CBEC Clarification
on Annual Supplement to FTP 2009-2014
[CBEC
Circular No. 38 dated 27th September 2010]
Sub: Foreign Trade Policy (FTP), 2009-14.
The Annual Supplement to the Foreign Trade Policy (hereinafter referred
to as the FTP), 2009-2014 and the Handbook of Procedures (Vol.I)
(hereinafter referred to as the Handbook) have been notified by the DGFT vide
notification No. 1(RE-2010) / 2009-2014 dated 23th August 2010 and Public
Notice 1(RE-2010)/2009-14 dated 23th August 2010 respectively. The Department
of Revenue has since issued notification Nos.88/2010-Cus, 89/2010-Cus & 90/2010-Cus
all dated 01.09.2010, 91/2010-Cus dated 06.09.2010, 92/2010-Cus dated
10.09.2010, 93/2010-Cus dated 14.09.2010 & 97/2010-Cus dated 21.09.2010 to
implement the Policy and the Handbook. The FTP, Handbook and the above
mentioned notifications may please be perused for details. The salient features
of the changes are discussed below:
I. New
schemes.
Annual
Export Promotion Capital Goods scheme
The annual supplement has
introduced a provision in para 5.2 D of the FTP that
EPCG Authorization can also be issued for annual requirement to Status
Certificate Holders and all other categories of exporters having past export
performance (in preceding two years), both under zero duty and 3% duty
Schemes. The authorization for annual
requirement may not indicate the capital goods which can be imported under the
authorization. However, the authorization shall indicate export product(s) to be
exported under the authorization. The authorization holder shall submit a Nexus
Certificate from an independent Chartered Engineer (
II. Changes in the existing Export Promotion schemes
(1) Zero
duty Export Promotion Capital Goods (EPCG) Scheme
This scheme has been
extended upto 31.3.2012. Further, the scheme has been expanded by
adding some more sectors like rubber
products, paints and varnishes, glass and glassware, ceramics, paper, books,
animal by-products, ossein and gelatine,
graphite products and explosives,
marine products, sports goods and
toys, engineering products (iron & steel, pipes and tubes and ferro alloys). Notification no. 92/2010-Cus dated
10.09.2010 may please be referred.
(2) Status Holder Incentive
Scheme (SHIS)
This scheme has been extended upto 31.3.2012
and has been expanded by adding some more sectors rubber products, paints and
varnishes, glass and glassware, ceramics, paper, books, animal by-products, ossein and gelatine, graphite
products and explosives, sports goods and toys, electronic products,
engineering products (iron & steel, steel pipes, tubes and fittings thereof
and ferro alloys). Notification no. 92/2010-Cus dated
10.09.2010 has been issued in this regard.
(3) Applicability
of benefits under Zero Duty EPCG & SHIS schemes
Para 5.1A to HBPv.1(2009-14) as notified on
27-08-2009 provided that benefit of Zero Duty EPCG Scheme & SHIS shall not
be simultaneously available in the same year.
The HBPv.1 (RE 2010) has made this provision clear by providing in para 3.10.3 to the effect that SHIS scrips
will not be issued in the year in which Zero Duty DPCG authorization has been
issued and that the SHIS scrips which are not issued
in a particular year for the reason that Zero Duty EPCG authorization has been
issued in that year shall not be issued in subsequent years also. The Customs notifications Nos. 101/2009-Cus
dated 11.09.2009, 102/2009-Cus dated 11.09.2009 and 104/2009-Cus dated
14.09.2009 have been accordingly amended vide notification No. 92/2010-Cus
dated 10.09.2010.
(4) Served
From India Scheme (SFIS)
As per existing Notification No. 91/2009-Cus, import of vehicles is not
allowed under the Served From India Scheme(SFIS), even if such vehicles are freely importable
under the Foreign Trade Policy. However, after the announcement of Annual
supplement to the Foreign Trade Policy, vehicles which are in the nature of
professional equipment such as Airfield
Fire Fighting and Rescue Vehicles (AFFRVs), Heavy Duty Modular Trailer
Combination, Reach Stackers etc. for use by
the service provider in his regular service business have been allowed to be
imported against SFIS scrips. However, personal
vehicles such as motor cars/ Sports Utility Vehicles(SUVs)
/ Multi Utility Vehicles (MUVs) etc. are
not permitted to be imported against SFIS scrips.
Notification no. 90/2010-Cus dated 01.09.2010 refers in this regard.
(5) Agri-Infrastructure Incentive Scrip (AIIS).
The Agri
Infrastructure Scrips (AIIS) issued under para 3.13.4 of the FTP Vishesh Krishi Gram Udyog Yojana (VKGUY) can now be transferred to units in
Parks recognized by the Ministry of Food
Processing Industries, for import of cold chain equipment. This facility, however, shall not be allowed
to developers of Agri parks. The Notification no.
90/2010-Cus dated 01.09.2010 has been issued in this regard.
(6) Advance
Authorization Scheme
The goods imported under Advance Authorization for Annual Requirement
have been exempted from anti-dumping duty & Safeguard duty on the same
lines as the goods imported under normal advance authorization scheme.
Notification no. 90/2010-Cus dated 01.09.2010 may please be referred.
(7) DEPB
Scheme
There is no change in the scheme except that the scheme shall now be
valid upto 30.06.2011. Necessary amendments in the
existing Notification No. 97/2009-Cus dated 11.9.2009 will be made at the
appropriate time.
III. Miscellaneous changes
(i) The
export duty on export of imported raw hides & skins and semi- processed
leathers from bonded warehouse, has been reduced from the present level of 60%
to Nil. The Notification No. 88/2010-Cus dated 01.09.2010 refers in this
regard.
(ii) The import of duty free
embellishments has been allowed to polyester made-ups in line with the facility
available to cotton made ups. The Notification No. 21/2002-Cus dated 01.03.2002
has been amended vide Notification No. 89/2010-Cus dated 01.09.2010
accordingly.
(iii) The import of duty free
embellishments has been allowed to handloom made-ups also in line with the facility
available to cotton made ups (other than handloom). The Notification No.
21/2002-Cus dated 01.03.2002 has been amended vide Notification No. 91/2010-Cus
dated 06.09.2010 accordingly.
(iv) The list of existing items which
are allowed duty free for Gem and Jewellery sector
has been extended and items, namely, tags and lables,
security sensors on cards, staple fibre, poly bags,
if imported by the Gem and Jewellery sector have been
permitted within the overall limits already allowed under the scheme. The notification No. 97/2010-Cus dated
21.09.2010 amending existing notification no. 41/1999-Cus dated 28.04.1999 has
been issued in this regard.
(v) Five new ports including Ennore (Tamil Nadu) have been notified for the purpose of
imports and exports under Export promotion Schemes.
IV. These instructions may be
brought to the notice of the trade / exporters by issuing suitable Trade /
Public Notices. Suitable Standing orders/instructions may be issued for the
guidance of the assessing officers. Difficulties faced, if any in
implementation of the Circular may please be brought to the notice of the Board
at an early date.
F.NO.605/33/2010-DBK