Modalities for Registration of Cotton Contracts with DGFT
[DGFT
Policy Circular No. 09 dated 29th December 2010]
Subject:- Conditions and modalities for
registration of contracts of cotton with DGFT.
Attention is invited to Notification No. 12 (RE-2010)/2009-14 dated 16.12.2010
issued by this Office whereby registration of contracts for export of cotton
under ITC(HS) Code 5201,5202 & 5203 will be done
by DGFT and Policy Circular No. 6(RE-2010)/2009-14 dated 16.12.2010, through
which it was informed that modalities for registration of contracts will be
notified separately. The data for export made from 1/11/2010 to 15/12/2010 is
being collected and allocation will made for the balance quantity keeping in
view the decision of GoM to limit the export of raw
cotton to 55 lakh bales during the cotton season
2010-11. Accordingly, it has been decided to invite applications for grant of
registration certificate for export of cotton from 31.12.2010 to 06.01.2011
(till 5.00 PM).
2. All applications for grant
of registration certificate shall be sent only through E-mail at cottonexport@nic.in in the
prescribed format as per Annexure-1 of this Policy Circular.
3. Allocation will be made
after scrutiny of applications, as per the following criteria:-
(i) Allocation
will be done on a prorata basis with a ceiling of 1,00,000 bales per IEC and floor of 500 bales per IEC.
Therefore, no application below 500 bales will be considered.
(ii) Exporters
who did not export full quantity for which registration certificate was
obtained by them from Textile Commissioner, Mumbai in October, 2010, would be disincentivised by reduction of their pro-rata quantity by
the percentage of such default.
(iii) After the
allocation is made, the applicants shall have to submit
(a) Copy of
Export Contract alongwith
(i) A copy of
confirmed and irrevocable Letter of Credit(LC), or
(ii) FIRC from
Bank showing receipt of remittance from the concerned foreign buyer as proof of
having received 100% Advance Payment or a minimum of 25% Advance Payment
and balance Cash Against Delivery(CAD),
(b) Declaration/Undertaking
as given with the application format, on the letter head of the firm, and a
hard copy of application duly signed,
(c) Copy of
IEC
These documents would need to be submitted within a period of 15 days of
allocation.
(iv) After
scrutinizing the documents so received, and if found eligible, the applicant
shall be issued a Registration Certificate. Export against such registered
contracts shall be completed on or before the date specified in Calendar of
events (Specified date will be at least 30 days from date of issuance of RC)
(v) Applicants
who fail to submit the stipulated documents within prescribed time or where
documents are found to be incorrect, that applicant shall be declared
ineligible. They will forfeit their right to seek further allocation. Their
allocation will then be redistributed amongst other eligible applicants.
(vi) Failure to
export the allocated quantity within the stipulated time would invite debarment
from further allocation. In addition, penal action as per Section 11(2) of the
Foreign Trade(D&R) Act would be initiated. For
ready reference Section 11(2) is extracted below:-
“11(2). Where any person makes or abets
or attempts to make any export or import in contravention of any provisions of
this Act or any rules or order made thereunder or the
Foreign Trade Policy, he shall be liable to a penalty of not less than ten
thousand rupees and not more than five times the value of the goods or services
or technology in respect of which any contravention is made or attempted to be
made, whichever is more.”
4. An illustrative example is
provided in Annexure-2 to this Policy Circular for information and guidance.
5. Calendar
for process of applications, issue of RC and export is provided in Annexure-3
to this Policy Circular.
6. This
issues with the approval of Commerce Secretary.
Annexure-1 to Policy Circular No.
09(RE-2010)/2009-14 dated 29.12.2010
Sample Format for Sending Application by E-mail To (cottonexport@nic.in)
Subject header of E-mail: IE Code- Name of the
Firm/Applicant-Quantity applied for
(Example: 0500030001-ABC Exports-10,000 bales)
(Fill this in the “Subject” field)
Message
Body Contact of E-mail
Line 1 : IE Code (Example:
0500030001)
Line 2 : Name (Example: ABC
Exports)
Line 3: Quantity applied for (In bales, both in figure and words).
(Example 10,000 bales, Ten Thousand bales)
Line 4: ITC(HS) Code (Example : 5201)
Line 5: Blank
Lines
6-13: Details of export made on EARCs obtained from Textile Commissioner,
Mumbai in October, 2010
Line 6: Amount for which EARC was obtained. (Example
20,000 bales)
Line 7: EARC Numbers and date.
Line 8: Actual export made on or before 15.12.2010 out of EARC quantity.
(Example 20,000 bales)
Line 9: % of such export. (Example
100%)
Line 10: FOB value of such export made. (Example US$ 50,300)
Line 11: Destination/Port of export.
(Example: Pakistan/ Karachi)
Line 12: Detail of Foreign buyer (Name and
Address).
Line 13: Blank
Lines 14-19: Any information that the applicant
wishes to submit.
Lines
20-30: Details of Applicant
Line 20: Name of the Applicant (in whose name IEC has been issued)
(Example: ABC Exports)
Line 21: l Exact Postal Address
Line 22: l (Example: D-402, 1st Floor, Karim
Nagar, New Delhi- 110010)
Line 23: l
Line 24: Phone Number(s) with STD Code (Example: 011-23456789)
Line 25: Fax Number (Example: 011-23456793)
Line 26: E-mail (Example: abcexports@yahoo.com)
Line 27: Alternative E-mail (Example: ashokbhalla@gmail.com)
(Application must be from one of these two E-mails)
Line 28: Name of the authorised person sending
the application
(Example: Ashok Bhalla)
Line 29: E-mail of the authorised person
(Example: ashokbhalla@gmail.com)
Line 30: Phone No of the authorized person (Landline & Cell phone)
Note 1: After
allocation, eligible applicant shall submit hard copies of above application,
duly signed by authorised person alongwith
following declaration on the official letter head of applicant firm.
Declaration/Undertaking
1. I / We hereby declare that
the particulars and the statements made in this application are true and
correct to the best of my / our knowledge and belief and nothing has been concealed
or held there from.
2. I / We fully understand that
any information furnished in the application if found incorrect or false will
render me / us liable for any penal action or other consequences as may be
prescribed in law or otherwise warranted.
3. I / We undertake to abide by
the provisions of the FT (D & R) Act, 1992, as amended, the Rules and
Orders framed there under, FTP, HBP v 1 and HBP v2 and ITC (HS). I also
undertake that in the event of non-performance after grant of Registration Certificate
for export of cotton by the Directorate General of Foreign Trade, I shall be
liable to Penal Action under Section 11(2) of Foreign Trade(Development &
Regulation) Act, 1992, (as amended), including debarment from future
allocations.
4. I hereby certify that I am authorised to verify and sign this declaration.
Signature of the Applicant: Place:
Name: Date:
Designation:
Official Address:
Telephone No.:
Cell Phone No.:
Fax No.:
Email:
Residential Address:
Note 2: Required
documents for submission by eligible applicants for obtaining RC (In addition
to documents prescribed in Note 1 above)
(a) Copy of
Export Contract alongwith
(i) A
copy of confirmed and irrevocable Letter of Credit(LC),
or
(ii) FIRC from
Bank showing receipt of remittance from the concerned foreign buyer as proof of
having received 100% Advance Payment or a minimum of 25% Advance Payment and
balance Cash Against Delivery(CAD).
(b) Copy of
IEC
(c) Proof of
shipments made against EARCs issued by Textile Commissioner, Mumbai
Annexure-2 to
Policy Circular No. 09(RE-2010)/2009-14 dated 29.12.2010
Illustrative
example
Suppose 5 exporters have applied for allocation of quota. Let us assume that
the total quantity to be allocated is 1,00,000 bales.
But, we have received applications for 10,00,000
bales. Accordingly, each applicant will get 10% of the quantity he/she has
applied for. The percentage share which each exporter will be allocated of the
total quantity is as below:-
(1) Allocation
of quantity on pro-rata basis {See para 3(i) of Policy Circular dated 29.12.2010}
|
Exporter |
Quantity applied in bales |
Quantity allotted in bales |
|
A |
1,00,000 |
10,000
+ 1,111.11= 11,111.11 |
|
B |
1,50,000 |
15,000+
1666.66= 16,666.66 |
|
C |
2,00,000 |
20,000+
2,222.23= 22,222.23 |
|
D |
2,50,000 |
25,000 |
|
E |
3,00,000 |
25,000* |
|
Total |
10,00,000 |
1,00,000 |
*The maximum ceiling is say 25,000 bales. Therefore, applicant E does not
get 10% of quantity applied for(10% of 3,00,000 is
30,000, which is more than the prescribed ceiling of 25,000) so, allocation for
E is limited to 25,000 bales only. The balance quantity of 5,000 bales has been
distributed in proportion to the applied quantity among A, B & C.
2A.
Calculation for disincentivisation due to
non-performance against EARCs obtained from Textile Commissioner, Mumbai during
October, 2010{See para 3(ii) of Policy Circular dated
29.12.2010}
|
Exporter |
Quantity allotted (in bales) |
Percentage of non-performance |
Disallowed quantity in bales |
|
A |
11,111.11 |
|
-- |
|
B |
16,666.66 |
|
-- |
|
C |
22,222.23 |
|
-- |
|
D |
25,000.00 |
25% |
6,250 |
|
E |
25,000.00 |
30% |
7,500 |
|
Total |
1,00,000.00 |
|
13,750 |
Note:
(1) Exporter A, B & C either
exported 100% of the quantity for which they had obtained EARCs from Textiles
Commissioner, Mumbai in October, 2010, or they had not obtained any such EARC.
(2) Exporter D & E had
obtained EARCs in October, 2010, but could not export 100% quantity for which
such EARCs were obtained by them. D exported only 75% (here non-performance is
25%); E exported only 70% (here non performance is 30%)
2B.
Allocation of disallowed quantity under 2A, (13,750 bales) among remaining
eligible exporters
|
Exporter |
Pro-rata allocation of quantity as per (1) above |
% share among three |
Additional allocation (in bales) |
|
A |
11,111.11 |
22.22% |
3,055.25 |
|
B |
16,666.66 |
33.33% |
4,582.87 |
|
C |
22,222.23 |
44.45% |
6,111.87 |
|
Total |
50,000.00 |
100.00% |
13,750.00 |
(3)
Allocation after re-distribution of disallowed quantity
|
Exporter |
Allocation of quota (in bales) |
Final allocation |
|
A |
11,111.11 + 3,055.25 |
14,166.36 |
|
B |
16,666.66 + 4,582.87 |
21,249.53 |
|
C |
22,222.23 + 6,111.87 |
25,000.00** |
|
D |
25,000.00 - 6,250.00 |
18,750.00 |
|
E |
25,000.00 - 7,500.00 |
17,500.00 |
|
|
|
96,665.89 |
** (For C, the total quantity comes to more than 25,000 bales, but as per
ceiling the quantity allocated to C is limited to 25,000 bales). This leaves a
balance of 3,334.11 bales which will be again re-allocated amongst the
remaining eligible applicants i.e. A & B using the above iteration, till
the total quantity available is fully allocated.
Annexure-3 to
Policy Circular No. 09(RE-2010)/2009-14 dated 29.12.2010
Calendar
of Events
|
1. |
Policy
Circular to be issued on |
29th
December, 2010 |
|
2 |
Receipt
of Application Start
Date: Close
Date: |
1200
hours, 31st December, 2010 1700
hours, 6th January, 2011 |
|
3 |
Compilation
Work |
7th,
8th & 9th January, 2011 |
|
4 |
Declaration
of Allocation |
Monday,
10th January, 2011 |
|
5 |
Document
submission, Scrutiny & Issue of RC Start
Date: Close
Date: |
1000
hours, Tuesday 11.01. 2011 1100
hours, Tuesday 25.01.2011 |
|
6 |
Last
Date to Export |
Friday,
25th February, 2011 |