DGFT Regulatory Doc

Handbook of Procedures (Vol. I) 27th August 2009 - 31st March 2014 Government of India Ministry of Commerce and Industry Department of Commerce website: http://dgft.gov.in

TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY (PART-I, SECTION-1) GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY PUBLIC NOTICE No 1 / 2009-14 NEW DELHI, DATED THE 27th August, 2009 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 I) as contained in Annexure to this Public Notice and the Appendices to the Handbook of Procedures (Volume I). This shall come into force from 27th August, 2009. This issues in Public interest. (R.S. Gujral) Director General of Foreign Trade and Ex Officio Additional Secretary to the Government of India (Issued from File No: 01/94/180/Handbook/AM10/ PC-4)

CONTENTS CHAPTER SUBJECT Page GLOSSARY 1 1 INTRODUCTION 5 2 GENERAL PROVISIONS 7 REGARDING IMPORTS AND EXPORTS 3 PROMOTIONAL MEASURES 41 4 DUTY EXEMPTION / REMISSION SCHEMES 51 5 EXPORT PROMOTION CAPITAL GOODS SCHEME 91 6 EXPORT ORIENTED UNITS (EOUs), 101 ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) AND BIO-TECHNOLOGY PARKS (BTPs) 7 SPECIAL ECONOMIC ZONES 121 8 DEEMED EXPORTS 123 9 MISCELLANEOUS MATTERS 127

Us), 101 ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) AND BIO-TECHNOLOGY PARKS (BTPs) 7 SPECIAL ECONOMIC ZONES 121 8 DEEMED EXPORTS 123 9 MISCELLANEOUS MATTERS 127

1 GLOSSARY (ACRONYMS) 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 Bio Technology 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 Pass Book 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

ial 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

2 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 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 (No. 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 HBP v1 Hand Book of Procedures (Vol. 1) HBP v2 Hand Book 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 ITPO India Trade Promotion Organisation LoC Line of Credit LoI Letter of Intent LoP Letter of Permit LUT Legal Under Taking MAI Market Access Initiative

tem) Classification for Export & Import Items ITPO India Trade Promotion Organisation LoC Line of Credit LoI Letter of Intent LoP Letter of Permit LUT Legal Under Taking MAI Market Access Initiative

3 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 S/B Shipping Bill SEH 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 TRQ Tariff Rate Quota VA Value Addition VKGUY Vishesh Krishi and Gram Udyog Yojana WHOGMP World Health Organisation Good Manufacturing Practices

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rk TEE Towns of Export Excellence TH Trading House TRQ Tariff Rate Quota VA Value Addition VKGUY Vishesh Krishi and Gram Udyog Yojana WHOGMP World Health Organisation Good Manufacturing Practices

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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 31st December, 2010 or till a replacement scheme is announced, whichever is earlier. Objective 1.2 Objective is to implement provisions of FT (D&R) Act, Rules and Orders made 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 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.

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

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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 2.2 Unless otherwise specifically provided, import / export will be Imports / Exports 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 2.4 Every application, unless otherwise specified, shall be submitted of Regional Authorities to RA concerned, as indicated in Appendix-1 of HBP v1. (RA) Filing of Application 2.5 An incomplete or unauthorised application is liable to be rejected giving specific reason for rejection. In case of manual applications, applicant would furnish a soft copy of the application in MS word format. Profile of Importer/ 2.6 Each importer / exporter shall be required to file importer/ Exporter 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.

r / exporter shall be required to file importer/ Exporter 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 2.7 Applicant shall furnish a self addressed envelope of 40x15 cm Stamped Envelope with required postal stamp affixed, for all documents required to be sent by Speed Post. IEC No: 2.8 Following categories of importers or exporters are exempted Exempted Categories 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.

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

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

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

na (through Gunji, Namgaya Shipkila and Nathula ports), provided CIF value of a single consignment does not exceed Indian Rs.25, 000. In case of Nathula port, the applicable value ceiling will be Rs. 100,000.

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

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

S.No Code Number Categories of Importers / Exporters

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

/ 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

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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 exempted from Customs duty under Notification issued by Ministry of Finance for bonafide use by victims affected by natural calamity. 12. 0100000134 Persons importing / exporting permissible goods as notified from time to time, from / to China through Gunji, Namgaya Shipkila and Nathula ports, subject to value ceilings of single consignment as given in Para 2.8(iv) above. 13 0100000169 Non-commercial imports and exports by entities who have been authorized by Reserve Bank of India. Application for Grant 2.9 An application for grant of IEC Number shall be made by of IEC Number 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 documentsprescribed therein.

ase 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 documentsprescribed 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).

10 IEC Format and 2.9.1 RA concerned shall issue an IEC number in prescribed format Statements (Appendix-18B). A copy of such IEC number shall be endorsed to concerned banker (as per details given in ANF 2A). A consolidated statement (in Appendix 18 C) of IEC numbers issued by RA shall be sent to Exchange Control Department of RBI as given in Appendix-18D. Validity of IEC No. 2.9.2 An IEC number allotted to an applicant shall be valid for all its branches / divisions / units / factories. Duplicate Copy of 2.9.3 Where an IEC Number is lost or misplaced, issuing authority IEC Number may consider requests for grant of a duplicate copy of IEC number, on an affidavit. Surrender of 2.9.4 If an IEC holder does not wish to operate allotted IEC number, IEC Number he may surrender same by informing issuing authority.

of a duplicate copy of IEC number, on an affidavit. Surrender of 2.9.4 If an IEC holder does not wish to operate allotted IEC number, IEC Number he may surrender same by informing issuing authority. On receipt of such intimation, issuing authority shall immediately cancel it and electronically transmit it to DGFT and Customs authorities. Application for Import 2.10 An application for grant of an Authorisation for import or export and Export of Restricted of items mentioned as restricted in ITC (HS) may be made to Items RA as specified under relevant Chapters of this Handbook. Imports under Indo-US 2.11 Import of specified capital goods, raw materials and Memorandum of components, from United States of America (USA) is subject Understanding 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.

ated 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.

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A request for an import certificate shall be made in ANF 2C. Import certificate in Appendix-31 may be issued by ICIA directly to importer with a copy to (i) Ministry of External Affairs (MEA) (AMS Section), New Delhi, (ii) DoE, New Delhi; and (iii) DGFT. However, this import certificate will not be regarded as a substitute for an import authorisation in respect of items mentioned as restricted in ITC (HS) and an import authorisation will have to be obtained for such items. 2.11A In case of import of any freely importable item in India, if a foreign Government insists on certification of end user of the item, before permitting export of the same from their country, RA may issue such certificates as per Appendix 31A of HBPv1. The certificate shall be issued based on application made under ANF 2C-1 along with documents prescribed therein. Validity of 2.12 Validity of import / export Authorisation from date of issue Import Licence/Certificate/ shall be as follows, unless specified otherwise: Authorisation/Permissions/ CCPs/Export licence

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

(ii) a For Zero duty EPCG Authorisations 9 months (other than spares) (ii) b For 3% EPCG Authorisations 36 months (other than spares)

(iii)

ation for Gem & Jewellery as per Chapter- 4 of FTP)

(ii) a For Zero duty EPCG Authorisations 9 months (other than spares) (ii) b For 3% EPCG Authorisations 36 months (other than spares)

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

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

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

12 (vi) Export Licence / Authorisation 12 months (However, EFC may decide to issue Export Authorisation for a longer duration in case of R&D studies based on recommendation of technical authority) 2.12.1 Where an Authorisation expires during the month, such Authorisation shall be deemed to be valid until last day of concerned month. This proviso would be applicable even for a revalidated Authorisation.

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

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

2.12.4 Similarly, EOP shall be deemed to be valid until month end. Revalidation of Import / 2.13

hich 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 / 2.13
RA concerned may revalidate import Authorisation on merits, Export Licence / for six months from date of expiry of validity. However, Export Certificate / Authorisation / Licence may only be revalidated by RA concerned onon Permissions recommendation of DGFT for six months at a time and maximum upto 12 months from date of expiry of validity.

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

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

2.13.3 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

ding 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

13 submitted to RA concerned and self-attested copy of same shall be submitted to DGFT. Duplicate Copies of 2.14 Where an Authorisation is lost or misplaced, an application Export-Import Licence / for issue of a duplicate may be made along with an affidavit, as Certificate / Authorisation / given in Appendix-24, to issuing RA. Permissions / CCPs RA concerned may, on merits to be recorded, issue a duplicate after issuing an order for cancellation of original and informing customs authority where original was registered.

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

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

b. A copy of FIR reporting loss.

inst an application accompanied with following documents:

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

b. A copy of FIR reporting loss.

c. Original affidavit on notorised stamp paper.

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

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

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

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

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

n 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

14 Identity Cards may be countersigned by the concerned RA. However, application for identity card in Appendix 20B will require to be made by the applicant and all other parameters would need to be met. However, in case of limited companies, RA may approve allotment of more than three identity cards per company. In case of loss of an identity card, a duplicate card may be issued on the basis of an affidavit. For common directors / partners, of a group company or in any other similar cases, RA may issue multiple identity cards after recording reasons in writing. Interviews with 2.17 Officers may grant interview at their discretion to authorised authorised Officers representative of importer / exporter. Interviews / clarifications may also be sought through E-mails. Export of Items 2.18 Units other than small scale units are permitted to expand or Reserved for SSI Sector 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.

n Industrial licence under the Industries (Development and Regulation) Act, 1951, with export obligation as may be specified. Such licensee is required to furnish a LUT to RA and DGFT in this regard. DGFT / RA concerned shall monitor export obligation. Warehousing Facility 2.19 Public / Private Customs Bonded Warehouses may be set up in DTA as per Chapter-IX of Customs Act, 1962, to import items in terms of paragraph 2.28 of FTP. On receipt of goods, such warehouses shall keep these goods for one year without payment of applicable customs duties. Goods can be cleared against Bill of Entry for home consumption, on payment of applicable custom duty and on submission of Authorisation wherever required, after an order for clearance of such goods for home consumption is issued by competent customs authorities. In case of clearance against duty free categories / concessional duty categories, exemption / concession from duty shall be, allowed. In case of clearance against DEPB and other duty credit scrips customs duty on imports may be adjusted. Goods can be re-exported without payment of customs duty provided (i) a shipping bill or a bill of export is presented in respect of such goods; and (ii) order for export of such goods has been made by competent customs authorities.

ayment 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.

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Before clearance of goods through Customs, Authorisation Bank Guarantee / holder shall execute a BG/LUT with customs authorities. Legal Undertaking for In such cases, RA shall endorse the following condition on Advance Authorisation / the licence/ Authorisation: DFIA and EPCG Authorisation "BG / LUT as applicable, to be executed with concerned Customs Authorities.” In case of indigenous sourcing, Authorisation holder shall furnish BG / LUT to RA as per Customs Circular No.58/2004 dated 31.10.04, as amended from time to time. In case, the firm has already executed BG / LUT for the full value of the licence/ certificate / authorization / permission (covering the items indigenously procured) to the Customs and furnishes proof of the same to Regional Authority (RA), no BG / LUT shall be required to be executed with the RA. The RA concerned shall endorse on the authorization that the Customs Authority shall release / redeem BG / LUT only after receipt of NOC or EODC from the RA concerned. RA shall endorse a copy of the same along with a forwarding letter to the Customs Authority at the Port of registration for their information and record.

eceipt 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 2.20A At the time of filing application for scrip(s) under DEPB Bank Guarantee/ Scheme/freely transferable incentive Scheme under Chapter Legal Undertaking for 3 of FTP, without Bank Realisation Certificate (BRC), the DEPB/freely applicant shall execute BG/LUT (as per Customs Circular no. transferable schemes 58/2004) with the RA as per Appendix 25C or Appendix under Chapter 3 25D respectively. Corporate Guarantee 2.20.1 A status holder or a PSU may also submit Corporate Guarantee in lieu of Bank Guarantee/LUT in terms of the provisions of relevant Customs Circular in this regard. In case of a group company, if one company of a Group is a status holder, Corporate Guarantee may be given for another company by this company, which is not a status holder. Certificate of 2.21 Certificate of Origin (CoO) is an instrument to establish Origin (CoO) 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

s (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

16 Free Trade Agreement. These arrangements / agreements prescribe Rules of Origin which have to be met for exports to be eligible for tariff preference. Authorised agencies shall provide services relating to issue of CoO, including details regarding rules of origin, list of items covered by an agreement, extent of tariff preference, verification and certification of eligibility. Export Inspection Council (EIC) is agency authorised to print blank certificates. Authorised agencies may charge a fee, as approved by DoC, for services rendered. Generalised System (a) GSP is a non-contractual instrument by which of Preferences (GSP) industrialized (developed) countries unilaterally and based on non-reciprocity extend tariff concessions to developing countries. Following countries extend tariff preferences under their GSP Scheme: (i) United States 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.

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

17 SAARC Preferential (c) SAPTA was signed by seven SAARC members namely Trading Agreement (SAPTA) 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 (d) APTA is a preferential trading arrangement designed Trade Agreement (APTA) 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.

Agreement (APTA) 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. India-Sri Lanka (e) Free Trade Agreement (FTA) between India and Sri Free Trade Agreement (ISLFTA) 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 (f) A Preferential Trade Agreement between Transitional Preferential Trade Agreement 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 (g) India and Thailand have signed protocol to implement Framework Agreement Early Harvest Scheme under India- Thailand Free Trade for Free Trade Area 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.

eme would be available only to those products, which satisfy Rules of Origin Criteria, notified by Department of Revenue, Ministry of Finance, vide notification No.101/2004- Customs dated 31.08.2004. EIC would be sole agency to issue CoO under Early Harvest Scheme of Framework Agreement on India-Thailand Free Trade Agreement. Non Preferential 2.21.2 Government has also nominated certain agencies to issue Non Preferential CoO in accordance with Article II of International Convention Relating to Simplification of Customs formalities,

18 1923. These CoOs evidence origin of goods and do not bestow any right to preferential tariffs. List of notified agencies is provided in Appendix – 4C. In addition, agencies authorized to issue Preferential CoO as per Para 2.21.1 of HBP v1 are also authorized to issue Non-Preferential CoO. All exporters who are required to submit CoO (Non Preferential) would have to apply to any of agencies enlisted in Appendix–4C with following documents:

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

(b) Two copies of invoices.

(c) Packing list in duplicate for concerned invoice.

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

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

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

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

In case of tea, all exporters who are required to submit CoO (Non-Preferential) shall apply to Tea Board or any Inspection Agency authorized by Tea Board and enlisted in Appendix-4C of HBP v1 with documents listed above. Automatic Licence / 2.22 Status holders shall be issued Authorisation automatically within Certificate / stipulated time period. Deficiency, if any, informed through Authorisation / covering letter, shall be required to be rectified by status holders Permission within 10 days from date of communication of deficiency. Submission of 2.23 Wherever original documents have been submitted to a certified copies different RA / nominated agencies or to a different division of of documents 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.

ports 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.

19 Payment through 2.25.1 Payment through ECGC cover would count for benefits under ECGC cover FTP. Payment through 2.25.2 Amount of Insurance Cover for transit loss by General General /Private Insurance Insurance and Private Approved Insurance Companies in India Companies would be treated as payment realized for exports under various export promotion schemes. Irrevocable 2.25.3 In case where applicant applies for duty credit scrip / DEPB / Letter of Credit DFIA / discharge of EO against confirmed irrevocable letter of credit (or bill of exchange which is unconditionally Avalised / Co-Accepted / Guaranteed by a bank) and this is confirmed and certified by exporter’s bank in relevant Bank Certificate of Export and Realization, payment of export proceeds shall be deemed to be realized. For Status Holders, irrevocable letter of credit would suffice. RBI write-off 2.25.4 Realization of export proceeds shall not be insisted under on export proceeds any of the Export Promotion Schemes under this Foreign Trade realization 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.

ement of realization of export proceeds on merits and the exporter produces a certificate from the concerned Foreign Mission of India about the fact of non-recovery of export proceeds from the buyer. However, this would not be applicable in self-write off cases. Export by post 2.26 In case of export by post, exporter shall submit following documents in lieu of documents prescribed for export by sea / air:

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

Relevant postal receipt

Invoice duly attested by Customs authorities. Import/ Export 2.26.1 Imports / Exports through a registered courier service is through Courier permitted as per Notification issued by DoR. However, Service importability / exportability of such items shall be regulated in accordance with FTP. Direct negotiation 2.26.2 In cases where exporter directly negotiates document (not of export documents 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),

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),

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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 2.27 No Authorisation shall be required for Import of bonafide of Samples 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 2.28 Import under lease financing shall be available under EPCG Lease Financing Scheme, EOU / SEZ scheme.

technical samples of freely exportable item shall be allowed without any limit. Import under 2.28 Import under lease financing shall be available under EPCG Lease Financing Scheme, EOU / SEZ scheme. Domestic supplier of capital goods to eligible categories of deemed exports shall be eligible for benefits of deemed exports as in paragraph 8.3 of FTP, even in cases where supplies are under lease financing. Exhibits Required 2.29 Import / export of exhibits, including construction and decorative for National and materials required for the temporary stands of foreign / Indian International exhibitors at exhibitions, fair or similar show or display for a Exhibitions or Fairs period of six months on re-export / re-import basis, shall be and Demonstration allowed without an Authorisation on submission of a certificate from an officer of a rank not below that of an Under Secretary / Deputy DGFT in DoC / DGFT or an officer of Indian Trade Promotion Organization (ITPO) duly authorised by its Chairman in this behalf, to effect that such exhibition, fair or similar show or display.

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

(ii) is being held in public interest.

Extension beyond six months for re-export / re-import will be considered by Customs authorities on merits. Consumables such as paints, printed material, pamphlets, literature etc. pertaining to exhibits need not be re-exported / re-imported. Import Policy 2.30 Policy relating to general provisions regarding import of capital goods, raw materials, intermediates, components,

c. 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,

21 consumables, spares, parts, accessories, instruments and other goods is given in Chapter 2 of FTP. General Procedure 2.31 Wherever an import Authorisation, including CCP, is required for Licensing of under FTP, procedure contained in this chapter shall be Restricted Goods 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 : S.No. ITC code Item description 1 720410 00 waste and scrap of cast iron 2. 72042190 Other 3. 72042920 Of High speed steel 4. 72042990 Other 5. 72043000 Waste and scrap of tinned iron or steel 6. 72044100 Turnings, shavings, chips, milling waste, saw dust, fillings, trimmings and stampings, whether or not in bundles 7. 72044900 Other 8. 72045000 Remelting scrap ingots 9. 74040010 Copper scrap 10. 74040022 Brass scrap 11. 75030010 Nickel scrap 12. 76020010 Aluminium scrap 13. 79020010 Zinc scrap 14. 80020010 Tin scrap 15. 81042010 Magnesium scrap

ting scrap ingots 9. 74040010 Copper scrap 10. 74040022 Brass scrap 11. 75030010 Nickel scrap 12. 76020010 Aluminium scrap 13. 79020010 Zinc scrap 14. 80020010 Tin scrap 15. 81042010 Magnesium scrap

22 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 does not contain radio active contaminated material in any form; and II) Copy of the contract between the importer and the exporter stipulating that the consignment does not contain any radio active contaminated material in any form. Import from Hodaideh, Yemen and Bandar Abbas, Iran will be in shredded form only. Unshredded compressed and loose form: Import of metallic waste, scrap listed in para 2.32.2 above in unshredded compressed and loose form shall be subject to following conditions:- a. Importer shall furnish the following documents to the Customs at the time of clearance of goods: I) Pre-shipment inspection certificate as per the format in Annexure-I to Appendix 5 from any Inspection & Certification agencies given in Appendix-5 to the effect that: i) The consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radio active contaminated or any other explosive

ication agencies given in Appendix-5 to the effect that: i) 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. 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.

23 b Import of scrap would take place only through following designated ports and no exceptions would be allowed even in case of EOUs, SEZs:- “1.Chennai, 2.Cochin, 3.Ennore, 4.JNPT, 5.Kandla, 6.Mormugao, 7.Mumbai, 8.New Mangalore, 9.Paradip, 10.Tuticorin, 11.Vishakhapatnam, 12. ICD Loni, Ghaziabad, 13.Pipava, 14.Mundra, 15.Kolkata, 16.ICD Ludhiana, 17.ICD Dadri (Greater Noida), 18.ICD Nagpur, 19.ICD Jodhpur, 20.ICD Jaipur, 21.ICD Udaipur, 22.CFS Mulund, 23.ICD Kanpur, 24.ICD Ahmedabad, 25.ICD Pitampur and 26.ICD Malanpur”. 2.32.2.A In case any agency wishes to be enlisted under Appendix-5, they may furnish an application to the office of Director General of Foreign Trade in the format in Appendix-5A, which will be considered by an Inter-Ministerial Committee 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

in Appendix-5A, which will be considered by an Inter-Ministerial Committee 2.32.3 However, import of other kinds of metallic waste and scrap will be allowed in terms of conditions of ITC (HS). 2.32.4 Import policy for seconds and defective, rags, PET bottles / waste, and ships is given in ITC (HS). Import of 2.33 Import of second hand capital goods including refurbished / Second Hand reconditioned spares, except those of personal computers/ Capital Goods laptops, shall be allowed freely, subject to conditions for following categories: Import of second hand computers including personal computers/ laptops and refurbished/reconditioned spares thereof is restricted. Import of refurbished / reconditioned spares of capital goods, other than those of personal computers/laptops will be allowed on production of a Chartered Engineer certificate that such spares have atleast 80% residual life of original spare.

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

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

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

y as donations by following category of donees:

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

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

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(iii) Registered Charitable Hospital,

(iv) Public Library,

(v) Public funded Research and Development Establishment,

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

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

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

Imports under this sub Para would be subject to the condition that goods shall not be used for any commercial purpose, is non transferable and complies with all terms and conditions of relevant Customs Rules and Regulations. 2.33A Customs or any other Central or State Government authority may avail of services of Inspection and Certification Agencies in Appendix 5 of the HBP v1, for certifying residual life as well as valuation / purchase price of capital good. Import of 2.34 Import of following types of ammunition are allowed against Ammunition by an Authorisation by licensed arms dealers subject to conditions Licensed Arms Dealers 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

ges of .25, .30 Mauser, .450 and .45 bores;

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

An import Authorisation shall be issued at 5% of value of annual average sales turnover of ammunition (whether indigenous or imported) during preceding three licensing years subject to a minimum of Rs. 2000. An application for grant of an Authorisation for items listed above may be made to RA in ANF 2B along with documents prescribed therein.

25 Restricted Items 2.35 Items mentioned as restricted for imports in ITC (HS) required Required By Hotels, by hotels, restaurants, travel agents and tour operators may Restaurants, Travel be allowed against an Authorisation, based on recommendation Agents, Tour Operators of Director General, Tourism, Government of India. and other Specified Categories 2.35.1 Hotels, including tourist hotels, recognised by Director General of Tourism, Government of India or a State Government shall be entitled to import Authorisation upto a value of 25% of foreign exchange earned by them from foreign tourists during preceding licensing year, for import of essential goods related to hotel and tourism industry.

2.35.2 Travel agents, tour operators, restaurants, and tourist transport

rom foreign tourists during preceding licensing year, for import of essential goods related to hotel and tourism industry.

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

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

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

2.35.5 An application for grant of an Authorisation under paragraphs 2.35.1 and 2.35.2 may be made in ANF 2B to DGFT through Director of Tourism, Government of India who will forward application to RA concerned along with their recommendations. Import of Other 2.36 ITC (HS) contains list of restricted items.

DGFT through Director of Tourism, Government of India who will forward application to RA concerned along with their recommendations. Import of Other 2.36 ITC (HS) contains list of restricted items. An application for Restricted Items 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.

26 EXIM Facilitation 2.37 Restricted item Authorisation may be granted by DGFT or Committee any other RA authorised by him in this behalf. DGFT / RA may take assistance and advice of a Facilitation Committee. The Assistance of technical authorities may also be taken by seeking their comments in writing. Facilitation Committee will consist of representatives of Technical Authorities and Departments / Ministries concerned. 2.37A Import authorizations for a restricted item if so directed by the competent authority, shall be issued for import through one of the sea ports or air ports or ICDs or LCS, as per the option indicated, in writing, by the applicant.

ricted 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. Authorization holder shall register the same 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 2.38 In terms of provisions contained in paragraph 2.19 of FTP, an or Other Goods 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. 2.39 Import of goods under Government to Government agreements to Govt. Agreements may be allowed without an Authorisation or CCP on production of necessary evidence to satisfaction of Customs authorities Import of Cheque 2.40 Indian branches of foreign banks, insurance companies and Books / Ticket Forms etc. travel agencies may import chequebooks, bank draft forms and travellers cheque forms without a CCP.

of Cheque 2.40 Indian branches of foreign banks, insurance companies and Books / Ticket Forms etc. 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 2.41 Import Authorisation for reconditioned / second hand aircraft Reconditioned/ Second Hand spares is not needed on recommendation of Director General Aircraft Spares of Civil Aviation, Government of India (DGCA). Import of 2.42 Goods or parts thereof on being imported and found defective Replacement Goods or otherwise unfit for use or which have been damaged after import, may be exported without an Authorisation, and goods

27 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;

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 2.43 Freely importable goods can be transferred by sale or Imported Goods otherwise by importer freely.

nt of Authorisation for replacement of goods for which an application may be made. Transfer of 2.43 Freely importable goods can be transferred by sale or Imported Goods otherwise by importer freely. Transfer of imported goods, which are subject to Actual User condition and have become surplus to needs of Actual User, shall be made only with prior permission of RA concerned. Following information alongwith supporting documents shall be furnished with request for grant of permission for transfer, to RA concerned:

(i) Reasons for transfer of imported material;

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

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

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

28

(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.

t Actual User condition on date of transfer.

2.43.2 Prior permission of RA shall also not be required for transfer or disposal of imported goods after a period of two years from the date of import. However, transfer of imported firearms by the importer / Authorisation holder shall be permitted only after 10 years of import with approval of DGFT. “Renowned Shooters” for 3 consecutive years are allowed to sell their imported weapons after three years from date of import of the respective weapon. Other “Renowned Shooters” are allowed to sell their weapons after 5 years from the date of import. The sale shall be subject to approval from DGFT. Sale of Exhibits 2.44 (i) Sale of exhibits of restricted items, mentioned in ITC (HS), imported for an international exhibition / fair organized / approved / sponsored by ITPO may also be made, without an Authorisation within bond period allowed for re-export, on payment of applicable customs duties, subject to a ceiling limit of Rs.5 lakhs (CIF) for such exhibits for each exhibitor. However, sale of exhibits of items, which were freely imported shall be made, without an Authorisation, within bond period allowed for re-export on payment of applicable customs duties.

(ii) If goods brought for exhibition are not re-exported or sold within bond period due to circumstances beyond control of importer, customs authorities may allow extension of bond period on merits. Import of Overseas 2.45 On winding up of overseas offices, set up with approval of Office Equipment RBI, used office equipment and other items may be imported

llow extension of bond period on merits. Import of Overseas 2.45 On winding up of overseas offices, set up with approval of Office Equipment 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.

29 Restricted items 2.47 All restricted items and items permitted to be imported by for R&D 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 2.49 An application for grant of Export Authorisation in respect of Grant of Export Licence/ items mentioned in Schedule 2 of ITC (HS) may be made in Certificate / Permission ANF 2D (2E for SCOMET items) to DGFT along with documents prescribed therein.

in respect of Grant of Export Licence/ items mentioned in Schedule 2 of ITC (HS) may be made in Certificate / Permission 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. 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;

t 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;

30 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. For certain items in Category 0, formal assurances from recipient State will include non-use in any nuclear explosive device.

guidelines are notified by that Department under Atomic Energy Act, 1962. For certain items in Category 0, formal assurances from recipient State will include non-use in any nuclear explosive device. Licences for export of certain items in Category 0 will not be granted unless transfer is additionally under adequate physical protection and is covered by appropriate International Atomic Energy Agency (IAEA) safeguards, or any other mutually agreed controls on transferred items. IV. Additional end-use conditions may be stipulated in licences for export of items or technology that bear possibility of diversion to or use in development or manufacture of, or use as, systems capable of delivery of weapons of mass destruction. V. Applications for transfer of “Technology” for any item on the List will be considered as an application for export of item itself. VI. Licences for export of items in this List (other than those under Category 0, 1 and 2) solely for purposes of display or exhibition shall not require any end-use or

on 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

31 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. 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.

tion abroad. Such sale shall not take place without a valid licence. Note 3: Export of items in Category 2 of this list may also be controlled by other applicable guidelines issued from time-to-time. Exporters of items in this category are advised to seek guidance from DGFT. Note 4: Exporters are entitled to apply for a ‘destination licence’ for countries and / or groupings of countries for export to which only re-transfer conditions need be imposed. Note 5: Exporters are entitled to request that only such conditions need be imposed as are subject of government-to-government instruments of accord over export of items on SCOMET List. Note 6: ‘Technology’ (see also entry ‘Technology’ in glossary in Appendix-3 to Schedule 2 of ITC (HS)): Approval of export of an item on the SCOMET List also authorizes the export to same end-user of minimum ‘technology’ required for installation, operation, maintenance and repair of the item.

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

RAs may also issue, on application, Free Sale and Commerce Certificate for export of items not covered

areness 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

32 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. Export of Items 2.50 An application for export of items mentioned in ITC (HS) under under STR regime may be made to DGFT. State Trading Regime (STR) Exports of 2.51 An application for export of samples or exhibits, which are Samples / Exhibits 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. Gifts / Spares / 2.53 For export of gifts, indigenous / imported warranty spares and Replacement Goods 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 2.54

y spares and Replacement Goods 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 2.54 All exports made in non physical form by using communication Returns in respect links including high speed data communication links, internet, of Exports in telephone line or any other channel which do not involve non Physical form 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 2.55 Duty free import of goods (as specified in list 28 of Customs R&D Equipment for notification No.21/2002 dated 1.3.2002, as amended from Pharmaceuticals and time to time) upto 25% of FOB value of exports during Bio-technology Sector preceding licensing year, shall be allowed.

or notification No.21/2002 dated 1.3.2002, as amended from Pharmaceuticals and time to time) upto 25% of FOB value of exports during Bio-technology Sector preceding licensing year, shall be allowed.

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

2.55.1 Duty free imports of goods as specified in list 28A of Customs notification No. 21/2002 dated 1.3.2002, upto 1% of FOB value of exports made during preceding licensing year, shall be allowed to agro chemicals sector unit having export turnover of Rs. 20 crore or above during preceding licensing year. The eligible unit shall apply in form given in Appendix-15B to RA concerned duly countersigned by Chartered Accountant. In respect of duty free import of R&D equipment, units not registered with Central excise shall be allowed to give Installation Certificate issued by an independent Chartered Engineer. Conversion of E.P. 2.56 If Customs Authorities, after recording reasons in writing, copy of shipping bill permit conversion of an E.P.

llation Certificate issued by an independent Chartered Engineer. Conversion of E.P. 2.56 If Customs Authorities, after recording reasons in writing, copy of shipping bill permit conversion of an E.P. copy of any scheme-shipping from one Scheme bill on which benefit of that scheme has not been availed, To Another exporter would be entitled to benefit under scheme in which shipment is subsequently converted. Offsetting of 2.57 Subject to specific approval of RBI, any payables, or equity Export Proceeds 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.

ding 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.

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2.58.2 List of such agencies authorised to grant quality certification is given in Appendix-6. For ISO 9000 (Series) and for ISO 14000 (Series), the Agencies accredited with National Accreditation Board for Certification Bodies (NABCB) under Quality Council of India shall be deemed to be authorized under this Policy. List of such accredited agencies is available on the web site www.qcin.org and also provided under Appendix 6. Any agency desirous of enlistment in Appendix –6 may submit their application as per Annexure I to Appendix 6 to concerned RA. Procedure for import 2.59 Attention is invited to Government of India, Ministry of Finance under the (Department of Revenue), Notification No. 21/2002-Customs Tariff Rate Quota Scheme dated 01.03 2002. As per it, import of four items viz., (1) Skimmed and whole milk powder, milk food for babies etc. (0402.10 or 0402.21) (2) Maize (corn): other (1005.90) (3) Crude sunflower seed or safflower oil or fractions thereof (1512.11) and (4) Refined rape, colza or mustard oil, other (1514.19 or 1514.99) is allowed in a financial year, up to quantities as well as such concessional rates of customs duty as indicated below: S.No ITC Code No. Quantity of Concessional & Item Quota Duty 1 Tariff Code No. 10,000 MTs 15% 0402.10 or 0402.21 Skimmed and whole Milk Powder. Milk Food for babies etc. 2 Tariff Code No.

ted below: S.No ITC Code No. Quantity of Concessional & Item Quota Duty 1 Tariff Code No. 10,000 MTs 15% 0402.10 or 0402.21 Skimmed and whole Milk Powder. Milk Food for babies etc. 2 Tariff Code No. 1005.90 5,00,000 MTs 15% Maize (Corn): other 3 Tariff Code No. 1512.11 150,000 MTs 50% Crude Sunflower seed or safflower oil or fractions thereof 4 Tariff Code No. 150,000 MTs 45% 1514.19 & 1514.99 Rape, Colza, Canola or Mustard Oil, Other (Refined) Eligible entities for 2.59.1 (a) Milk Powder (Tariff Code No. 0402.10 or 0402.21): allocation of quota National Dairy Development Board (NDDB), State Trading Corporation (STC), National Cooperative

35 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), 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.

rporation of India Limited(PEC), Spices Trading Corporation Limited (STCL) and State Cooperative Marketing Federations (c) Crude sunflower seed or safflower oil or fractions thereof (Tariff Code No. 1512.11) and Refined rape, colza, canola or mustard oil, other (Tariff Code No. 1514.19 or 1514.99): National Dairy Development Board (NDDB), State Trading Corporation (STC), National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED) Spices Trading Corporation Limited (STCL) and Central Warehousing Corporation (CWC) State Cooperative Marketing Federation & State Cooperative Civil Supplies Corporation All eligible entities are eligible to avail quotas as per request of applicants received. All eligible entities desiring availment of quota as mentioned above, may make application to EFC in ANF to DGFT, Udyog Bhavan, New Delhi – 110 011. Completed application forms along with prescribed documents must reach on or before 1st March of each financial year preceding to the year of quota e.g. Applications for TRQ for 2010-2011 must reach DGFT by 01.03. 2010. Imports have to be completed before 31st March of financial year i.e. consignments must be cleared by customs authorities before this date. Since import of maize (corn) is through STEs, the allottes of quota i.e. designated agencies in para 1 (b) above for this item shall also be granted an import Authorisation for allotted quantities as indicated at Sl. No. 21(b) of Customs Notification No. 21/2002 dated 1.3.2002 in terms of para 2.11 of FTP, 2009-2014, if they do not wish to make imports through FCI.

ion for allotted quantities as indicated at Sl. No. 21(b) of Customs Notification No. 21/2002 dated 1.3.2002 in terms of para 2.11 of FTP, 2009-2014, if they do not wish to make imports through FCI.

36 Application fee for these applications shall be paid according to procedure contained in Appendix 21 B to HBP-v1. EFC in DGFT will evaluate and allot quota among applicants by 31st March of each financial year preceding to year of quota e.g. for 2010-11, EFC will allot quota by 31st March 2010. Issuance of scrips 2.60 In case where EP copy of Shipping Bill / original BRC has against lost EP copy been lost, claim under VKGUY/ FMS/ FPS can be considered of the Shipping Bills subject to submission of following documents: - and / or original Bank Realisation Certificate a) A duplicate / certified copy of concerned document issued by Customs Authority / Bank in lieu of original; b) An application fee equivalent to 2% of relevant entitlement. However, no fee shall be charged when such document is lost by Government agencies and a documentary proof to this effect is submitted; c) An affidavit by exporter about loss of document and an undertaking to surrender it immediately to concerned RA, if found subsequently; d) An indemnity bond by exporter to effect that he would indemnify Government for financial loss if any on account of duty credit issued against lost Shipping Bills/ BRC. Customs Authority, before allowing clearance, shall ensure that benefit / duty credit against such shipping bill has not been availed. 2.60.1

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

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.

ution 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.

37 Concerned Administrative Ministry would interact with Managing Committee of EPC concerned at least twice a year. Registering Authorities 2.63 (i) While obtaining RCMC, an exporter has to declare his issuing RCMC main line of business in the application. The exporter is required to obtain RCMC from the Council which is concerned with the product of his main line of business. (ii) Irrespective of para (i) above, a status holder has to obtain RCMC from Federation of Indian Exporters’ Organisation (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. (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.

IEO. (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 2.64 An exporter may, on application given in Appendix-19A, Membership Certificate register and become a member of EPC. On being admitted to (RCMC) 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 .

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 .

38 Validity Period 2.64.1 RCMC shall be deemed to be valid from 1st April of licensing of RCMC year in which it was issued and shall be valid for five years ending 31st March of licensing year, unless otherwise specified. Intimation Regarding 2.65 In case of change in ownership, constitution, name or address Change In Constitution of an exporter, it shall be obligatory on part of RCMC holder to intimate such change to registering authority within a period of one month from date of such change. Registering authority, however, may condone delays on merits. Furnishing Of Returns 2.66 Exporter shall furnish quarterly returns / details of his exports of different commodities to concerned registering authority. However, status holders shall also send quarterly returns to FIEO in format specified by FIEO. De-Registration 2.67 Registering authority may de-register an RCMC holder for a specified period for violation of conditions of registration. Before such de-registration, RCMC holder shall be given a show cause notice by registering authority, and an adequate and reasonable opportunity to make a representation against the proposed de-registration.

uch 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 2.68 A person aggrieved by a decision of registering authority in De-registration 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/. 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.

ication 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.

39 Fiscal Incentives 2.70.3 Following deductions in Application Fee would be admissible for EDI 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 25% vide EFT 3 Both digitally signed as 50% well as use of EFT for payment of application fee Benefits 2.70.4 Facility will reduce unnecessary physical interface with DGFT. It will enable faster processing, speedier communication of deficiencies, if any, and on-line availability of application processing status.

2.70.5 Authorisation issued using DGFT Electronic Application System shall be transmitted electronically to Customs through EDI Mode. This shall also obviate need for verification of Authorisations before allowing clearance. New EDI Initiatives 2.70.6 To further improve quality of services some new EDI initiatives are being taken by DGFT: Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under Chapter 3 will become operational by 31st December, 2009.

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new EDI initiatives are being taken by DGFT: Electronic Message Exchange between Customs and DGFT in respect of incentive schemes under Chapter 3 will become operational by 31st December, 2009.

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41 CHAPTER - 3 PROMOTIONAL MEASURES Status Certificate 3.1 Policy for Status Holder is given in Chapter 3 of FTP. Application for 3.2 Application for grant of status shall be filed by 31st March, in grant of Status ANF 3A. An existing status holder shall be automatically treated Certificate 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.

t 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 3.3 Status Holder shall maintain true and proper accounts of its Accounts exports and imports based on which such recognition has been granted.Record shall also be maintained during validity period and for a minimum period of three years thereafter. These accounts shall be made available for inspection to RA concerned or any authority nominated by DGFT.

lso 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.

42 Refusal / Suspension / 3.4 Status Certificate may be refused or suspended or cancelled Cancellation of by RA concerned, if status holder or any agent or employee Certificate 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.

r before taking any action under above paragraph. Appeal 3.5 An applicant, who is not satisfied with decision taken to suspend or cancel Status Certificate, may file an appeal to DGFT within 45 days. Decision of DGFT shall be final thereon. 3.6 SERVED FROM INDIA SCHEME (SFIS) (a) Policy for SFIS is given in Chapter 3 of FTP. (b) For foreign exchange earned during current financial year, application for Duty Credit Scrip shall be filed on monthly/quarterly/half-yearly/annual basis, at the option of the applicant to be exercised along with first application for the current financial year, with jurisdictional RA, in ANF 3B along with documents prescribed therein, for which the last date for filing application on time shall be 12 months from the end of relevant month / quarter / half-year /year periodicity. (c) Service provider shall within one month of completion of imports made or expiry of validity of Duty Credit scrip whichever is earlier, submit a statement of imports made under it to jurisdictional RA with a copy to jurisdictional Excise authorities (service tax cell) wherever applicable. Ineligible Remittances 3.6.1 Foreign exchange remittances other than those that are earned and Services for SFIS for rendering of services would not be counted for entitlement. scheme 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.

f 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.

43 a) Foreign Exchange remittances: I. related to Financial Services Sector 1. Raising of all types of foreign currency Loans; 2. Export proceeds realization of clients; 3. Issuance of Foreign Equity through ADRs / GDRs or other similar instruments; 4. Issuance of foreign currency Bonds; 5. Sale of securities and other financial instruments; 6. Other receivables not connected with services rendered by financial institutions; and II. earned through contract/regular employment abroad (e.g. labour remittances); b) Payments for services received from EEFC Account; c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc. (However, remittances received on account of medical treatment, surgery, testing, consultancy and health care provided by the institution shall be eligible.); d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc. (However remittances received on account of the course fees and consultancy provided by the institution shall be eligible.); e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units; f) Clubbing of turnover of services rendered by SEZ / EOU / EHTP / STPI / BTP units with turnover of DTA Service Providers; g) Service Providers in Telecom Sector (Sr.

of services made to such units; f) Clubbing of turnover of services rendered by SEZ / EOU / EHTP / STPI / BTP units with turnover of DTA Service Providers; g) Service Providers in Telecom Sector (Sr. No 2C of Appendix 10); h) Foreign Exchange earnings for Services provided by Airline and Shipping Lines Service providers for routes plying from any country X to any country Y only, not touching India at all; and i) Exports of Goods. 3.7 VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY) 3.7.1 Policy pertaining to VKGUY is given in Chapter 3 of FTP. Appendix 37A contains the list of VKGUY items along with

44 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.

uments prescribed therein. Listed products shall be eligible for Duty Credit Scrip upon exports on or after the Date of Export indicated in the relevant Appendix. 3.7.2 Policy pertaining to the Agri. Infrastructure Incentive Scrip under VKGUY is given in Para 3.13.4 of Chapter 3 of FTP. All Status Holders may apply for grant of Duty Credit scrip for export made during current year to RA, CLA, New Delhi in ‘ANF 3D - ANF for Policy Para 3.13.4.’ along with documents prescribed therein. Applicants may file one application before the last date prescribed for each half year period (Apr-Sep / Oct-Mar). Applications for exports during Apr-Sept period shall be filed from 15th January till 15th February of current year and for exports during Oct-Mar period, applications shall be filed from 1st May till 31st May of the next licensing year. Applications received after the last date shall be summarily rejected, as Para 9.3 and Para 9.4 shall not be applicable. The allocation of duty credit scrips by RA, CLA, New Delhi, under Para 3.13.4 of FTP, shall be done proportionate to the eligible claims of individual applications, vis-à-vis the total eligible claims of all the status holders put together, received for each half year (Apr-Sep / Oct-Mar) periods, in such a way that the total benefits granted for all status holders put together does not exceed the limit prescribed for each half year in Para 3.13.4 of FTP.

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.

45 Proof of Landing – 3.8.2 Applicant shall be required to submit proof of landing of export for FMS and MLFPS consignment in specified market. Any one of the following documents should suffice, as a proof of landing of export consignment in specified Focus Market: (i) A self attested copy of import bill of entry filed by importer in specified market, or (ii) Delivery order issued by port authorities, or (iii) Arrival notice issued by goods carrier, or (iv) Tracking report from the goods carrier (Shipping Line/ Airline etc.

er in specified market, or (ii) Delivery order issued by port authorities, or (iii) Arrival notice issued by goods carrier, or (iv) Tracking report from the goods carrier (Shipping Line/ Airline etc. or his accredited agent in India) duly certified by them, evidencing arrival of export cargo to destination Focus Market, or (v) For Land locked Focus Market, Rail/Lorry receipts of transportation of goods from Port to Land locked Focus Market, or (vi) Any other documents that may satisfactorily prove to RA concerned that goods have landed in / reached the Focus Market. In case of (iv) and (vi) above, the accredited agent of the Goods Carrier must certify that he is the accredited agent of the concerned Goods Carrier on the date of issuance of the tracking report / document. Further, in the case of issuance of any other document under (vi) above, the accredited agent must state that he has verified that this proof of landing of goods in relevant Focus Market is given based on information available in the Goods Carrier’s backup database and he has issued this document accordingly. FOCUS PRODUCT SCHEME (FPS) 3.9 Policy pertaining to FPS is given in Chapter 3 of FTP. Notified Products are listed in Appendix 37D. 3.9.1 An application for exports made from 27.8.2009 onwards shall be filed, with RA concerned in ANF3C along with documents prescribed therein.

of FTP. Notified Products are listed in Appendix 37D. 3.9.1 An application for exports made from 27.8.2009 onwards shall be filed, with RA concerned in ANF3C along with documents prescribed therein. Eligibility of Focus Product (as in Appendix 37D) shall be determined from date of export as per Para 9.12 of HBP v1. 3.9.2 The procedure for filing applications against export of Market Linked Focus Products under FPS (Para 3.15.3 of FTP) will be the same as laid down for Focus Product Scheme in Para 3.9.1 above. In case of applications for grant of benefit under

46 Market Linked Focus Product scheme, for proof of landing of export consignment in specified market, Para 3.8.2 of HBP Vol.1 shall apply. 3.10 Procedure for Status Holders Incentive Scrip 3.10.1 Policy pertaining to Status Holders Incentive Scrip is given in

Para 3.16 of Chapter 3 of FTP.

3.10.2 ANF3E and other conditions for claiming Status Holders Incentive Scrip shall be notified separately. 3.11 COMMON PROCEDURAL FEATURES FOR PROMOTIONAL SCHEMES, APPLICABLE TO ALL SCHEMES IN THIS CHAPTER, UNLESS SPECIFICALLY PROVIDED FOR: Jurisdictional RA / 3.11.1 Applicant shall have option to choose Jurisdictional RA on the RA Concerned 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. Port of Registration 3.11.3 Duty Credit Scrip (including splits) shall be issued with a single port of registration which shall be the port of export. After issue of Duty Credit Scrip, but before registration with Customs, the Applicant can change the port of registration from RA concerned. Before registration, authorities shall verify genuineness of Duty Credit scrip, from RA concerned, until EDI system of message exchange is put in place. However, applicant may use Duty Credit Scrip for imports from any other port (that includes ICD/LCS) after obtaining TRA from authorities at port of registration. The above procedure shall be applicable only in respect of EDI enabled ports.

rip 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.

47 In case of exports through non-EDI ports, the facility of splits shall not be allowed, after issue of scrip. Import from 3.11.5 Entitlement can be used for import from private / public bonded private / public warehouses subject to fulfillment of paragraph 2.28 of FTP bonded warehouses and terms and conditions of DoR notification. Re-export of 3.11.6 Goods imported which are found defective or unfit for use, defective / unfit goods 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.

uty 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 3.11.7 Duty Credit Scrip shall be valid for a period of 24 months. & Revalidation Revalidation of Duty Credit Scrip shall not be permitted. Declaration of Intent 3.11.8 For export shipments filed under Free Shipping Bill category, on Free Shipping Bills for exports of products / to markets eligible under Chapter 3 of FTP (Appendix 37A, 37C, 37D), the exporter shall state the intention to claim benefits under Chapter 3 of FTP by declaring on the Free Shipping Bills as under: ‘I/We, hereby, declare that I/We shall claim the benefits, as admissible, under Chapter 3 of FTP’. This declaration shall not be required for export shipments under any of the schemes of Chapter 4 (including drawback) or Chapter 5 of FTP. Further for products, markets notified during the year, this declaration shall be necessary for exports under Free Shipping Bills, only after a grace period of one month from the date of relevant public notice. Moreover for exports made prior to date of notification of products / markets, such a declaration will not be required, since export shipments under Free Shipping Bills have already

nt public notice. Moreover for exports made prior to date of notification of products / markets, such a declaration will not be required, since export shipments under Free Shipping Bills have already taken place. Last date of 3.11.9 Applications for obtaining Duty Credit Scrip shall be filing of application for filed within a period of twelve months from the date of Duty Credit Scrips, export or within six months from the date of realization or

48 except three months from the date of printing / release of shipping for FTP Para bill, whichever is later, in respect of shipments for which claim 3.13.4 and FTP is being filed. Further, for shipments already made prior to the

Para 3.16

inclusion/modification of the items / markets in relevant appendices by various Public Notices issued from time to time; the last date for filing applications shall be six months from the end of the month of the relevant Public Notice that included/ modified the items/markets, or the time period permitted in the first sentence of this Para, whichever is later. For SFIS for current financial year, the last date shall be 12 months from the end of application frequency period. 3.11.10 Shipments from EDI Ports and Non-EDI Ports cannot be clubbed in one application. Port of registration for EDI enabled ports shall be the port of export. In case of exports through non-EDI port, the port of registration shall be the relevant non EDI port of exports. Accordingly separate application shall be filed for each non EDI port. 3.11.11 Freely Transferable Duty Credit Scrip shall be granted on FOB value of exports. FOB Value of Exports shall be taken from the Shipping Bill (FOB value in free foreign exchange declared on the Shipping Bill and converted into Indian Rupees at the Monthly Customs Rate of Exchange on the date of LEO). Date of export is determined as per Para 9.12 of HBPv1. Multiple Applications can be filed and supplementary cut shall not be applicable. However, an application shall contain a maximum of upto 50 shipping bills. 3.11.12 All the pre-realization cases are to be monitored by RA concerned with respect to realization of export proceeds.

e. 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

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

49 of export proceeds as required under FTP or the Procedure laid thereunder) could not be produced. In case the Scrip holder surrenders the unutilized / partially unutilized Duty Credit Scrip, then unutilized / partially unutilized credit shall be deduced from the payable amount. (ii) In case the FOB value realized in free foreign exchange is higher as per BRC, when compared to the FOB value in free foreign exchange as declared on the Shipping Bill(s) on which the original duty credit scrip was issued, supplementary claim shall be filed within a period of six months from the date of realization.

50

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

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

4.4.1

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 Where import of Acetic Anhydride, Ephedrine and Pseudo- ephedrine is required as an input, applications shall be filed with RA concerned. Copies of such applications shall also be simultaneously endorsed to the Drug Controller of India, Nirman Bhawan, New Delhi, Narcotics Commissioner, Central Bureau of

all 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

52 Narcotics, Gwalior and respective Zonal Director of Narcotics Control Bureau, alongwith a declaration that applicant will maintain prescribed records and also submit prescribed returns. 4.4.4
RA, while issuing Advance Authorisation for import of Acetic Anhydride, Ephedrine and Pseudo- ephedrine, shall endorse a condition that before effecting imports, NOC shall be obtained from Narcotics Commissioner of India, Central Bureau of Narcotics, Gwalior and shall also endorse a copy of Authorisation to Drug Controller, Nirman Bhawan, New Delhi and concerned Zonal Director of Narcotics Control Bureau. Advance 4.5 Transfer of any duty free material imported or procured against Authorisation for Advance Authorisation from one unit of company to another applicants with for manufacturing purpose shall be done with prior intimation multiple units 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.

any / products, units should maintain a proper record. However to avail facility, all such units should be available in IEC certificate and follow rules and regulation of Central Excise for job work. Large Taxpayer Units (LTUs) having multiple units, may not follow above job work procedure, after fulfillment of EO. Duty Free material imported or procured against advance authorization can be taken from the port directly to the project site of the project authority as per provision stated in ANF 4A and DOR guide lines. Advance 4.6 For policy in paragraph 4.1.8, a specific endorsement shall be Authorisation for
made on exchange control copy of Advance Authorisation Free of Cost and disallowing remittances for material being supplied free of cost. Paid Material All inputs imported shall be utilised in manufacturing of product except wastage. Self Declared 4.7 RA may also issue Advance Authorisations, where SION are Authorisations not fixed, based on self declaration and an undertaking by where SION applicant for a final adjustment as per Adhoc / SION fixed by does not exist NC.

e Authorisations, where SION are Authorisations not fixed, based on self declaration and an undertaking by where SION applicant for a final adjustment as per Adhoc / SION fixed by does not exist NC.

53 However, no Advance Authorisation shall be issued under this paragraph for import of following products:- i. All vegetable / edible oils classified under Chapter - 15 and all types of oilseeds classified under Chapter - 12 of ITC (HS) book; ii. All types of cereals classified under Chapter – 10 of ITC (HS) book; iii. All spices other than light black pepper (light berries) having a duty of more than 30%, classified under Chapter-9 and 12 of ITC (HS) book; iv. All types of fruits/vegetables having a duty of more than 30%, classified under Chapter 7 and 8 of ITC (HS) book; and v. Horn, hoof and any other organ of animal. vi. Honey. 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.

hnology. Entitlement 4.7.1 CIF value of one or more such authorisations shall be maximum 500% of FOB and / or FOR value of preceding year’s exports and / or supplies in case of status holders and Rs. 5 crore or 500% of the FOB and / or FOR value of preceding year exports and / or supply, whichever is more, for others. However, in cases where NC has already ratified norms for same export and import products in respect of an authorization obtained under paragraph 4.7, such norms shall be valid for a period of one year reckoned from the date of ratification. In such cases Authorisations shall be issued by RA concerned under “Adhoc Norms Fixed” category and application copies need not be forwarded to NC for fixation / ratification of norms. Authorisation holder in such cases shall be entitled for further authorisation (s) as per norms ratified by NC without need for subsequent ratification by NC. In such cases, applicant would file application under Adhoc Norms Fixed category.

e 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.

54 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 4.7.3 An applicant shall be entitled for authorisation in excess of Excess of entitlement mentioned in paragraph 4.7.1 subject to furnishing Entitlement 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.

mption from customs duties. A specific endorsement to this effect shall be made on authorisation. Application 4.7.4 Original application with prescribed documents shall be submitted to concerned RA. RA shall forward a copy of application within 7 days from Authorisation issue date to NC for fixation of norms within prescribed time. Undertaking 4.7.5 Applicant shall give an undertaking that he shall abide by norms fixed by NC and accordingly pay duty, together with interest, on unutilised inputs as per norms fixed by NC. However, Authorisation holder has option to undertake additional EO in proportion to excess unutilized inputs. In case application is rejected by NC, authorization holder shall pay customs duty saved along with interest on imported inputs, as notified. However in such cases where the NC decides adhoc norms based on information available to it and the exporter represents against the decision of the NC, time limit for filing representation, if any, before the Norms Committee shall be four months from the date of communication of decision of the fixation of adhoc norms by NC. In addition, an amount as per Para 4.28(i)(b) below has to be deposited. 4.7.6 In such cases, where norms are not finalised by NC within four months from Authorisation issue date, norms as applied for shall be treated as final and no adjustment will be made. However, where application for fixation of adhoc / SION is

ised by NC within four months from Authorisation issue date, norms as applied for shall be treated as final and no adjustment will be made. However, where application for fixation of adhoc / SION is

55 rejected on account of non-furnishing of required documents/ information, Authorisation holder shall be liable for penalty as stated in above paragraph. In case SION for the said product is notified, SION would be made applicable for deciding wastage norm and EO. In such cases where export obligation is completed pending fixation of norms by NC, entitlement for authorisation as given in paragraph 4.7.1 may be re-credited upon production of documentary evidence (copies of Shipping bill / bill of export / Central Excise certified copies of invoices) showing fulfillment of export obligation in respect of previous authorisations. However, bond waiver / redemption shall not be allowed pending fixation of norms in such cases. Standardisation 4.8 For standardization of norms, an application may be made by of Adhoc Norms manufacturer exporter or merchant exporter tied to supporting manufacturer, duly filled in with complete data. Such applications shall be made to NC in ANF 4B. Import of fuel may also be allowed under SION by NC subject to following: - (a) Facility of import of fuel shall be allowed only to manufacturer having captive power plant. (b) In cases where SION specifically allows fuel, same shall be permitted under advance Authorisation.

a) Facility of import of fuel shall be allowed only to manufacturer having captive power plant. (b) In cases where SION specifically allows fuel, same shall be permitted under advance Authorisation. However, If fuel is not covered specifically under SION, it may be allowed as per General Fuel Policy for products covered under SION or under paragraph 4.7 above. (c) Fuel should be allowed only against an actual user Authorisation. However in case of DFIA, fuel can only be transferred to agencies granted marketing rights by the Ministry of Petroleum and Natural Gas. (d) Applications of fixation for fuel entitlement for new sectors and modification of the existing entitlement as per General Note for Fuel in HBP v2 would be made to NC along with requisite data in ANF 4B. Modification of 4.9 An application for modification of existing SION may be filed SION before the NC by manufacturer exporter or merchant-exporter, tied to supporting manufacturer, in form given in ANF 4B. Amendment of 4.10 An application for amendment of an export item or inputs under Export item SION or under Adhoc Norms may be filed by any and inputs manufacturer or merchant exporter as per ANF 4B. Applicant would give justification for seeking amendment and same would be considered by Regional Authority with specific

be filed by any and inputs manufacturer or merchant exporter as per ANF 4B. Applicant would give justification for seeking amendment and same would be considered by Regional Authority with specific

56 approval of Head of office. In case of any major change in input or request for more wastage to that allowed under SION or adhoc norm, same should be referred to NC for ratification. Revision of SION 4.10.1 NC may identify SIONs which in its opinion are required to by NC be reviewed. Exporters are required to submit revised data in ANF 4B for such revision. It is mandatory for industry / exporter(s) to provide production and consumption data etc. as may be required by DGFT / EPC for revision of SION. Otherwise, applicant shall not be allowed to take benefit of Advance Authorization scheme. Description of 4.11 An Advance Authorisation shall specify: an Advance Authorisation (a) names and description of items to be imported and exported / supplied; (b) quantity of each item to be imported or wherever quantity cannot be indicated, value of item shall be indicated. However, if in SION, quantity and value of individual inputs is a limiting factor, same shall be applicable. (c) aggregate CIF value of imports; and (d) FOB / FOR value and quantity of exports / supplies. Exports in 4.12 Exports / supplies made from the date of EDI generated file Anticipation of number for an Advance Authorisation, may be accepted Authorisation towards discharge of EO.

rts / supplies. Exports in 4.12 Exports / supplies made from the date of EDI generated file Anticipation of number for an Advance Authorisation, may be accepted Authorisation towards discharge of EO. Shipping / Supply document(s) should be endorsed with File Number or Authorisation Number to establish co-relation of exports / supplies with Authorisation issued. The requirement of endorsement of file number or authorisation number on the shipping bill would be dispensed with once the EDI Data Transmission System for the shipments becomes operational. If application is approved, authorisation shall be issued based on input / output norms in force on the date of receipt of application by RA in proportion to provisional exports / supplies already made till any amendment in norms is notified. For remaining exports, Policy / Procedures in force on authorisation issue date shall be applicable.

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

force on authorisation issue date shall be applicable.

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

57

4.12.2 Conversion of duty free shipping bills to drawback shipping bills may also be permitted by customs authorities in case application for an Advance Authorisation is rejected or modified by RA. Advance 4.13 Application for grant of Advance Authorisation or DFIA for Authorisation or Intermediate supply may be made on the basis of a tie-up DFIA for agreement with exporter (physical / deemed) holding an Intermediate Advance Authorisation or DFIA. RA concerned shall consider Supplies such requests. Advance Authorisation or DFIA for Intermediate supply shall be issued after making Authorisation invalid for direct import of items, to be supplied by intermediate manufacturer. In such cases, a copy of the invalidation letter will be given to Authorisation holder and copy thereof will be sent to intermediate supplier as well as RA of intermediate supplier. Authorisation holder in such case has an option either to supply intermediate product to the holder of Advance Authorisation or DFIA or to export (physical / deemed) directly. Intermediate supplier can also supply the product(s) directly to the port for export by the ultimate exporter (holder of Advance Authorisation or DFIA). In such cases, shipping bill shall be in the name of the ultimate exporter with the name of intermediate supplier endorsed on it.

t by the ultimate exporter (holder of Advance Authorisation or DFIA). In such cases, shipping bill shall be in the name of the ultimate exporter with the name of intermediate supplier endorsed on it. However, once Electronic message transfer facility among the RAs becomes fully operational, sending copy of invalidation letter / ARO to jurisdictional RA shall not be required. Facility of Advance Authorisation shall be available even in cases where intermediate supplier has supplied or intend to supply material subsequent to fulfilment of EO by exporter holding Advance Authorisation / DFIA from where invalidation letter was issued. Advance Release 4.14 An application may be made to RA concerned for grant of Order (ARO) ARO to procure inputs from indigenous sources / STEs. 4.14.1 Application shall specify: (i) name, description and quantity of items and (ii) individual value of items to be procured. An ARO may be issued along with Advance Authorisation / DFIA or subsequently, and its validity shall be co-terminus with validity of Advance Authorisation / DFIA.

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

58 An ARO issued for procurement of an individual item shall be automatically valid for procurement from one or more indigenous sources. Back to Back 4.15 Exporter may alternatively avail facility of a back to back inland Inland Letter letter of credit from banks. An Advance Authorisation / DFIA of Credit (L/C) holder may approach a bank for opening an inland letter of credit (L/C) in favour of an indigenous supplier. 4.15.1 Before opening the L/C, bank will ensure that necessary BG / LUT has been executed by Advance Authorisation / Non Transferable DFIA holder and an endorsement to that effect has been made on the Authorisation. However, execution of BG / LUT shall not be required against transferable DFIA. After opening inland L/C, bank shall make following endorsement on Exchange Control and Customs copy of Advance Authorisation / DFIA: Value of this Advance Authorisation / DFIA stands reduced by a sum of Rs.

ening inland L/C, bank shall make following endorsement on Exchange Control and Customs copy of Advance Authorisation / DFIA: Value of this Advance Authorisation / DFIA stands reduced by a sum of Rs. __________ , being value of inland L/C No.________ opened today by authorisation holder in favour of M/s ______________________ (name and address of indigenous supplier). 4.15.2 Authorisation shall be invalidated by bank for direct import only in respect of full quantity and value of item being sourced indigenously. 4.15.3 Original Letter of credit (L/C) may be retained by bank for negotiation and only non-negotiable copy of L/C may be given to indigenous supplier. 4.15.4 Responsibility of bank shall be confined to making endorsement. Bank shall not be liable for any misrepresentation or false statement made by authorisation holder while requesting bank to make endorsement. Inland L/C opened by bank in favour of indigenous supplier shall not be cancelled for any reason whatsoever. 4.15.5 Non negotiable copy of inland L/C together with photocopy of Advance Authorisation / DFIA duly carrying endorsements made by bank shall be sufficient for indigenous supplier to claim deemed export benefits. L/C issued shall be entitled to benefits given in paragraph 8.3 (b) and (c) of FTP, as applicable. 4.15.6 Where import is permitted as an input under this scheme, gold/ silver can be sourced through nominated agencies as given in

benefits given in paragraph 8.3 (b) and (c) of FTP, as applicable. 4.15.6 Where import is permitted as an input under this scheme, gold/ silver can be sourced through nominated agencies as given in

59 FTP (Chapter 4) for supply against the Advance Authorisations/ DFIA issued. Before supply of material, nominated agencies should follow same procedure as given in paragraph 4.15.1 above. Facility of 4.16 Imported material may be used in any unit of holder of Advance Supporting Authorisation or Non Transferable DFIA (subject to condition Manufacturer(s)/ of paragraph 4.5 of this Handbook) or jobber / supporting Jobber/co-licensee manufacturer provided same is endorsed on authorisation by RA. If applicant desires to have name of any manufacturer or jobber added to authorisation, he may apply. Such endorsement shall be mandatory where prior import before export is a condition for availing Advance Authorisation / DFIA scheme and authorisation holder desires to have material processed through any other manufacturer or jobber. Upon such endorsement made by RA, authorisation holder and co- authorisation holder shall jointly and severally be liable for completion of EO. Any one of co-authorisation holders may import goods in his name or in joint names. BG/LUT shall also be furnished in their joint names. However if authorisation holder is registered with Central Excise, he has an option of getting names of jobber endorsed by Central Excise as per Central Excise Rules in lieu of RA’s endorsement.

mes. However if authorisation holder is registered with Central Excise, he has an option of getting names of jobber endorsed by Central Excise as per Central Excise Rules in lieu of RA’s endorsement. In case manufacturer exporter holding authorisation is not registered / not required to be registered with Central Excise authority, job work may be allowed as per Central Excise Rules and regulations without insisting for endorsement of supporting manufacturer’s name. However, authorisation holder shall be solely responsible for imported items and fulfillment of EO. 4.17 In case BG / LUT has been redeemed, advance authorization holder can get duty free inputs processed from any manufacturer under Actual User condition as per job work regulations prescribed under Central Excise Rules. However such restriction shall not be applicable in case of transferable DFIA holder. Acceptance of 4.18 At the time of issue of authorisation, acceptance of undertaking BG/LUT given by applicant to RA concerned in relevant ANF will be endorsed on the reverse of Advance Authorisation. Authorisation holder shall execute Bank Guarantee / Legal Undertaking, as the case may be, in terms of para 2.20 of HBP v1.

n relevant ANF will be endorsed on the reverse of Advance Authorisation. Authorisation holder shall execute Bank Guarantee / Legal Undertaking, as the case may be, in terms of para 2.20 of HBP v1.

60 Port of 4.19 Advance Authorisation shall be issued for purpose of import Registration and export through one of sea ports or airports or ICDs or LCS specified below. Authorisation holder shall register authorisation at the port specified in authorisation and thereafter all imports against said authorisation shall be made only through that port, unless the authorisation holder obtains permission from customs authority concerned to import through any other specified port. However, exports may be made through any of the specified ports. Sea Ports: Mumbai, Kolkata, Cochin, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Paradeep, Pipavav, Sikka, Tuticorin Vishakhapatnam, Dahej, Nagapattinam, Okha, Mundhra, Surat (Magdalla), Jamnagar, Nhava Sheva, Haldia, Krishnapatnam. Air-ports: Ahmedabad, Bangalore, Bhubaneshwar, Mumbai, Kolkata Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur, Chennai, Indore, Dabolim (Goa). ICDs: Agra, Bangalore, Coimbatore, Delhi, Faridabad, Guwahati (Amingaon), Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik, Rudrapur(Nainital), Dighi (Pune), Vadodara, Daulatabad, (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anaparthy, Salem Mallanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi,

nasi, Nasik, Rudrapur(Nainital), Dighi (Pune), Vadodara, Daulatabad, (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anaparthy, Salem Mallanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar, Chheharata (Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri, Tuticorin. LCS: Ranaghat , Singhabad , Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Hilly, Chengrabanda, Dawki, Atari, Ghojadanga. SEZ: As notified by Central Government, any SEZ can be a specified port for import and export.

61 4.19.1 Commissioner of Customs may permit imports and exports from any other seaport / airport / ICD or LCS . 4.19.2 For imports from Airport / Seaport / ICD / LCS other than port of registration, a TRA shall be issued by the customs authority at the port of registration to customs authority at port of import. Facility of Clubbing 4.20 Facility of clubbing shall be available only for redemption / regularisation of cases and no further import or export shall be allowed. For this facility, authorisations are required to have been issued under similar Customs notification even pertaining to different financial years.

s and no further import or export shall be allowed. For this facility, authorisations are required to have been issued under similar Customs notification even pertaining to different financial years. However in case of Authorisations issued in 2004-09 period or thereafter, Advance Authorisations with different customs notification can be clubbed. 4.20.1 RA, under whose jurisdiction authorisation is issued or DGFT (HQ) in other cases, shall consider a request in ANF 4D for clubbing all imports and exports of more than one Advance Authorisation provided imported inputs are properly accounted for as per norms. Value addition of the authorisations so clubbed shall be average of minimum value addition prescribed in FTP and Procedure laid thereunder, imposed on individual authorisations. Upon clubbing, authorisations shall, for all purposes, be deemed to be one Authorisation and thereafter shortfall, if any, shall be regularized in terms of para 4.28 of HBP v1. 4.20.2 Accountability of imports and exports shall be restricted in relation to individual categories of Advance Authorisations including Advance Authorisation for annual requirements. 4.20.3 Facility is available only for Advance Authorisation(s) where there is shortfall in fulfillment of EO, and which is sought to be clubbed with an advance Authorisation(s) which is valid for imports.

3 Facility is available only for Advance Authorisation(s) where there is shortfall in fulfillment of EO, and which is sought to be clubbed with an advance Authorisation(s) which is valid for imports. For expired Authorisation(s) with EO shortfall and which is sought to be clubbed with an advance Authorisation(s) which is valid for imports, applicant shall pay composition fee for EO period extension as per paragraph 4.22 below. 4.20.4 Wherever exports are effected beyond EO extension period (allowed vide paragraph 4.22 below) of earlier authorisation, no clubbing shall be permitted. 4.20.5 Notwithstanding provisions of para 4.20.3 and 4.20.4 above, Clubbing of all expired Authorisations may also be permitted provided all expired Authorisations have been issued during

62 Exim Policy period 1992-1997 & 1997-2002 i.e., 1st April 1992 to 31st March, 2002. However clubbing of erstwhile Value Based Advance licences shall not be allowed. Enhancement/ 4.21 In respect of an Advance Authorisation, RA concerned (as Reduction in the per their financial powers) may consider a request for: value of Authorisation (a) enhancement / reduction in CIF value of advance authorisation; (b) enhancement / reduction in CIF value, quantity of inputs, FOB value and quantity of exports of an advance authorization; provided VA after such enhancement does not fall below minimum VA stipulated in FTP and HBP v1 laid thereunder and there is no change in input-output norms and FTP under which advance authorisation was issued. 4.21.1 Request for prorata enhancement in value and quantity may

es 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 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. 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 4.53 In such cases where original Bank Realisation Certificate (BRC) Bank Certificate 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

; 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;

75 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.

Export 4.54 Export obligation fulfillment period and its extension shall be Obligation period governed as per paragraph 4.22 above. However, any (EOP) and its extension in EOP beyond 36 months from the date of issue of extension the authorisation shall not be allowed.

76 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 4A.1 An application for REP Authorisation may be made in ANF Authorisation 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. Item of exports Percentage of wastage by weight No.

for REP Authorisation. Wastage Norms 4A.2 Wastage or manufacturing loss on gold/silver/ platinum jewellery and articles thereof is as follows: Sl. Item of exports Percentage of wastage by weight No. with reference to Gold/Platinum/ Silver content in export item Gold/ Platinum Silver a) Plain jewellery and articles and ornaments like 3.5% 4.5% Mangalsutra containing gold and black beads/ imitation stones, cubic zirconia diamonds, precious, semi-precious stones. b) Studded jewellery and articles thereof 9.0% 10% c) Mountings and findings manufactured 3.5% 4.5% (by non-mechanised process) indigeneously d) Any jewellery/articles manufactured by a fully 1.25% 1.25% mechanised process and unstudded. e) Mountings, whether imported or indigenously 2.5% 2.5% procured/ manufactured, used in studded jewellery f) Gold/silver/platinum medallions and coins 0.25% 0.25% (excluding coins of nature of legal tender) g) Findings and mountings manufactured by 1.25% 1.25% mechanized process

sed in studded jewellery f) Gold/silver/platinum medallions and coins 0.25% 0.25% (excluding coins of nature of legal tender) g) Findings and mountings manufactured by 1.25% 1.25% mechanized process

77 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 3% and ornaments like Mangalsutra containing gold and black beads / imitation stones, except in studded form of jewellery. b) All types of Studded gold / platinum / silver 5% Jewellery and articles thereof. c) Any jewellery / articles manufactured by fully 1.5% mechanised process 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 4A.3 Consignments of gem and jewellery items exported out of and Jewellery 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 4A.4 Gem REP Authorisations shall be valid for import of precious Replenishment stones, semi-precious and synthetic stones and pearls.

ed, will also be eligible for REP Authorisation. Gem & Jewellery 4A.4 Gem REP Authorisations shall be valid for import of precious Replenishment stones, semi-precious and synthetic stones and pearls. In Authorisations 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 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.

78 (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.1.4 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.

agraph 4A.1.1 to 4A.1.4 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. Endorsement on 4A.6 During export of jewellery, shipping bill and invoice presented shipping Bill to customs authorities shall contain description of item, its purity, and Invoice 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.

espect 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. 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; (c) Bank certificate of realisation in Appendix 22A. In case of Personal carriage of jewellery by foreign buyer, following documents should be submitted by the exporter/seller

oms attested invoice; (c) Bank certificate of realisation in Appendix 22A. In case of Personal carriage of jewellery by foreign buyer, following documents should be submitted by the exporter/seller

79 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 (c) Foreign Exchange Encashment Certificate from Bank.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. Conversion of 4A.9 For conversion of quantity of gold/ silver/platinum in terms of Purity/Fineness 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;

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

d 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

80 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, Cochin, 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, Cochin, 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. 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 4A.14 This facility has been stated in Paragraph 4A.2 of FTP. At the for Certification/ time of imports of diamonds, the bill of entry shall have the Grading & re-export detailed description, including the dimensions /specifications of the diamonds.

A.2 of FTP. At the for Certification/ time of imports of diamonds, the bill of entry shall have the Grading & re-export 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. 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

ted 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

81 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 4A.15 Before clearance of each consignment of import supplied by Supply By foreign buyer, nominated agency shall execute a bond with Foreign Buyer 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. 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.

nished 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. 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

ssociate/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

82 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. 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.

icate 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 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.

s 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.

83 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 4A.16 Nominated agency shall maintain complete account, Accounts 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. Export Through 4A.17 Nominated agencies shall produce to Customs Authorities letter Exhibitions /Export in original or its certified copy, containing Government’s Promotion Tours / approval for holding exhibition/export of branded jewellery. Export of Branded Any other person shall produce to Asst.

ort in original or its certified copy, containing Government’s Promotion Tours / approval for holding exhibition/export of branded jewellery. Export of Branded Any other person shall produce to Asst. Commissioner, customs Jewellery 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 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

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

84 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.

otion 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 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;

eriod 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;

85 (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. Such account shall be maintained for a minimum period of three years from date of close of exhibition. Export Against 4A.20 Exporter may obtain gold/silver/ platinum on following basis:- Supply By Nominated Agencies (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.

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. 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/ 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

ice 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

86 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. Outright Purchase 4A.22 Exporter may obtain required quantity of precious metal in Basis in Advance 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.

porter 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. 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

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

87 from date of export. This price 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 4A.25 Procedure applicable to Advance Authorisations under Advance Chapter-4 of HBP v1 shall generally apply to this scheme Authorisation 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. 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.

tion 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 4A.27 Cases of bonafide default in fulfillment of EO by an exporter Bonafide Default 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 4A.28 A replenishment authorization for duty free import of Authorisation for consumables and tools (as notified by Customs) for Jewellery Import of made out of precious metals (other than Gold & Platinum) Consumables etc. 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

) Consumables etc. 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

88 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 4A.29 Personal Carriage of gems & jewellery parcels by Foreign Gems & Jewellery Bound Passengers from all EOU/SEZ units and all firms in Export Parcels DTA through Airports in Delhi, Mumbai, Kolkata, Chennai, Cochin, Coimbatore, Bangalore, Hyderabad, Jaipur is permitted. Procedure for Personal Carriage of exports shall be as prescribed by Customs. Export proceeds shall, however, be realised 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.

ised 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. Authorised Courier Companies are also permitted to operate on the above lines. Personal Carriage of 4A.30 Personal carriage of gems & jewellery import parcels by an Gems & Jewellery Indian importer/ Foreign National may be permitted into all Import Parcels 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 4A.31 Duty free import of gems and jewellery samples upto Rs 3 samples 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 4A.32 An exporter of plain/ studded precious metal jewellery shall rejected jewellery 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 exemption/refund/ replenishment benefit availed on inputs used as per customs rules and regulations.

licencing year (based on CA certified copy of export of preceding year) with refund of any duty exemption/refund/ replenishment benefit availed on inputs used as per customs rules and regulations.

89 Diamond & Jewellery 4A.33 Policy for Diamond and Jewellery Dollar Accounts is given in Dollar Accounts paragraph 4A.17 of FTP. Detailed procedure for its operation will be notified separately. Export of Diamond, 4A.34 Policy for export of diamond, gemstone and jewellery on Gemstone & Jewellery consignment basis is given in paragraph 4A.20 of FTP. on consignment basis 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.

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91 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 5.1A Zero duty EPCG Scheme under para 5.1 of FTP shall not be Zero Duty EPCG available for import of capital goods relating to export of Scheme products covered under following chapters/headings of ITC(HS) classification: Chapters 1 to 24, 25 to 27, 31, 40, 43, 44, 45 , 47 to 49, 68 to 70, 71, 81 (metals in primary and intermediate forms only), 89, 93, 97, 98 ITC(HS) 7201 to 7212, 7218 to 7220, 7224 to 7226, 7401

ion: Chapters 1 to 24, 25 to 27, 31, 40, 43, 44, 45 , 47 to 49, 68 to 70, 71, 81 (metals in primary and intermediate forms only), 89, 93, 97, 98 ITC(HS) 7201 to 7212, 7218 to 7220, 7224 to 7226, 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, 44, 68, 97. Imports under 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. 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. 5.3 RA concerned shall, on the basis of nexus certificate from an Independent Chartered Engineer (CEC) submitted by the applicant in Appendix 32A, issue EPCG authorization. Reasonable wastage, if any, anticipated at the time of installation of capital goods will also be certified by the Chartered Engineer in the nexus certificate and the same would

EPCG authorization. Reasonable wastage, if any, anticipated at the time of installation of capital goods will also be certified by the Chartered Engineer in the nexus certificate and the same would

92 be mentioned in the condition sheet of the EPCG authorization at the time of issue. RA shall thereafter forward a copy of the EPCG authorization to the concerned Jurisdictional Central Excise Authority. The wastage so permitted at the time of issuance of authorization would be allowed to be sold on payment of applicable duty on sale of scrap/ waste. 5.3.1 Authorization holder shall produce to the concerned RA a certificate from the Jurisdictional Central Excise Authority, confirming installation of Capital Goods at factory premises of authorization holder or his supporting manufacturer(s) / vendor(s) within six months from date of completion of import. In the case of import of spares, the installation certificate shall be submitted by the Authorization holder within a period of three years from the date of import. However, in case of units not registered with Central Excise Authorities, the Authorization holder shall produce to the concerned RA, a certificate from an independent Chartered Engineer confirming the said installation of capital goods/spares. 5.3.2 EPCG authorization shall be issued with a single port of registration mentioned in paragraph 4.19 of HBPv1 for imports. However, exports can be made from any port specified in

paragraph 4.19.

5.3.3 (i) An applicant may also apply for import of spares, tools, spare refractories and catalyst as are required for installation and maintenance of Capital Goods. Application shall contain list of plant/ machinery installed in factory/ premises of applicant for which spares, tools, spare refractories and catalyst are required, duly certified by Chartered Engineer or Jurisdictional Central Excise Authorities. In such cases EPCG authorization shall not specify list of spares but shall indicate:- (a) Name of plant /machinery for which spares are required. (b) Value of duty saved allowed under the authorization. (c) Description of product to be exported with value of export obligation as per FTP.

93 (ii) Further, at time of final redemption of export obligation, authorization holder shall submit certificate from Independent Chartered Engineer confirming use of spares, tools, spare refractories and catalyst so imported in the installed capital goods on the basis of stock & consumption register maintained by authorization holder. EPCG Scheme to 5.4 An EOU/ a relocated SEZ unit, while converting to a DTA resultant DTA Unit Unit, may apply for an EPCG authorization in ANF alongwith from conversion documents prescribed therein.

EPCG Scheme to 5.4 An EOU/ a relocated SEZ unit, while converting to a DTA resultant DTA Unit Unit, may apply for an EPCG authorization in ANF alongwith from conversion documents prescribed therein. ‘No Objection Certificate’ of EOU/ Relocated should be produced from concerned Development SEZ Units Commissioner. Indigenous Sourcing 5.5 EPCG authorization holder intending to source capital goods of Capital goods indigenously, either alongwith application or after issuance of EPCG authorization, shall request to RA for invalidation of EPCG authorization for direct import/ issue of ARO , alongwith name and address of source person of the capital goods. 5.5.1 RA concerned will issue such invalidation letter/ARO, in duplicate. 5.5.2 Indigenous manufacturer intending to supply capital goods to EPCG authorization holder may apply to RA in ANF for issuance of Advance authorization for import of inputs including components required for manufacture of capital goods to be supplied to EPCG authorization holder. Leasing of Capital 5.6 An EPCG authorization holder may, source capital goods from Goods a domestic leasing company. In such cases, the Bill of Entry of imported capital goods or commercial invoice of indigenous capital goods, shall be signed jointly by EPCG authorization holder and leasing company.

easing company. In such cases, the Bill of Entry of imported capital goods or commercial invoice of indigenous capital goods, shall be signed jointly by EPCG authorization holder and leasing company. However, EPCG authorization holder shall alone be fully responsible for fulfillment of export obligation. Conditions for 5.7 In addition to conditions mentioned in paragraph 5.5 of FTP fulfillment of following conditions shall also be applicable for fulfillment of Export Obligation export obligation. 5.7.1 EPCG authorization holder shall export either directly or through third party (s). If a merchant exporter is EPCG authorization holder, name of supporting manufacturer shall also be indicated on shipping bills. At the time of export, EPCG authorization No. and date shall be endorsed on shipping bills which are proposed to be presented towards discharge of export obligation.

94 5.7.2 Export proceeds shall be realized in freely convertible currency except for deemed exports.

rsed on shipping bills which are proposed to be presented towards discharge of export obligation.

94 5.7.2 Export proceeds shall be realized in freely convertible currency except for deemed exports. Exports to SEZ units /Supplies to developers/ Co-developers, irrespective of currency of realization would also be counted for discharge of Export Obligation. 5.7.3. Supplies made to Oil and Gas sector also may be counted towards discharges of export obligation against an EPCG authorization provided it has been issued on or before 31.03.2000 and no benefit under paragraph 8.3.of FTP has been claimed on such supplies. 5.7.4 Exports made to former USSR, or to such countries as notified by DGFT, shall not be counted for fixing average level of exports. Additional Export Obligation (over and above indicated average) for all previous EPCG Licenses, which have not been redeemed, will be indicated separately. Exports made against EPCG authorizations, which have not been redeemed, shall not be added up for calculating the average export performance for the purpose of subsequent EPCG authorization. 5.7.5 Export under EPCG scheme shall also be entitled for benefits under Chapter 4 of FTP. 5.7.6 In case of export of goods relating to handicraft, handlooms, cottage, tiny sector, agriculture, aqua-culture (including fisheries), animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture, the EPCG authorization holders shall not be required to maintain average level of exports.

isheries), animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture, the EPCG authorization holders shall not be required to maintain average level of exports. However, this exemption from maintenance of average level of exports shall not be allowed for import of fishing trawlers, boats, ships and other similar items. Goods, excepting tools imported under EPCG scheme by such sectors, shall not be allowed to be transferred for a period of five years from date of imports even in cases where export obligation has been fulfilled. Transfer of capital goods to group companies, within five years from the date of import would however be permitted after fulfillment of EO, under intimation to RA and jurisdictional Central Excise Authority. 5.8 The Authorization holder under the EPCG scheme shall fulfill the export obligation over the specified period in the following proportions:

95 For Zero Duty EPCG Scheme Period from the date of Minimum export issue of Authorization obligation to be fulfilled Block of 1st to 4th year 50% Block of 5th and 6th year 50% For concessional 3% duty EPCG Scheme Period from the date of Minimum export issue of Authorization obligation to be fulfilled Block of 1st to 6th year 50% Block of 7th and 8th year 50% 5.8.1 In respect of Authorizations, on which the value of duty saved is Rs.100 crore or more , the export obligation shall be fulfilled over a period of 12 years (not applicable to zero duty EPCG scheme) in the following proportion:- Period from the date of Minimum export issue of Authorization obligation to be

on shall be fulfilled over a period of 12 years (not applicable to zero duty EPCG scheme) in the following proportion:- Period from the date of Minimum export issue of Authorization obligation to be fulfilled Block of 1st to 10th year 50% Block of 11th and 12th year 50% 5.8.2 However, the export obligation of a particular block of year may be set off by the excess exports made in the preceding block year. The Authorization holder would intimate the regional authority on the fulfillment of the export obligation, as well as average exports, within three months of completion of the block, by secured electronic filing using digital signatures. 5.8.3 Where export obligation of any particular block of years is not fulfilled in terms of the above proportions, except in such cases where the export obligation prescribed for a particular block of years is extended by the Regional Authority subject to payment of composition fee of 2% on duty saved amount equal to unfulfilled portion of EO, such Authorization holder shall, within 3 months from the expiry of the block of years, pay duties of customs (alongwith applicable interest as notified by DoR) of an amount equal to that proportion of the duty leviable

lder shall, within 3 months from the expiry of the block of years, pay duties of customs (alongwith applicable interest as notified by DoR) of an amount equal to that proportion of the duty leviable

96 on the goods which bears the same proportion as the unfulfilled portion of the export obligation bears to the total export obligation. 5.8.4 EPCG authorizations issued upto 31.03.2000 shall be governed by provisions laid down in paragraph 6.11 in HBP v1 (RE-99). Notwithstanding the same in HBPv1 (RE-99), authorization holder shall not have to surrender special Import licence in case of value wise shortfall. Authorizations issued from 1st April, 2000 upto 31st March, 2002 shall be governed by provisions of Chapter 6 of HBPv1 (RE-01) as amended from time to time. Authorizations issued from 1st April, 2002 upto 31st August, 2004 shall be governed by provisions of para 5.8 of HBP v1 (RE-02) as amended from time to time. Monitoring of 5.9 Authorization holder shall submit to RA concerned by 30th Export Obligation April of every year, report on fulfillment of export obligation. RA concerned may issue partial EO fulfillment certificate, provided export performance is proportionately adequate to fulfillment of export obligation. Automatic 5.10 If authorization issued has actually been utilized for import of Reduction/Enhancement a value in excess, upto 10% of CIF value /duty saved amount upto 10% of CIF value of authorization, authorization shall be deemed to have been and prorata Reduction/ enhanced by that proportion.

ment a value in excess, upto 10% of CIF value /duty saved amount upto 10% of CIF value of authorization, authorization shall be deemed to have been and prorata Reduction/ enhanced by that proportion. Customs shall automatically allow Enhancement in export clearance of goods in excess, upto 10% of authorization value/ obligation duty saved amount, without endorsement by concerned RA In such case, authorization holder shall furnish additional fee to cover excess imports effected, in terms of CIF value/duty saved amount, to RA concerned, within one month of excess imports taking place. Export obligation shall automatically stand enhanced proportionately. In case of utilization being more than 10%, concerned RA as per their financial powers, may endorse as per extant provisions. Authorization holder shall furnish additional BG/ LUT to the customs authority. 5.10.1 Similarly, if EPCG authorization holder has utilized authorization less than the value earmarked in authorization, his export obligation shall stand reduced on prorata basis with reference to actual utilization of authorization.

on holder has utilized authorization less than the value earmarked in authorization, his export obligation shall stand reduced on prorata basis with reference to actual utilization of authorization.

97 Extension of Export 5.11 Concerned RA, may consider one or more requests for grant Obligation Period of extension in export obligation period, on payment of composition fee equal to 2% of proportionate duty saved amount on unfulfilled export obligation or an enhancement in export obligation imposed to the extent of 10% of total export obligation imposed under authorization, as the case may be, at the choice of exporter, for each year of extension sought. Such first extension in EO period can be for a maximum period of 2 years. Extension in EO period beyond two years’ period available above, may be considered, for a further extension upto 2 years with a condition that 50% of duty payable in proportion to the unfulfilled export obligation is paid by authorization holder to Custom authorities before an endorsement of extension is made on EPCG authorization by RA concerned. In such cases, no composition fee is to be paid or additional EO is to be imposed as prescribed in the Para above.

es before an endorsement of extension is made on EPCG authorization by RA concerned. In such cases, no composition fee is to be paid or additional EO is to be imposed as prescribed in the Para above. In case the firm is still not able to complete the export obligation, duty already deposited will be deducted from total duty plus interest to be paid for EO default. However for zero duty EPCG scheme only one extension of 2 years in export obligation period shall be available, subject to conditions mentioned above. Extension in export obligation period shall also be subject to such terms and conditions as may be prescribed by competent authority. 5.11.1 The firm /company, which is applying for registration with BIFR/ Rehabilitation Department of State Government, shall also intimate DGFT with regard to relief sought for EPCG authorization, if any, within 30 days of receipt of application by agency concerned. DGFT, thereafter, shall take up the matter with agency concerned to safeguard government interest on account of default in fulfillment of export obligation imposed on EPCG authorization obtained by such firm/companies. DGFT may consider such application for grant of period of extension upto 12 years, or as per rehabilitation package prepared by operating agency and approved by BIFR board/ state authority.

mpanies. DGFT may consider such application for grant of period of extension upto 12 years, or as per rehabilitation package prepared by operating agency and approved by BIFR board/ state authority.

98 5.11.2 To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% compared to the previous year, average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year as against the preceding year. The sectors /product groups for which this relaxation is to be allowed shall be conveyed by the DGFT to all the RAs within seven months of the end of the previous financial year, and the RAs shall re- fix the annual average EO for previous year accordingly, for exporters in that sector /product group. Automatic EO extension 5.11.3 Whenever a ban/restriction is imposed on export of any in the event of ban on product, export obligation period in respect of EPCG export product authorizations already issued prior to imposition of ban of such export products, would stand automatically extended for a period equivalent to the duration of ban, without any composition fee and exporter would not be required to maintain average E.O.

ban of such export products, would stand automatically extended for a period equivalent to the duration of ban, without any composition fee and exporter would not be required to maintain average E.O. as well for the ban period. Export Obligation 5.12 RA concerned may condone shortfall upto 5% in export Shortfall obligation arising out of duty saved amount. Redemption 5.13 As evidence of fulfillment of export obligation, authorization holder shall furnish application in ANF 5 B with documents prescribed therein. On being satisfied, RA concerned shall issue a certificate of discharge of export obligation to the EPCG authorization holder and send a copy to customs authorities with whom BG/LUT has been executed. RA shall ensure disposal of such applications within 30 days. Shortcomings, if any, shall be pointed out in one go. All correspondence, thereafter, shall relate to these deficiencies only. Fresh correspondence, if necessary, shall be within 15 days. Once documents are complete, EO will be discharged within 30 days of receipt of complete documents /information. Process of issue of final discharge certificate/ rejection shall be completed within a period of 90 days from date of receipt of initial request. Applications that remain outstanding beyond a period of 90 days shall be reported to DGFT alongwith reasons thereof, immediately thereafter.

riod of 90 days from date of receipt of initial request. Applications that remain outstanding beyond a period of 90 days shall be reported to DGFT alongwith reasons thereof, immediately thereafter.

99 Regularization of 5.14 In case, EPCG authorization holder fails to fulfill prescribed Bonafide Default export obligation, he shall pay duties of Customs plus interest as prescribed by Customs authority. Such facilities can also be availed by EPCG authorization holder to exit at his option. The authorization holder will have the option to furnish valid duty credit scrips, issued under Chapter 3 of FTP & DEPB, for payment of the customs duty component. Maintenance of Records 5.15 Every EPCG authorization holder shall maintain, for a period of 3 years from date of redemption, a true and proper account of exports/ supplies made and services rendered towards fulfillment of export obligation. Re-Export of Capital 5.16 Capital Goods imported under EPCG scheme, which are found Goods Imported under defective or unfit for use, may be re-exported back to foreign EPCG Scheme supplier within three years from the date of payment of duty on importation thereof, with permission of RA /Customs Authority. Consequently, EO would be refixed. Replacement of 5.16.1 Capital Goods imported and found defective or otherwise unfit Capital Goods for use may be exported, and Capital Goods in replacement thereof be imported under EPCG scheme.

xed. Replacement of 5.16.1 Capital Goods imported and found defective or otherwise unfit Capital Goods for use may be exported, and Capital Goods in replacement thereof be imported under EPCG scheme. In such cases, while allowing export, the Customs shall credit the duty benefit availed which can be debited again at the time of import of such replaced Capital Goods. Penal Action 5.17 In case of failure to fulfill export obligation or any other condition of authorization, authorization holder shall be liable for action under FT (D&R) Act, 1992, Orders and Rules made there under, provisions of FTP and Customs Act, 1962. Clubbing of EPCG 5.18 Clubbing of two or more EPCG authorizations of same authorization authorization holder would be permitted. 5.18.1 An application for clubbing can be made only to RA concerned in ANF 5D. Clubbing shall not be permitted in case authorizations are issued by different RAs. 5.18.2 Total export obligation would be refixed taking into account total of duty saved or total of CIF value of imports. 5.18.3 On Clubbing, authorizations for all purpose shall be deemed to be a single EPCG authorization. Export obligation period for clubbed authorization shall be reckoned from first authorization issue-date. However, in cases where clubbed CIF /duty saved value exceeds Rs.100 crore, no corresponding benefit of increase in export obligation period shall be admissible.

from first authorization issue-date. However, in cases where clubbed CIF /duty saved value exceeds Rs.100 crore, no corresponding benefit of increase in export obligation period shall be admissible.

100 5.18.4 Average export obligation for clubbed authorizations would be highest of average export obligations endorsed on individual authorizations so clubbed. 5.18.5 No clubbing would be permitted after expiry of EOP. 5.18.6 The aforesaid provisions for Clubbing of EPCG Authorizations shall be applicable for authorizations issued on or after 1.4.2007. However, EPCG authorizations issued prior to 1.4.2007 shall be governed by provisions contained in Chapter 5 of HBP v1 (RE-2006). Refixation of Export 5.19 (a) EPCG authorization holder can apply for refixation Obligation upon of export obligation as given in para 5.5 (i) of FTP in conversion from CIF ANF 5C. based to duty based EO (b) For all EPCG authorizations, authorization holder should have fulfilled mandated (original or amended) block wise export obligation, till previous block to application date.

d to duty based EO (b) For all EPCG authorizations, authorization holder should have fulfilled mandated (original or amended) block wise export obligation, till previous block to application date. In all such cases, refixed export obligation would be computed as under: (% export obligation unfulfilled) x (8) x (duty saved on authorization issue-date) (c) There would be no change in average export obligation fixed or export obligation period of original authorization. Technological 5.20 Application for technological upgradation of the capital goods Upgradation of would be made in ANF 5A. Capital Goods Import of Refurnished/ 5.21 Import of refurbished / reconditioned spares must have a Reconditioned Spares residual life not less than 80% of life of original spare, which and Tools would be certified by EPCG authorization holder. The tools imported under EPCG Scheme may be transferred to any of units or group companies of applicant. 5.22 Revalidation of authorizations issued under EPCG scheme shall not be allowed.

on holder. The tools imported under EPCG Scheme may be transferred to any of units or group companies of applicant. 5.22 Revalidation of authorizations issued under EPCG scheme shall not be allowed.

101 CHAPTER 6 EXPORT ORIENTED UNITS (EOUs), ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) SCHEME AND BIO-TECHNOLOGY PARKS (BTPs) Scheme 6.1 Policy relating to EOUs, EHTPs, STPs and BTPs Schemes is given in Chapter 6 of FTP. Applications / 6.2.1 For setting up an EOU, three copies of application as in Approval / Renewal Appendix 14-I-A may be submitted to DC. of approval 6.2.2 Applications for setting up units under EOU scheme other than proposals for setting up of unit in service sector (except R&D, software and IT enabled services, or any other service activity as may be delegated by BoA), shall be approved or rejected by Units Approval Committee within 15 days, as per criteria indicated in Appendix 14-I-B and sector specific conditions relating to approval as in Appendix 14-I-C.

BoA), shall be approved or rejected by Units Approval Committee within 15 days, as per criteria indicated in Appendix 14-I-B and sector specific conditions relating to approval as in Appendix 14-I-C. In other cases, approval may be granted by DC after clearance by BoA. 6.2.3 Proposals for setting up EOU requiring industrial licence may be granted approval by DC after clearance of proposal by BoA (as per Appendix 14-I-D) and Department of Industrial Policy and Promotion within 45 days on merits. 6.2.4 STP / EHTP complexes can be set up by Central Government, State Government, Public or Private Sector Undertakings or any combination thereof, duly approved by Inter-Ministerial Standing Committee (IMSC) in Ministry of Communication and Information Technology (Department of Information Technology - DoIT). Application for setting up EHTP / STP unit shall be in format prescribed by DoIT and shall be submitted to officer designated by DoIT. 6.2.5 BTP can be set up by Central Government, State Government, Public or Private Sector Undertakings or any combination thereof. Application for setting up of BTP shall be submitted to Department of Bio-Technology (DoBT) and such applications which meet guidelines prescribed by DoBT will be approved and recommended to DGFT for notification. Application for setting up of BTP unit shall be submitted to officer designated by DoBT.

lications which meet guidelines prescribed by DoBT will be approved and recommended to DGFT for notification. Application for setting up of BTP unit shall be submitted to officer designated by DoBT.

102 6.2.6 LoP / LoI shall specify item(s) of manufacture / service activity, annual capacity, projected annual export for first five years in dollar terms, Net Foreign Exchange (NFE) earnings, limitations, if any, regarding sale of finished goods, by-products and rejects in DTA and such other matter as may be necessary and also impose such conditions as may be required. 6.2.7 LoP/LoI issued to EOU / EHTP / STP / BTP units by concerned authority would be construed as an authorization for all purposes. Standard format for LoP for EOU is given in Appendix 14- I-E. 6.2.8 EOUs shall have separate earmarked premises for separate LoP. Similarly, EOUs may be approved on leased premises provided lease has been obtained from Government Department / Undertaking / Agency. However, in case