Chapter- 1 A
Legal Framework
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Foreword |
The Foreword spells out the broad
framework. |
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Duration |
The Foreign Trade Policy 2
009-2014 (FTP), incorporating provisions relating to export and import of
goods and services, shall come into force with effect from 2 7th August, 2
009 and shall remain in force upto 31 st March, 2014 unless otherwise
specified. All exports and imports upto 2 6th August 2 009 shall be
accordingly governed by the FTP 2004-2009. |
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Amendments |
Central Government reserves right
in public interest to make any amendments by notification to this Policy in
exercise of powers conferred by Section 5 of FT(D&R) Act. |
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Transitional Arrangements |
Authorisation issued before commencement
of FTP shall Arrangements continue to be valid for the purpose and duration
for which such Authorisation was issued, unless otherwise stipulated |
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1.5 |
In case an export or import that
is permitted freely under FTP is subsequently subjected to any restriction or
regulation, such export or import will ordinarily be permitted
notwithstanding such restriction or regulation, unless otherwise stipulated,
provided that shipment of export or import is made within original validity
with respect to available balance and time period of an irrevocable
commercial letter of credit, established before date of imposition of such
restriction. |
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However for operationalizing such
irrevocable commercial letter of credit the applicant shall have to register
the Letter of Credit and contract with the concerned RA within 15 days of the
issue of any such restriction or regulation. |
Chapter- 1 B
Special Focus
Initiatives
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Special Focus |
With a view to continously
increasing our percentage share of global trade and expanding employment
opportunities, certain special focus initiatives have been
identified/continued for Market Diversification, Technological Upgradation,
Support to status holders, Agriculture, Handlooms, Handicraft, Gems &
Jewellery, Leather, Marine, Electronics and IT Hardware manufacturing
Industries, Green products, Exports of products from North-East, Sports Goods
and Toys sectors. Government of India shall make concerted efforts to promote
exports in these sectors by specific sectoral strategies that shall be
notified from time to time. |
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Further Sectoral Initiatives in
other sectors will also be announced from time to time. (i) Market Diversification Weaker demand in developed
economies, triggered by falling asset prices and increased economic
uncertainty has pulled down the growth of India’s exports to developed
countries. There are no clear signals as to when the markets in developed
countries would revive. To insulate Indian exports from the decline in demand
from developed countries, in this Policy focus is on diversification of
Indian exports to other markets, specially those located in Latin America,
Africa, parts of Asia and Ocenia. To achieve diversification of Indian
exports, following initiatives have been taken under this Policy. 1.
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new countries have been included within the ambit of Focus Market Scheme. 2.
The
incentives provided under Focus Market Scheme have been increased from 2.5%
to 3%. 3.
There
has been a significant increase in the outlay under ‘Market Linked Focus
Product Scheme’ by inclusion of more markets and products. This ensures
support for exports to all countries in Africa and Latin America. (ii) Technological Upgradation To usher in the next phase of
export growth, India needs to move up in the value chain of export goods.
This objective is sought to be achieved by encouraging technological
upgradation of our export sector. A number of initiatives have been taken in
this Policy to focus on technological upgradation; such initiatives include: 1.
EPCG
Scheme at zero duty has been introduced for certain engineering products,
electronic products, basic chemicals and pharmaceuticals, apparel and
textiles, plastics, handicrafts, chemicals and allied products and leather
and leather products. 2.
The
existing 3 % EPCG Scheme has been considerably simplified, to ease its usage
by the exporters. 3.
To
encourage value added manufacture export, a minimum 15 % value addition on
imported inputs under Advance Authorisation Scheme has been stipulated. 4.
A
number of products including automobiles and other engineering products have
been included for incentives under Focus Product, and Market Linked Focus
Product Schemes. 5.
Steps
to encourage Project Exports shall be taken. (iii) Support to status holders The Government recognized ‘Status
Holders’ contribute approx. 60% of India’s goods exports. To incentivise and
encourage the status holders, as well as to encourage Technological
upgradation of export production, additional duty credit scrip @ 1 % of the
FOB of past export shall be granted for specified product groups including
leather, specific sub sectors in engineering, textiles, plastics, handicrafts
and jute. This duty credit scrip can be used for import of capital goods by
these status holders. The imported capital goods shall be subject to actual
user condition. (iv) Agriculture and Village
Industry 1.
Vishesh
Krishi and Gram Udyog Yojana 2.
Capital
goods imported under EPCG will be permitted to be installed anywhere in AEZ. 3.
Import
of restricted items, such as panels, are allowed under various export
promotion schemes. 4.
Import
of inputs such as pesticides are permitted under Advance Authorisation for
agro exports. 5.
New
towns of export excellence with a threshold limit of Rs 150 crore shall be
notified. 6.
Certain
specified flowers, fruits and vegetables are entitled to a special duty
credit scrip, in addition to the normal benefit under VKGUY. (v) Handlooms 1.
Specific
funds are earmarked under MAI / MDA Scheme for promoting handloom exports. 2.
Duty
free import entitlement of specified trimmings and embellishments is 5 % of
FOB value of exports during previous financial year. 3.
Duty
free import entitlement of hand knotted carpet samples is 1 % of FOB value of
exports during previous financial year. 4.
Duty
free import of old pieces of hand knotted carpets on consignment basis for
re-export after repair is permitted. 5.
New
towns of export excellence with a threshold limit of Rs 150 crore shall be
notified. (f) Machinery and equipment for effluent treatment plants is exempt
from customs duty. (vi) Handicrafts 1.
Duty
free import entitlement of tools, trimmings and embellishments is 5 %of FOB
value of exports during previous financial year. Entitlement is broad banded,
and shall extend also to merchant exporters tied up with supporting
manufacturers. 2.
Handicraft
EPC is authorized to import trimmings, embellishments and consumables on
behalf of those exporters for whom directly importing may not be viable. 3.
Specific
funds are earmarked under MAI & MDA Schemes for promoting Handicraft
exports. 4.
CVD
is exempted on duty free import of trimmings, embellishments and consumables.
5.
New
towns of export excellence with a reduced threshold limit of Rs 150 crore shall
be notified. 6.
Machinery
and equipment for effluent treatment plants are exempt from customs duty. 7.
All
handicraft exports would be treated as special Focus products and entitled to
higher incentives. (vii) Gems & Jewellery 1.
Import
of gold of 8 k and above is allowed under replenishment scheme subject to
import being accompanied by an Assay Certificate specifying purity, weight
and alloy content. 2.
Duty
Free Import Entitlement (based on FOB value of exports during previous
financial year) of Consumables and Tools, for: 1. Jewellery made out of: (a) Precious metals (other than
Gold & Platinum)– 2% (b) Gold and Platinum – 1% (c ) Rhodium finished Silver – 3% 2. Cut and Polished Diamonds – 1% 3.
Duty
free import entitlement of commercial samples shall be Rs. 300,000. 4.
Duty
free re-import entitlement for rejected jewellery shall be 2% of FOB value of
exports. 5.
Import
of Diamonds on consignment basis for Certification/ Grading & re-export
by the authorized offices/agencies of Gemological Institute of America (GIA)
in India or other approved agencies will be permitted. 6.
Personal
carriage of Gems & Jewellery products in case of holding/participating in
overseas exhibitions increased to US$ 5 million and to US$ 1 million in case
of export promotion tours. 7.
Extension
in number of days for re-import of unsold items in case of participation in
an exhibition in USA increased to 90 days. 8.
In
an endeavour to make India a diamond international trading hub, it is planned
to establish “Diamond Bourse (s)”. (viii) Leather and Footwear 1.
Duty
free import entitlement of specified items is 3% of FOB value of exports of
leather garments during preceding financial year. 2.
Duty
free entitlement for import of trimmings, embellishments and footwear
components for footwear (leather as well as synthetic), gloves, travel bags
and handbags is 3 % of FOB value of exports of previous financial year. Such
entitlement shall also cover packing material, such as printed and nonprinted
shoeboxes, small cartons made of wood, tin or plastic materials for packing
footwear. 3.
Machinery
and equipment for Effluent Treatment Plants shall be exempt from basic
customs duty. 4.
Re-export
of unsuitable imported materials such as raw hides & skins and wet blue
leathers is permitted. 5.
CVD
is exempted on lining and interlining material notified at S.No 168 of
Customs Notification No 21/2002 dated 01.03.2002. 6.
CVD
is exempted on raw, tanned and dressed fur skins falling under Chapter 43 of
ITC (HS). 7.
Re-export
of unsold hides, skins and semi finished leather shall be allowed from Public
Bonded warehouse at 50% of the applicable export duty. (ix) Marine Sector 1.
Imports
for technological upgradation under EPCG in fisheries sector (except fishing
trawlers, ships, boats and other similar items) exempted from maintaining
average export obligation. 2.
Duty
free import of specified specialised inputs / chemicals and flavouring oils
is allowed to the extent of 1% of FOB value of preceding financial year’s
export. 3.
To
allow import of monofilament longline system for tuna fishing at a
concessional rate of duty and Bait Fish for tuna fishing at Nil duty. 4.
A
self removal procedure for clearance of seafood waste is applicable subject
to prescribed wastage norms. 5.
Marine
products are considered for VKGUY scheme. (x) Electronics and IT Hardware
Manufacturing Industries 1.
Expeditious
clearance of approvals required from DGFT shall be ensured. 2.
Exporters
/Associations would be entitled to utilize MAI & MDA Schemes for
promoting Electronics and IT Hardware Manufacturing industry exports. (xi) Sports Goods and Toys 1.
Duty
free import of specified specialised inputs allowed to the extent of 3 % of
FOB value of preceding financial year’s export. 2.
Sports
goods and toys shall be treated as a Priority sector under MDA / MAI Scheme.
Specific funds would be earmarked under MAI /MDA Scheme for promoting exports
from this sector. 3.
Applications
relating to Sports Goods and Toys shall be considered for fast track
clearance by DGFT. 4.
Sports
Goods and Toys are treated as special focus products and entitled to higher
incentives. (xii) Green products and
technologies India aims to become a hub for
production and export of green products and technologies. To achieve this
objective, special initiative will be taken to promote development and
manufacture of such products and technologies for exports. To begin with,
focus would be on items relating to transportation, solar and wind power
generation and other products as may be notified which will be incentivized
under Reward Schemes of Chapter 3 of FTP. (xiii) Incentives for Exports from
the North Eastern Region In order to give a fillip to
exports of products from the north-eastern States, notified products of this
region would be incentivized under Reward Schemes of Chapter 3 of FTP. |
Chapter- 1 C
Board of Trade
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Board of Trade (BOT) |
BOT has a clear and dynamic role
in advising government on relevant issues connected with Foreign Trade. |
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Terms of Reference |
BOT has following terms of
reference: |
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I To advise Government on Policy measures for preparation
and implementation of both short and long term plans for increasing exports
in the light of emerging national and international economic scenarios; II To review export performance of various sectors, identify
constraints and suggest industry specific measures to optimize export
earnings; III To examine existing institutional framework for imports
and exports and suggest practical measures for further streamlining to
achieve desired objectives; IV To review policy instruments and procedures for imports
and exports and suggest steps to rationalize and channelize such schemes for
optimum use; V To examine issues which are considered relevant for
promotion of India’s foreign trade, and to strengthen international
competitiveness of Indian goods and services; and VI To commission studies for furtherance of above objectives.
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Composition |
Commerce & Industry Minister
will be the Chairman of the Board of Trade (BOT). Government shall also
nominate upto 25 persons, of whom at least 1 0 will be experts in trade
policy. In addition, Chairmen of recognized EPCs and President or Secretary-Generals
of National Chambers of Commerce will be ex-officio members. BOT will meet at
least once every quarter. |
Chapter-2
General Provisions
Regarding Imports and Exports
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2.1 |
Exports and Imports shall be free,
except where regulated by FTP or any other law in force. The item wise export
and import policy shall be, as specified in ITC (HS) notified by DGFT, as
amended from time to time. Import of rough diamond from Cote
d’Ivoire shall be prohibited in compliance to Paragraph 6 of UN Security
Council Resolution (UNSCR) 1643(2005). The import/export of rough diamond
(HS Code 710210, 710221 or 710231) from / to Venezuela shall be prohibited in
view of voluntary separation of Venezuela from the Kimberley Process
Certification Scheme (KPCS). No Kimberley Process Certificate shall be
accepted / endorsed/ issued for import and export of rough diamonds from / to
Venezuela. |
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2.1.1 |
Import / export of arms and
related material from / to Iraq shall be prohibited. |
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2.1.2 |
Direct or indirect export and
import of following items, whether or not originating in Democratic People’s
Republic of Korea (DPRK), to / from, DPRK is prohibited: All items, materials equipment, goods
and technology including as set out in lists in documents S/2006/814,
S/2006/815 (including S/2009/205), S/2009/364 and S/2006/853 (United Nations
Security Council Documents) INFCIRC/254/Rev.9/Part1a and
INFCIRC/254/Rev.7/Part 2a (IAEA documents) which could contribute to DPRK’s
nuclear-related, ballistic missile-related or other weapons of mass
destruction-related programmes. [Para 2.1.2 substituted by Notification 17(RE)/27.10.2009]. |
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2.1.3 |
Direct or indirect export and
import of all items, materials, equipment, goods and technology which could
contribute to Iran’s enrichment-related, reprocessing or heavy water related
activities, or to development of nuclear weapon delivery systems, as
mentioned below, whether or not originating in Iran, to / from Iran is
prohibited: i) items, listed in
INFCIRC/254/Rev8/Part I in document S/2006/814, in Sections B.2 to B.7 as
well as A.I and B.I except supply, sale or transfer of equipment covered by
B.I when such equipment is for light water reactors and low-enriched uranium
covered by A.1.2 when it is incorporated in assembled nuclear fuel elements
for such reactors; ii) items listed in S/2006/815
except supply sale or transfer of items covered by 19.A.3 of Category II. Above-mentioned UN Security Council
documents are accessible from DGFT web site. |
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2.2 |
Every exporter or importer shall
comply with the provisions of FT (D&R) Act, the Rules and Orders made
there-under, FTP and terms and conditions of any Authorisation granted to
him. All imported goods shall also be subject to domestic Laws, Rules,
Orders, Regulations, technical specifications, environmental and safety norms
as applicable to domestically produced goods. No import or export of rough
diamonds shall be permitted unless accompanied by Kimberley Process (KP)
Certificate as specified by Gem & Jewellery EPC (GJEPC). |
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2.3 |
If any question or doubt arises in
respect of interpretation of any provision contained in FTP, or
classification of any item in ITC (HS) or HBP-v1 or HBP-v2, or Schedule of
DEPB Rates (including content, scope or issue of an authorization there
under) said question or doubt shall be referred to DGFT whose decision
thereon shall be final and binding. |
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2.4 |
DGFT may, specify procedure to be
followed for an exporter or importer or by any licensing or any other
competent authority for purpose of implementing provisions of FT (D&R)
Act, the Rules and the Orders made there under and FTP. Such procedures shall
be published by means of a Public Notice, and may, in like manner, be amended
from time to time. |
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2.5 |
DGFT may pass such orders or grant
such relaxation or relief, as he may deem fit and proper, on grounds of genuine
hardship and adverse impact on trade. DGFT may, in public interest,
exempt any person or class or category of persons from any provision of FTP
or any procedure and may, while granting such exemption, impose such
conditions as he may deem fit. Such request may be considered only after
consulting committees as under:
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2.6 |
DGFT may, through a notification,
adopt and enforce any measurenecessary for: - i Protection of public morals. ii Protection of human, animal or
plant life or health. iii Protection of patents,
trademarks and copyrights and the prevention of deceptive practices. iv Prevention of use of prison
labour. v Protection of national treasures
of artistic, historic or archaeological value. vi Conservation of exhaustible
natural resources. vii Protection of trade of
fissionable material or material from which they are derived; and viii Prevention of traffic in
arms, ammunition and implements of war. |
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2.7 |
Any goods, export or import of
which is restricted under ITC(HS) may be exported or imported only in
accordance with an Authorisation or in terms of a public notice issued in
this regard. |
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Terms and Conditions of a
licence / Certificate Permission / Authorisation |
2.8 |
Every Authorisation shall be valid
for prescribed period of validity and shall contain such terms and conditions
as may be specified by RA, which may include: |
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(a) Quantity, description and value
of goods; (b) Actual User condition; (c) Export obligation; (d) Value addition to be achieved;
and (e) Minimum export / import price. |
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Authorisation / Licence
/ Certificate /Permission, not a Right |
2.9 |
No person may claim an Authorization
as a right and DGFT or RA shall have power to refuse to grant or renew the
same in accordance with provisions of FT (D&R) Act, Rules made there
under and FTP. |
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2.10 |
If an Authorisation holder
violates any condition of such Authorisation or fails to fulfill export
obligation, he shall be liable for action in accordance with FT (D&R)
Act, the Rules and Orders made there under, FTP and any other law for time
being in force. |
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2.11 |
Any goods, import or export of which
is governed through exclusive or special privileges granted to STE(s), may be
imported or exported by STE(s) as per conditions specified in ITC (HS). DGFT
may, however, grant an Authorisation to any other person to import or export
any of these goods. Such STE(s) shall make any such
purchases or sales involving imports or exports solely in accordance with
commercial considerations, including price, quality, availability,
marketability, transportation and other conditions of purchase or sale in a
non discriminatory manner and shall afford enterprises of other countries
adequate opportunity, in accordance with customary business practices, to
compete for participation in such purchases or sales. |
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2.12 |
No export or import shall be made
by any person without an IEC number unless specifically exempted. An IEC
number shall be granted on application by competent authority in accordance
with procedure specified in HBP v1. |
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2.13 |
DGFT may issue instructions or
frame schemes as may be required to promote trade and strengthen economic
ties with neighbouring countries. |
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2.14 |
Transit of goods through India
from / or to countries adjacent to India shall be regulated in accordance
with bilateral treaties between India and those countries and will be subject
to such restrictions as may be specified by DGFT in accordance with
International Conventions. |
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2.15 |
In case of trade with Russia under
Debt Repayment Agreement, DGFT may issue instructions or frame schemes as may
be required, and anything contained in FTP, in so far as it is inconsistent
with such instructions or schemes, shall not apply. |
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2.16 |
Capital goods, raw materials,
intermediates, components, consumables, spares, parts, accessories,
instruments and other goods, which are importable without any restriction,
may be imported by any person. However, if such imports require
an Authorisation, actual user alone may import such goods unless actual user
condition is specifically dispensed with by RA. |
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2.17 |
All second hand goods, except
second hand capital goods, shall be restricted for imports and may be
imported only in accordance with provisions of FTP, ITC (HS), HBP v1, Public
Notice or an Authorisation issued in this regard. Import of second hand capital
goods, including refurbished / re-conditioned spares shall be allowed freely.
However, second hand personal computers / laptops, photocopier machines, air
conditioners, diesel generating sets will only be allowed against a licence. Import of re-manufactured goods
shall be allowed only against a licence. |
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2.17A |
Any waste or scrap or remnant
including any form of metallic waste & scrap generated during
manufacturing or processing activities of an SEZ Unit/ Developer/Codeveloper
shall be allowed to be disposed in DTA freely subject to payment of
applicable Customs Duty. |
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2.18 |
Import of samples shall be
governed by HBP v1. |
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2.19 |
Import of gifts shall be permitted
where such goods are otherwise freely importable under FTP. In other cases, a
Customs Clearance Permit (CCP) shall be required from DGFT. |
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2.20 |
Bonafide household goods and
personal effects may be imported as part of passenger baggage as per limits,
terms and conditions thereof in Baggage Rules notified by Ministry of
Finance. Samples of such items that are
otherwise freely importable under FTP may also be imported as part of
passenger baggage without an Authorisation. Exporters coming from abroad are
also allowed to import drawings, patterns, labels, price tags, buttons,
belts, trimming and embellishments required for export, as part of their
passenger baggage without an Authorisation. |
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2.21 |
Freely exportable new or second
hand capital goods, equipments, components, parts and accessories, containers
meant for packing of goods for exports, jigs, fixtures, dies and moulds may
be imported for export without an Authorisation on execution of LUT / BG with
Customs Authorities. |
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2.22 |
Capital goods, equipments,
components, parts and accessories, whether imported or indigenous, except
those restricted under ITC (HS) may be sent abroad for repairs, testing,
quality improvement or upgradation or standardization of technology and
re-imported without an Authorisation. |
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2.23 |
After completion of projects
abroad, project contractors may import, without an Authorisation used goods
including capital goods provided they have been used for at least one year. |
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2.24 |
Sale of goods on high seas for
import into India may be made subject to FTP or any other law in force. |
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2.25 |
Permission of RA is not required
for import of capital goods under lease financing. |
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2.26 |
Goods already imported / shipped /
arrived, in advance, but not cleared from Customs may also be cleared against
an Authorisation issued subsequently. |
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2.27 |
Wherever any duty free import is
allowed or where otherwise specifically stated, importer shall execute prescribed
LUT / BG / Bond with Customs Authority before clearance of goods. In case of
indigenous sourcing, Authorisation holder shall furnish LUT / BG / Bond to RA
concerned before sourcing material from indigenous supplier / nominated
agency as prescribed in HBP v1. |
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2.28 |
Private / Public bonded warehouses
may be set up in DTAas per terms and conditions of notification issued by
DoR. Any person may import goods except
prohibited items, arms and ammunition, hazardous waste and chemicals and
warehouse them in such bonded warehouses. Such goods may be cleared for home
consumption in accordance with provisions of FTP and against Authorisation,
wherever required. Customs duty as applicable shall be paid at the time of
clearance of such goods. If such goods are not cleared for
home consumption within a period of one year or such extended period as the
custom authorities may permit, importer of such goods shall re-export the goods. |
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2.29 |
All goods may be exported without
any restriction except to extent such exports are regulated by ITC (HS) or
any other provision of FTP or any other law for time being in force. DGFT may, however, specify through
a public notice such terms and conditions according to which any goods, not
included in ITC (HS), may be exported without an Authorisation. |
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2.30 |
Export of samples and Free of
charge goods shall be governed by provisions given in HBP v1. |
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2.31 |
Bonafide personal baggage may be
exported either along with passenger or, if unaccompanied, within one year
before or after passenger’s departure from India. However, items mentioned as
restricted in ITC (HS) shall require an Authorisation. Government of India
officials proceeding abroad on official postings shall, however, be permitted
to carry alongwith their personal baggage, food items (free, restricted or
prohibited) strictly for their personal consumption. |
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2.32 |
Goods, including edible items, of
value not exceeding Rs.5,00,000 /- in a licensing year, may be exported as a
gift. However, items mentioned as
restricted for exports in ITC (HS) shall not be exported as a gift, without an
Authorisation. |
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2.33 |
Warranty spares (whether
indigenous or imported) of plant, equipment, machinery, automobiles or any
other goods, (except those restricted under ITC (HS)) may be exported along
with main equipment or subsequently but within contracted warranty period of
such goods subject to approval of RBI. |
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2.34 |
Third party exports, as defined in
Chapter 9 shall be allowed under FTP. |
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2.35 |
Goods imported, in accordance with
FTP, may be exported in same or substantially same form without an
Authorisation provided that item to be imported or exported is not restricted
for import or export in ITC (HS). Exports of such goods imported
against payment in freely convertible currency would be permitted against
payment in freely convertible currency. |
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2.36 |
Goods, including those mentioned
as restricted for import (except prohibited items) may be imported under
Customs Bond for export in freely convertible currency without an
Authorisation provided that item is freely exportable without any
conditionality / requirement of Licence / permission as may be required under
ITC (HS) Schedule II. |
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2.36A |
Hides, Skins and semi finished
leather may be imported in the Public Bonded warehouse for the purpose of DTA
sale and the unsold items thereof can be re-exported from such bonded
warehouses at 5 0% of the applicable export duty. However, this facility
shall not be allowed for import under Private Bonded warehouse. |
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2.37 |
Goods or parts thereof on being
exported and found defective / damaged or otherwise unfit for use may be
replaced free of charge by the exporter and such goods shall be allowed
clearance by Customs authorities, provided that replacement goods are not
mentioned as restricted items for exports in ITC (HS). |
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2.38 |
Goods or parts, except restricted
under ITC (HS) thereof, on being exported and found defective, damaged or
otherwise unfit for use may be imported for repair and subsequent re-export. Such goods shall be allowed
clearance without an Authorisation and in accordance with customs
notification. |
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2.39 |
Private bonded warehouses
exclusively for exports may be set up in DTA as per terms and conditions of
notifications issued by DoR. Such warehouses shall be entitled
to procure goods from domestic manufacturers without payment of duty.
Supplies made by a domestic supplier to such notified warehouses shall be
treated as physical exports provided payments are made in free foreign
exchange. |
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2.40 |
All export contracts and invoices
shall be denominated either in freely convertible currency or Indian rupees
but export proceeds shall be realised in freely convertible currency. However, export proceeds against
specific exports may also be realized in rupees, provided it is through a
freely convertible Vostro account of a non resident bank situated in any
country other than a member country of ACU or Nepal or Bhutan. Additionally,
rupee payment through Vostro account must be against payment in free foreign
currency by buyer in his non-resident bank account. Free foreign exchange
remitted by buyer to his non-resident bank (after deducting the bank service
charges) on account of this transaction would be taken as export realization
under export promotion schemes of FTP. Contracts [for which payments are
received through Asian Clearing Union (ACU)] shall be denominated in ACU
Dollar. Central Government may relax provisions of this paragraph in
appropriate cases. Export contracts and Invoices can be denominated in Indian
rupees against EXIM Bank / Government of India line of credit. |
|||||||||||||
|
2.41 |
If an exporter fails to realise
export proceeds within time specified by RBI, he shall, without prejudice to
any liability or penalty under any law in force, be liable to action in
accordance with provisions of FT (D&R) Act, Rules and Orders made there
under and FTP. |
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|
2.42 |
Consignments of items meant for
exports shall not be withheld / delayed for any reason by any agency of
Central / State Government. In case of any doubt, authorities concerned may
ask for an undertaking from exporter. |
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|
2.42.1 |
No seizure of stock shall be made
by any agency so as to disrupt manufacturing activity and delivery schedule
of exports. In exceptional cases, concerned agency may seize the stock on
basis of prima facie evidence. However, such seizure should be lifted within
7 days. |
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|
2.43 |
Basic objective of Export
Promotion is to promote Councils (EPC) and develop Indian exports. Each
Council is responsible for promotion of a particular group of products,
projects and services as given in HBP v1. |
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|
2.44 |
Any person, applying for: (i) an Authorisation to import /
export, [except items listed as restricted items in ITC(HS)] or (ii) any other benefit or
concession under FTP shall be required to furnish RCMC
granted by competent authority in accordance with procedure specified in
HBP-v1, unless specifically exempted under FTP. Certificate of Registration as
Exporter of Spices (CRES) issued by Spices Board shall be treated as
Registration-Cum-Membership Certificate (RCMC) for the purposes under this
Policy |
|||||||||||||
|
2.45 |
It is endeavor of Government to
work towards greater simplification, standardization and harmonization of
trade documents using international best practices. As a step in this
direction, DGFT shall move towards an automated environment for electronic
filing, retrieval and authentication of documents based on agreed protocols
and message exchange with other community partners including Customs and
Banks. |
|||||||||||||
|
2.45.1 |
To enable users to make commercial
decisions in a more professional manner, DGCI&S trade data shall be made
available with a minimum time lag in a query based structured format on a
commercial criteria. |
|||||||||||||
|
2.45.2 |
With a view to promote use of
Information Technology, DGFT will provide fiscal incentives to user
community. Deductions in Application Fee would be admissible for applications
signed digitally or / and where application fee is paid electronically
through EFT(Electronic Fund Transfer). Details are enumerated in HBP v1. |
|||||||||||||
|
2.46 |
With a view to providing
assistance to firms who have defaulted under FTP for reasons beyond their
control as also facilitating merger ,acquisition and rehabilitation of sick
units, it has been decided to empower Settlement Commission in Central Board
of Excise and Customs to decide such cases also with effect from 01.04.2005. |
|||||||||||||
|
2.47 |
Pending finalisation of Single
Common Document (SCD) for international trade, Government Departments dealing
with exports and imports will honour Authorisation issued by other Government
departments based on verification of export documents like shipping bill,
bank realization certificate, Packing list, bill of lading etc. and will not
insist upon fresh submission of these documents. |
|||||||||||||
|
2.48 |
For all goods and services which
are exported from units in DTA and units in EOU / EHTP / STP / BTP, exemption
/ remission of service tax levied and related to exports, shall be allowed,
as per prescribed procedure in Chapter 4 of HBP v1. |
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|
2.48.1 |
Units in SEZ shall be exempted
from service tax. |
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|
2.48.2 |
For all goods and services
exported from India, services received /rendered abroad, where ever possible,
shall be exempted from service tax. |
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|
Grievance Redressal |
||||||||||||||
|
2.49 |
DGFT has a commitment to function
as a facilitator of exports and imports Focus is on good governance, which
depends on clean, transparent and accountable delivery systems. |
|||||||||||||
|
2.49.1 |
DGFT has in place a Citizen’s
Charter, giving time schedules for providing services to clients, and details
of grievance committees at different levels. |
|||||||||||||
|
2.49.2 |
In order to facilitate speedy
redressal of grievances of trade and industry, a new grievance redressal
mechanism has been put in place in the form of GRC by a Government
Resolution. The Government is committed to
resolving all outstanding problems and disputes pertaining to past policy
periods through GRC set up on 27.10.2004, for condoning delays, regularizing
breaches by exporters in bonafide cases, resolving disputes over
entitlements, granting extensions for utilization of Authorisations. |
|||||||||||||
|
2.50 |
To reduce transaction and handling
costs, a single window system to facilitate export of perishable agricultural
produce has been introduced. The system will involve creation of
multi-functional nodal agencies to be accredited by Agricultural and Processed
Food Products Export Development Authority (APEDA), New Delhi. The detailed
procedures have been notified at Appendix 40 of HBP v1. |
|||||||||||||
Chapter – 3
Promotional Measures
|
Promotional Measures in
Department of Commerce |
||||||||||||||||
|
Assistance to States for
Developing Export Infrastructure and Allied Activities (ASIDE) |
Scheme for Assistance to States
for Developing Export Infrastructure and Allied Activities (ASIDE) is
formulated to involve the States in the export effort by providing assistance
to the States Governments for creating appropriate infrastructure for the
development and growth of exports. The Scheme is administered by Department
of Commerce (DoC). The objective of scheme is to
establish a mechanism for involving the State Governments to participate in
funding of infrastructure critical for growth of exports by providing export
performance linked financial assistance to them. The activities aimed at
development of infrastructure for exports can be funded from the scheme
provided such activities have overwhelming export content and their linkage
with exports is full established. The specific purposes for which funds
allocated under the Scheme can be sanctioned and utilized are as follows: · Creation of new Export Promotion
Industrial Parks/ Zones (SEZs/Agri Business Zones) and augmenting facilities
in the existing ones. · Setting up of electronics and
other related infrastructure in export conclave. · Equity participation in infrastructure
projects including the setting up of SEZs. · Meeting requirements of capital
outlay of EPIPs/ EPZs/SEZs. · Development of complementary
infrastructure such as, roads connecting the production centres with the
ports, setting up of Inland Container Depots and Container Freight Stations. · Stabilizing power supply through
additional transformers and islanding of export production centre etc. · Development of minor ports and
jetties to serve export purpose. · Assistance for setting up Common
Effluent Treatment facilities and · Any other activity as may be
notified by DoC. Details of ASIDE Scheme are
available at: http://www.commerce.nic.in or http://www.commerce.gov.in. |
|||||||||||||||
|
Under MAI scheme, Financial
assistance is provided for export promotion activities on focus country,
focus product basis. Financial assistance is available for Export Promotion
Councils (EPCs), Industry and Trade Associations (ITAs), Agencies of State
Government, Indian Commercial Missions (ICMs) abroad and other national level
institutions/eligible entities as may be notified. A whole range of activities can be
funded under MAI scheme. These include, amongst others,
i.
Market
studies/surveys,
ii.
Setting
up of showroom / warehouse, iii. Participation in international
trade fairs, iv.
Displays
in International departmental stores, v. Publicity campaigns, vi.
Brand
promotion, vii.
Reimbursement
of registration charges for pharmaceuticals and expenses for carrying out
clinical trials etc., in fulfillment of statutory requirements in the buyer
country, viii.
Testing
charges for engineering products abroad, ix.
Assistance
for contesting Anti Dumping litigations etc. Each of these export promotion
activities can receive financial assistance from Government ranging from 25%
to 1 00% of total cost depending upon activity and implementing agency. Full
text of guidelines is available at http://commerce.nic.in. |
||||||||||||||||
|
Under MDA Scheme, financial
assistance is provided for a range of export promotion activities implemented
by EPCs and Trade Promotion Organizations on the basis of approved annual
action plans. The scheme is administered by DOC. Assistance includes, amongst
others, participation in: i. Trade Fairs and Buyer Seller
meets abroad or in India, and ii. Export promotions seminars. iii. Financial assistance with
travel grant is available to exporters traveling to focus areas, viz., Latin
America, Africa, CIS region, ASEAN countries, Australia and New Zealand. In
other areas, financial assistance without travel grant is available. MDA assistance is available for
exports having an annual export turnover as prescribed in MDA guidelines.
Full text of guidelines is available at http://commerce.nic.in. |
||||||||||||||||
|
Meeting expenses for
statutory compliances in buyer country for Trade Related Matters |
DOC provides for reimbursement of
charges/expenses for fulfilling statutory requirements in the buyer country,
including registration charges for product registration for pharmaceuticals,
bio-technology and agro-chemicals products on recommendation of EPCs.
Financial assistance is also provided for contesting litigation(s) in the
foreign country concerning restrictions/anti dumping duties etc. on
particular product(s) of Indian origin, as provided under the Market Access
Initiative (MAI) Scheme of DOC. |
|||||||||||||||
|
A number of towns have emerged as
dynamic industrial clusters contributing handsomely to India’s exports. It is
necessary to grant recognition to these industrial clusters with a view to
maximizing their potential and enabling them to move higher in the value
chain and tap new markets. Selected towns producing goods of
Rs. 750 Crore or more will be notified as TEE based on potential for growth
in exports. However for TEE in Handloom, Handicraft, Agriculture and
Fisheries sector, threshold limit would be Rs 150 Crores. (i) Recognized associations of
units will be provided financial assistance under MAI scheme, on priority
basis, for export promotion projects for marketing, capacity building and
technological services. (ii) Common Service Providers in
these areas shall be entitled for EPCG scheme. (iii) The projects received from
TEEs shall be accorded priority by SLEPC for financial assistance under
ASIDE. Notified Towns (TEEs) are listed
in Appendix 7 of HBPv1. |
||||||||||||||||
|
IBEF (originally called India
Brand Equity Fund and later renamed as India Brand Equity Foundation) was set
up by the Ministry of Commerce on 11th July, 1 996, with the primary
objective to promote and create international awareness of the “Made in
India” label in markets overseas. IBEF aims to promote India as a business
opportunity by creating positive economic perceptions of India globally as
well as effectively present the India business perspective and leverage
business partnerships in a globalised market-place. DOC provides funds for capacity
building for up-gradation of quality to national level Institutions and EPCs
to organize training programmes for the skill improvement of the exporters
for quality up-gradation, reduction in rejection, product improvement etc. as
provided under the Market Access Initiative (MAI) Scheme of DOC. |
||||||||||||||||
|
Central Government will assist in
modernization and upgradation of test houses and laboratories to bring them
at par with international standards. |
||||||||||||||||
|
|
Promotional Measures in DGFT |
|||||||||||||||
|
Regional Sub-Committee on Quality
Complaints (RSCQC) set up at Regional Offices of this Directorate shall
investigate quality complaints received from foreign buyers. Guidelines for
settlement of quality complaints, in particular, and such other complaints,
in general, are given in Appendix-16 of HBPv1. |
||||||||||||||||
|
If it comes to DGFT’s notice or he
has reason to believe that an export or import has been made in a manner that
(i) is gravely prejudicial to
trade relations of India with any other country; and / or (ii) is gravely prejudicial to
interest of other persons engaged in exports or imports; and / or (iii) has brought disrepute to the
country; DGFT may take action against such
exporter or importer in accordance with FT(D&R) Act, Rules and Orders
made there-under and FTP. |
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|
3.10 |
||||||||||||||||
|
Merchant as well as Manufacturer
Exporters, Service Providers, Export Oriented Units (EOUs) and Units located
in Special Economic Zones (SEZs), Agri Export Zones (AEZs), Electronic
Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and Bio-
Technology Parks (BTPs) shall be eligible for status. |
||||||||||||||||
|
Applicant shall be categorized
depending on his total FOB (FOR - for deemed exports) export performance
during current plus previous three years (taken together) upon |
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|
||||||||||||||||
|
3.10.3 |
(i) Exporters in Small Scale
Industry (SSI) / Tiny Sector / Cottage Sector, Units registered with KVICs /
KVIBs, Units located in North Eastern States, Sikkim and Jammu & Kashmir,
Units exporting handloom/ handicrafts / hand knotted or silk carpets,
exporters exporting to countries in Latin America / CIS / sub-Saharan Africa
as listed in Appendix-9, Units having ISO 9000 (series) / ISO 14 000 (series)
/ WHOGMP/HACCP / SEI CMM level-II and above status granted by agencies listed
in Appendix-6 of HBP v1, exports of services and exports of agro products
shall be entitled for double weightage on exports made for grant of status.
Double Weightage shall be admissible to Merchant as well as Manufacturer
Exporters. However, a shipment can get double weightage only once in any one
of above categories. (ii) Transfer of export
performance from one to another is not permitted. Therefore disclaimer system
shall not be allowed for counting of export turnover. (iii) Exports made on re-export
basis shall not be counted for recognition. (iv) Exports made by subsidiary of
a limited company shall be counted towards export performance of limited
company for recognition only if limited company has a majority share holding
in subsidiary company. |
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|
A Status Holder shall be eligible
for privileges as under: (i) Authorization and Customs
Clearances for both imports and exports on self-declaration basis; (ii) Fixation of Input-Output
norms on priority within 60 days; (iii) Exemption from compulsory
negotiation of documents through banks. Remittance / Receipts, however, would
be received through banking channels; (iv) 100% retention of foreign
exchange in EEFC account; (v) Exemption from furnishing of
BG in Schemes under FTP; (vi) SEHs and above shall be
permitted to establish Export Warehouses, as per DoR guidelines. (vii) For status holders, a
decision on conferring of ACP Status shall be communicated by Customs within
3 0 days from receipt of application with Customs. (viii)As an option, for Premier
Trading House (PTH), the average level of exports under EPCG Scheme shall be
the arithmetic mean of export performance in last 5 years, instead of 3
years. (ix) Status Holders of specified
sectors shall be eligible for Status Holder Incentive Scrip under Para 3 .16
of FTP. (x) Status Holders of Agri. Sector
(Chapter 1 to 24 ) shall be eligible for Agri. Infrastructure Incentive Scrip
under VKGUY - Para 3.13.4 of FTP. |
||||||||||||||||
|
3.11 |
||||||||||||||||
|
Services include all 1 61 tradable
services covered under General Agreement on Trade in Services (GATS) where payment
for such services is received in free foreign exchange. A list of services is
given in Appendix 1 0 of HBPv1. All provisions of this Policy
shall apply mutatis mutandis to export of services as they apply to goods. |
||||||||||||||||
|
Registration cum
Membership Certificate (RCMC) for Service Providers |
Software exporters shall register
themselves with Electronics and Software EPC. Exporters of 15 specific
services listed in Sl. No. 34 of Appendix 2 of HBPv1 are required to register
themselves with Services EPC. Other service exporters shall register
themselves with Federation of Indian Export Organisations (FIEO). |
|||||||||||||||
|
3.11.3 |
Government shall promote
establishment of Common Facility Centres for use by home-based service
providers, particularly in areas like Engineering & Architectural Design,
Multi-media operations, Software developers etc., in State and District level
towns, to draw in a vast multitude of home-based professionals into services
export arena. |
|||||||||||||||
|
Reward / Incentive Schemes in DGFT |
||||||||||||||||
|
|
3.12 |
|||||||||||||||
|
Objective is to accelerate growth
in export of services so as to create a powerful and unique ‘Served From India’
brand, instantly recognized and respected world over. |
||||||||||||||||
|
All Indian Service Providers, of
services listed in Appendix 1 0 of HBPv1, who have free foreign exchange earning
of at least Rs. 10 Lakhs in preceding financial year / current financial year
shall qualify for Duty Credit Scrip. For Individual Indian Service
Providers, minimum free foreign exchange earnings would be Rs 5 Lakhs. |
||||||||||||||||
|
Services and Service Providers as
listed in Para 3 .6.1 of HBPv1 shall not be entitled for benefits under the
SFIS scheme. |
||||||||||||||||
|
3.12.4 |
All Service Providers shall be entitled
to Duty Credit Scrip equivalent to 1 0% of free foreign exchange earned
during current financial year. |
|||||||||||||||
|
Free foreign exchange earned
through International Credit Cards and other instruments as permitted by RBI
for rendering of service shall also be taken into account for computation of
Duty Credit Scrip. |
||||||||||||||||
|
3.12.6 |
Duty Credit scrip may be used for
import of any capital goods including spares, office equipment and
professional equipment, office furniture and consumables; that are otherwise
freely importable and / or restricted under ITC (HS). Imports shall relate to
any service sector business of applicant. Utilization of Duty Credit scrip
earned shall not be permitted for payment of duty in case of import of
vehicles, even if such vehicles are freely importable under ITC (HS). In case of hotels, clubs having
residential facility of minimum 3 0 rooms, golf resorts and stand-alone
restaurants having catering facilities, Duty Credit scrip may also be used
for import of consumables including food items and alcoholic beverages. |
|||||||||||||||
|
Entitlement / goods (imported /
procured) shall be non transferable (except within group company and managed
hotels) and be subject to Actual User condition. |
||||||||||||||||
|
Utilization of Duty Credit Scrip
shall be permitted for payment of excise duty in terms of DoR notification
issued in this behalf for procurement from domestic sources, of items
permitted for imports under SFIS Duty Credit Scrip. |
||||||||||||||||
|
3.13 |
Vishesh Krishi And Gram Udyog Yojana (Vkguy) (Special
Agriculture And Village Industry Scheme) |
|||||||||||||||
|
Objective |
Objective of VKGUY is to promote
exports of : (i) Agricultural Produce and their
value added products; (ii) Minor Forest Produce and
their value added variants; (iii) Gram Udyog Products; (iv) Forest Based Products; and (v) Other Products, as notified
from time to time. Such products shall be listed in Appendix 3 7A of HBPv1. |
|||||||||||||||
|
Entitlement |
Duty Credit Scrip benefits are
granted with an aim to compensate high transport costs, and to offset other
disadvantages. Exporters, of products notified in
Appendix 37A of HBPv1, shall be entitled for Duty Credit Scrip equivalent to
5 % of FOB value of exports (in free foreign exchange) for exports made from
27.8.2009 onwards, unless a specific date of export / period
is specified by public notice/notification. [The underlined words added in the sub-para by
Notification 25(RE)/15.01.2010]. However, for exports made w.e.f
27.8.2009, some Flowers, Fruits, Vegetables and other products, as listed in
Table 2 of Appendix 3 7A shall be entitled to an additional duty credit scrip
equivalent to 2 % of FOB value of exports; over and above the 5 % or 3 %
VKGUY reduced rate entitlement available as per Para 3.13.3 below. |
|||||||||||||||
|
3.13.3 |
Duty Credit Scrip benefits under
VKGUY scheme shall be granted only at a reduced rate of 3 % of FOB value of
exports in such cases where exporter has also availed benefits of: (i) Drawback at rates higher than
1%; and/or (ii) Specific DEPB rate (i.e.
other than Miscellaneous Category – Sr. Nos. 2 C & 2 D of Product Group
90); and/or (iii) Advance Authorization or
Duty Free Import Authorization Import of inputs (other than catalysts,
consumables and packing materials) for the exported product for which Duty
Credit Scrip under VKGUY is being claimed. |
|||||||||||||||
|
3.13.4 |
For exports made during a
particular year, all Status Holders (having status recognition for the
current year) exporting products covered under ITC HS Chapters 1 to 24 ,
shall be incentivized with duty credit scrip equal to 1 0% of FOB value of
agricultural exports (including VKGUY benefits entitled under Policy Para
3.13.2) provided that the total benefits for all status holders put together
does not exceed Rs 1 00 Cr (i.e. Rs 5 0 Cr for each half year) and the
conditions specified in Para 3.7.2 of HBPv1 are satisfied. Zonal Office, CLA, New Delhi shall
be the licensing office for grant of the benefit to all status holders. The following capital goods /
equipments shall be permitted for import: (i) Cold storage units (including
Controlled Atmosphere (CA) and Modified Atmosphere (MA) Stores); Pre cooling
Units and Mother Storage Units for Onions, etc.; (ii) Pack Houses (including
facilities for handling, grading, sorting and packaging etc.); (iii) Reefer Van / Containers; and
(iv) Other Capital Goods /
Equipments as may be notified in Appendix 37F. Imported capital goods/equipment
shall be utilized for storage, packing etc. (as in (ii) above) and
transportation of agricultural products (including agro-processed perishable
products). This additional benefit shall be
subject to actual user condition and hence non-transferable. However, for import of Cold Chain
Equipment this Incentive Scrip shall be freely transferable amongst Status
Holder. |
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|
3.14
|
||||||||||||||||
|
Objective |
Objective is to offset high freight
cost and other externalities to select international markets with a view to
enhance India’s export competitiveness in these countries. |
|||||||||||||||
|
Exporters of all products to
notified countries (as in Appendix 3 7C of HBPv1) shall be entitled for Duty
Credit Scrip equivalent to 3 % of FOB value of exports (in free foreign
exchange) for exports made from 2 7.8.2009 onwards, unless
a specific date of export / period is specified by public notice/notification. [The underlined words added in
the sub-para by Notification 25(RE)/15.01.2010]. |
||||||||||||||||
|
3.14.3 |
The following categories of export
products / sectors shall be ineligible for Duty Credit Scrip, under FMS
scheme: a) Supplies made to SEZ units; b) Service Exports; c) Diamonds and other precious,
semi precious stones; d) Gold, silver, platinum and
other precious metals in any form, including plain and studded Jewellery; e) Ores and Concentrates, of all
types and in all forms; f) Cereals, of all types; g) Sugar, of all types and in all
forms; h) Crude / Petroleum Oil &
Crude / Petroleum based Products covered under ITC HS codes 2 709 to 2 715,
of all types and in all forms; and i) Export of Milk and Milk
Products covered under ITC HS Codes 0401 to 0406, 1 9011 001, 1 9011 010,
2105 & 3501. |
|||||||||||||||
|
3.15 |
||||||||||||||||
|
Objective is to incentivise export
of such products which have high export intensity / employment potential, so
as to offset infrastructure inefficiencies and other associated costs
involved in marketing of these products. |
||||||||||||||||
|
Entitlement |
Exports of notified products (as in
Appendix 37D of HBPv1) to all countries (including SEZ units) shall be
entitled for Duty Credit scrip equivalent to 2 % of FOB value of exports (in
free foreign exchange) for exports made from 27.8.2009 onwards, unless
a specific date of export / period is specified by public notice/notification. [The underlined words added in
the sub-para by Notification 25(RE)/15.01.2010]. However, Special Focus Product(s)
/sector(s), covered under Table 2 and Table 5 of Appendix 3 7D, shall be
granted Duty Credit Scrip equivalent to 5 % of FOB value of exports (in free
foreign exchange) for exports made from 27.8.2009 onwards. |
|||||||||||||||
|
3.15.3 |
||||||||||||||||
|
Export of Products/Sectors of high
export intensity/ employment potential (which are not covered under present
FPS List) would be incentivized at 2 % of FOB value of exports (in free
foreign exchange) under FPS when exported to the Linked Markets (countries),
which are not covered in the present FMS list, as notified in Appendix 3 7D
of HBPv1, for exports made from 27.8.2009 onwards, unless
a specific date of export / period is specified by public notice/notification. [The underlined words added in
the sub-para by Notification 25(RE)/15.01.2010]. |
||||||||||||||||
|
3.16 |
||||||||||||||||
|
3.16.1 |
With an objective to promote investment
in upgradation of technology of some specified sectors as listed in Para
3.16.4 below, Status Holders shall be entitled to incentive scrip @1% of FOB
value of exports made during 2 009-10 and during 2010-11, of these specified
sectors, in the form of duty credit. This shall be over and above any duty
credit scrip claimed/availed under this chapter. |
|||||||||||||||
|
|
Status Holders availing Technology
Upgradation Fund Scheme (TUFS) benefits (under Ministry of Textiles) during a
particular year shall not be eligible for Status Holders Incentive Scrip for
exports of that year. |
|||||||||||||||
|
|
3.16.3 |
The Status Holders Incentive Scrip
shall be with Actual User Condition and shall be used for imports of capital
goods (as defined in FTP) relating to the sectors specified in Para 3.16.4
below. |
||||||||||||||
|
|
3.16.4 |
The Status Holders of the
following Sectors shall be eligible for this Status Holders Incentive Scrip: 1. Leather Sector (excluding
finished leather); 2. Textiles and Jute Sector; 3. Handicrafts; 4. Engineering Sector (excluding
Iron & Steel, Nonferrous Metals in primary or intermediate forms,
Automobiles & two wheelers, nuclear reactors & parts and Ships, Boats
and Floating Structures; 5. Plastics; and 6. Basic Chemicals (excluding
Pharma Products). |
||||||||||||||
|
3.17 |
Common Provisions of Duty Credit Scrips, except where
specifically provided for Special Provisions |
|||||||||||||||
|
Objective |
Government reserves the right in public
interest, to specify export products or services or exports to such
countries, which shall not be eligible for computation of entitlement. Further Government reserves the
right to impose / change the rate / ceiling on Duty Credit Scrip under this chapter.
Similarly, Government may also notify goods (in Appendix 3 7B of HBPv1),
which shall not be allowed for import under Duty Credit Scrips. |
|||||||||||||||
|
For VKGUY, FMS, FPS (including MLFPS)
and Status Holders Incentive Scrip, the following exports categories/sectors
shall be ineligible for Duty Credit Scrip entitlement: (i) EOUs / EHTPs / BTPs who are
availing direct tax benefits / exemption; (ii) Export of imported goods
covered under Para 2 .35 of FTP; (iii) Exports through
transshipment, meaning thereby that exports originating in third country but
transshipped through India; (iv) Deemed Exports; (v) Exports made by SEZ units or
SEZ products exported through DTA units; and (vi) Items, which are restricted
or prohibited for export under Schedule-2 of Export Policy in ITC (HS). |
||||||||||||||||
|
Counting of Commission
in FOB value of Exports (in free foreign exchange) |
3.17.3 |
For computation of Duty Credit Scrip
Benefits, FOB Value of Exports (in free foreign exchange) shall include up to
12.5% Foreign Agency Commission. |
||||||||||||||
|
Duty Credit Scrip and items
imported against it would be freely transferable. However, Duty Credit Scrip under
SFIS (Para 3 .12) and under Status Holders Incentive Scrip (Para 3 .16) shall
not be freely transferable. |
||||||||||||||||
|
Imports Allowed |
Duty Credit Scrip may be used for
import of inputs or goods including capital goods, provided same is freely
importable and / or restricted under ITC (HS). However, import of items
listed in Appendix 3 7B of HBPv1 shall not be permitted to be debited. Duty Credit Scrips under Chapter 3
of FTP can also be utilized for payment of duty against imports under EPCG scheme
provided the item is importable against the scrip. |
|||||||||||||||
|
Additional customs duty/excise
duty paid in cash or through debit under Duty Credit scrip shall be adjusted
as CENVAT Credit or Duty Drawback as per DoR rules, except under SFIS. |
||||||||||||||||
|
Utilization of Duty Credit Scrip
for imports from a port other than port of registration shall be allowed
under Telegraphic Release Advice (TRA) facility as per DoR notification. |
||||||||||||||||
|
For a shipment, Duty Credit Scrip
benefit under any one of the schemes covered in this Chapter can alone be
claimed, at exporter’s option. |
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|
Utilization of Duty Credit Scrip shall
be permitted for payment of duty in case of import of capital goods under
lease financing in terms of provision in Para 2.25 of FTP. |
||||||||||||||||
|
Transfer of export performance
from one to another shall not be permitted. Thus, a shipment bill containing
name of applicant shall be counted in export performance / turnover of
applicant only if export proceeds from overseas are realized in applicant’s
bank account and this shall be evidenced from BRC / FIRC. However, for VKGUY, FMS and FPS
(including MLFPS), benefits can be claimed either by the supporting
manufacturer (along with disclaimer from the company / firm who has realized
the foreign exchange directly from overseas) or by the company / firm who has
realized the foreign exchange directly from overseas. |
||||||||||||||||
|
Facility of Payment of
Customs Duties in case of EO defaults |
Duty Credit Scrips can also be
used / debited towards payment of Customs Duties in case of EO defaults under
Authorizations issued under Chapters 4 and 5 of the Policy. |
|||||||||||||||
Chapter-4
Duty Exemption &
Remission Schemes
|
4.1 |
Duty exemption schemes enable duty
free import of inputs required for export production. Duty Exemption Schemes
consist of (a) Advance Authorisation scheme and (b) Duty Free Import
Authorisation (DFIA) scheme. A Duty Remission Scheme enables post export
replenishment / remission of duty on inputs used in export product. Duty
Remission Schemes consist of (a) Duty Entitlement Passbook (DEPB) Scheme and
(b) Duty Drawback (DBK) Scheme. |
|
||||
|
Re-import of exported goods under Duty Exemption
/ Remission Scheme |
4.1.1 |
Goods exported under Advance
Authorisation / DFIA / DEPB may be re-imported in same or substantially same
form subject to DoR specified conditions. |
|
|||
|
4.1.2 |
Value addition (VA) for the
purpose of this Chapter (Except for Gems and Jewellery Sector) shall be:- A - B A = FOB value of export realised /
FOR value of supply received. B = CIF value of inputs covered by
authorisation, plus any other imported materials used on which benefit of DBK
is claimed. |
|
||||
|
||||||
|
4.1.3 |
An Advance Authorisation is issued
to allow duty free import of inputs, which are physically incorporated in
export product (making normal allowance for wastage). In addition, fuel, oil,
energy, catalysts which are consumed/utilised to obtain export product, may
also be allowed. DGFT, by means of Public Notice, may exclude any product(s)
from purview of Advance Authorisation. |
|
||||
|
Duty free import of mandatory
spares upto 1 0% of CIF value of Authorisation which are required to be
exported/supplied with resultant product are allowed under Advance
Authorisation. Advance Authorisations are issued for inputs and export items
given under SION. These can also be issued on the basis of Adhoc norms or
self declared norms as per para 4.7 of HBP v1. |
|
|||||
|
Advance Authorisation can be
issued either to a manufacturer exporter or merchant exporter tied to
supporting manufacturer(s) for: i) Physical exports (including
exports to SEZ); and/ or ii) Intermediate supplies; and /or iii) Supply of goods to the categories
mentioned in paragraph 8 .2 (b), (c), (d), (e), (f), (g), (i) and (j) of FTP
; iv) supply of ‘stores’ on board of
foreign going vessel/ aircraft subject to condition that there is specific
SION in respect of item(s) supplied. |
|
|||||
|
In addition, in respect of supply
of goods to specified projects mentioned in paragraph 8 .2 (d), (e), (f), (g)
and (j) of FTP, an Advance Authorisation can also be availed by
sub-contractor to such project provided name of subcontractor(s) appears in
main contract. |
|
|||||
|
Such Authorisation can also be
issued for supplies made to United Nations Organisations or under Aid
Programme of the United Nations or other multilateral agencies and which are
paid for in free foreign exchange. |
|
|||||
|
However, Advance Authorization for
import of raw sugar, can be issued either to a manufacturer exporter or
merchant exporter tied to supporting manufacturer(s). Exports can also be
made by procurement of white sugar from any other factory(ies). This provision
shall be applicable for exports from 17.2.2009. |
|
|||||
|
4.1.4 |
Advance Authorisations are
exempted from payment of basic customs duty, additional customs duty,
education cess, anti- dumping duty and safeguard duty, if any. However,
imports for supplies covered under paragraph 8.2 (h) & (i) will not be
exempted from payment of applicable anti-dumping and safeguard duty, if any. |
|
||||
|
4.1.5 |
Advance Authorisation and / or materials
imported thereunder will be with actual user condition. It will not be
transferable even after completion of export obligation. However,
Authorisation holder will have option to dispose off product manufactured out
of duty free inputs once export obligation is completed. In case where CENVAT
credit facility on inputs have been availed for the exported goods, even
after completion of export obligation, the goods imported against Advance
Authorisation shall be utilized only in the manufacture of dutiable goods
whether within the same factory or outside (by a supporting manufacturer),
for which the authorisation holder shall produce a certificate from either
the jurisdictional Central Excise Supdt. or Chartered Accountant, at the
option of the exporter, at the time of filing application for EODC to RA
concerned. However, the actual user condition shall not be applicable in case
of raw sugar to be imported from 17.2.2009, till 3 0.09.2009 under Advance
Authorization Scheme. Further the manufacturing wastes/scrap,
as allowed, can be disposed off with the payment of applicable duty before
fulfilment of export obligation. |
|
||||
|
4.1.6 |
Advance Authorisation necessitates exports with a
minimum value addition of 15%, except for items specified in Appendix 11B
of HBP v1 and for items in Gems & Jewellery
Sector, for which value addition would be as per paragraph 4A.2.1 of HBP v1. Exports to SEZ Units/ supplies to
Developers / Co-Developers, irrespective of currency of realization, would
also be covered. [First sentence of
para 4.1.6 amended by Notification 31(RE)/16.02.2010] |
|
||||
|
For physical exports for which
payments are not received in freely convertible currency, same shall be
subject to value addition as specified in Appendix-11 of HBP v1. |
|
|||||
|
In case of Authorisation for import
of Tea, minimum value addition under Advance Authorisation shall be 50%. |
|
|||||
|
Similarly, in case of spices
{covered by Chapter 9 of ITC(HS)}, duty free import of spices shall be
permitted only for value addition purposes like crushing / grinding
/sterilization or for manufacture of oils and oleoresins and not for simple
cleaning, grading, re-packing etc. |
|
|||||
|
4.1.7 |
Advance Authorisation shall be
issued in accordance with Policy and procedure in force on Authorisation
issue date. |
|
||||
|
Validity period of Advance
Authorisation for import shall be as prescribed in HBP v1. |
|
|||||
|
4.1.8 |
Facility of Advance Authorisation
shall also be available where some or all inputs are supplied free of cost to
exporter by foreign buyer. |
|
||||
|
In such cases, for calculation of
value addition, notional value of free of cost inputs along with value of
other duty free inputs shall be taken into consideration. However, if all
inputs are supplied free of cost, exporter shall also have option to follow
provision prescribed by DoR. |
|
|||||
|
4.1.9 |
Period for fulfillment of export
obligation under Advance Authorisation shall be as prescribed in HBP v1. |
|
||||
|
4.1.9 |
Any firm / company registered with
BIFR or any firm/ company acquiring a unit, which is under BIFR shall be
allowed Export Obligation Period (EOP) extension as per rehabilitation
package prepared, subject to approval of BIFR or 5 years if not specified,
without payment of composition fee. |
|
||||
|
Above provisions apply also to SSI
units as per rehabilitation scheme of concerned State government. |
|
|||||
|
4.1.10 |
Advance Authorisation can also be
issued for annual requirement. |
|
||||
|
Status Certificate holder and all
other categories of exporters having past export performance (in preceding
two years) shall be entitled for Advance Authorisation for Annual
Requirement. |
|
|||||
|
Entitlement in terms of CIF value
of imports shall be upto 300% of the FOB value of physical export and / or
FOR value of deemed export in preceding licensing year or Rs 1 crore,
whichever is higher. |
|
|||||
|
4.1.11 |
Holder of Advance Authorisation,
Advance Authorisation for Annual Requirement and Duty Free Import
Authorisation intending to source inputs from indigenous sources / State
Trading Enterprises, in lieu of direct import, has option to source them
either against Advance Release Order (ARO) or Invalidation letter denominated
in free foreign exchange / Indian rupees. However, supplies may be obtained
against Authorisation from EOU / EHTP / BTP / STP / SEZ units, without
conversion into ARO or Invalidation letter. |
|
||||
|
Transferee of DFIA shall also be
eligible for ARO /invalidation letter facility. |
|
|||||
|
Validity period of ARO shall be as
prescribed in HBP v1. |
|
|||||
|
4.1.12 |
Holder of Advance Authorisation,
Advance Authorisation for Annual Requirement and DFIA may, instead of
applying for an ARO or Invalidation letter, avail of the facility of
Back-to-Back Inland Letter of Credit in accordance with procedure specified
in HBP v1. |
|
||||
|
4.1.13 |
Prohibited items of imports
mentioned in ITC(HS) shall not be imported under Advance Authorisation /
DFIA. Further items reserved for imports by STEs cannot be imported against
Advance Authorisation / DFIA. However those items can be procured from STEs against
ARO or Invalidation letter. |
|
||||
|
STEs are also allowed to sell
goods on High Sea Sale basis to holders of Advance Authorisation / DFIA
holder. |
|
|||||
|
In addition, STEs are permitted to
issue “No Objection Certificate (NOC)” for import by advance
Authorisation/DFIA holder. Authorisation Holder would be required to file
Quarterly Returns of imports effected against such NOC to concerned STE and
STE would submit half-yearly import figures of such imports to concerned
administrative Department for monitoring with a copy endorsed to DGFT. |
|
|||||
|
Similarly prohibited items of
exports mentioned in ITC(HS) shall not be exported under Advance
Authorisation / DFIA scheme. Export of restricted items shall be subject to
all conditionalities or requirements of Export Authorisation or permission,
as may be required, under Schedule II of ITC (HS). |
|
|||||
|
4.1.14 |
In case of an Advance
Authorisation, drawback shall be available for any duty paid material,
whether imported or indigenous, used in goods exported, as per drawback rate
fixed by DoR, Ministry of Finance (Directorate of Drawback). Drawback allowed
shall be mentioned in Authorisation. |
|
||||
|
||||||
|
4.2.1 |
DFIA is issued to allow duty free
import of inputs, fuel, oil, energy sources, catalyst which are required for
production of export product. DGFT, by means of Public Notice, may exclude
any product(s) from purview of DFIA. This scheme is in force from 1st May,
2006. |
|
||||
|
Entitlement |
4.4.2 |
Provisions of paragraph 4 .1.3
shall be applicable in case of DFIA. However, these Authorisations shall be
issued only for products for which Standard Input and Output Norms (SION)
have been notified. |
|
|||
|
In case of post export DFIA, a
merchant exporter shall be required to mention only name(s) and address(s) of
manufacturer(s) of the export product(s). Applicant is required to file
application to concerned RA before effecting exports under DFIA. |
|
|||||
|
Pre-export Authorisation shall be issued
with actual user condition and shall be exempted from payment of basic
customs duty, additional customs duty / excise duty, education cess,
anti-dumping duty and safeguard duty, if any. |
|
|||||
|
In case of actual user DFIA and
where CENVAT credit facility on inputs have been availed for the exported
goods, even after completion of export obligation, the goods imported against
such DFIA shall be utilized in the manufacture of dutiable goods whether
within the same factory or outside (by a supporting manufacturer). |
|
|||||
|
4.2.3 |
Provisions of paragraphs 4 .1.11 ,
4 .1.12, 4 .1.13 and 4 .1.14 of FTP shall be applicable for DFIA holder. |
|
||||
|
4.2.4 |
A minimum 2 0% value addition shall
be required for issuance of such authorisation, except for items in gems and
jewellery sector, for which value addition would be as per paragraph 4 A.2.1
of HBP v1. Items for which higher value addition is prescribed under Advance
Authorisation Scheme, shall be applicable. |
|
||||
|
4.2.5 |
Procedure and time period related
to fulfillment of Export Obligation have been laid down in Chapter 4 of HBP
v1. |
|
||||
|
Transferability |
4.2.6 |
Once export obligation has been fulfilled,
request for transferability of Authorisation or inputs imported against it
may be made before concerned RA. Once, transferability is endorsed,
Authorisation holder may transfer DFIA or duty free inputs, except fuel and
any other item(s) notified by DGFT. However, for fuel, import entitlement may
be transferred only to companies which have been granted authorisation to
market fuel by Ministry of Petroleum and Natural Gas. |
|
|||
|
Once transferability is endorsed, imports
/ domestic procurement against authorisation or transfer of imported inputs /
domestically procured inputs shall be subject to payment of applicable
additional customs duty / excise duty. While endorsing transferability,
authorisation would bear a note as to liability of such additional customs
duty / excise duty. However, in case where CENVAT facility has not been
availed, exemption from additional customs duty/ excise duty would be
available even after endorsement of transferability on DFIA. |
|
|||||
|
Wherever SIONs prescribe actual
user condition and in case of Acetic Anhydride, Ephedrine and
Pseudo-Ephedrine, DFIA shall be issued with actual user condition for these
inputs and no transferability shall be allowed for these inputs even after fulfillment
of export obligation. |
|
|||||
|
However, for authorizations issued
prior to 1 .4.2007, exemption from Additional Customs Duty/ Excise Duty shall
continue to be available even after endorsement of transferability as provided
in FTP (RE-2006). |
|
|||||
|
4.2.7 |
CENVAT credit facility shall be
available for inputs either imported or procured indigenously. |
|
||||
|
Duty
Entitlement Passbook (DEPB) Scheme |
|
|||||
|
4.3 |
Objective of DEPB is to neutralise
incidence of customs duty on import content of export product. Component of
customs duty on fuel (appearing as consumable in the SION) shall also be
factored in the DEPB rate. Component of Special Additional Duty shall also be
allowed under DEPB (as brand rate) in case of non-availment of CENVAT credit.
Neutralisation shall be provided by way of grant of duty credit against
export product. |
|||||
|
4.3.1 |
An exporter may apply for credit, at
specified percentage of FOB value of exports, made in freely convertible
currency. In case of supply by a DTA unit to a SEZ unit/SEZ
Developer/Co-Developer, an exporter may apply for credit for exports made in
freely convertible currency or payment made from foreign currency account of
SEZ Unit/SEZ Developer/Co-Developer. In addition, the exporter shall also be
entitled for DEPB benefit in case payment is made in Indian Rupees by SEZ
Developer/Co-Developer for supplies received w.e.f 10.2.2006. |
|||||
|
Credit shall be available against
such export products and at such rates as may be specified by DGFT by way of
public notice. Credit may be utilized for payment of Customs Duty on freely
importable items and/or restricted items. DEPB Scrips can also be utilized
for payment of duty against imports under EPCG Scheme. Further, DEPB Scrips
can also be used / debited towards payment of Customs Duty in case of EO
defaults for Authorizations issued under Chapters 4 and 5 of this Policy.
However, penalty / interest shall be required to be paid in cash. |
||||||
|
Prohibited items of exports
mentioned in ITC(HS) Book (as amended from time to time) shall not be
entitled for DEPB credit except for the exports effected under transitional
facility, wherever allowed, in terms of paragraph 1.5 of FTP. |
||||||
|
4.3.2 |
DEPB holder shall have option to
pay additional customs duty in cash as well. |
|||||
|
4.3.3 |
Validity period of DEPB for import
shall be as prescribed in HBP v1. |
|||||
|
4.3.4 |
DEPB and / or items imported
against it are freely transferable. Transfer of DEPB shall however be for
import at specified port, which shall be the port from where exports have
been made. Imports from a port other than the port of export shall be allowed
under TRA facility as per terms and conditions of DoR notification. |
|||||
|
4.3.5 |
Additional customs duty / Excise
Duty and Special Drawback Additional Duty paid in cash or through debit under
DEPB may also be adjusted as CENVAT Credit or Duty Drawback as per DoR rules. |
|||||
|
4A |
Exporters of gems and Jewellery can
import / procure and duty free inputs for manufacturing. |
|
||||
|
4A.1 |
Exporters may obtain Replenishment
(REP) Authorisations from RA in accordance with procedure specified in HBP
v1. |
|
||||
|
4A.1.1 |
Replenishment authorisation may
also be issued for consumables & tools as per paragraph 4A.28 of HBP v1. |
|
||||
|
4A.2 |
The authorized offices/agencies in
India of Gemological & Institute of America (GIA) or any other agency
approved in this regard, shall be permitted to import diamonds to their
laboratories for the purpose of certification/grading reports by them with a
condition that the same should be re-exported with the certification/grading
reports issued by them without any import duty, as per the procedure laid
down in HBP v1. |
|
||||
|
4A.3 |
Exporters of gold / silver / platinum
jewellery and articles thereof Silver / Platinum may import their essential
inputs such as gold, silver, platinum, Jewellery mountings, findings, rough
gems, precious and semi-precious stones, synthetic stones and unprocessed
pearls etc. in accordance with the procedure specified in this behalf. |
|
||||
|
4A.4 |
Nominated agencies are MMTC Ltd,
Handicraft and Handloom Export Corporation (HHEC), State Trading Corporation
(STC), the Project and Equipment Corporation (PEC) of India Ltd, STCL Ltd,
MSTC Ltd, Diamond India Limited (DIL), Gems & Jewellery Export Promotion
Council (G&J EPC)), Star Trading House (only for Gems & Jewellery
sector) and Premier Trading House under Paragraph 3 .10.2 of FTP and any
other agency authorised by RBI. Exporters (except EOUs and units in SEZ) may
obtain gold / silver / platinum from nominated agency(s). |
|
||||
|
Procedure for import of precious
metal by these agencies (other than those authorized by RBI and the Gems
& Jewellery units operating under EOU and SEZ schemes)and the monitoring
mechanism thereof shall be as per the provisions laid down in HBP v1 in this
regard. |
|
|||||
|
A bank authorised by RBI is allowed
export of gold scrap for refining and import standard gold bars as per RBI
guidelines. |
|
|||||
|
4A.5 |
Following items, if exported,
would be eligible for facilities: (a) Gold jewellery, including partly
processed jewellery and articles including medallions and coins (excluding
legal tender coins), whether plain or studded, containing gold of 8 carats
and above; (b) Silver jewellery including
partly processed jewellery, silverware, silver strips and articles including
medallions and coins (excluding legal tender coins and any engineering goods)
containing more than 50% silver by weight; (c) Platinum jewellery including
partly processed jewellery and articles including medallions and coins
(excluding legal tender coins and any engineering goods) containing more than
5 0% platinum by weight. |
|
||||
|
Value Addition |
4A.6 |
Value Addition (VA) for gems and
jewellery sector shall be as per paragraph 4A.2.1 of HBP v1. It would be
calculated as under: A – B A = FOB value of the export
realised / FOR value of supply received. B = Value of inputs ( including
domestically procured ) such as gold / silver / platinum content in export
product plus admissible wastage along with value of other items such as
gemstone etc. Wherever gold has been obtained on loan basis, value shall also
include interest paid in free foreign exchange to foreign supplier. |
|
|||
|
4A.7 |
Wastage or manufacturing loss for
gold / silver / platinum jewellery shall be admissible as per paragraph 4 A.2
of HBP v1. |
|
||||
|
4A.8 |
Where export orders are placed on
nominated agencies / status by holder / exporters of three years standing
having an annual average turnover of Rs. Five Crores during preceding three
licensing years, foreign buyer may supply in advance and free of charge, gold
/ silver / platinum, alloys, findings and mountings of gold / silver /
platinum for manufacture and export. |
|
||||
|
Such supplies can also be in
advance and may involve semi-finished jewellery including findings /
mountings /components for repairs / re-make and export subject to minimum
value addition of 1 0%. However, if so imported semi finished gold / silver
/platinum jewellery is exported as studded jewellery, value addition of 15 %
shall be achieved. In such cases of export, wastage of 2 % may be permitted. |
|
|||||
|
Exports may be made by nominated
agencies directly or through their associates or by status holder / exporter.
Import and Export of findings shall be on net to net basis. |
|
|||||
|
4A.9 |
Exporter may obtain gold / silver
/ platinum as an input for export products from nominated agencies in advance
or as replenishment after exports in accordance with specified procedure. |
|
||||
|
4A.10 |
An Advance Authorisation may be
granted for duty free import of: (a) Gold of fineness not less than
0.995 and mountings, sockets, frames and findings of 8 carats and above; (b) Silver of fineness not less
than 0.995 and mountings, sockets, frames and findings containing more than
50% silver by weight; (c) Platinum of fineness not less
than 0.900 and mountings, sockets, frames and findings containing more than
50% platinum by weight. |
|
||||
|
4A.11 |
Such authorisations shall carry an
export obligation to be fulfilled as per procedure specified in paragraph 4A
of HBP v1. Value addition shall be as per paragraph 4 A.2.1 of HBP v.1. |
|
||||
|
Advance Authorisation holder may
obtain gold / silver/platinum from nominated agencies in lieu of direct
import. |
|
|||||
|
4A.12 |
Gem Replenishment (Gem &
Jewellery REP) Authorisation may be issued as given in paragraph 4 A.8,4A.9
and 4A.10 above. |
|
||||
|
In case of plain or studded gold /
silver / platinum jewellery and articles, value of such Authorisations shall
be determined with reference to realisation in excess of prescribed minimum
VA. |
|
|||||
|
Such Gem REP Authorisations shall
be freely transferable. |
|
|||||
|
4A.13 |
Replenishment Rate and item of
import will be as prescribed in Appendix 12B of HBP v1. |
|
||||
|
4A.14 |
Nominated agencies and their
associates, with the approval of Department of Commerce, and others, with the
approval of Gem & Jewellery EPC (GJEPC), may export gold / silver /
platinum jewellery and articles thereof for exhibitions abroad. |
|
||||
|
Personal carriage of gold / silver
/ platinum jewellery, precious, semi-precious stones, beads and articles and
export of branded jewellery is also permitted, subject to conditions as in
HBP v1. |
|
|||||
|
4A.15 |
Personal carriage of gems and jewellery
export parcels by foreign bound passengers and import parcels by an Indian
importer/foreign national may be permitted as in HBP v1. |
|
||||
|
4A.16 |
In case of exports through Foreign
Post Office (including via Speed Post), value of jewellery parcels shall not
exceed US$ 75000 and 20 kg. by weight. |
|
||||
|
4A.17 |
Firms and companies dealing in
purchase/ sale of rough or cut and polished diamonds/precious metal jewellery
plain, minakari and / or studded with / without diamond and/or other stones,
with a track record of at least two years in import or export of diamonds /
coloured gemstones/ diamond and coloured gemstones studded jewellery / plain
gold jewellery, and having an average annual turnover of Rs. 3 crores or
above during preceding three licensing years, may also carry out their
business through designated Diamond Dollar Accounts (DDA). |
|
||||
|
Dollars in such accounts available
from bank finance and / or export proceeds shall be used only for: (i) Import / purchase of rough
diamonds from overseas/ local sources; (ii) Purchase of cut and polished
diamonds, coloured gemstones and plain gold jewellery from local sources; (iii) Import / purchase of gold
from overseas / nominated agencies and repayment of dollar loans from the
bank; and (iv) Transfer to Rupee Account of
exporter. Details of this DDA Scheme are given in HBP v1. A non DDA holder is also permitted
to supply cut and polished diamonds to DDA holder, receive payment in dollars
and convert same into Rupees within 7 days. Cut and polished diamonds and
coloured gemstones so supplied by non-DDA holder will also be counted towards
discharge of his export obligation and / or entitle him to replenishment
Authorisation. |
|
|||||
|
|
4A.18 |
Gems and Jewellery exporters shall
be allowed to export cut and polished precious and semi-precious stones for the
treatment and re-import as per Customs rules and regulations. In case of
re-export, the exporter shall be entitled for duty drawback as per rules. |
|
|||
|
4A.19 |
Gems & Jewellery exporters
shall be allowed to re-import rejected precious metal jewellery as per para 4
A.32 of HBP v1. |
|
||||
|
4A.20. |
Gems & Jewellery exporters
shall be allowed to export diamond, gemstones & jewellery on consignment
basis as per HBP v1 and Customs rules and regulations. |
|
||||
Chapter-5
Export Promotion
Capital Goods (EPCG) Scheme
|
5.1 |
Zero duty EPCG scheme allows
import of capital goods for pre production, production and post production
(including CKD/SKD thereof as well as computer software systems) at zero
Customs duty, subject to an export obligation equivalent to 6 times of duty saved
on capital goods imported under EPCG scheme, to be fulfilled in 6 years
reckoned from Authorization issue-date. |
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The scheme will be available for
exporters of engineering & electronic products, basic chemicals &
pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals
& allied products and leather & leather products; subject to
exclusions as provided in HBPv1. |
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Validity period for import of
capital goods and provision for extension in export obligation period will be
as separately provided in the HBPv1. All other provisions pertaining to
concessional 3 % duty 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 EPCG scheme also. The zero duty EPCG scheme will
be in operation till 31.3.2011 . |
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5.2 |
Concessional 3 % duty EPCG scheme
allows import of capital goods for pre production, production and post
production (including CKD/SKD thereof as well as computer software systems)
at 3 % Customs duty, subject to an export obligation equivalent to 8 times of
duty saved on capital goods imported under EPCG scheme, to be fulfilled in 8
years reckoned from Authorization issue date. |
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In case of agro units, and units
in cottage or tiny sector, import of capital goods at 3 % Customs duty shall
be allowed subject to fulfillment of export obligation equivalent to 6 times
of duty saved on capital goods imported, in 12 years from Authorization
issue-date. For SSI units, import of capital
goods at 3 % Customs duty shall be allowed, subject to fulfillment of export
obligation equivalent to 6 times of duty saved on capital goods, in 8 years
from Authorization issue-date, provided the landed cif value of such imported
capital goods under the scheme does not exceed Rs. 5 0 lakhs and total
investment in plant and machinery after such imports does not exceed SSI
limit. However, in respect of EPCG
Authorization with a duty saved amount of Rs. 1 00 crores or more, export
obligation shall be fulfilled in 12 years. In case CVD is paid in cash on
imports under EPCG, incidence of CVD would not be taken for computation of
net duty saved, provided the same is not CENVATed. Capital goods shall include spares
(including refurbished/reconditioned spares), tools, jigs, fixtures, dies and
moulds. Second hand capital goods, without
any restriction on age, may also be imported under EPCG scheme. However, import of motor cars, sports
utility vehicles/all purpose vehicles shall be allowed only to hotels, travel
agents, tour operators or tour transport operators and companies
owning/operating golf resorts, subject to the condition that: (i) total foreign exchange earning
from hotel, travel & tourism and golf tourism sectors in current and
preceding three licensing years is Rs. 1 .5 crores or more. (ii) ‘duty saved’ amount on all
EPCG Authorizations issued in a licensing year for import of motor
cars,sports utility vehicles/ all purpose vehicles shall not exceed 5 0% of
average foreign exchange earnings from hotel, travel & tourism and golf
tourism sectors in preceding three licensing years. Import of Restricted items of
imports mentioned under ITC(HS) shall only be allowed under EPCG Scheme after
approval from EFC at Headquarters. |
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5.2A |
Spares (including
refurbished/reconditioned spares),moulds, dies, jigs, fixtures, tools, refractory
for initial lining and catalyst for initial charge; for existing plant and
machinery (imported earlier, under EPCG or otherwise),shall be allowed to be
imported under the EPCG scheme subject to an export obligation equivalent to
5 0% of the normal export obligation prescribed in para 5 .1 and 5 .2 above
(for import of capital goods), to be fulfilled in 8 years (6 years for zero
duty EPCG scheme), reckoned from Authorization issue date. This would however
be subject to the condition that the c.i.f. value of import of the above
spares etc. will be limited to 1 0% of the value of plant and machinery
imported under the EPCG scheme. In case of plant and machinery not imported
under the EPCG scheme, c.i.f. value of import of the spares etc. will be limited
to 1 0% of the book value of the plant and machinery. |
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5.2B |
An EPCG Authorization can also be
issued for import of capital goods under Scheme for project Imports notified
by the Central Board of Excise and Customs under S.No.441 of Customs
Exemption Notification No. 21/2002 dated 01.03.2002. Export obligation for such EPCG
Authorizations would be eight times (6 times for zero duty EPCG scheme) of
duty saved. Duty saved would be difference between the effective duty under
aforesaid Customs Notification and concessional duty under the EPCG Scheme. |
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5.2C |
To create modern infrastructure in
retail sector, concessional duty benefits under EPCG scheme shall be extended
for import of capital goods required by retailers having minimum area of 1
000 sq. meters. Such retailer shall fulfill export obligation i.e. 8 times of
duty saved, in 8 years. |
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5.3 |
EPCG scheme covers manufacturer
exporters with or without supporting manufacturer(s)/ vendor(s), merchant
exporters tied to supporting manufacturer(s) and service providers. Export Promotion Capital Goods
(EPCG) Scheme also covers a service provider who is designated /certified as
a Common Service Provider (CSP) by the DGFT, Department of Commerce or State
Industrial Infrastructural Corporation in a Town of Export Excellence subject to provisions of Foreign
Trade Policy/Handbook of Procedures with the following conditions:- (i) EPCG licence to be given to
the CSP should have a clear endorsement giving the details of the users and
the quantum of Export Obligation (EO) which each user would fulfill; (ii) Such exports will not count
towards fulfillment of other specific export obligations ; and (iii) Each one of the users of the
CSP apart from the CSP should furnish 1 00% bank Guarantee (BG) equivalent to
their portion of duty foregone apportioned in terms of quantum of EO to be
discharged by them and the B.G. will be enforced in the event of the obligation
not being fulfilled. |
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5.4 |
Import of capital goods shall be
subject to Actual User condition till export obligation is completed. |
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Export obligation |
5.5 |
Following conditions shall apply
to the fulfillment of the export obligation:- (i) Export Obligation shall be
fulfilled by export of goods manufactured/services rendered by the applicant. Export obligation under the scheme
shall be, over and above, the average level of exports achieved by him in the
preceding three licensing years for the same and similar products within the
overall export obligation period including extended period, if any; except
for categories mentioned in paragraph 5 .7.6 of HBP v1. Such average would be
the arithmetic mean of export performance in the last three years for the
same and similar products provided that Premier Trading House (PTH) shall
have option of fixing average level of exports based on arithmetic mean of
export performance in the last five years instead of three years. Upto 50% Export Obligation may
also be fulfilled by exports of other good(s) manufactured or service(s)
provided by the same firm / company, or group company / managed hotel, which
has the EPCG authorization. However, EPCG authorization issued prior to 1
.4.2008 will be governed by earlier policy provisions. However, in such cases, additional
export obligation imposed shall be over and above average exports achieved by
the unit / company / group company /managed hotel in preceding three years
for both the original and the substitute product(s) / service(s), despite
exemptions in Para 5.7.6 of HBP v1. (ii) Shipments under Advance
Authorization, DFRC,DFIA, DEPB or Drawback scheme, or incentive schemes under
Chapter 3 of FTP; would also count for fulfillment of EPCG export obligation. (iii) Export obligation can also
be fulfilled by the supply ITA-I items to DTA, provided realization is in
free foreign exchange. (iv) Exports shall be physical
exports. However, deemed exports as specified in paragraph 8.2 (a), (b), (d)
(f), (g) & (j) of FTP shall also be counted towards fulfillment of export
obligation, alongwith usual benefits available under paragraph 8.3 of FTP. Royalty payments received in
freely convertible currency and foreign exchange received for R&D
services shall also be counted for discharge under EPCG. Payment received in
rupee terms for port handling services, in terms of Chapter 9 of FTP shall
also be counted for export obligation discharge. |
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Provision for BIFR units |
5.5.1 |
Any firm/ company registered with
BIFR or any firm/ company acquiring a unit, which is under BIFR, may be
allowed EO extension, as per rehabilitation package prepared by operating
agency and approved by BIFR/Rehabilitation Department of State Government,
upto 12 years if not specified. Above provisions apply also to SSI
units as per rehabilitation scheme of concerned State government. |
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5.5.2 |
LUT/Bond or 15 % BG ( as
applicable) may be given for EPCG Authorization granted to units in Agri
Export Zones provided EPCG Authorization is taken for export of primary
agricultural product(s) notified in Appendix 8 or their value added variants. |
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Indigenous Sourcing of
Capital Goods and benefits to Domestic Supplier |
5.6 |
A person holding an EPCG
Authorization may source capital goods from a domestic manufacturer. Such
domestic manufacturer shall be eligible for deemed export benefit under
paragraph 8.3 of FTP. Such domestic sourcing shall also be permitted from
EOUs and these supplies shall be counted for purpose of fulfillment of
positive NFE by said EOU as provided in Para 6.9 (a) of FTP. |
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5.7 |
In case of direct imports, export
obligation shall be reckoned with reference to actual duty saved amount. In
case of domestic sourcing, export obligation shall be reckoned with reference
to notional Customs duties saved on FOR value. |
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5.8 |
EPCG Authorization holders can opt
for Technological Upgradation of existing capital good imported under EPCG
Authorization. Conditions governing Technological
Up-gradation of existing capital goods are as under: (i) Minimum time period for
applying for Technological Up-gradation of existing capital goods imported
under EPCG is 5 years from Authorization issue date. (ii) Minimum exports made under
old capital goods must be 4 0% of total export obligation imposed on first
EPCG Authorization. (iii) Export obligation would be
re-fixed such that total export obligation mandated for both capital goods
would be sum total of 6 times of duty saved on both the capital goods, to be
fulfilled in 8 years from new authorization issue-date. (iv) Facility for technological up-gradation
shall be available only once and the minimum imports to be made shall be at
least 1 0% of the existing investment in plant and machinery by applicant. (v) Capital Goods to be imported
must be new and technologically superior to earlier CG. |
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5.9 |
To incentivize fast track
companies with a view to accelerate exports, in cases where Authorization
holder has fulfilled 75% or more of specific export obligation and 1 00% of
Average Export Obligation till date, if any, in half or less than half the
original export obligation period specified, remaining export obligation
shall be condoned and the Authorization redeemed by RA concerned. However no benefits under Para
5.12 of HBP v1 shall be available in such cases. |
Chapter-6
Export Oriented
Units (EOUs), Electronics Hardware Technology Parks (EHTPs), Software
Technology Parks (STPs) and Bio-Technology Parks (BTPs).
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Eligibility |
Units undertaking to export their
entire production of goods and services (except permissible sales in DTA),may
be set up under the Export Oriented Unit (EOU) Scheme, Electronics Hardware
Technology Park (EHTP) Scheme, Software Technology Park (STP) Scheme or
Bio-Technology Park (BTP) Scheme for manufacture of goods, including repair,
re-making, reconditioning, reengineering and rendering of services. Trading
units are not covered under these schemes. |
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Export and Import of goods |
(a) An EOU / EHTP / STP / BTP unit
may export all kinds of goods and services except items that are prohibited
in ITC (HS). Export of Special Chemicals, Organisms, Materials, Equipment and
Technologies (SCOMET) shall be subject to fulfillment of the conditions
indicated in ITC(HS). Procurement and supply of export
promotion material like brochure / literature, pamphlets, hoardings,
catalogues, posters etc. upto a maximum value limit of 1 .5% of FOB value of
previous years exports shall also be allowed. (b) An EOU / EHTP / STP / BTP unit
may import and/or procure, from DTA or bonded warehouses in DTA /
international exhibition held in India, without payment of duty, all types of
goods, including capital goods, required for its activities, provided they
are not prohibited items of import in the ITC (HS). Any permission required
for import under any other law shall be applicable. Units shall also be
permitted to import goods including capital goods required for approved activity,
free of cost or on loan / lease from clients. Import of capital goods will be
on a self certification basis. Goods imported by a unit shall be with actual
user condition and shall be utilized for export production. (c) State Trading regime shall not
apply to EOU manufacturing units. However, in respect of Chrome Ore / Chrome
concentrate, State Trading Regime as stipulated in export policy of these
items, will be applicable to EOUs. (d) EOU / EHTP / STP / BTP units
may import / procure from DTA, without payment of duty, certain specified
goods for creating a central facility. Software EOU/DTA units may use such
facility for export of software. (e) An EOU engaged in agriculture,
animal husbandry, aquaculture, floriculture, horticulture, pisciculture, viticulture,
poultry or sericulture may be permitted to remove specified goods in
connection with its activities for use outside bonded area. (f) Gems and jewellery EOUs may
source gold / silver/ platinum through nominated agencies on loan / outright
purchase basis. Units obtaining gold/ silver/ platinum from nominated
agencies, either on loan basis or outright purchase basis shall export gold/
silver / platinum within 90 days from date of release. (g) EOU / EHTP / STP / BTP units,
other than service units, may export to Russian Federation in Indian Rupees
against repayment of State Credit / Escrow Rupee Account of buyer subject to
RBI clearance, if any. (h) Procurement and export of
spares / components, upto 5 % of FOB value of exports, may be allowed to same
consignee / buyer of the export article, subject to the condition that it
shall not count for NFE and direct tax benefits. (i) BoA may allow, on a case to
case basis, requests of EOU / EHTP / STP / BTP units in sectors other than
Gems & Jewellery, for consolidation of goods related to manufactured
articles and export thereof along with manufactured article. Such goods may
be allowed to be imported / procured from DTA by EOU without payment of duty,
to the extent of 5 % FOB value of such manufactured articles exported by the
unit in preceding financial year. Details of procured / imported goods and
articles manufactured by the EOU will be listed separately in the export
documents. In such cases, value of procured /imported goods will not be taken
into account for calculation of NFE, DTA sale entitlement & profits
accruing out of such procured / imported goods will not be eligible for
income tax benefits. Such procured/ imported goods shall not be allowed to be
sold in DTA. BoA may also specify any other conditions. |
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Second Hand capital goods |
Second hand capital goods, without
any age limit, may also be imported duty free. |
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Leasing of Capital Goods |
a) An EOU / EHTP / STP / BTP unit
may, on the basis of a firm contract between parties, source capital goods
from a domestic / foreign leasing company without payment of customs / excise
duty. In such a case, EOU / EHTP / STP / BTP unit and domestic /foreign
leasing company shall jointly file documents to enable import / procurement
of capital goods without payment of duty. b) An EOU / EHTP / BTP / STP unit
may sell capital goods and lease back the same from a Non Banking Financial
Company (NBFC), subject to the following conditions: i) The unit should obtain
permission from the jurisdictional Deputy / Assistant Commissioner of Customs
or Central Excise, for entering into transaction of ‘Sale and Lease Back of
Assets’, and submit full details of the goods to be sold and leased back and
the details of NBFC; ii) The goods sold and leased back
shall not be removed from the unit’s premises; iii) The unit should be NFE
positive at the time when it enters into sale and lease back transaction with
NBFC; iv) A joint undertaking by the
unit and NBFC should be given to pay duty on goods in case of violation or
contravention of any provision of the notification under which these goods
were imported or procured, read with Customs Act,1962 or Central Excise Act,
1 944, and that the lien on the goods shall remain with the Customs/Central
Excise Department, which will have first charge over the said goods for
recovery of sum due from the unit to Government under provision of Section
142 (b) of the Customs Act, 1 962 read with the Customs (Attachment of
Property of Defaulters for Recovery of Govt .Dues) Rules, 1995. |
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Net Foreign Exchange Earnings (NFE) |
EOU / EHTP / STP / BTP unit shall
be a positive net foreign exchange earner except for sector specific
provision of Appendix 14 -I-C of HBP v1, where a higher value addition shall
be required. NFE earnings shall be calculated cumulatively in blocks of five
years, starting from commencement of production. Whenever a unit is unable to
export due to prohibition / restriction imposed on export of any product
mentioned in LoP, the five year block period for calculation of NFE earnings
may be suitably extended by BoA. BoA may also consider extension of block
period by another one year, for calculation of NFE, on case to case basis,
for those units which complete 5 years block period in between 30.09.2008 and
3 0.09.2009, keeping in view the decline in exports in that particular unit,
due to economic slow down only. |
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Letter of Permission / Letter of Intent and Legal Undertaking
Investment Criteria |
(a) On approval, a Letter of
Permission (LoP) / Letter of Intent (LoI) shall be issued by DC / designated
officer to EOU / EHTP / STP / BTP unit. LoP / LoI shall have an initial
validity of 3 years, by which time unit should have commenced production. Its
validity may be extended further up to 3 years by competent authority.
However, proposals for extension beyond six years shall be considered in
exceptional circumstances, on a case-to-case basis by BoA. Once unit
commences production, LoP/ LoI issued shall be valid for a period of 5 years
for its activities. This period may be extended further by DC for a period of
5 years at a time. (b) LoP / LoI issued to EOU / EHTP
/ STP / BTP units by concerned authority, subject to compliance of provision
in para 6.2 above, would be construed as an Authorisation for all purposes. (c) Unit shall execute an LUT with
DC concerned. Failure to ensure positive NFE or to abide by any of the terms
and conditions of LoP / LoI / IL / LUT shall render the unit liable to penal
action under provisions of the FT (D&R) Act and Rules and Orders made
thereunder, without prejudice to action under any other law / rules and
cancellation or revocation of LoP / LoI / IL. (d) Only projects having a minimum
investment of Rs. 1 Crore in plant & machinery shall be considered for
establishment as EOUs. However, this shall not apply to existing units and
units in EHTP / STP / BTP, Handicrafts / Agriculture / Floriculture /
Aquaculture/ Animal Husbandry / Information Technology, Services, Brass
Hardware and Handmade jewellery sectors. BoA may also allow establishment of
EOUs with a lower investment criteria. |
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Application & Approval |
(a) Applications for setting up of
units under EOU scheme, other than proposals for setting up of units in
services 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 the Units Approval Committee within 15 days as per criteria
indicated in HBP v1. (b) In other cases, approval may
be granted by BoA set up for this purpose as indicated in HBP v 1. (c) Proposals for setting up EOU
requiring industrial licence may be granted approval by DC after clearance of
proposal by BoA and DIPP within 45 days. (d) Applications for conversion
into an EOU / EHTP/ STP / BTP unit from existing DTA units, having an
investment of Rs. 5 0 crores and above in plant and machinery or exporting
Rs. 5 0 crores and above annually, shall be placed before BoA for a decision. |
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DTA Sale of Finished Products / Rejects / Waste / Scrap /Remnants
and By-products |
Entire production of EOU / EHTP /
STP / BTP units shall be exported subject to following: (a) Units, other than gems and
jewellery units, may sell goods upto 5 0% of FOB value of exports, subject to
fulfilment of positive NFE, on payment of concessional duties. Within
entitlement of DTA sale, unit may sell in DTA, its products similar to goods
which are exported or expected to be exported from units. However, units
which are manufacturing and exporting more than one product can sell any of
these products into DTA, upto 90% of FOB value of export of the specific
products, subject to the condition that total DTA sale does not exceed the
overall entitlement of 5 0% of FOB value of exports for the unit, as
stipulated above. No DTA sale at concessional duty shall be permissible in
respect of motor cars, alcoholic liquors, books, tea (except instant tea),
pepper & pepper products, marble and such other items as may be notified
from time to time. Such DTA sale shall also not be permissible to units
engaged in activities of packaging / labeling / egregation / refrigeration/
compacting / micronisation / pulverization /granulation / conversion of monohydrate
form of chemical to anhydrous form or vice-versa. Sales made to a unit in SEZ
shall also be taken into account for purpose of arriving at FOB value of
export by EOU provided payment for such sales are made from Foreign Exchange
Account of SEZ unit. Sale to DTA would also be subject to mandatory
requirement of registration of pharmaceutical products (including bulk
drugs). An amount equal to Anti Dumping duty under section 9A of the Customs
Tariff Act, 1 975 leviable at the time of import, shall be payable on the
goods used for the purpose of manufacture or processing of the goods cleared
into DTA from the unit. (b) For services, including
software units, sale in DTA in any mode, including on line data
communication, shall also be permissible up to 5 0% of FOB value of exports
and /or 5 0% of foreign exchange earned, where payment of such services is
received in foreign exchange. (c) Gems and jewellery units may
sell upto 1 0% of FOB value of exports of the preceding year in DTA, subject
to fulfillment of positive NFE. In respect of sale of plain jewellery,
recipient shall pay concessional rate of duty as applicable to sale from
nominated agencies. In respect of studded jewellery, duty shall be payable as
applicable. (d) Unless specifically prohibited
in LoP, rejects within an overall limit of 5 0% may be sold in DTA on payment
of duties as applicable to sale under sub-para 6.8(a) on prior intimation to
Customs authorities. Such sales shall be counted against DTA sale
entitlement. Sale of rejects upto 5 % of FOB value of exports shall not be
subject to achievement of NFE. (e) Scrap / waste / remnants
arising out of production process or in connection therewith may be sold in
DTA, as per SION notified under Duty Exemption Scheme, on payment of
concessional duties as applicable, within overall ceiling of 5 0% of FOB
value of exports. Such sales of scrap / waste /remnants shall not be subject
to achievement of positive NFE. In respect of items not covered by norms, DC
may fix ad-hoc norms for a period of six months and within this period, norms
should be fixed by Norms Committee. Ad-hoc norms will continue till such time
norms are fixed by Norms Committee. Sale of waste / scrap / remnants by units
not entitled to DTA sale, or sales beyond DTA sale entitlement, shall be on
payment of full duties. Scrap / waste /remnants may also be exported. (f) There shall be no duties /
taxes on scrap / waste / remnants, in case same are destroyed with permission
of Customs authorities. (g) By-products included in LoP
may also be sold in DTA subject to achievement of positive NFE, on payment of
applicable duties, within the overall entitlement of sub-para 6.8(a). Sale of
by-products by units not entitled to DTA sales, or beyond entitlements of sub
para 6.8 (a), shall also be permissible on payment of full duties. (h) EOU / EHTP / STP / BTP units
may sell finished products, except pepper and pepper products and marble,
which are freely importable under FTP in DTA, under intimation to DC, against
payment of full duties, provided they have achieved positive NFE. An amount
equal to Anti Dumping duty under section 9A of the Customs Tariff Act, 1 975
leviable at the time of import, shall be payable on the goods used for the
purpose of manufacture or processing of the goods cleared into DTA from the
unit. (i) In case of units manufacturing
electronics hardware and software, NFE and DTA sale entitlement shall be
reckoned separately for hardware and software. (j) In case of DTA sale of goods
manufactured by EOU/EHTP / STP / BTP, where basic duty and CVD is nil, such
goods may be considered as non-excisable for payment of duty. (k) In case of new EOUs, advance
DTA sale will be allowed not exceeding 5 0% of its estimated exports for
first year, except pharmaceutical units where this will be based on its
estimated exports for first two years. (l) Units in Textile and Granite
sectors shall have an option to sell goods into DTA in terms of sub- paras
6.8 (a), (d), (e), (g) and (k) above, on payment of an amount equal to
aggregate of duties of excise leviable under section 3 of the Central Excise
Act, 1 944 or under any other law for the time being in force, on like goods
produced or manufactured in India other than in an EOU, subject to the
condition that they have not used duty paid imported inputs in excess of 3 %
of the FOB value of exports of the preceding year and they have achieved
positive NFE. Once this option is exercised, the unit will not be allowed to
import any duty free inputs for any purpose. |
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Other Supplies in DTA |
Following supplies effected from
EOU / EHTP / STP/ BTP units to DTA will be counted for fulfillment of
positive NFE: (a) Supplies effected in DTA to
holders of Advance Authorisation / Advance Authorisation for annual
requirement / DFIA under duty exemption / remission scheme / EPCG scheme.
However, printing sector EOUs (or any other sector that may be notified in HBP
v 1 ), can not supply goods, where basic customs duty and CVD is nil or
exempted otherwise, to holders of Advance Authorisation / Advance
Authorization for annual requirement. (b) Supplies effected in DTA
against foreign exchange remittance received from overseas. (c) Supplies to other EOU / EHTP /
STP / BTP / SEZ units, provided that such goods are permissible for
procurement in terms of para 6.2 of FTP. (d) Supplies made to bonded
warehouses set up under FTP and / or under section 65 of Customs Act and free
trade and warehousing zones, where payment is received in foreign exchange. (e) Supplies of goods and services
to such organizations which are entitled for duty free import of such items
in terms of general exemption notification issued by MoF, as may be provided
in HBP v 1. (f) Supplies of Information
Technology Agreement (ITA -1) items and notified zero duty telecom /
electronics items. (g) Supplies of items like tags,
labels, printed bags, stickers, belts, buttons or hangers to DTA unit for
export. (h) Supply of LPG produced in an
EOU refinery to Public Sector domestic oil companies for being supplied to
household domestic consumers at subsidized prices under the Public
Distribution System (PDS) Kerosene and Domestic LPG Subsidy Scheme, 2 002, as
notified by the Ministry of Petroleum and Natural Gas vide notification No.
E-20029/18/2001-PP dated 28.01.2003 (hereinafter referred to as PDS Scheme)
subject to the following conditions:- (a) Only supply of such quantity
of LPG would be eligible for which Ministry of Petroleum and Natural Gas
declines permission for export and requires the LPG to be cleared in DTA; and (b) The Ministry of Finance by a
notification has permitted duty free imports of LPG for supply under the
aforesaid PDS Scheme. |
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Export through other |
An EOU / EHTP / STP / BTP unit may
export goods manufactured / software developed by it through another exporter
or any other EOU / EHTP / STP / SEZ unit subject to conditions mentioned in
para 6.18 of HBP v1. |
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Entitlement for Supplies from the DTA |
(a) Supplies from DTA to EOU /
EHTP / STP / BTP units will be regarded as “deemed exports” and DTA supplier
shall be eligible for relevant entitlements under chapter 8 of FTP, besides discharge
of export obligation, if any, on the supplier. Notwithstanding the above, EOU
/ EHTP / STP / BTP units shall, on production of a suitable disclaimer from
DTA supplier, be eligible for obtaining entitlements specified in chapter 8
of FTP. For claiming deemed export duty drawback, they shall get brand rates
fixed by DC wherever All Industry Rates of Drawback are not available. (b) Suppliers of precious and
semi-precious stones, synthetic stones and processed pearls from DTA to EOU
shall be eligible for grant of Replenishment Authorisations at rates and for
items mentioned in HBP v1. (c) In addition, EOU / EHTP / STP
/ BTP units shall be entitled to following:- (i) Reimbursement of Central Sales
Tax (CST) on goods manufactured in India. Simple interest @ 6% per annum
will be payable on delay in refund of CST, if the case is not settled within
3 0 days of receipt of complete application (as in paragraph 9.10.1 of HBP
v1). (ii) Exemption from payment of
Central Excise Duty on goods procured from DTA on goods manufactured in
India. (iii) Reimbursement of duty paid
on fuel procured from domestic oil companies / Depots of domestic oil Public
Sector Undertakings as per drawback rate notified by DGFT from time to time.
Reimbursement of additional duty of excise levied on fuel under the Finance
Acts would also be admissible. (iv) CENVAT Credit on service tax
paid. |
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Other Entitlements |
Other entitlements of EOU / EHTP /
STP / BTP units are as under: (a) Exemption from Income Tax as
per Section 1 0A and 10B of Income Tax Act. (b) Exemption from industrial
licensing for manufacture of items reserved for SSI sector. (c) Export proceeds will be
realized within 12 months. (d) Units will be allowed to
retain 1 00% of its export earning in the EEFC account. (e) Unit will not be required to
furnish bank guarantee at the time of import or going for job work in DTA,
where unit has (i) a turnover of Rs. 5 crores or
above; (ii) unit is in existence for at
least three years; and (iii) The unit: (a) has achieved positive NFE /
export obligation wherever applicable; (b) has not been issued a show
cause notice or a confirmed demand, during the preceding 3 years, on grounds
other than procedural violations, under the penal provision of the Customs
Act, the Central Excise Act, the Foreign Trade (Development & Regulation)
Act, the Foreign Exchange Management Act, the Finance Act, 1 994 covering
Service Tax or any allied Acts or the rules made thereunder, on account of
fraud / collusion / willful mis-statement / suppression of facts or
contravention of any of the provisions thereof; (f) 100% FDI investment permitted
through automatic route similar to SEZ units. (g) Units shall pay duty on the
goods produced or manufactured and cleared into DTA on monthly basis in the
manner prescribed in the Central Excise Rules. |
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|
Inter Unit Transfer |
(a) Transfer of manufactured goods
from one EOU / EHTP / STP / BTP unit to another EOU / EHTP / STP / BTP unit
is allowed with prior intimation to concerned DC and Customs authorities,
following procedure of in-bond movement of goods. Transfer of manufactured
goods shall also be allowed from EOU / EHTP / STP / BTP unit to a SEZ
developer or unit following procedure prescribed in SEZ Rules,2006. (b) Capital goods may be
transferred or given on loan to other EOU / EHTP / STP / BTP / SEZ units,
with prior intimation to concerned DC and Customs authorities. (c) Goods supplied by one unit of
EOU / EHTP / STP / BTP to another unit shall be treated as imported goods for
second unit for payment of duty, on DTA sale by second unit. |
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Sub-Contracting |
(a) (i) EOU / EHTP / STP / BTP
units, including gems and jewellery units, may on the basis of annual
permission from Customs authorities, subcontract production processes to DTA
through job work which may also involve change of form or nature of goods,
through job work by units in DTA. (ii) These units may subcontract
upto 5 0% of overall production of previous year in value terms in DTA with
permission of Customs authorities. (b) (i) EOU may, with annual
permission from Customs authorities, undertake job work for export, on behalf
of DTA exporter, provided that goods are exported directly from EOU and
export document shall jointly be in name of DTA / EOU. For such exports, DTA
units will be entitled for refund of duty paid on inputs by way of brand rate
of duty drawback. (ii) Duty free import of goods for
execution of export order placed on EOU by foreign supplier on jobwork basis,
would be allowed subject to condition that no DTA clearance shall be allowed. (iii) Subcontracting of both
production and production processes may also be undertaken without any limit
through other EOU / EHTP / STP / BTP / SEZ units, on the basis of records
maintained in unit. (iv) EOU / EHTP / STP / BTP units
may subcontract part of production process abroad and send intermediate
products abroad as mentioned in LoP. No permission would be required when
goods are sought to be exported from subcontractor premises abroad. When
goods are sought to be brought back, prior intimation to concerned DC and
Customs authorities shall be given. (c) Scrap / waste / remnants
generated through job work may either be cleared from job worker’s premises
on payment of applicable duty on transaction value or destroyed in presence
of Customs / Central Excise authorities or returned to unit. Destruction
shall not apply to gold, silver, platinum, diamond, precious and semi
precious stones. (d) Sub-contracting / exchange by
gems and jewellery EOUs through other EOUs or SEZ units or units in DTA,
shall be as per procedure indicated in HBP v1. |
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Sale of Unutilized Material |
(a) In case an EOU / EHTP / STP /
BTP unit is unable to utilize goods and services, imported or procured from
DTA, it may be (i) transferred to another EOU /
EHTP / STP /BTP/ SEZ unit; or (ii) disposed off in DTA with
approval of Customs authorities on payment of applicable duties and
submission of import authorization; or (iii) exported. Such transfer from
EOU / EHTP / STP / BTP unit to another such unit would be treated as import
for receiving unit. (b) Capital goods and spares that
have become obsolete /surplus, may either be exported, transferred to another
EOU / EHTP / STP / BTP / SEZ unit or disposed off in DTA on payment of
applicable duties. Benefit of depreciation, as applicable, will be available
in case of disposal in DTA only when the unit has achieved positive NFE
taking into consideration the depreciation allowed. No duty shall be payable
in case capital goods, raw material, onsumables, spares, goods manufactured,
processed or packaged, and scrap / waste / remnants / rejects are destroyed
within unit after intimation to Customs authorities or destroyed outside unit
with permission of Customs authorities. Destruction as stated above shall not
apply to gold, silver, platinum, diamond, precious and semi precious stones. (c) In case of textile sector,
disposal of left over material / fabrics upto 2 % of cif value or quantity of
import, whichever is lower, on payment of duty on transaction value, may be
allowed, subject to certification of Central Excise / Customs officers that
these are leftover items. (d) Disposal of used packing
material will be allowed on payment of duty on transaction value |
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|
Reconditioning/ repair, & Re-engineering |
EOU / EHTP / STP / BTP units may
be set up with approval of BoA to carry out reconditioning, repair, remaking,
testing, calibration, quality improvement, upgradation of technology and
re-engineering activities for export in foreign currency. Provisions of
paragraphs 6.8,6.9, 6.10, 6.13, 6.14 of FTP and para 6.28 of HBP v1 shall
not, however, apply to such activities. |
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|
Replacement/ Repair of Imported/ Indigenous Goods |
(a) General provisions of FTP relating
to export / import of replacement / repair of goods would also apply equally
to EOU / EHTP / STP / BTP units. Cases not covered by these provisions shall
be considered on merits by DC. (b) Goods sold in DTA and not
accepted for any reasons, may be brought back for repair / replacement, under
intimation to concerned jurisdictional Customs / Central Excise authorities. (c) Goods or parts thereof, on
being imported / indigenously procured and found defective or otherwise unfit
for use or which have been damaged or become defective subsequently, may be
returned and replacement obtained or destroyed. In the event of replacement,
goods may be brought back from foreign suppliers or their authorized agents
in India or indigenous suppliers. The unit can take free of cost replacement
(duty paid) from the authorized agents in India of foreign suppliers,
provided the defective part is re-exported or destroyed. However, destruction
shall not apply to precious and semi precious stones and precious metals. |
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Exit from EOU Scheme |
(a) With approval of DC, an EOU
may opt out of scheme. Such exit shall be subject to payment of Excise and
Customs duties and industrial policy in force. (b) If unit has not achieved
obligations, it shall also be liable to penalty at the time of exit. (c) In the event of a gems and
jewellery unit ceasing its operation, gold and other precious metals, alloys,
gems and other materials available for manufacture of jewellery, shall be
handed over to an agency nominated by DoC, at price to be determined by that
agency. (d) An EOU / EHTP / STP / BTP unit
may also be permitted by DC to exit from the scheme at any time on payment of
duty on capital goods under the prevailing EPCG Scheme for DTA Units. This
will be subject to fulfillment of positive NFE criteria under EOU scheme,
eligibility criteria under EPCG scheme and standard conditions indicated in HBP
v 1. (e) Unit proposing to exit out of
EOU scheme shall intimate DC and Customs and Central Excise authorities in
writing. Unit shall assess duty liability arising out of debonding and submit
details of such assessment to Customs and Central Excise authorities. Customs
and Central Excise authorities shall confirm duty liabilities on priority
basis, subject to the condition that the unit has achieved positive NFE,
taking into consideration the depreciation allowed. After payment of duty and
clearance of all dues, unit shall obtain “No Dues Certificate” from Customs
and Central Excise authorities. On the basis of “No Dues Certificate” so
issued by the Customs and Central Excise authorities, unit shall apply to DC
for final debonding. In case there is no proceeding
pending under FT(D&R) Act, DC shall issue final debonding order within a
period of 7 working days. Between “No Dues Certificate” issued by Customs and
Central Excise authorities and final debonding order by DC, unit shall not be
entitled to claim any exemption for procurement of capital goods or inputs.
However, unit can claim Advance Authorisation / DEPB /Duty Drawback. Since
the duty calculations and dues are disputed and take a long time, a BG / Bond
/ Installment processes backed by BG shall be provided for expediting the
exit process. (f) In cases where a unit is
initially established as DTA unit with machines procured from abroad after
payment of applicable import duty, or from domestic market after payment of
excise duty, and unit is subsequently converted to EOU, in such cases removal
of such capital goods to DTA after debonding would be without payment of
duty. Similarly, in cases where a DTA unit imported capital goods under EPCG
Scheme and after completely fulfilling export obligation gets converted into
EOU, unit would not be charged customs duty on capital goods at the time of
removal of such capital goods in DTA when debonding. (g) An EOU / EHTP / STP / BTP unit
may also be permitted by DC to exit under Advance Authorization as a one time
option. This will be subject to fulfillment of positive NFE criteria. |
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Conversion |
(a) Existing DTA units may also
apply for conversion into an EOU / EHTP / STP / BTP unit, and Income Tax
benefits under Section 10A and 10B will be available for plant, machinery and
equipment already installed. (b) Existing EHTP / STP units may
also apply for conversion / merger to EOU and vice-versa. In such cases,
units will remain in bond and avail exemptions in duties and taxes as
applicable. |
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|
Monitoring of NFE |
Performance of EOU / EHTP / STP /
BTP units shall be monitored by Units Approval Committee as per guidelines in
HBP v1. |
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Export through Exhibitions / Export Promotion Tours / showrooms
abroad / Duty Free Shops |
EOU / EHTP / STP / BTP are
permitted to: i) Export goods for holding /
participating in exhibitions abroad with permission of DC. ii) Personal carriage of gold /
silver / platinum jewellery, precious, semi-precious stones, beads and
articles. iii) Export goods for display /
sale in permitted shops set up abroad. iv) Display / sell in permitted
shops set up abroad, or in showrooms of their distributors / agents. v) Set up showrooms / retail
outlets at International Airports. |
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Personal Carriage of Import / Export Parcels including through
Foreign bound Passengers |
Import / export through personal
carriage of gems and jewellery items may be undertaken as per Customs
procedure. However, export proceeds shall be realized through normal banking
channel. Import / export through personal carriage by units, other than gems
and jewellery units, shall be allowed provided goods are not in commercial
quantity. An authorized person of Gems & Jewellery EOU may also import
gold in primary form, upto 10 Kgs in a financial year through personal
carriage, as per guidelines prescribed by RBI and DoR. |
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|
Export / Import by Post / Courier |
Goods including free samples, may
be exported / imported by airfreight or through foreign post office or
through courier, as per Customs procedure. |
|
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Administration of EOUs / Powers of Development Commissioner |
Details of administration of EOUs
and powers of are given in HBP v1. Development Commissioner |
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Revival of Sick Units. |
Subject to a unit being declared
sick by appropriate authority, proposals for revival of the unit or its take
over may be considered by BoA. |
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Approval of EHTP/STP |
In case of units under EHTP / STP
schemes, necessary approval / permission under relevant paragraphs of this
Chapter shall be granted by officer designated by Ministry of Communication
and Information Technology, Department of Information Technology, instead of
DC, and by Inter-Ministerial Standing Committee (IMSC) instead of BoA. |
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|
Approval of BTP |
Bio-Technology Parks (BTP) would
be notified by DGFT on recommendations of Department of Biotechnology. In
case of units in BTP, necessary approval / permission under relevant
provisions of this chapter will be granted by designated officer of
Department of Biotechnology. |
Chapter-7
Special Economic
Zones
The
policy relating to Special Economic Zones is governed by SEZ Act 2005, and the
Rules framed there under.
Chapter-7A
Free Trade &
Warehousing Zones
The
policy relating to Free Trade and Warehousing Zones is governed by SEZ Act 2005,
and the Rules framed thereunder.
Chapter –8
Deemed Exports
|
Deemed Exports |
“Deemed Exports” refer to those
transactions in which goods supplied do not leave country, and payment for
such supplies is received either in Indian rupees or in free foreign
exchange. |
|
|
Categories of Supply |
Following categories of supply of
goods by main / subcontractors shall be regarded as “Deemed Exports” under
FTP, provided goods are manufactured in India: 1.
Supply
of goods against Advance Authorisation /Advance Authorisation for annual
requirement /DFIA; 2.
Supply
of goods to EOU / STP / EHTP / BTP; 3.
Supply
of capital goods to EPCG Authorisation holders; 4.
Supply
of goods to projects financed by multilateral or bilateral Agencies / Funds
as notified by Department of Economic Affairs (DEA), MoF under International
Competitive Bidding (ICB) in accordance with procedures of those Agencies /
Funds, where legal agreements provide for tender evaluation without including
customs duty; Supply and installation of goods and equipment (single
responsibility of turnkey contracts) to projects financed by multilateral or
bilateral Agencies / Funds as notified by DEA, MoF under ICB, in accordance
with procedures of those Agencies / Funds, which bids may have been invited
and evaluated on the basis of Delivered Duty Paid (DDP) prices for goods
manufactured abroad; 5.
Supply
of capital goods, including in unassembled / disassembled condition as well
as plants, machinery, accessories, tools, dies and such goods which are used
for installation purposes till stage of commercial production, and spares to
extent of 1 0% of FOR value to fertilizer plants; 6.
Supply
of goods to any project or purpose in respect of which the MoF, by a
notification, permits import of such goods at zero customs duty; 7.
Supply
of goods to power projects and refineries not covered in (f) above; 8.
Supply
of marine freight containers by 1 00% EOU (Domestic freight containers-manufacturers)
provided said containers are exported out of India within 6 months or such
further period as permitted by customs; 9.
Supply
to projects funded by UN Agencies; and 10. Supply of goods to nuclear power
projects through competitive bidding as opposed to ICB. Benefits of deemed exports shall
be available under paragraphs (d), (e), (f) and (g) only if the supply is
made under procedure of ICB. However,
in regard to mega power projects, the requirement of ICB would not be
mandatory, if the requisite quantum of power has been tied up through tariff
based competitive bidding or if the project has been awarded through
tariff based competitive bidding. [Inserted
by Notification 24(RE)/14.01.2010]. |
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|
Benefits for Deemed Exports |
Deemed exports shall be eligible
for any / all of following benefits in respect of manufacture and supply of
goods qualifying as deemed exports subject to terms and conditions as in HBP
v1:- 1.
Advance
Authorisation / Advance Authorisation for annual requirement / DFIA. 2.
Deemed
Export Drawback. 3.
Exemption
from terminal excise duty where supplies are made against ICB. In other cases,
refund of terminal excise duty will be given. Exemption from TED shall also
be available for supplies made by an Advance Authorisation holder to a
manufacturer holding another Advance Authorization if such manufacturer, in
turn, supplies the product(s) to an ultimate exporter. |
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Benefits to the Supplier |
1.
In
respect of supplies made against Advance Authorisation / DFIA in terms of
paragraph 8.2(a) of FTP, supplier shall be entitled to Advance Authorisation
/ DFIA for intermediate supplies. 2.
If
supplies are made against Advance Release Order (ARO) or Back to Back Letter
of Credit issued against Advance Authorisation / DFIA in terms of paragraphs
4.1.11 and 4.1.12 of FTP, suppliers shall be entitled to benefits listed in
paragraphs 8.3(b) and (c) of FTP, whichever is applicable. |
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8.4.2 |
In respect of supply of goods to
EOU / EHTP / STP / BTP in terms of paragraph 8.2(b) of FTP, supplier shall be
entitled to benefits listed in paragraphs 8.3(a), (b) and (c) of FTP,
whichever is applicable. |
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8.4.3 |
In respect of supplies made under
paragraph 8.2(c) of FTP, supplier shall be entitled to the benefits listed in
paragraphs 8.3(a), (b) and (c) of the Policy, whichever is applicable. |
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8.4.4 |
(i) In respect of supplies made
under paragraphs 8.2(d), (f) and (g) of FTP, supplier shall be entitled to
benefits listed in paragraphs 8.3(a), (b) and (c), whichever is applicable. (ii) In respect of supplies
mentioned in paragraph 8 .2(d), supplies to projects funded by such Agencies
alone, as may be notified by DEA, MoF, shall be eligible for deemed export
benefits. A list of such Agencies / Funds is given in Appendix 13 of HBP v1. (iii) Benefits of deemed exports
under para 8.2(f) of FTP shall be applicable in respect of items, import of
which is allowed by DoR at zero customs duty, subject to fulfillment of
conditions specified under Notification No. 21/2002-Customs dated 1.3.2002,
as amended from time to time. (iv) Supply of Capital goods and
spares upto 1 0% of FOR value of capital goods to power projects in terms of
paragraph 8.2(g), shall be entitled for deemed export benefits provided the
ICB procedures have been followed at Independent Power Producer (IPP) /
Engineering and Procurement Contract (EPC) stage. Benefit of deemed exports
shall also be available for renovation / modernization of power plants.
Supplier shall be eligible for benefits listed in paragraph 8.3(a) and (b) of
FTP, whichever is applicable. However, supply of goods required for setting
up of any mega power project as specified in S.No. 400 of DoR Notification
No. 21/2002-Customs dated 1.3.2002, as amended, shall be eligible for deemed
export benefits as mentioned in paragraph 8.3(a), (b) and (c) of FTP,
whichever is applicable, if such mega power project complies with the
threshold generation capacity specified therein, in Customs Notification. However, in regard to mega power projects, the
requirement of ICB would not be mandatory, if the requisite quantum of power
has been tied up through tariff based competitive bidding or if the project
has been awarded through tariff based competitive bidding. [Sentence inserted by notification
28(RE)/08.02.2010]. Further,
supply of goods required for the expansion of existing mega power project as
specified in Sl. no 400A of DoR
Notification 21/2002- Customs dated 1.3.2002, as amended shall also be
eligible for deemed export benefits as mentioned in paragraph 8.3 ( a),
(b) and (c) of FTP, whichever is applicable. [Paragraph inserted by notification 24(RE)/14.01.2010]. (v) Supplies under paragraph
8.2(g) of FTP to new refineries being set up during Ninth Plan period and
spilled over to Tenth Plan period, shall be entitled for deemed export
benefits in respect of goods mentioned in list 17 specified in S.No. 228 of
Notification No. 21/2002-Customs dated 1.3.2002, as amended from time to
time. Supplier shall be eligible for benefits listed in paragraphs 8.3(a) and
(b) of FTP, whichever is applicable. |
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8.4.5 |
In respect of supplies made under
paragraph 8.2(e) of FTP, supplier shall be eligible for benefits listed in
paragraph 8.3(a) and (b) of FTP, whichever is applicable. Benefit of deemed
exports shall be available in respect of supplies of capital goods and spares
to Fertilizer Plants which are set up or expanded / revamped / retrofitted /
modernized during Ninth Plan period. Benefit of deemed exports shall also be
available on supplies made to Fertilizers Plants, which have started in the
8th / 9th Plan periods and spilled over to 10th Plan period. |
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|
8.4.6 |
Supplies of goods to projects
funded by UN Agencies covered under para 8.2(i) of FTP are eligible for
benefits listed in paragraph 8.3(a) and (b) of FTP, whichever is applicable. |
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|
8.4.7 |
In respect of supplies made to
Nuclear Power Projects under para 8.2(j) of FTP, the supplier would be
eligible for benefits given in para 8.3(a), (b) and (c) of FTP, whichever is
applicable. Supply of only those goods required for setting up any Nuclear
Power Project specified in list 43 at S.No. 401 of Notification No.
21/2002-Customs dated 1 .3.2002, as amended from time to time, having a
capacity of 440MW or more as certified by an officer not below rank of Joint
Secretary to Government of India in Department of Atomic Energy, shall be
entitled for deemed export benefits in cases where procedure of competitive
bidding (and not ICB) has been followed. |
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|
Eligibility for refund of terminal excise duty / drawback |
Supply of goods will be eligible
for refund of terminal excise duty in terms of para 8.3(c) of FTP, provided
recipient of goods does not avail CENVAT credit / rebate on such goods.
Similarly, supplies will be eligible for deemed export drawback in terms of
para 8.3(b) of FTP on Central Excise paid on inputs / components, provided
CENVAT credit facility / rebate has not been availed by applicant. Such
supplies will however be eligible for deemed export drawback on customs duty
paid on inputs/ components. |
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|
8.5.1 |
Simple interest @ 6% per annum
will be payable on delay in refund of duty drawback and terminal excise duty
under deemed export scheme, if the case is not settled within 30 days of
receipt of complete application (as in paragraph 9.10.1 of HBP v1). |
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Supplies to be made by the main /sub-contractor |
In all cases of deemed exports,
supplies shall be made directly to designated Projects / Agencies / Units /
Advance Authorisation / EPCG Authorisation holders. Sub-contractor may,
however, make supplies to main contractor instead of supplying directly to
designated projects / Agencies. Such supplies shall be eligible for deemed
export benefits as per procedure laid down in paragraph 8.4 of HBP v1. |
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8.6.2 |
Supplies made by an Indian
sub-contractor of an Indian or foreign main contractor directly to the
designated projects / Agencies, shall also be eligible for deemed export
benefits provided sub-contractor is indicated either originally or
subsequently in the contract, and payment certificate is issued by project
authority in the name of sub-contractor as in Appendix 2C of HBP v1. |
Chapter-9
Definitions
|
9.1 |
For purpose of FTP, unless context
otherwise requires, following words and expressions shall have the following
meanings attached to them. |
|
9.2 |
“Accessory” or “Attachment” means
a part, sub-assembly or assembly that contributes to efficiency or
effectiveness of a piece of equipment without changing its basic functions. |
|
9.3 |
“Act” means Foreign Trade
(Development and Regulation) Act, 1992 (No.22 of 1992) [FT(D&R) Act]. |
|
9.4 |
“Actual User” means an actual user
who may be either industrial or non-industrial. |
|
9.5 |
“Actual User (Industrial)” means a
person who utilizes imported goods for manufacturing in his own industrial
unit or manufacturing for his own use in another unit including a jobbing
unit. |
|
9.6 |
“Actual User (Non-Industrial)”
means a person who utilizes the imported goods for his own use in (i) any commercial establishment
carrying on any business, trade or profession; or (ii) any laboratory, Scientific or
Research and Development(R&D) institution, university or other
educational institution or hospital; or (iii) any service industry. |
|
9.7 |
“AEZ” means Agricultural Export
Zones notified by DGFT in Appendix 8 of HBP v1. |
|
9.8 |
“Appeal” is an application filed
under section 15 of the Act and includes such applications preferred by DGFT
officials in government interest against decision by designated adjudicating
/ appellate authorities. |
|
9.9 |
“Applicant” means person on whose
behalf an application is made and shall, wherever context so requires,
includes person signing the application. |
|
9.9.1 |
“Authorisation” means a permission
as included in Section 2 (g) of FT(D&R) Act to import or export as per
provisions of FTP. |
|
9.10 |
“BoA” means the Board of Approval as
notified by DoC. |
|
9.11 |
“BTP” means Biotechnology Park as
notified by DGFT on recommendation of Department of Biotechnology. |
|
9.12 |
“Capital Goods” means any plant,
machinery, equipment or accessories required for manufacture or production,
either directly or indirectly, of goods or for rendering services, including
those required for replacement, modernization, technological upgradation or
expansion. It also includes packaging machinery and equipment, refractoriness
for initial lining, refrigeration equipment, power generating sets, machine
tools, catalysts for initial charge, equipment and instruments for testing,
research and development, quality and pollution control. Capital goods may be
for use in manufacturing, mining, agriculture, aquaculture, animal husbandry,
floriculture, horticulture, pisciculture, poultry, sericulture and
viticulture as well as for use in services sector. |
|
9.13 |
“Competent Authority” means an
authority competent to exercise any power or to discharge any duty or
function under the Act or the Rules and Orders made there under or under FTP. |
|
9.14 |
“Component” means one of the parts
of a sub-assembly or assembly of which a manufactured product is made up and
into which it may be resolved. A component includes an accessory or
attachment to another component. |
|
9.15 |
“Consumables” means any item,
which participates in or is required for a manufacturing process, but does
not necessarily form part of end-product. Items, which are substantially or
totally consumed during a manufacturing process, will be deemed to be
consumables. |
|
9.16 |
“Consumer Goods” means any
consumption goods, which can directly satisfy human needs without further
processing and includes consumer durables and accessories thereof. |
|
9.17 |
“Counter Trade” means any
arrangement under which exports/ imports from/to India are balanced either by
direct imports/exports from importing/exporting country or through a third
country under a Trade Agreement or otherwise. Exports/Imports under Counter
Trade may be carried out through Escrow Account, Buy Back arrangements,
Barter trade or any similar arrangement. Balancing of exports and imports
could wholly or partly be in cash, goods and/or services. |
|
9.18 |
“Developer” means a person or body
of persons, company, firm and such other private or government undertaking,
who develops, builds, designs, organises, promotes, finances, operates,
maintains or manages a part or whole of infrastructure and other facilities
in SEZ as approved by Central Government and also includes a co-developer. |
|
9.19 |
“Development Commissioner” means
Development Commissioner of SEZ. |
|
9.20 |
“DFRC” means Duty Free
Replenishment Certificate (as given in FTP 2004-09). |
|
9.21 |
“Domestic Tariff Area (DTA)” means
area within India which is outside SEZs and EOU/ EHTP/ STP/BTP. |
|
9.22 |
“Drawback” in relation to any
goods manufactured in India and exported, means rebate of duty chargeable on
any imported material or excisable material used in manufacture of such goods
in India. Goods include imported spares, if supplied with capital goods
manufactured in India. |
|
9.23 |
“EHTP” means Electronic Hardware
Technology Park. |
|
9.24 |
“EOU” means Export Oriented Unit
for which an LOP has been issued by Development Commissioner. |
|
9.25 |
“Excisable goods” means any goods
produced or manufactured in India and subject to a duty of excise under
Central Excise and Salt Act 1944 (1 of 1944). |
|
9.26 |
“Exporter” means a person who
exports or intends to export and holds an IEC number, unless otherwise
specifically exempted. |
|
9.27 |
“Export Obligation” means
obligation to export product or products covered by Authorisation or
permission in terms of quantity, value or both, as may be prescribed or
specified by Regional or competent authority. |
|
9.27.1 |
“FTP” means the Foreign Trade
Policy which specifies policy for exports and imports under section 5 of the
Act. |
|
9.28 |
“Group Company” means two or more
enterprises which, directly or indirectly, are in a position to — (i) exercise twenty-six per cent,
or more of voting rights in other enterprise; or (ii) appoint more than fifty
percent, of members of board of directors in the other enterprise. For group companies to claim
benefits or have their exports counted for benefits to be claimed by another
member of group, the group company should have been in existence at least 2
years prior to date of application under any of export promotion schemes
notified in FTP. |
|
9.29 |
“HBP v1” means the Handbook of
Procedures (Vol.1) and “HBP v2” means Handbook of Procedures (Vol.2)
published under provisions of paragraph 2.4 of FTP. |
|
9.30 |
“Importer” means a person who
imports or intends to import and holds an IEC number, unless otherwise
specifically exempted. |
|
9.31 |
“Infrastructure facilities” means
industrial, commercial and social infrastructure or any other facility for
development of SEZ as notified. |
|
9.32 |
“ITC(HS)” means ITC(HS)
Classifications of Export and Import Items Book. |
|
9.33 |
“Jobbing” means processing or
working upon of raw materials or semi-finished goods supplied to job worker,
so as to complete a part of process resulting in manufacture or finishing of
an article or any operation which is essential for aforesaid process. |
|
9.34 |
“Licensing Year” means period
beginning on the 1 st April of a year and ending on 31st March of following
year. |
|
9.35 |
“Managed Hotel” means hotels
managed by a three star or above hotel/ hotel chain under an operating
management contract for a duration of at least three years between operating
hotel/ hotel chain and hotel being managed. Management contract must
necessarily cover the entire gamut of operations/ management of managed
hotel. |
|
9.36 |
“Manufacture” means to make,
produce, fabricate, assemble, process or bring into existence, by hand or by
machine, a new product having a distinctive name, character or use and shall
include processes such as refrigeration, re-packing, polishing, labelling,
Re-conditioning repair, remaking, refurbishing, testing, calibration,
re-engineering. Manufacture, for the purpose of FTP, shall also include
agriculture, aquaculture, animal husbandry, floriculture, horticulture,
pisciculture, poultry, sericulture, viticulture and mining. |
|
9.37 |
“Manufacturer Exporter” means a
person who exports goods manufactured by him or intends to export such goods. |
|
9.38 |
“MAI” means Market Access
Initiative Scheme notified by Department of Commerce. |
|
9.39 |
“Merchant Exporter” means a person
engaged in trading activity and exporting or intending to export goods. |
|
9.40 |
“NC” means the Norms Committee in
the Directorate General of Foreign Trade, for recommending grant of
Authorisations under Duty Exemption Scheme and for recommending Input Output
norms and value addition norms to be notified by DGFT. |
|
9.41 |
“NFE” means Net Foreign Exchange. |
|
9.42 |
“Notification” means a
notification published in Official Gazette. |
|
9.43 |
“Order” means an Order made by
Central Government under the Act. |
|
9.44 |
“Part” means an element of a sub-assembly
or assembly not normally useful by itself, and not amenable to further
disassembly for maintenance purposes. A part may be a component, spare or an
accessory. |
|
9.45 |
“Person” includes an individual,
firm, society, company, corporation or any other legal person including the
DGFT officials. |
|
9.46 |
“Policy” means FTP 2009-2014 as
amended from time to time. |
|
9.47 |
“Prescribed” means prescribed
under the Act or the Rules or Orders made there under or under FTP. |
|
9.48 |
“Public Notice” means a notice
published under provisions of paragraph 2.4 of FTP. |
|
9.49 |
“Raw material” means: (i) basic materials which are
needed for manufacture of goods, but which are still in a raw, natural,
unrefined or unmanufactured state; and (ii) for a manufacturer, any
materials or goods which are required for his manufacturing process, whether
they have actually been previously manufactured or are processed or are still
in a raw or natural state. |
|
9.49.1 |
“Regional Authority” means authority
competent to grant an Authorisation under the Act / Order. |
|
9.50 |
“Registration-Cum-Membership
Certificate” (RCMC) means certificate of registration and membership granted
by an Export Promotion Council/ Commodity Board/ Development Authority or
other competent authority as prescribed in FTP or HBP v1. |
|
9.51 |
“Rules” means Rules made by
Central Government under Section 19 of the Act. |
|
9.52 |
“Services” include all tradable
services covered under General Agreement on Trade in Services and earning
free foreign exchange. |
|
9.53 |
“Service Provider” means a person
providing (i) Supply of a ‘service’ from
India to any other country; (ii) Supply of a ‘service’ from
India to service consumer of any other country in India; and (iii) Supply of a ‘service’ from
India through commercial or physical presence in territory of any other
country. (iv) Supply of a ‘service’ in
India relating to exports paid in free foreign exchange or in Indian Rupees
which are otherwise considered as having being paid for in free foreign
exchange by RBI. |
|
9.54 |
“SEZ” means Special Economic Zone
notified by Ministry of Commerce & Industry, Department of Commerce. |
|
9.55 |
“Ships” mean all types of vessels
used for sea borne trade or coastal trade, and shall include second hand
vessels. |
|
9.56 |
“SION” means Standard Input Output
Norms notified by DGFT in HBP v2 / approved by Board of Approval. |
|
9.57 |
“Spares” means a part or a
sub-assembly or assembly for substitution, that is ready to replace an
identical or similar part or sub-assembly or assembly. Spares include a
component or an accessory. |
|
9.58 |
“Specified” means specified by or
under the provisions of this Policy through Notification / Public Notice. |
|
9.59 |
“Status holder” means an exporter
recognized as Export House/Trading House etc. by DGFT/Development
Commissioner. |
|
9.59.1 |
“Stores” means goods for use in a
vessel or aircraft and includes fuel and spares and other articles of
equipment, whether or not for immediate fitting. |
|
9.60 |
“STP” means Software Technology
Park |
|
9.61 |
“Supporting Manufacturer” means
any person who manufactures any product or part/accessories/components of
that product. Name of supporting manufacturer as well as the exporter must be
endorsed on export documents. |
|
9.62 |
“Third-party exports” means
exports made by an exporter or manufacturer on behalf of another exporter(s).
In such cases, export documents such as shipping bills shall indicate name of
both manufacturing exporter/ manufacturer and third party exporter(s). BRC,
GR declaration, export order and invoice should be in the name of third party
exporter. |
|
9.63 |
“Transaction Value” is as defined
in Customs Valuation Rules of Department of Revenue. |
|
9.64 |
“Wild Animal” means any wild
animal as defined in Section 2(36) of Wildlife (Protection) Act, 1972. |
Glossary
|
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 |
|
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 |