may make application to EFC in ANF to DGFT, Udyog Bhavan, New Delhi – 110 011. Completed application forms along with prescribed documents must reach on or before 1st March of each financial year preceding to the year of quota e.g. Applications for TRQ for 2011-2012 must reach DGFT by 01.03.2011.

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

Since import of maize (corn) is through STEs, the allottees of quota i.e.

pleted before 31st March of financial year i.e. consignments must be cleared by customs authorities before this date.

Since import of maize (corn) is through STEs, the allottees of quota i.e. designated agencies in para 1 (b) above for this item shall also be granted an import Authorisation for allotted quantities as indicated at Sl. No. 21(b) of Customs Notification No. 21/2002 dated 1.3.2002 in terms of para 2.11 of FTP, 2004-2009, if they do not wish to make imports through FCI.

Application fee for these applications shall be paid according to procedure contained in Appendix 21 B to HBP-v1.

EFC in DGFT will evaluate and allot quota among applicants by 31st March of each financial year preceding to year of quota e.g. for 2011-2012, EFC will allot quota by 31st March 2011. Issuance of scrips against lost EP copy of the Shipping Bills and / or original Bank Realisation Certificate

2.60

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

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

b) An application fee equivalent to 2% of relevant entitlement.

documents: -

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

b) An application fee equivalent to 2% of relevant entitlement.

38 However, no fee shall be charged when such document is lost by Government agencies and a documentary proof to this effect is submitted;

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

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

  Customs Authority, before allowing clearance, shall ensure

that benefit / duty credit against such shipping bill has not been availed.

2.60.1

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

Export Promotion Council (EPC)/ Commodity Boards (CB) 2.61 A list and product category of EPCs, including CB is given in Appendix-2. Commodity Boards function as EPCs for products allotted to them. EPC is authority issuing RCMC. Non-Profit, Autonomous and Professional Bodies
2.62 EPCs are non-profit organizations registered under Companies Act or Societies Registration Act.

2.62.1 EPCs shall be autonomous and shall regulate their own affairs.

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

2.62.1 EPCs shall be autonomous and shall regulate their own affairs. However, if Central Government frames uniform bylaws for constitution and / or for transaction of business for EPCs, they shall adopt the same with such modifications as Central Government may approve having regard to special nature or functioning of such EPC.
Concerned Administrative Ministry would interact with Managing Committee of EPC concerned at least twice a year.
Registering Authorities issuing RCMC

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

(ii) A status holder has an option to obtain RCMC from Federation of Indian Exporters’ Organization (FIEO).

(iii) In case an export product is not covered by any Export Promotion Council/Commodity Board etc., RCMC in respect thereof is to be obtained from FIEO. Further, in case of multi

ation (FIEO).

(iii) In case an export product is not covered by any Export Promotion Council/Commodity Board etc., RCMC in respect thereof is to be obtained from FIEO. Further, in case of multi

39 product exporters, not registered with any EPC, where main line of business is not discernible, the exporter has an option to obtain RCMC from Federation of Indian Exporters Organization (FIEO).

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

(v) Exporters of 14 specific services as listed in Appendix-2 of HBPv1, are required to register themselves with Services EPC. Other service exporters shall register themselves with FIEO.

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

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

Registration cum- Membership Certificate (RCMC) 2.64 An exporter may, on application given in Appendix-19A, register and become a member of EPC.

d after by APEDA, Spices Board and Tea Board).

Registration cum- Membership Certificate (RCMC) 2.64 An exporter may, on application given in Appendix-19A, register and become a member of EPC. On being admitted to membership, applicant shall be granted forthwith Registration- cum-Membership Certificate (RCMC) of EPC concerned, in format given in Appendix-19B. In case an exporter desires to get registration as a manufacturer exporter, he shall furnish evidence to that effect.
Prospective / potential exporters may also, on application, register and become an associate member of an EPC . Validity Period of RCMC
2.64.1 RCMC shall be deemed to be valid from 1st April of licensing year in which it was issued and shall be valid for five years ending 31st March of licensing year, unless otherwise specified. Intimation Regarding Change In Constitution 2.65 In case of change in ownership, constitution, name or address of an exporter, it shall be obligatory on part of RCMC holder to intimate such change to registering authority within a period of one month from date of such change. Registering authority, however, may condone delays on merits.
Furnishing Of Returns 2.66 Exporter shall furnish quarterly returns / details of his exports of different commodities to concerned registering authority. However, status holders shall also send quarterly returns to

ns 2.66 Exporter shall furnish quarterly returns / details of his exports of different commodities to concerned registering authority. However, status holders shall also send quarterly returns to

40 FIEO in format specified by FIEO. De-Registration 2.67 Registering authority may de-register an RCMC holder for a specified period for violation of conditions of registration. Before such de-registration, RCMC holder shall be given a show cause notice by registering authority, and an adequate and reasonable opportunity to make a representation against the proposed de-registration. Upon de–registration, concerned EPC shall intimate the same to all RAs. Appeal Against De- registration 2.68 A person aggrieved by a decision of registering authority in respect of any matter connected with issue of RCMC may prefer an appeal to DGFT or an officer designated in this behalf within 45 days against said decision and decision of appellate authority shall be final. Directives of DGFT 2.69 DGFT may direct any registering authority to register or de- register an exporter or otherwise issue such other directions to them consistent with and in order to implement provisions of FT (D&R) Act, Rules and Orders made there under, FTP or this Handbook.

2.70 Electronic Data Interchange Eligibility 2.70.1 Facility of electronic filing of applications shall be available to all exporters. Procedure
2.70.2 An exporter would be able to file his application on DGFT website at http://dgft.gov.in/.

70.1 Facility of electronic filing of applications shall be available to all exporters. Procedure
2.70.2 An exporter would be able to file his application on DGFT website at http://dgft.gov.in/. Application will then be processed in accordance with prevalent rules and regulations. Applicant will have to visit concerned office to hand-over hard copy of application along with requisite documents including application fee. Authorisation shall be issued on receipt of hard copies of documents as mentioned above after due scrutiny as prescribed in HBP v1. Fiscal Incentives for EDI 2.70.3 Following deductions in Application Fee would be admissible for applications signed digitally and / or where application fee is paid electronically through EFT (electronic fund transfer)

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

1 Digitally signed 25%

2 Application fee payment vide EFT 25%

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

50%

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

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

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

CHAPTER 3

PROMOTIONAL MEASURES

Status Certificate
3.1 Policy for Status Holder is given in Chapter 3 of FTP.

Application for grant of Status Certificate 3.2 Application for grant of status shall be filed by 31st March, in ANF 3A. An existing status holder shall be automatically treated to be an equivalent status holder as given in Para 3.10 of FTP.

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

3.2.2 All newly issued Status certificates shall be valid from 1st April of the year during which application for recognition was filed. For renewals, application filed before expiry of current validity, renewals shall have a validity commencing from 1st April of next licensing year; otherwise validity period shall be 1st April of year during which application was filed.

All Status Certificates shall be valid for a period of 5 years reckoned from the 1st April of the relevant year. All Status Certificates valid beyond 31.3.2014 shall continue to remain in force, in case provisions of Foreign Trade Policy (2014-19) continue to recognize the status.

April of the relevant year. All Status Certificates valid beyond 31.3.2014 shall continue to remain in force, in case provisions of Foreign Trade Policy (2014-19) continue to recognize the status.

Pending the finalization of the applications for grant of recognition, existing status holders who have applied for recognition before the expiry of their status, shall have a grace period of 6 months. During this grace period of 6 months such status holders shall continue to be recognized as Status holders even after the expiry of earlier Status Certificate i.e. till September end, unless their applications are finally rejected or status recognition is granted once again, as the case may be.

Maintenance of Accounts

3.3 Status Holder shall maintain true and proper accounts of its exports and imports based on which such recognition has been granted.

44 Record shall also be maintained during validity period and for a minimum period of three years thereafter. These accounts shall be made available for inspection to RA concerned or any authority nominated by DGFT.

o be maintained during validity period and for a minimum period of three years thereafter. These accounts shall be made available for inspection to RA concerned or any authority nominated by DGFT.

Refusal / Suspension / Cancellation of Certificate

3.4 Status Certificate may be refused or suspended or cancelled by RA concerned, if status holder or any agent or employee or authorized representative acting on his behalf: (a) Fails to discharge export obligation imposed; (b)
Tampers with Authorisations; (c)
Misrepresents or has been a party to any corrupt or fraudulent practice in obtaining any Authorisation; (d)
Commits a breach of FT (D& R) Act, or Rules, Orders made there under and FTP; or (e)
Fails to furnish information required by this Directorate.

3.4.1

A reasonable opportunity shall be given to Status Holder before taking any action under above paragraph.

Appeal 3.5 An applicant, who is not satisfied with decision taken to suspend or cancel Status Certificate, may file an appeal to DGFT within 45 days. Decision of DGFT shall be final thereon.

3.6 SERVED FROM INDIA SCHEME (SFIS)

(a) Policy for SFIS is given in Chapter 3 of FTP.

us Certificate, may file an appeal to DGFT within 45 days. Decision of DGFT shall be final thereon.

3.6 SERVED FROM INDIA SCHEME (SFIS)

(a) Policy for SFIS is given in Chapter 3 of FTP.

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

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

f Duty Credit scrip whichever is earlier, submit a statement of imports made under it to jurisdictional RA with a copy to jurisdictional Excise authorities (service tax cell) wherever applicable.

45 Ineligible Remittances and Services for SFIS scheme 3.6.1 Foreign exchange remittances other than those that are earned for rendering of services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible. For calculation of entitlement, following shall not be taken into account. a) Foreign Exchange remittances: I. related to Financial Services Sector

Raising of all types of foreign currency Loans;
Export proceeds realization of clients;
Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;
Issuance of foreign currency Bonds;
Sale of securities and other financial instruments;
Other receivables not connected with services rendered by financial institutions; and II. earned through contract/regular employment abroad (e.g. labour remittances); b) Payments for services received from EEFC Account; c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.

employment abroad (e.g. labour remittances); b) Payments for services received from EEFC Account; c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc. (However, remittances received on account of medical treatment, surgery, testing, consultancy and health care provided by the institution shall be eligible.); d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc. (However remittances received on account of the course fees and consultancy provided by the institution shall be eligible.); e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units; f) Clubbing of turnover of services rendered by SEZ / EOU / EHTP / STPI / BTP units with turnover of DTA Service Providers;
g) Service Providers in Telecom Sector (Sr. No 2C of Appendix 10);
h) Foreign Exchange earnings for Services provided by Airlines, Shipping Lines Service Providers from plying from any country X to any country Y routes, not touching India at all; and i) Exports of Goods.

Exchange earnings for Services provided by Airlines, Shipping Lines Service Providers from plying from any country X to any country Y routes, not touching India at all; and i) Exports of Goods.

3.7 VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY)

3.7.1 Policy pertaining to VKGUY is given in Chapter 3 of FTP. Appendix 37A contains the list of VKGUY items along with the admissible date of export. Application for grant of Duty Credit scrip under VKGUY for exports made from 27.8.2009 onwards shall be made to RA concerned in ANF3C along with documents prescribed therein.

Listed products shall be eligible for Duty Credit Scrip upon exports on or after the Date of Export indicated in the relevant Appendix.

3.7.2 Policy pertaining to the Agri. Infrastructure Incentive Scrip under VKGUY is given in Para 3.13.4 of Chapter 3 of FTP. All Status Holders may apply for grant of Duty Credit scrip for export made during current year to RA, CLA, New Delhi in ‘ANF 3D - ANF for Policy Para 3.13.4.’ along with documents prescribed therein.

Applicants may file one application before the last date prescribed for each half year period (Apr-Sep / Oct-Mar). Applications for exports during Apr-Sept period shall be filed from 15th January till 15th February of current year and for exports during Oct-Mar period, applications shall be filed from 1st May till 31st May of the next licensing year.

Applications received after the last date shall be summarily rejected, as Para 9.2 and Para 9.3 shall not be applicable.

ns shall be filed from 1st May till 31st May of the next licensing year.

Applications received after the last date shall be summarily rejected, as Para 9.2 and Para 9.3 shall not be applicable.

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

FOCUS MARKET SCHEME (FMS)

3.8 Policy pertaining to FMS is given in Chapter 3 of FTP. Notified Markets are listed in Appendix 37C.

3.8.1 An application for exports made from 27.8.2009 onwards shall be filed separately, with RA concerned in ANF3C along with documents prescribed therein.

Eligibility of Focus Market (as in Appendix 37C) shall be determined from date of export as per Para 9.12 of HBP v1.

Proof of Landing – for FMS and MLFPS 3.8.2 Applicant shall be required to submit proof of landing of export consignment in specified market.

d from date of export as per Para 9.12 of HBP v1.

Proof of Landing – for FMS and MLFPS 3.8.2 Applicant shall be required to submit proof of landing of export consignment in specified market.

Any one of the following documents should suffice, as a proof of landing of export consignment in specified Focus Market:
(i) A self attested copy of import bill of entry filed by importer in specified market, or (ii) Delivery order issued by port authorities, or (iii) Arrival notice issued by goods carrier, or (iv) Tracking report from the goods carrier (Shipping Line/Airline etc. or his accredited agent in India) duly certified by them, evidencing arrival of export cargo to destination Focus Market, or (v) For Land locked Focus Market, Rail/Lorry receipts of transportation of goods from Port to Land locked Focus Market, or (vi) Any other documents that may satisfactorily prove to RA concerned that goods have landed in / reached the Focus Market.

In case of (iv) and (vi) above, the accredited agent of the Goods Carrier must certify that he is the accredited agent of the concerned Goods Carrier on the date of issuance of the tracking report / document.

Further, in the case of issuance of any other document under (vi) above, the accredited agent must state that he has verified that this proof of landing of goods in relevant Focus Market is given based on information available in the Goods Carrier’s backup database and he has issued this document accordingly.

s verified that this proof of landing of goods in relevant Focus Market is given based on information available in the Goods Carrier’s backup database and he has issued this document accordingly.

FOCUS PRODUCT SCHEME (FPS)

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

3.9.1 An application for exports made from 27.8.2009 onwards shall be filed, with RA concerned in ANF3C along with documents prescribed therein.

Eligibility of Focus Product (as in Appendix 37D) shall be determined from date of export as per Para 9.12 of HBP v1.

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

3.10 Procedure for Status Holders Incentive Scrip

3.10.1 Policy pertaining to Status Holders Incentive Scrip is given in

Para 3.16 of Chapter 3 of FTP.

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

3.10.3 The last date of filing the application shall be 31st March 2011/2012/2013 for SHIS scheme for exports made during 2009- 10/2010-11/2011-12 respectively.

Further, in view of fourth subpara of Para 5.1A of HBPv1: a) Para 9.3 of HBPv1 shall not be applicable for SHIS Scheme in cases where the SHIS application (say for exports made during 2009-10) has been filed after the prescribed date (i.e. after 31st March 2011) and Zero Duty EPCG Authorisation has been issued to the applicant by any RA during the year 2010-11 (from 1.4.2010 till 31.3.2011).

49 b) Similarly for SHIS Applications for exports made during 2010-11 & 2011-12 filed late (i.e. after the prescribed dates of 31st March 2012/2013 respectively), Para 9.3 shall not be applicable in cases where Zero Duty EPCG Authorisation has been issued to the applicant by any RA during the year 2011- 12 (from 1.4.2011 till 31.3.2012) or 2012-13 (from 1.4.2012 till 31.3.2013) as the case may be. c) In case SHIS Application is filed within the prescribed date (for exports made during 2009-10/2010-11/2011-12 as the case may be, including any supplementary claim under Para 9.4 of HBPv1) and where Zero Duty EPCG Authorisation has been issued to the applicant by any RA during the relevant year (i.e.

-12 as the case may be, including any supplementary claim under Para 9.4 of HBPv1) and where Zero Duty EPCG Authorisation has been issued to the applicant by any RA during the relevant year (i.e. during 2010-11/2011-12/2012-13 respectively, as the case may be), SHIS application shall be summarily rejected in view of fourth subpara of Para 5.1A of HBPv1.

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

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

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

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

3.10.6 SHIS scrip can be used for payment of applicable duties on import of Capital Goods (as defined in FTP) relating to the sectors specified in Para 3.16.4 of FTP. The Scrip / the goods so imported shall be with Actual User Condition.

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

3.10.7

Para 3.11.8 of this HBP shall not apply to this Scheme. Further,

Monitoring the realization of export proceeds shall be in terms of

Para 3.11.12 & 3.11.13 of this HBP.

3.10.8 The following additional sectors shall be eligible for Status Holders Incentive Scrip on exports made during 2010-11 and 2011-12:

Sl. No. Products / Product Groups ITC(HS) 1 Chemical & Allied Products (other than Bulk minerals, Granite/Stones, Processed minerals, Cement, Clinkers and asbestos)

(i) Rubber products,
4001 to 4010, 4014 to 4017 (ii) Paints, Varnishes & Allied Products
3208, 3209, 3210 (iii) Glass and glassware Chapter 70 (iv) Plywood and allied products Chapter 44 (v) Ceramics / refractories Chapter 69 (vi) Paper, Paper Boards & Paper products Chapter 48 (vii) Books, Publications & Printings Chapter 49 (viii) Animal By-products (Codes 35030030, , 05069099, 05079010, 05079020, 05079050, 23011010, 23011090, 96062910, and 96063010) Various codes

(ix) Ossein & Gelatine

Codes 05061039 and 35030020 (x) Graphite Products (Codes 3801, 85451100 and 85451900) & Explosives (Codes 3601, 3602 and 3603) Various codes

(xi) Misc. Products (Codes 3201, 32029010, 32030010, 3604, 3605, & 38021000) Various codes

Electronics Products

3 Sports Goods and Toys

Chapter 95 and Codes 420321, 650610 4 Engineering products for the three groups indicated below Chapter 72

(i) Iron and Steel

(ii) Pipes and tubes

(iii) Ferro Alloys

and Toys

Chapter 95 and Codes 420321, 650610 4 Engineering products for the three groups indicated below Chapter 72

(i) Iron and Steel

(ii) Pipes and tubes

(iii) Ferro Alloys

3.11 COMMON PROCEDURAL FEATURES FOR PROMOTIONAL SCHEMES, APPLICABLE TO ALL SCHEMES IN THIS CHAPTER, UNLESS SPECIFICALLY PROVIDED FOR: Jurisdictional RA / RA Concerned

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

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

However, it is clarified that in case the importer wants to use a specific permission/license for import of a restricted item as well as pay the duty using Duty Credit Scrip, then Duty Credit Scrip shall be allowed to be used only if the item is also importable under the respective paras of Duty Credit Scrip (reference FTP Paras 3.12.6, 3.13.4, 3.16.4, and 3.17.5).

Port of Registration 3.11.3 Duty Credit Scrip (including splits) shall be issued with a single port of registration which shall be the port of export. After issue of Duty Credit Scrip, but before registration with Customs, the Applicant can change the port of registration from RA concerned. Before registration, authorities shall verify genuineness of Duty Credit scrip, from RA concerned, until EDI system of message exchange is put in place.

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

Facility for Split Scrips

3.11.4

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

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

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

Import from private / public bonded warehouses

3.11.5 Entitlement can be used for import from private / public bonded warehouses subject to fulfillment of paragraph 2.28 of FTP and terms and conditions of DoR notification. Re-export of defective / unfit goods

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

Validity Period & Revalidation

3.11.7 Duty Credit scrip shall be valid for a period of 24 months. Revalidation of Duty Credit scrip shall not be permitted unless covered under paragraph 2.13.1 or paragraph 2.13.2 A of HBP v1.

Declaration of Intent on Free Shipping Bills

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

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

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

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

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

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

For exports made w.e.f 1st January 2011, the above Paragraph shall be replaced as under: ‘For products/markets listed in Appendix 37A, 37C, 37D that are eligible for benefit under Chapter 3 of FTP, exporters shall declare their intention to claim benefit by stating in all categories of Shipping Bills as under: ‘I/We, hereby, declare that I/We shall claim the benefits, as admissible, under Chapter 3 of FTP’.

This declaration shall also be required on export shipments under any of the Schemes of Chapter 4 or Chapter 5 or Chapter 6 of FTP as well as on Bills of Exports filed for Supply to SEZ. No claim under Chapter 3 shall be admissible without this declaration. However, Schemes names are not required to be mentioned in the declaration of intent.

Further, for products / markets notified during the year, the declaration of intent shall be necessary for exports under all categories of Shipping Bills only after a grace period of one month from the date of relevant Public Notice which notifies such product / market. For exports made prior to date of notification (i.e.

ategories of Shipping Bills only after a grace period of one month from the date of relevant Public Notice which notifies such product / market. For exports made prior to date of notification (i.e. the date of the relevant Public Notice which notified such product / market), such a declaration will not be required since export shipments have already taken place.’

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

Para 3.16.

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

For SFIS for current financial year, the last date shall be 12 months from the end of application frequency period.

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

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

hall be taken from the Shipping Bill (FOB value in free foreign exchange declared on the Shipping Bill and converted into Indian Rupees at the Monthly Customs Rate of Exchange on the date of LEO).

Date of export is determined as per Para 9.12 of HBPv1.

Multiple Applications can be filed and supplementary cut shall not be applicable. However, an application shall contain a maximum of upto 50 shipping bills.

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

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

of the Scrip(s) for the Duty Credit for which BRC or Documentary evidence (evidencing realisation of export proceeds as required under FTP or the Procedure laid thereunder) could not be produced. In case the Scrip holder surrenders the unutilized / partially unutilized Duty Credit Scrip, then unutilized / partially unutilized credit shall be deduced from the payable amount.

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

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

4.3 Where applicant is branch office or manufacturing unit(s) of an exporter, it shall furnish self certified copy of valid RCMC where name of branch office or manufacturing unit is given.
Advance Authorisation
4.4 Where SION have been published, an application in ANF 4A, along with documents prescribed therein, shall be submitted to RA concerned.

r manufacturing unit is given.
Advance Authorisation
4.4 Where SION have been published, an application in ANF 4A, along with documents prescribed therein, shall be submitted to RA concerned.

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

4.4.2 In case where norms have not been published, an application in ANF 4B, along with prescribed documents, shall be furnished to concerned Norms Committee (NC) at DGFT Headquarters for fixation of Norms. In such cases, original copy of application along with prescribed fee shall be filed with RA concerned and a self-attested copy of same shall be filed with NC.
Authorisation in such cases shall be issued by RA as per NC recommendation.

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

4.4.3 Applications, where Acetic Anhydride, Ephedrine and Pseudo- ephedrine is required as an input for import, shall be filed with RA concerned.
Copies of such applications shall also be simultaneously endorsed to the Drug Controller of India, Nirman Bhawan, New Delhi, Narcotics Commissioner, Central Bureau of Narcotics, Gwalior and respective Zonal Director of Narcotics Control Bureau, alongwith a declaration that applicant will maintain prescribed records and also submit prescribed returns.

Bureau of Narcotics, Gwalior and respective Zonal Director of Narcotics Control Bureau, alongwith a declaration that applicant will maintain prescribed records and also submit prescribed returns.

4.4.4 RA, while issuing Advance Authorisation for import of Acetic Anhydride, Ephedrine and Pseudo- ephedrine, shall endorse a condition that before effecting imports, NOC shall be obtained

4.4.5

from Narcotics Commissioner of India, Central Bureau of Narcotics, Gwalior and shall also endorse a copy of Authorisation to Drug Controller, Nirman Bhawan, New Delhi and concerned Zonal Director of Narcotics Control Bureau. Where import of meat and meat products of any kind including fresh, chilled and frozen meat, tissue or organs of poultry, pig, sheep, goat; egg & egg powder; milk & milk products; bovine, ovine and caprine embryos, ova or semen; and pet food products of animal origin has been sought as an input under Advance Authorisation, the RA, while issuing advance authorisation, shall endorse a condition that before effecting imports of any of these inputs, Sanitary Import Permit shall be obtained from the Department of Animal Husbandry, Dairying and Fisheries (DAHDF). RA shall also endorse a copy of authorisation to DAHDF, Krishi Bhawan, New Delhi.

Sanitary Import Permit shall be obtained from the Department of Animal Husbandry, Dairying and Fisheries (DAHDF). RA shall also endorse a copy of authorisation to DAHDF, Krishi Bhawan, New Delhi.

Advance Authorisation for applicants with multiple units 4.5 Transfer of any duty free material imported or procured against Advance Authorisation from one unit of company to another for manufacturing purpose shall be done with prior intimation to jurisdictional Excise Authorities with a clear understanding that no benefit of CENVAT shall be claimed on such transferred inputs. However, such transfers shall not be allowed to units located in areas covered by Central Excise Notification No. 39/2003 and 50/2003 (i.e. Himachal Pradesh / Uttaranchal). In case of non-excisable company / products, units should maintain a proper record. However to avail facility, all such units should be available in IEC certificate and follow rules and regulation of Central Excise for job work. Large Taxpayer Units (LTUs) having multiple units, may not follow above job work procedure, after fulfillment of EO. Duty Free material imported or procured against advance authorization can be taken from the port directly to the project site of the project authority as per provisions stated in ANF 4 A and DOR guidelines.
Advance Authorisation for Free of Cost and Paid Material

4.6

For policy in paragraph 4.1.8, a specific endorsement shall be made on exchange control copy of Advance Authorisation disallowing remittances for material being supplied free of cost.

4.6

For policy in paragraph 4.1.8, a specific endorsement shall be made on exchange control copy of Advance Authorisation disallowing remittances for material being supplied free of cost. All inputs imported shall be utilised in manufacturing of product except wastage.
Self Declared Authorisations where SION does not exist 4.7 RA may also issue Advance Authorisations, where SION are not fixed, based on self declaration and an undertaking by applicant for a final adjustment as per Adhoc / SION fixed by NC.

59 However, no Advance Authorisation shall be issued under this paragraph for import of following products:- i. All vegetable / edible oils classified under Chapter - 15 and all types of oilseeds classified under Chapter - 12 of ITC (HS) book;
ii. All types of cereals classified under Chapter – 10 of ITC (HS) book;
iii. All spices other than light black pepper (light berries) having a duty of more than 30%, classified under Chapter-9 and 12 of ITC (HS) book; iv. All types of fruits/vegetables having a duty of more than 30%, classified under Chapter 7 and 8 of ITC (HS) book;
v. Horn, hoof and any other organ of animal; vi. Honey; vii. Rough Marble Blocks/ Slabs; and
viii. Rough Granite.
For export of perfumes, perfumery compounds and various feed ingredients containing vitamins, no Authorisation shall be issued by RA and applicants may apply under Para 4.4.2 above.

ough Granite.
For export of perfumes, perfumery compounds and various feed ingredients containing vitamins, no Authorisation shall be issued by RA and applicants may apply under Para 4.4.2 above. Where export and/or import of biotechnology items are involved, Authorisation under this paragraph shall be issued by RA only on submission of a “No Objection Certificate” from Department of Biotechnology. Entitlement
4.7.1 CIF value of one or more such authorisations shall be maximum 500% of FOB and / or FOR value of preceding year’s exports and / or supplies in case of status holders and Rs. 5 crore or 500% of the FOB and / or FOR value of preceding year exports and / or supply, whichever is more, for others. However, in cases where NC has already ratified norms for same export and import products in respect of an authorization obtained under paragraph 4.7, such norms shall be valid for a period of one year, both with retrospectively as well as prospectively, reckoned from the date of ratification.
In such cases Authorisations shall be issued by RA concerned under "Adhoc Norms Fixed" category and application copies need not be forwarded to NC for fixation / ratification of norms. Where the application has already been forwarded before the ratification of Norms, the RA shall finalise the case as per the norms subsequently ratified by NC in a similar case.

Authorisation holder in such cases shall be entitled for further authorisation (s) as per norms ratified by NC without need for subsequent ratification by NC.

ratified by NC in a similar case.

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

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

4.7.2 Once norms are fixed by NC, value limits mentioned in above paragraph would not be applicable to advance authorisations issued under this paragraph. Such authorisations, subsequent to fixation of norms by NC, may be enhanced.
It is mandatory for industry to provide production data etc. as may be required by DGFT / EPC for fixation of SION. Otherwise, applicant shall not be allowed to take benefit of Advance Authorization scheme for taking repeat advance authorizations on self-declared basis.
Authorisation in
Excess of Entitlement 4.7.3 An applicant shall be entitled for authorisation in excess of entitlement mentioned in paragraph 4.7.1 subject to furnishing of 100% Bank Guarantee to Customs authority to cover exemption from customs duties. A specific endorsement to this effect shall be made on authorisation. Application 4.7.4 Original application with prescribed documents shall be submitted to concerned RA. RA shall forward a copy of application within 7 days from Authorisation issue date to NC for fixation of norms within prescribed time.

with prescribed documents shall be submitted to concerned RA. RA shall forward a copy of application within 7 days from Authorisation issue date to NC for fixation of norms within prescribed time. Undertaking 4.7.5 Applicant shall give an undertaking that he shall abide by norms fixed by NC and accordingly pay duty, together with interest, on unutilised inputs as per norms fixed by NC. However Authorisation holder has option to undertake additional EO in proportion to excess unutilized inputs. In case application is rejected by NC, authorization holder shall pay customs duty saved along with interest on imported inputs, as notified. However in such cases where the NC decides adhoc norms based on information available to it and the exporter represents against the decision of the NC, time limit for filing representation, if any, before the Norms Committee shall be four months from the date of communication of decision of the fixation of adhoc norms by NC .

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

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

4.7.6 In such cases, where norms are not finalised by NC within four months from Authorisation issue date, norms as applied for shall

ing is executed by Advance Authorisation holder, shall maintain a proper record in a master register indicating starting and closing dates of obligation period and other particulars to monitor EO.
Within two months from date of expiry of period of obligation, Authorisation holder shall submit requisite evidence in discharge of export obligation in accordance with paragraph 4.25 below.
However, in respect of shipments where six months period (one year in case of status certificate holder and others as per RBI guidelines) for realisation of foreign exchange has not become due, RA shall not take action for non submission of bank certificate of exports and realisation provided other document substantiating fulfillment of EO have been furnished.

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

ubmit relevant information / documents, RA shall take action by refusing further Authorisations, enforce condition of Authorisation and Undertaking and also initiate penal action as per law.

70 Advance Authorisation for Annual Requirement

4.24A
Exporters eligible for such Authorisations shall file an application in ANF 4A to RA concerned. All provisions as to Advance Authorisation given above would apply except the following:

(i) RA while issuing Authorisation shall mention technical characteristics quality and specifications in respect of following inputs:-

Alloy steel including stainless steel, copper alloy, synthetic rubber, bearings, solvents, perfumes/ essential oils/aromatics chemicals, surfactants, relevant fabrics and marble. (ii) Authorisation holder shall have flexibility to export any product falling under export product group using duty exempted material. (iii) Within eligible entitlement, an exporter may apply for one or more than one authorisations in a licensing year, subject to condition that against one port of registration only one authorisation can be issued for same product group. One time enhancement / reduction of the authorisation shall be available in terms of paragraph 4.21 above.
(iv) On completion of EO against one or more authorisations, all issued in same licensing year, entitlement of an exporter for that licensing year shall be deemed to be revived by an amount equivalent to EO completed against authorisation(s).

uthorisations, all issued in same licensing year, entitlement of an exporter for that licensing year shall be deemed to be revived by an amount equivalent to EO completed against authorisation(s).
(v) In respect of export product for which Standard Input Output Norms (SION) does not exist, the authorization holder shall submit an application in “Aayaat-Niryaat Form” along with prescribed documents to NC before making the shipment. The applicant shall also furnish Advance Authorisation for Annual Requirement No. and date along with the File No. from which the same was issued in the covering letter to the application.

Fulfillment Of Export Obligation

4.25 Authorisation holder shall furnish prescribed documents in ANF 4F in support of fulfillment of EO.
Discharge of export obligation against advance licences issued prior to 1.4.2002

4.25A Quantity Based Advance licences issued prior to 1.4.2002 shall be disposed off as per Public Notice No. 79 dated 2.1.2006, PN 151 dated 26.2.09, as amended from time to time.

o 1.4.2002

4.25A Quantity Based Advance licences issued prior to 1.4.2002 shall be disposed off as per Public Notice No. 79 dated 2.1.2006, PN 151 dated 26.2.09, as amended from time to time.

71 Redemption / No Bond Certificate 4.26 In case EO has been fulfilled, RA shall redeem the case. After redemption, RA shall forward a copy of redemption letter indicating shipping bill number(s), date(s), FOB value in Indian rupees as per shipping bill(s) and description of export product in respect of shipment which were taken into account for the purpose of fulfillment of EO to Customs authority at port of registration. Such details shall also be placed by the Zonal Offices in their website immediately after issuance of export obligation discharge/redemption letter/No Bond Certificate (in case of “No BG / LUT” facility) and by DGFT Hqr in DGFT website on monthly basis for customs authority to access it from website. Cancellation/ redemption of BG / LUT would be undertaken by Customs within 30 days of issue of Export Obligation Discharge Certificate (EODC) / bond waiver by RA.
Ordinarily, redemption of BG / LUT shall not preclude customs authority from conducting random checks and from taking action against Authorisation holder for any misrepresentation, mis- declaration and default detected subsequently.

shall not preclude customs authority from conducting random checks and from taking action against Authorisation holder for any misrepresentation, mis- declaration and default detected subsequently.
Further RA shall also take action against authorisation holder in case of non-submission of Appendix 23, duly filled in, as stipulated in Paragraph 4.30 below or for any misrepresentation, misdeclaration and default detected subsequently in details declared and furnished in Appendix 23. An endorsement to this effect shall be made by RA in the redemption certificate. Transitional Arrangement for Authorisations issued upto 26.08.2009
4.27 Advance Licences including Advance Licences for Annual Requirement issued upto 26.08.2009 shall be governed by provisions contained in Chapter-7 of HBP v1 (RE-2001), Chapter 4 of HBP v1 (2002-2007) as Notified on 31.3.2002 and Chapter 4 of HBP v1 (2004-2009) as notified on 31.8.2004 respectively as amended from time to time, excepting provisions relating to clubbing and extension in E.O. period which shall be governed by provisions of paragraphs 4.20 and 4.22.1 respectively above and any other provision, as notified by DGFT.
However, wherever Customs duty is to be paid on unutilised material, same shall be paid alongwith interest thereon as notified.
Regularisation of Bonafide Default.

vision, as notified by DGFT.
However, wherever Customs duty is to be paid on unutilised material, same shall be paid alongwith interest thereon as notified.
Regularisation of Bonafide Default. 4.28 Cases of bonafide default in fulfillment of EO may be regularised by RA as under:

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

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

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

(ii) If the EO is fulfilled in quantity but there is shortfall in value, no penalty shall be imposed if Authorisation holder has achieved minimum value addition prescribed.

e date of import.

(ii) If the EO is fulfilled in quantity but there is shortfall in value, no penalty shall be imposed if Authorisation holder has achieved minimum value addition prescribed. However, if value addition falls below the minimum value addition prescribed Authorisation holder shall be required to deposit an amount equal to 1% of shortfall in FOB value in Indian Rupee through TR in authorised branch of Central Bank of India as above or through EFT mode.
Value wise shortfall shall be calculated with reference to actual quantity of exports and FOB value of realisation with reference to prorata quantity of imports and CIF value. For example, if export performance is only 50% quantitywise but import has been for complete CIF value permitted, then value addition would be calculated on a prorata basis, i.e with reference to 50% of CIF value of imports. This would accordingly imply that where Authorisation holder is unable to export, no penalty on valuewise shortfall shall be imposed.

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

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

will also have an option to get the Authorisation cancelled and apply for drawback after obtaining permission from Customs authorities for conversion of shipping bills to Drawback Shipping Bills.

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

73 licensing year for all such Authorisations redeemed in preceding licensing year. In this verification process, in case it is found that Authorisation holder has consumed lesser quantity of inputs than imported, Authorisation holder shall be liable to pay customs duty on unutilized value of imported material, alongwith interest thereon as notified, or effect additional export within the EO period. However, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB. Time Period For Depositing Fines, Customs Duty, Etc. 4.29 Customs duty with interest to be recovered from Authorisation holder on account of regularisation or enforcement of BG / LUT, shall be deposited by Authorisation holder in relevant Head of Account of Customs Revenue i.e., "Major Head 0037 - Customs and minor head 001- Import Duties” in prescribed T.R. Challan within 30 days of demand raised by regional / customs authority and documentary evidence shall be produced to this effect to RA / customs authority immediately.

Duties” in prescribed T.R. Challan within 30 days of demand raised by regional / customs authority and documentary evidence shall be produced to this effect to RA / customs authority immediately. However, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB. On receipt of such documentary evidence from Authorisation holder, RA shall intimate details of recovery/ deposits made to Customs Authority at port of registration under intimation to Joint Secretary (Drawback), Department of Revenue, Ministry of Finance, Jeevan Deep Building, New Delhi.

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

Consideration of cases against lost EP copy of the Shipping Bills and / or Bank Realisation Certificate 4.30

4.30A Every Advance Authorisation holder shall maintain a true and proper account of consumption and utilisation of duty free imported / domestically procured goods against each authorisation as prescribed in Appendix-23. These records are required to be sent to the concerned RA at the beginning of each licensing year for all those authorisations, which have been redeemed in previous licencing year. However, these records in said format are required to be submitted for authorisations issued on or after 13-05-2005.

all those authorisations, which have been redeemed in previous licencing year. However, these records in said format are required to be submitted for authorisations issued on or after 13-05-2005. Such records should be preserved for a period of at least three years from date of redemption.
In case where Original EP copy of Shipping Bill / original BRC has been lost, request for EODC, "No BG / LUT condition" under Advance Authorisation / DFIA scheme or endorsement of transferability under DFIA scheme can be considered, subject to submission of following documents in lieu of those original documents: -

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

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

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

d) An indemnity bond by exporter to the effect that he would indemnify Government for financial loss, if any, on account of duty free import entitlement availed / allowed against lost Shipping Bills / BRC.

emnity bond by exporter to the effect that he would indemnify Government for financial loss, if any, on account of duty free import entitlement availed / allowed against lost Shipping Bills / BRC.

Customs Authority, before allowing redemption of BG / LUT or clearance after endorsement of “No BG / LUT condition” or endorsement of transferability, shall verify the genuineness of such shipping bill (s) and ensure that no double benefit against such shipping bill has been availed. This specific condition shall be endorsed by RA concerned on the EODC.

DUTY FREE IMPORT AUTHORISATION (DFIA) SCHEME Duty Free Import Authorisation (DFIA) Scheme 4.31 Policy relating to the Duty Free Import Authorisation (DFIA) Scheme is prescribed in Chapter 4 of FTP. Application 4.32 An application in ANF 4H along with documents therein, shall be submitted to RA concerned.

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

4.32.2 However in respect of following items, exporter shall be required to give declaration with regard to technical characteristics, quality and specification in shipping bill. RA while issuing DFIA shall mention technical characteristics, quality and specification in respect of such inputs: Alloy steel including Stainless Steel, Copper Alloy, Synthetic Rubber, Bearings, Solvent, Perfumes/ Essential Oil/ Aromatic

l characteristics, quality and specification in respect of such inputs: Alloy steel including Stainless Steel, Copper Alloy, Synthetic Rubber, Bearings, Solvent, Perfumes/ Essential Oil/ Aromatic

75 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. Facility for Split DFIA 4.32.3 Split Authorisations of DFIA subject to a minimum of CIF value of Rs. 10 lakhs each and multiples thereof may also be issued, on request at the time of seeking transferability. A fee of Rs. 1000/- each shall be paid for each split authorization. Split-up DFIAs shall be permitted with same Port of Registration as appearing on the original DFIA.

4.33 Provisions of paragraphs 4.6, 4.11, 4.12, 4.12.1, 4.18, 4.19, 4.21, 4.22, 4.23, 4.24, 4.26 and 4.28 of this Handbook shall also be applicable for DFIA Scheme.
DFIA for applicants with multiple units 4.34 Transfer of any duty free material imported or procured against actual user DFIA shall be governed by provisions of paragraph 4.5 above.
Re-export of goods imported under DFIA Scheme 4.35 Goods imported against transferable DFIA, which are found defective or unfit for use, may be re-exported, as per DoR guidelines.

4.5 above.
Re-export of goods imported under DFIA Scheme 4.35 Goods imported against transferable DFIA, which are found defective or unfit for use, may be re-exported, as per DoR guidelines. In such cases 95% of CIF value debited against DFIA for export of such goods, shall be generated by concerned Commissioner of Customs as an Authorisation, containing amount generated and the details of original DFIA. Based on the certificate, a fresh DFIA shall be issued by concerned RA. Fresh DFIA, so issued, shall have same port of registration and shall be valid for a period equivalent to balance period available on date of import of such defective/unfit goods. Fulfillment of Export Obligation and maintenance of proper accounts of imports 4.36

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

A along with request for bond waiver / redemption / discharge of export obligation/ transferability. Such records should be preserved for a period of at least three years from date of redemption.

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

DUTY ENTITLEMENT PASSBOOK (DEPB) SCHEME

Duty Entitlement Passbook (DEPB) Scheme

4.37 Policy relating to Duty Entitlement Passbook (DEPB) Scheme is given in Chapter-4 of FTP. Duty credit under the scheme shall be calculated by taking into account deemed import content of said export product as per SION. Value addition achieved by export of such product shall also be taken into account while determining the rate of duty credit under the scheme.

ed import content of said export product as per SION. 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 ANF 4C prescribes form regarding fixation of DEPB rates. All applications for fixation of DEPB rates shall be routed through concerned EPCs which shall verify the FOB value of exports as well as international price of inputs covered under SION. Provisional DEPB Rate 4.38A To encourage diversification and to promote export of new products, DEPB Committee would be empowered to notify provisional DEPB rates. However, such DEPB rates would be valid for a limited period of time during which exporter would furnish data on export and import for regular fixation of rates. Exports in anticipation of DEPB Rate 4.39 No exports shall be allowed under DEPB scheme unless DEPB rate of concerned export product is notified. Port of Registration 4.40 Exports/imports made from specified Sea Ports, Airports, ICD & LCSs given in paragraph 4.19 above and made to any Special Economic Zone (SEZ), notified by Central Government, are entitled to DEPB.

4.40.1 DEPB shall be issued with single port of registration, which will be the port from where exports have been effected.
Maintenance of Record 4.40.2 Each Custom House at ports shall maintain a separate record of details of exports made under DEPB.

, which will be the port from where exports have been effected.
Maintenance of Record 4.40.2 Each Custom House at ports shall maintain a separate record of details of exports made under DEPB.

77 Credit under DEPB and Present Market Value 4.41 In respect of products where rate of credit entitlement under DEPB Scheme comes to 10% or more, amount of credit against each such export product shall not exceed 50% of Present Market Value (PMV) of export product. During export, exporter shall declare on shipping bill that benefit under DEPB Scheme would not exceed 50% of PMV of export product.

However PMV declaration shall not be applicable for products for which value cap exists irrespective of DEPB rate of product.
Utilisation of DEPB credit
4.42 As notified in FTP.
Application for DEPB
4.43 An application for grant of credit under DEPB may be made to RA concerned in ANF 4G alongwith prescribed documents. Agency commission shall be allowed for DEPB entitlement upto 12.5% of FOB value only. FOB value in free foreign exchange shall be converted into Indian rupees as per exchange rate for exports, notified by Ministry of Finance, as applicable on the date of order of "Let Export" by Customs.

4.43A In respect of consignment exports wherein exporter has declared FOB value on a provisional basis, exporter shall be eligible for final assessment of such shipping bill based on actual FOB realised upon sale of such goods in freely convertible currency.

eclared FOB value on a provisional basis, exporter shall be eligible for final assessment of such shipping bill based on actual FOB realised upon sale of such goods in freely convertible currency.

4.43B An application for grant of credit for supplies from DTA to SEZ can be made by DTA unit or SEZ unit. DTA unit may claim benefits either from RA or Development Commissioner concerned. In case claims have been filed with RA, RA while allowing benefits to the DTA unit will simultaneously endorse a copy of communication to concerned Development Commissioner alongwith details of export documents . In case DTA supplier prefers claim with Development Commissioner, the Development Commissioner will verify Denied Entity List (DEL) status of supplier from DGFT website before allowing DEPB benefits. SEZ unit will file application with Development Commissioner concerned in ANF 4G along with prescribed documents.

4.44 DEPB shall be issued with transferable endorsement.
Monitoring of Realisation 4.45 RA shall monitor all such cases wherein the Scrip(s) has been issued without Bank Realisation Certificate(BRC) and ensure that the BRC is submitted within 12 months from the date of issuance of the Scrip. In case no RBI extension is produced, RA shall initiate action for recovery of the same. In such cases, DEPB holder (the original applicant) shall deposit in cash or through debit of the valid DEPB / adjustment of pending DEPB claim for an amount equivalent to the Duty Free Credit allowed.

ch cases, DEPB holder (the original applicant) shall deposit in cash or through debit of the valid DEPB / adjustment of pending DEPB claim for an amount equivalent to the Duty Free Credit allowed. If amount realized in Free Foreign Exchange is less, then payable amount would be reduced proportionately. However, if the DEPB holder

78 does not pay the amount within 60 days of the expiry of the 12 months time period from the date of issue of the Scrip, he shall be required to pay the said amount along with 15% interest per annum from the date of issuance of Scrip(s) for the Duty Credit for which BRC or Documentary evidence (evidencing realisation of export proceeds as required under FTP or the Procedure laid thereunder) could not be produced by the DEPB holder. In case he surrenders the unutilized / partially unutilized Duty Credit Scrip, then unutilized / partially unutilized Credit shall be deducted from the payable amount.

In case of Cash Payment, the same shall be deposited in the Head of Account of Customs as stated in paragraph 4.29 above. Time Period 4.46 Application for obtaining credit shall be filed within a period of twelve months from the date of exports or the date of up linking of EDI shipping bill details in the DGFT website, or within three months from the date of printing / release of shipping bill, whichever is later, in respect of shipments for which claim has been filed.

shipping bill details in the DGFT website, or within three months from the date of printing / release of shipping bill, whichever is later, in respect of shipments for which claim has been filed. However, in case the application is filed along with BRC, the time period for filing shall be within a period of twelve months from the date of exports or six months from the date of realisation of export proceeds or the date of up-linking of EDI shipping bill details in the DGFT website or within three months from the date of printing / release of shipping bill, whichever is later, in respect of shipments for which claim has been filed.

In case the FOB realisation in free foreign exchange is higher as per BRC than the FOB value in the shipping bill(s) on which original DEPB was issued, supplementary claim shall be filed within a period of six months from the date of realisation, in respect of shipments for which claim has been filed.

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

ping bills in any one application must relate to exports made from one Custom House only. There is no limit on number of shipping bills which can be filed through EDI mode in a single application.
Verification by Customs
4.49 In case of EDI shipping bills before 1.10.2005 and non-EDI shipping bills, RA shall ensure that while issuing DEPB, 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 DEPB. Before allowing imports against such DEPB, Customs shall verify that details of exports, as given on DEPB, are as per their records. However, in case of EDI shipping bills

79 issued on or after 1-10-2005 from EDI ports which are being transmitted electronically by Customs to DGFT, DEPBs issued shall be sent to Customs at port of registration through an electronic message exchange system and DEPB shall be registered at 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 original period of validity of DEPB unless covered under paragraph 2.13.1 and

paragraph 2.13.2 of HBP v1.

Re-export of goods imported under DEPB Scheme 4.51 Goods imported under DEPB scheme, which are found defective or unfit for use, may be re-exported, as per guidelines given in

paragraph 3.11.6 of HBP v1.

In case where EP copy of Shipping Bill has been lost, DEPB and other duty credit certificates, claim can be considered subject to submission of following documents:-
a) A duplicate / certified copy of Shipping Bill issued by Customs authority in lieu of original; Issuance of DEPB and other duty credit certificates against lost EP copy of the Shipping Bills 4.52 b) An application fee equivalent to 2% of the DEPB or other duty credit entitlement in respect of lost Shipping Bills. However, no fee shall be charged when Shipping Bill is lost by Government agencies and a documentary proof to this effect is submitted;

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

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

Customs authority, before allowing clearance, shall ensure that no DEPB benefit has been availed against same shipping bill.

4.52.1 Claim against 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. This is subject to the condition that the request for duplicate copy of Shipping Bill to Customs Authority was filed within the time period similar to that mentioned in paragraph 4.46 above.

cted. This is subject to the condition that the request for duplicate copy of Shipping Bill to Customs Authority was filed within the time period similar to that mentioned in paragraph 4.46 above. However, if a provisionally assessed DEPB shipping bill is lost, 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 Bank Certificate 4.53 In such cases where original Bank Realisation Certificate (BRC) has been lost, the DEPB claim can be considered subject to submission of following documents:

a) A duplicate copy of BRC issued by bank authority in lieu of original loss;

b) An application fee equivalent to 2% of the DEPB entitlement in respect of lost BRC;

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

d) An indemnity bond by exporter to the effect that he would indemnify Government for financial loss, if any, on account of DEPB issued against lost BRC.

Claim against lost BRC shall be preferred within a period of six months from date of realisation and application received thereafter will be rejected.

In such cases, where both documents have been lost, exporter shall follow procedure laid down in paragraph 4.52 and 4.53. Time period for such application shall be as per paragraph 4.52 and 4.53, whichever is later.

Late cut provision stated in paragraph 9.3 shall be applicable.

id down in paragraph 4.52 and 4.53. Time period for such application shall be as per paragraph 4.52 and 4.53, whichever is later.

Late cut provision stated in paragraph 9.3 shall be applicable.

GEMS AND JEWELLERY

4A Policy relating to Gem Replenishment Authorisation, and scheme for gold/ silver/platinum jewellery is given in paragraph 4A of FTP.
Replenishment Authorisation 4A.1 An application for REP Authorisation may be made in ANF 4I alongwith documents prescribed therein to RA concerned as in Appendix-1A.

4A.1.1 Application shall be filed within six months following the month during which the export proceeds are realised. For export proceeds realised during the month, consolidated application for entire month shall be filed.

4A.1.2 In case where payment is received in advance and exports take place subsequently, application for REP Authorisation shall be filed within six months following the month during which exports are made.

4A.1.3 For purpose of clarity, it is again reiterated that the month in which the export has been made in case of advance payment and the month in which export proceeds have been realised in part or full after making of exports, shall be excluded while calculating period of six months for filing of application for REP Authorisation. Wastage Norms
4A.2 Wastage or manufacturing loss on gold/silver/ platinum jewellery and articles thereof is as follows:

Sl.
No.

months for filing of application for REP Authorisation. Wastage Norms
4A.2 Wastage or manufacturing loss on gold/silver/ platinum jewellery and articles thereof is as follows:

Sl.
No. Item of exports Percentage of wastage by weight with reference to Gold/ Platinum/ Silver content in export item

Gold/ Platinum Silver a) Plain jewellery and articles and ornaments like Mangalsutra containing gold and black beads/ imitation stones, cubic zirconia diamonds, precious, semi- precious stones.
3.5% 4.5% b) Studded jewellery and articles thereof 7.0% 7.0% c) Mountings and findings manufactured (by non-mechanised process) indigeneously 3.5% 4.5% d) Any jewellery/articles manufactured by a fully mechanised process and unstudded. 1.25% 1.25%

82 e) Mountings, whether imported or indigenously procured/ manufactured, used in studded jewellery 2.5% 2.5% f) Gold/silver/platinum medallions and coins (excluding coins of nature of legal tender) 0.25% 0.25% g) Findings and mountings manufactured by mechanized process

1.25% 1.25% Value Addition 4A.2.1 Under scheme for export of jewellery, value addition shall be calculated as per paragraph 4A.6 of FTP. Minimum value addition shall be: S.No. Item of Export Minimum Value Addition a) Plain gold / platinum / silver jewellery and Articles and
ornaments like Mangalsutra containing gold and black beads / imitation stones, except in studded form of jewellery.
3% b) All types of Studded gold / platinum / silver Jewellery and articles thereof.

nts like Mangalsutra containing gold and black beads / imitation stones, except in studded form of jewellery.
3% b) All types of Studded gold / platinum / silver Jewellery and articles thereof. 5% c) Any jewellery / articles manufactured by fully mechanised process 1.5% d) Gold / silver / platinum medallions & coins (excluding coins of nature of legal tender) 1.5% e) Gold / silver / platinum findings / mountings manufactured by mechanised process 2.25%

4A.2.2 Entitlement of quantity of gold / silver / platinum against the export shall be quantity of gold / silver / platinum in item of export plus admissible wastage / manufacturing loss. Loss of Gem and Jewellery 4A.3 Consignments of gem and jewellery items exported out of country and lost in transit after exports, where foreign exchange against such exports has been realised or insurance claims settled, will also be eligible for REP Authorisation. Gem & Jewellery Replenishment Authorisations 4A.4 Gem REP Authorisations shall be valid for import of precious stones, semi-precious and synthetic stones and pearls. In addition, Authorisation shall also be valid for import of empty jewellery boxes upto 5% of value of Authorisation within its overall CIF value. Gem REP Authorisations issued against export of studded gold / silver / platinum jewellery articles, shall also be valid for import of cut and polished precious / semi-precious stones other than

Gem REP Authorisations issued against export of studded gold / silver / platinum jewellery articles, shall also be valid for import of cut and polished precious / semi-precious stones other than

83 emerald upto 10% of CIF value of Authorisation within its overall CIF value.

4A.4.1 Gem REP Authorisation are available as per scale given in Appendix-12B. Filing of Application 4A.4.2 (i) An application for Gem Rep Authorisation may be given to RA concerned as given in Appendix-1A in the form given in Appendix-22-F alongwith prescribed documents.

(ii) In case E.P Copy of Shipping Bill and Customs attested invoice is submitted to nominated agencies, exporter shall furnish a self certified photo copy of same along with a certificate from nominated agencies certifying carat / value of studdings in case of studded jewellery and excess value addition achieved in case of plain jewellery and articles.

(iii) Provision of paragraph 4A.1.1 to 4A.1.3 will also be applicable for Gem Rep Authorisations. Agency Commission 4A.5 Exporter availing scheme of gold / silver / platinum jewellery are allowed to pay agency commission. Value addition shall be calculated after deducting agency commission.

Agency Commission 4A.5 Exporter availing scheme of gold / silver / platinum jewellery are allowed to pay agency commission. Value addition shall be calculated after deducting agency commission.
Endorsement on shipping Bill and Invoice 4A.6 During export of jewellery, shipping bill and invoice presented to customs authorities shall contain description of item, its purity, weight of gold/ silver/ platinum content, wastage claimed thereon, total weight of gold/ silver/ platinum content plus wastage claimed and its equivalent quantity in terms of 0.995/0.999 fineness for gold/ silver and in terms of 0.9999 fineness for platinum and its value, fob value of exports and value addition achieved. If purity of gold/silver/platinum used is same in respect of all or some of items made out from each of these metals for export, exporter may give total weight of gold/silver/platinum and other details of such similar items which are of same purity. In case of studded items, shipping bill shall also contain description, weight and value of precious/ semi-precious stones/diamonds/ pearls used in manufacture, and weight / value of any other precious metal used for alloying gold/silver. Conditions of Exports 4A.7 Exports shall be allowed by customs authorities provided endorsement made on shipping bill and invoice are correct and value addition achieved is not below minimum prescribed in FTP.

xports 4A.7 Exports shall be allowed by customs authorities provided endorsement made on shipping bill and invoice are correct and value addition achieved is not below minimum prescribed in FTP. Proof of Exports 4A.8 Exporter has to furnish the proof of exports, wherever required for export of gold / silver / platinum jewellery and articles thereof, by furnishing following documents:

(a) E.P copy of the shipping bill;

(b) Customs attested invoice;

In case of Personal carriage of jewellery by foreign buyer, following documents should be submitted by the exporter/seller as proof of exports for claiming export entitlements:

(a) Copy of shipping bill filed by Indian Seller;

(b) A copy of Currency Declaration Form filed by Foreign Buyer with Customs at the time of his arrival; and

In addition to this, Personal Carriage on Documents Against Acceptance (DA)/ Cash On Delivery (COD) basis is also allowed. Exporter will have to furnish following documents as proof of exports for claiming export entitlements:

(i) Copy of Shipping Bill filed by Indian Seller; and

(ii) Bank Certificate of Export and Realisation

Instructions issued by Customs Department in this regard should be followed mutatis mutandis.

of Shipping Bill filed by Indian Seller; and

(ii) Bank Certificate of Export and Realisation

Instructions issued by Customs Department in this regard should be followed mutatis mutandis. Conversion of Purity/Fineness 4A.9 For conversion of quantity of gold/ silver/platinum in terms of equivalent quantity in terms of fineness, following formula shall be used:

(i) Where items of gold has been exported in terms of carats, quantity of gold shall be multiplied by number of carat of gold exported, divided by 24 and thereafter again divided by 0.995/0.999/0.900 to arrive at equivalent quantity of gold in terms of fineness of 0.995/0.999/0.900 respectively; and

(ii) Wherever purity of item of export is expressed in terms of fineness, the quantity of gold/silver/platinum shall be multiplied by fineness of gold/silver/platinum exported and thereafter divided by 0.995 / 0.999 / 0.900 to arrive at equivalent quantity of gold/ silver/platinum in terms of 0.995 / 0.999 / 0.900 fineness respectively’. Release of Gold/Silver/ Platinum by Nominated Agencies 4A.10 Gold / silver / platinum shall be released to exporter of jewellery by nominated agencies/RBI authorised banks in multiples of 10 gms or in Ten Tola Bars in respect of golds.

ted Agencies 4A.10 Gold / silver / platinum shall be released to exporter of jewellery by nominated agencies/RBI authorised banks in multiples of 10 gms or in Ten Tola Bars in respect of golds.

85 However, silver shall be released to exporters in multiples of 1 Kg only. Any balance of gold/ silver/ platinum shall be available to exporter along with his future entitlement. Gold/ silver shall be released by the nominated agencies in terms of 0.995 fineness or more and platinum in terms of 0.900 fineness or more.
Terms of payment 4A.11 Export of gold / silver / platinum jewellery and articles thereof shall be against irrevocable letter of credit, payment of cash on delivery basis, Documents Against Acceptance (DA) basis or advance payment in foreign exchange. Port of Export 4A.12 Exports under schemes of gold /silver/platinum jewellery and articles thereof shall be allowed by airfreight and Foreign Post Office through the Customs House at Mumbai, Calcutta, Chennai, Delhi, Jaipur, Bangalore, Kochi, Coimbatore, Ahmedabad, Dabolin Airport, Goa, Hyderabad and Surat (Surat Hira Bourse). Export by courier shall also be allowed through Custom Houses at Mumbai, Calcutta, Chennai, Kochi, Coimbatore, Delhi, Jaipur, Bangalore, Ahmedabad and Hyderabad upto FOB value of Rs.20 lakhs per consignment. Export by Post 4A.13 Policy for export of gems and jewellery parcel by post is in paragraph 4A.16 of FTP.

aipur, Bangalore, Ahmedabad and Hyderabad upto FOB value of Rs.20 lakhs per consignment. Export by Post 4A.13 Policy for export of gems and jewellery parcel by post is in paragraph 4A.16 of FTP. At the time of exports, exporter shall submit following documents:

(i) Shipping bills or invoice presented at foreign Post Office;

(ii) Certificate from nominated agencies indicating price at which gold/ silver/platinum was booked or given on outright sale basis or loan basis;

(iii) Three copies of invoice. Import of Diamonds for Certification/ Grading & re-export 4A.14 This facility has been stated in Paragraph 4A.2 of FTP. At the time of imports of diamonds, the bill of entry shall have the detailed description, including the dimensions /specifications of the diamonds. At the time of re-export after grading/certification, the Bill of entry details should be endorsed in the shipping bill, so far as the dimensions and other specifications/ details of the diamonds are concerned, so as to establish a clear correlation between the imported diamonds and the diamonds being re-exported. In addition, a separate self certificate shall be attached by GIA (or any other approved agency) along with the shipping bill at the time of shipment, for matching of the imports to that of the exports as per the documents and GIA (or any other approved agency) certificate.

GIA (or any other agency approved in this regard) shall obtain GR waiver as per the procedure laid down by RBI, in all such cases.

documents and GIA (or any other approved agency) certificate.

GIA (or any other agency approved in this regard) shall obtain GR waiver as per the procedure laid down by RBI, in all such cases.

Re-export of the imported diamonds shall be completed within a maximum time period of 3 months from the date of import(s). At the time of import, the agency shall give an undertaking to the customs to this effect. GIA (or any other agency approved in this regard) shall furnish a quarterly report to the customs authority at the port of import by 25th of the month, succeeding the end of the quarterly period, to ensure that the exports are effected within the stipulated time period. Export Against Supply By Foreign Buyer 4A.15 Before clearance of each consignment of import supplied by foreign buyer, nominated agency shall execute a bond with Customs, undertaking to export within stipulated period in contract, gold/silver/platinum jewellery or articles equivalent to entire import quantity of gold/silver/platinum, mountings and findings etc excluding admissible wastage.

stipulated period in contract, gold/silver/platinum jewellery or articles equivalent to entire import quantity of gold/silver/platinum, mountings and findings etc excluding admissible wastage.

In case of direct supply of gold/silver/platinum, alloys, findings and mountings of gold/silver/platinum and plain semi-finished gold/silver/platinum jewellery to status holder/ exporter, Status Holder/exporter shall furnish a Bank Guarantee/LUT, as per Customs Rules and regualtions to Customs equivalent to Customs Duty leviable on imported gold/ silver/ platinum, alloys, findings and mountings of gold/ silver/ platinum and plain semi-finished gold/ silver/ platinum jewellery etc.

BG /LUT, executed with Customs shall be valid for one year. In case of direct supply to Status Holder/exporter, exports shall be completed within 90 days. In case of non- fulfillment of EO / non-achievement of stipulated value addition, Customs Department shall proceed to recover custom duty alongwith interest which may include enforcement of BG /LUT. Besides importer will be liable to penal action under Customs Act.

4A.15.1 Nominated agency/Status Holder/exporter shall be liable to pay customs duty leviable on that quantity which is proved to have been not exported.

4A.15.2 Goods shall be cleared through Customs by nominated agency/ Status Holder/exporter. Even where export order is received by an Associate, goods shall be cleared through Customs by nominated agency only and not Associate.

through Customs by nominated agency/ Status Holder/exporter. Even where export order is received by an Associate, goods shall be cleared through Customs by nominated agency only and not Associate. Associate shall, in such cases, authorise nominated agency to act as its agent to file Bill of Entry and shipping bill.

4A.15.3 At time of export, shipping bill presented to Customs shall also contain the following:

(i) Name and address of associate / Status Holder / exporter;

(ii) An endorsement by nominated agency that export is made against an order received by concerned associate, its date of registration with nominated agency. In case of exports by Status Holder/exporter, a Self Declaration shall be provided to this effect;

(iii) Name of Customs House through which gold/ silver/platinum/plain semi-finished gold/ silver/ platinum jewellery was imported and corresponding Bill of Entry No. and date and date of import.

4A.15.4 Each shipping bill shall be valid for exports only through Customs House located at the place where office of nominated agency/Status Holder/ exporter concerned is situated. It shall be valid for shipment for a period of seven days including the date on which endorsement was made by nominated agency in case of exports through nominated agency. If exports cannot be made within this period, exporter shall file a fresh shipping bill.

ing the date on which endorsement was made by nominated agency in case of exports through nominated agency. If exports cannot be made within this period, exporter shall file a fresh shipping bill.

4A.15.5 At the time of export, exporter shall submit following documents:

(i) Shipping bill with two extra copies where exports are made from a Customs House other than Customs House through which corresponding import of gold/ silver/ platinum/plain semi-finished gold/silver/ platinum jewellery was effected. In other cases, shipping bill with an extra copy;

(ii) Three copies of invoice;

(iii) Certificate from nominated agency indicating quantity and value of items supplied by foreign buyer.

4A.15.6 Customs authorities shall return two copies of shipping bill and connected invoice duly attested. One copy shall be sent to person who presented documents and the other copy shall be sent by Customs to office of nominated agency/Status holder/ exporter.

4A.15.7 In case of exports through nominated agency, exporter shall submit proof of exports to nominated agency within 15 days of exports, who shall, after verifying documents, release admissible quantity of the gold/ silver/ platinum etc. to exporter.

4A.15.8 Exporter may also obtain, in advance, gold/ silver/ platinum etc. supplied by foreign buyer by furnishing a BG /LUT for

sible quantity of the gold/ silver/ platinum etc. to exporter.

4A.15.8 Exporter may also obtain, in advance, gold/ silver/ platinum etc. supplied by foreign buyer by furnishing a BG /LUT for

88 an amount equal to international price of such items plus customs duty payable thereon. BG /LUT shall be redeemed only when the exporter has furnished proof of exports to nominated agency and accounted for the use of items supplied in advance in export product.

4A.15.9 For redemption of bond/ BG /LUT executed with Customs, nominated agency/Status Holder/exporter shall furnish a statement indicating items, its quantity and value supplied by foreign buyer, corresponding Bill of Entry number and date, number of each of shipping bills against which corresponding exports was made.
Maintenance of Accounts 4A.16 Nominated agency shall maintain complete account, consignment-wise, of the gold, silver, platinum, mountings, findings/ plain semi-finished gold/silver/ platinum jewellery etc. imported for execution of each export order, exports effected and quantity of gold, silver, platinum mountings, findings etc. released against such exports. For direct exports, similar accounts shall also be maintained by Status Holder. Such accounts shall be maintained for a minimum period of three years from date of exports.

ed against such exports. For direct exports, similar accounts shall also be maintained by Status Holder. Such accounts shall be maintained for a minimum period of three years from date of exports.
Export Through Exhibitions / Export Promotion Tours / Export of Branded Jewellery 4A.17 Nominated agencies shall produce to Customs Authorities letter in original or its certified copy, containing Government’s approval for holding exhibition/export of branded jewellery. Any other person shall produce to Asst. Commissioner, customs letter in original or its certified copy containing GJEPC’s approval for holding exhibitions/ export promotion tour/export of branded jewellery.

In case of re-import, such items, on arrival, shall be verified alongwith export documents before clearance.

4A.18 (a) Exports under this scheme shall be subject to following conditions for following modes of export:

(i) Export of Gems and Jewellery for holding/participating in overseas exhibition.

Exports under this scheme shall be subject to the following conditions:

Items not sold abroad shall be re-imported within 60 days of close of exhibition. However in case exporter is participating in more than one exhibition within 45 days of close of first exhibition, then 60 days shall be counted from date of close of last exhibition. . In case of exhibition in USA, the time period shall be 90 days instead of 60 days mentioned above. In case of personal carriage of gems and jewellery

ted from date of close of last exhibition. . In case of exhibition in USA, the time period shall be 90 days instead of 60 days mentioned above. In case of personal carriage of gems and jewellery

89 for holding /participating in overseas exhibitions, value of such gems and jewellery shall not exceed US $ 5 million. Gold/ silver/ platinum content on items sold in such exhibitions may be imported as replenishment.

Exporter shall take replenishment from nominated agency within 120 days from the close of the exhibition gold /silver / platinum for replenishment content against items sold abroad in exhibition.

(ii) Personal Carriage of gems & jewellery or export through airfreight/post parcel route for Export Promotion Tours/photo shoots/fashion shows overseas.

Personal carriage/export through airfreight/post parcel route of gold/silver/ platinum jewellery, cut and polished diamonds, precious, semi- precious stones, beads and articles as samples upto US$ 1 Million for export promotion tours/photo shoots/fashion shows and temporary display/ sale abroad is also permitted with approval of Gem & Jewellery EPC subject to the condition that promoter would bring back jewellery / goods or repatriate sale proceeds within 45 days from date of departure through normal banking channel. In case of personal carriage for export promotion tours, exporter shall declare personal carriage of such samples to Customs while leaving country and obtain necessary endorsement on Export Certificate issued by Jewellery Appraiser of Customs.

n tours, exporter shall declare personal carriage of such samples to Customs while leaving country and obtain necessary endorsement on Export Certificate issued by Jewellery Appraiser of Customs. In such cases exporter shall book with nominated agency, within 120 days after export promotion tour or expiry of stipulated period of 45 days, whichever is earlier, gold/silver/platinum for replenishment content against items sold abroad.

(iii) Export of branded jewellery.

Export of branded jewellery is also permitted with approval of Gem & Jewellery EPC for display/sale in permitted shops set up abroad or in showroom of their distributors/ agents. Items not sold abroad within 365 days shall be re- imported. Exporter shall book with nominated agency within 120 days after the end of

90 stipulated period of 365 days, gold/silver/platinum for replenishment content against items sold abroad.

(b) Following documents shall be submitted for claiming such replenishment:

(i) Customs attested invoice;

(ii) Copy of the approval letter issued by Government/ GJEPC;

(iii) Certificate from nominated agency/ GJEPC as in Appendix-22F.

(c) In case of exhibitions organised by nominated agencies, gold/silver/ platinum shall be imported as replenishment by nominated agencies within 60 days from close of exhibition.

4A.19 Nominated agencies shall maintain a complete account of exports made, goods sold abroad, goods re-imported, and metals purchased abroad and imported into India.

from close of exhibition.

4A.19 Nominated agencies shall maintain a complete account of exports made, goods sold abroad, goods re-imported, and metals purchased abroad and imported into India. Such account shall be maintained for a minimum period of three years from date of close of exhibition.
Export Against Supply By Nominated Agencies 4A.20 Exporter may obtain gold/silver/ platinum on following basis:-

(i) Replenishment basis after completion of exports;

(ii) Outright purchase basis in advance;

(iii) Loan basis.
Replenishment Basis 4A.21 Exporter may apply to nominated agency for booking of precious metal gold/silver/platinum. Quantity of precious metal booked with nominated agency shall be equivalent to precious metal content in the export product and admissible wastage.

4A.21.1 Applicant shall at the time of booking deposit an earnest money for a minimum amount of 20% of notional price of precious metal, which shall be adjusted at actual sale.

4A.21.2 Exporter may also export jewellery on a notional rate based on certificate provided by Bank. Exporter must fix price within credit terms allowed to buyer and realise proceeds within the due date of the credit terms or 180 days, whichever is earlier. Exporter exporting on a notional basis under Replenishment Scheme must book the same quantity of gold with Nominated Agency on same rate that he may have booked with buyer.

whichever is earlier. Exporter exporting on a notional basis under Replenishment Scheme must book the same quantity of gold with Nominated Agency on same rate that he may have booked with buyer. Nominated agencies shall purchase precious metal on behalf of exporter at the rate so fixed and thereafter issue a purchase certificate bearing a serial number to exporter indicating quantity of gold/

91 silver/platinum and CIF value, in dollars including the Rupee equivalent. Price shall be actual price at which gold/silver/platinum is purchased by nominated agencies plus permitted service charges levied by nominated agencies shall be included with the price of gold/ silver/ platinum for value addition. Duplicate and triplicate copies of exporter’s application together with copies of purchase certificate for exporter shall be sent by nominated agencies to concerned Custom House as well as to the negotiating bank who will confirm realization at which gold has been purchased. Exporter exporting under notional rate will get replenishment only after proceeds are realised.

4A.21.3 Exports shall be effected within a period of 120 days from date of booking and drawal of precious metal shall be completed within a period of 150 days from date of booking or within 30 days from date of export whichever is later.

a period of 120 days from date of booking and drawal of precious metal shall be completed within a period of 150 days from date of booking or within 30 days from date of export whichever is later.
Outright Purchase Basis in Advance 4A.22 Exporter may obtain required quantity of precious metal in advance on outright purchase basis subject to furnishing of BG / LUT to nominated agencies for an amount as may be prescribed by nominated agency. On failure to effect exports within period prescribed, the nominated agencies shall enforce BG / LUT, as the case may be.

4A.22.1 Exports shall be effected within a maximum period of 90 days from date of outright purchase of precious metal.
Loan Basis 4A.23 Exporter may obtain required quantity of precious metal on loan basis subject to furnishing of BG / LUT, for customs duty to nominated agencies for an amount as may be prescribed by nominated agencies. On failure to effect exports within the period prescribed, the nominated agencies shall enforce the BG / LUT.

4A.23.1 Exporter has to pay interest on gold taken on loan basis at the rate as may be specified.

4A.23.2 Export has to be completed within a maximum period of 90 days from date of release of gold on loan basis. No extension for fulfillment of EO shall be allowed.

4A.23.3 Exporter shall be permitted to export jewellery on the basis of a notional rate certificate to be issued by nominated agency / GJEPC. This rate will be based on prevailing Gold/US$ rate and the US$/INR rate in notional rate certificate.

ellery on the basis of a notional rate certificate to be issued by nominated agency / GJEPC. This rate will be based on prevailing Gold/US$ rate and the US$/INR rate in notional rate certificate. Certificate issued by nominated agency/GJEPC should not be older than 7 working days of date of shipment.

Value addition will have to be achieved on rate as may be got fixed with buyer and Nominated Agency. Exporter shall have flexibility to fix the price and repay Gold Loan within 180 days from date of export. This price

92 shall be communicated to nominated agencies who will issue a certificate showing final confirmation of the rate to the bank negotiating documents, to ensure export proceeds are realized at this rate.

4A.24 Nominated agencies may accept payment in dollars towards cost of import of precious metal from EEFC account of exporter.

Exports against Advance Authorisation
4A.25 Procedure applicable to Advance Authorisations under Chapter-4 of HBP v1 shall generally apply to this scheme except norms for value addition, EO period and regularization of default. Value addition for Gems and Jewellery items shall be as per paragraph 4A.2.1 of this Handbook.

4A.25.1 EO will be required to be fulfilled within 120 days from date of import of each consignment against Authorisation. However EO period shall be 180 days from date of import of findings, mountings made of gold, platinum and silver and export of jewellery. No further extension in EO period will be allowed.

ation. However EO period shall be 180 days from date of import of findings, mountings made of gold, platinum and silver and export of jewellery. No further extension in EO period will be allowed. Advance Authorisation holder may also import gold as replenishment after completion of exports.

4A.26 Advance Authorisation holder may obtain gold /silver / platinum from nominated agencies in lieu of direct imports. In such a case, nominated agency shall make, both exchange control copy and customs purpose copy of Authorisation invalid for direct imports.

Regularistion of
Bonafide Default 4A.27 Cases of bonafide default in fulfillment of EO by an exporter who has obtained precious metals from nominated agencies may be regularised provided exporter has paid customs duty alongwith interest thereon as notified by Customs. However, for the customs duty component, the authorisation holder has the option to furnish valid duty credit scrips issued under Chapter 3 of FTP and DEPB. Further, in case of Advance Authorisation, the provisions as given in paragraph 4.28 above shall apply. This shall be without prejudice to any action that may be taken against exporter under FT(D&R) Act, Order or Rules issued thereunder.

Replenishment Authorisation for Import 4A.28 A replenishment authorization for duty free import of Consumables, Tools and other items namely, Tags and

t, Order or Rules issued thereunder.

Replenishment Authorisation for Import 4A.28 A replenishment authorization for duty free import of Consumables, Tools and other items namely, Tags and

93 of Consumables etc. labels, Security censor on card, Staple wire, Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) equal to 2% and for Cut and Polished Diamonds and Jewellery made out of Gold and Platinum equal to 1% of FOB value of exports of the preceding year, may be issued on production of Chartered Accountant Certificate indicating the export performance. However, in case of Rhodium finished Silver jewellery, entitlement will be 3% of FOB value of exports of such jewellery. This Authorisation shall be non-transferable and subject to actual user condition.

Application for import of consumables etc., as given above, may be made to the concerned RA in ANF 4I.

Personal Carriage of Gems & Jewellery Export Parcels 4A.29 Personal Carriage of gems & jewellery parcels by Foreign Bound Passengers from all EOU/SEZ units and all firms in DTA through Airports in Delhi, Mumbai, Kolkata, Chennai, Kochi, Coimbatore, Bangalore, Hyderabad, Jaipur is permitted. Procedure for Personal Carriage of exports shall be as prescribed by Customs. Export proceeds shall, however, be realized through normal banking channel.

For claiming Replenishment in case of Personal Carriage of Exports by Foreign Bound passenger, documents shall be same as mentioned under paragraph 4A.21.2 above.

ough normal banking channel.

For claiming Replenishment in case of Personal Carriage of Exports by Foreign Bound passenger, documents shall be same as mentioned under paragraph 4A.21.2 above. Authorised Courier Companies are also permitted to operate on the above lines.
Personal Carriage of Gems & Jewellery Import Parcels 4A.30 Personal carriage of gems & jewellery import parcels by an Indian importer/ Foreign National may be permitted into all EOUs/SEZ units and all firms in DTA through airports in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Jaipur. Procedure will be same as for import of goods by air- freight except that parcels shall be brought to Customs by Importer / Foreign National for examination and release. Clearance of imports under this scheme shall be as per normal customs clearance procedure. Duty free import of samples 4A.31 Duty free import of gems and jewellery samples upto Rs 3 lakhs or 0.25% of the average of last three years export turnover of gems and jewellery items, whichever is lower, shall be allowed in a financial year as per Customs notification.
Re-import of rejected jewellery 4A.32 An exporter of plain/ studded precious metal jewellery shall be allowed to re-import duty free jewellery rejected and returned by buyer upto 2% of FOB value of exports in preceding licencing year (based on CA certified copy of export of preceding year) with refund of any duty

ort duty free jewellery rejected and returned by buyer upto 2% of FOB value of exports in preceding licencing year (based on CA certified copy of export of preceding year) with refund of any duty

94 exemption/refund/replenishment benefit availed on inputs used as per customs rules and regulations. Diamond & Jewellery Dollar Accounts 4A.33 Policy for Diamond and Jewellery Dollar Accounts is given in paragraph 4A.17 of FTP. Detailed procedure for its operation will be notified separately. Export of Diamond, Gemstone & Jewellery on consignment basis 4A.34 Policy for export of diamond, gemstone and jewellery on consignment basis is given in paragraph 4A.20 of FTP.

Detailed procedure in this regard shall be governed as per the relevant Customs Rules & Regulations. Re-import of these items (either in complete or partial lot) exported on consignment basis shall be subject to condition that exporter follows prescribed provisions of relevant customs notification to establish that goods are the same which were exported.

ted on consignment basis shall be subject to condition that exporter follows prescribed provisions of relevant customs notification to establish that goods are the same which were exported.

95 CHAPTER 5

EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME

Policy 5.1 Policy relating to zero duty EPCG scheme and concessional 3% duty EPCG Scheme are given in Chapter 5 of FTP.

Exclusions under
Zero Duty EPCG Scheme

5.1A Zero duty EPCG Scheme under para 5.1 of FTP shall not be available for import of capital goods relating to export of products covered under following chapters/headings of ITC(HS) classification:

Chapters 1, 2, 4 to 24, 25 to 27, 31, 43, 44 (except plywood and allied products), 45, 47, 68, 71, 81 (metals in primary and intermediate forms only), 89, 93,97, 98.

ITC(HS) 4011 to 4013, ITC(HS) 7401 to 7406, 7501 to 7504, 7601 to 7603, 7801,7802, 7901 to 7903, 8001, 8002 and 8401. However, zero duty EPCG Scheme will be available for handicraft exports under Chapters 5, 68, 97.

Zero duty scheme shall also not be available for units who are currently availing any benefits under Technology Upgradation Fund Scheme (TUFS) administered by Ministry of Textiles, Government of India. Zero duty EPCG scheme shall also not be available to applicants, who avail in that year, the benefit of Status Holder Incentive Scheme under Paragraph 3.16 of FTP.

f Textiles, Government of India. Zero duty EPCG scheme shall also not be available to applicants, who avail in that year, the benefit of Status Holder Incentive Scheme under Paragraph 3.16 of FTP.

All other provisions pertaining to the concessional 3% EPCG scheme under this Chapter, to the extent they are not inconsistent with the above provisions of zero duty EPCG scheme, shall be applicable to the zero duty scheme also.

Application Form 5.2 An application for grant of an authorization may be made to RA concerned in ANF 5A along with documents prescribed therein.

EPCG Authorization for Annual Requirement

5.2A The Authorization for Annual Requirement will be issued subject to the following conditions in addition to other terms and conditions governing the EPCG scheme:-

(i) Authorizations shall be issued with a specific duty saved amount and corresponding export obligation. The applicant would be required to indicate export products proposed to be exported under the authorization.

(ii) The authorization holder shall also be required to submit a Nexus Certificate from an independent Chartered Engineer (CEC) in Appendix 32A, to the Customs

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