workshop on foreign trade policy. agenda co-relation between the departments various export...

Workshop on Workshop on Foreign Trade PolicyForeign Trade Policy

AgendaAgendaCo-relation between the Departments

Various Export Promotion SchemesGeneral Provisions regarding Imports and Exports

Promotional Measures Star Export Houses Focus Market SchemeFocus Product SchemeTarget Plus Scheme

Duty Exemption/Remission SchemeAdvance Authorisation including Advance Authorisation for Annual requirement Duty Free Import Authorisation Duty Entitlement Passbook Scheme

AgendaAgenda

Various Export Promotion Schemes

Export Promotion Capital Goods Schemes [EPCG]

100% Export Oriented Unit [EOU].

Deemed Exports

Special Economic Zones

Correlation Correlation Between the Between the Departments Departments

Ministry of Commerce

DGFTForeign Trade Policy

Foreign Trade (Development and Regulation) Act, 1992

1) Foreign Trade Policy 2) Handbook of Procedures Vol.13) ITC (HS) Classification of Export and Import Items 4) Handbook of Procedures Input-Output Norms Vol.25) Schedule DEPB Rates

Tools : Notification, Public Notice, Policy Circular, ALC Circular and Trade Notice

Ministry of Finance

Customs ExciseValidity of Imports and Exports ExportCollection of Duty Under Bond - ExemptionInspection and Supervision Rebate of Excise Duty of Cargo Monitoring Factory Stuffed

Container Import

Monitoring Cenvat

Governing Acts and Laws Governing Acts and Laws1) Customs Act, 1962 1) Central Excise Act, 1944

2) Customs Tariff Act, 1975 2) Central Excise Tariff Act, 19853) Customs Law Manual 3) Central Excise Law ManualTools : Notification, Tools : Notification,Public Notice Central Excise CircularCustoms Circular, General Exemption NotificationGeneral Exemption Notification

Monitoring ForexInflow - Exports

Outflow - Imports

1) FEMA 19992) Exchange Management Manual

Tools:Master Circulars

FEMA NotificationA.P. (DIR. Srs.) Circular

RBI

General Provisions General Provisions related Imports and related Imports and ExportsExports

Revalidation of Import/Export Licence Revalidation of Import/Export Licence Certificate/Authorisation/Permissions Certificate/Authorisation/Permissions

Licence/certificate/Authorisation/permissions can be revalidated for a period of six months from the date of expiry of validity period.

No revalidation is allowed to transferable Authorisation unless the same is expired while in the custody of Customs Authority/Regional Authority

Duplicate Copies of Export-Import Duplicate Copies of Export-Import Licence/Certificate/Authorisation/ Licence/Certificate/Authorisation/ Permissions/ CCPsPermissions/ CCPs

In case of loss of Licence/Authorisation, an application for grant of a duplicate copy thereof can be made along with a copy of an affidavit, as given in Appendix-24, to the Regional Authority which has issued the original licence/ Authorisation.


The following documents are to be submitted along with the Application:

1. An application with a fee equivalent to 10% of duty saved or duty credit.

2. A copy of FIR reporting the loss.3. A copy of the original affidavit on notorised stamp paper.4. Indemnity bond on a stamp paper undertaking to

indemnify the revenue loss to the Government which may be caused on account of issue of duplicate licenses covering the duty saved/ duty credit amount.


The validity of duplicate licence/ Authorisation shall be co-terminus with the original license. No request will be entertained if the validity of the original licence/Authorisation has expired.

However, in case when DEPB, scrips issued under Focus Market scheme/scrips issued under Focus Product scheme/Transferable DFIA is lost by Customs/Regional Authority, duplicate licence/ Authorisation/ can be issued for a validity of six months.


However, in the case of loss of DEPB/scrips issued under Focus Market scheme/scrips issued under Focus Product scheme/Transferable DFIA not involving either the Customs or the Regional Authorities, the duplicate issued would have a validity equivalent to the balance period of validity of the original on the date of application for the duplicate.

Execution of Bank Guarantee and LUT Execution of Bank Guarantee and LUT

In cases of direct import before clearance of goods through customs, the licence/ Authorisation holder shall execute a legal undertaking (LUT)/Bank Guarantee (BG) with the customs authorities in the manner as prescribed by them.

Regional Authority will endorse the following condition on the licence/ Authorisation:“Bank Guarantee/ LUT as applicable to be executed as per relevant Customs Notification/ Circular”

Execution of Bank Guarantee and LUT Execution of Bank Guarantee and LUT

In case of direct import the authorisation holder will have to follow Customs Circular No. 58/2004 dtd. 21/10/2004 as amended vide Customs Circular No. 49/2005 dtd. 29/11/2005.

In case of indigenous sourcing the norms of BG/LUT is given in the Para 2.20 of HBP.

Promotional Promotional Measures Measures

Star Export House Star Export House

Export Performance based Scheme.

Merchant, Manufacturer, Service Provider, EOUs, EHTPs, STPs, BTPs, SEZs, AEZs can apply for Star Export House Certificate.

The applicant has to make application depending on his total FOB/FOR export performance during the current plus the previous three years. The criteria is

Category Performance(Rupees in

Crores)

One Star Export House

15

Two Star Export House

100

Three Star Export House

500

Four Star Export House

1500

Five Star Export House

5000


A Star Export House shall be eligible for the following facilities:

Authorisation/ Licence/ certificate/ permissions and Customs clearances for both imports and exports on self-declaration basis;

Fixation of Input-Output norms on priority within 60 days;

Exemption from compulsory negotiation of documents through banks. The remittance, however, would continue to be received through banking channels;


100% retention of foreign exchange in EEFC account;

Enhancement in normal repatriation period from 180 days to 360 days;

Exemption from furnishing of Bank Guarantee in Schemes under this Policy.

Two Star Export Houses and above shall be permitted to establish Export Warehouses, as per the guidelines issued by Department of Revenue in this regard.

Focus Market SchemeFocus Market Scheme

Introduced in the Foreign Trade Policy 2006-2007 [Annual Updation].

Export of all products to the notified countries.

Entitlement – 2.5% of the FOB value of exports.

List of Countries notified vide Public Notice No. 19 Dtd. 13.06.2006. This covers Latin American Countries and African Countries. However, South Africa and Brazil are not covered.

APPENDIX 37C [HANDBOOK OF PROCEDURES VOL. I]

Sr. No. Focus Market Code

Country Code Country

Countries in Latin American Block

1 L 001 015 ARGENTINA

2 L 002 039 BOLIVIA

3 L 003 073 CHILE

4 L 004 109 ECUADOR

5 L 005 317 PARAGUAY

6 L 006 319 PERU

7 L 007 427 URUGUAY

8 L 008 433 VENEZUELA


Countries in African Block

9 A 001 011 ANGOLA

10 A 002 035 BENIN

11 A 003 041 BOTSWANA

12 A 004 050 BURKINA FASO

13 A 005 053 BURUNDI

14 A 006 057 CAMEROON

15 A 007 061 CANARY IS

16 A 008 063 CAPE VERDE IS

17 A 009 067 C AFRI REP

18 A 010 069 CHAD

19 A 011 085 COMOROS

20 A 012 087 CONGO P REP



21 A 013 115 ETHIOPIA

22 A 014 116 ERITREA

23 A 015 117 EQUTL GUINEA

24 A 016 135 FR S ANT TR

25 A 017 141 GABON

26 A 018 143 GAMBIA

27 A 019 167 GUINEA

28 A 020 169 GUINEA BISSAU

29 A 021 199 COTE D' IVOIRE

30 A 022 227 LESOTHO



31 A 023 229 LIBERIA

32 A 024 231 LIBYA

33 A 025 241 MADAGASCAR

34 A 026 243 MALAWI

35 A 027 249 MALI

36 A 028 255 MAURITANIA

37 A 029 257 MAURITIUS

38 A 030 265 MOROCCO

39 A 031 267 MOZAMBIQUE

40 A 032 269 NAMIBIA



41 A 033 289 NIGER

42 A 034 339 REUNION

43 A 035 345 RWANDA

44 A 036 347 SAHARWI A.DM RP

45 A 037 349 SAO TOME

46 A 038 353 SENEGAL

47 A 039 355 SEYCHELLES

48 A 040 357 SIERRA LEONE

49 A 041 363 SOMALIA

50 A 042 371 ST HELENA



51 A 043 385 SWAZILAND

52 A 044 399 TOGO

53 A 045 407 TUNISIA

54 A 046 417 UGANDA

55 A 047 459 CONGO D. REP.

56 A 048 461 ZAMBIA

57 A 049 463 ZIMBABWE

Note: The export performance of notified markets under Para 3.9.2.1 of Policy shall be regularly reviewed and the list of countries in Appendix 37 C may be modified from time to time, in terms of Para 3.9.5 of the Policy.

Target Plus Scheme Target Plus Scheme

Star Export Houses entitled for a duty credit based on incremental exports

Benefit is allowed for the year 2004-2005 only [for Petroleum Products this scheme is discontinued with retrospective effect for the year 05-06 vide NTF. NO. 48/2005, DT. 20/02/2006.

Non-transferable, however, can be used for group companies.

Allows import of freely permissible items and capital goods subject to Actual User Condition.

Duty Exemption/ Duty Exemption/ Remission SchemeRemission Scheme

Duty Exemption SchemeDuty Exemption Scheme

The Duty Exemption Scheme enables duty free import of inputs required for export production.

Duty Exemption Scheme consists of: Advance Authorisation SchemeDuty Free Import Authorisation Scheme [DFIA]

Duty Exemption SchemeDuty Exemption Scheme

The facility of Advance Authorisation entitles exporter to import required inputs for export production without payment of duty subject to export obligation to be completed within prescribed time. This scheme reduces burden of customs duties on the inputs and thereby facilitates cost-competitiveness.

The facility of Newly introduced Duty Free Import Authorisation entitles exporter to avail the benefit of duty free import of inputs plus transferability after the exports have been completed. The Scheme has been operationalized by issue of Customs Ntfn No. 40-Cus. Dtd. 01.05.2006.

Advance Advance AuthorisationAuthorisation

Advance Authorisation Advance Authorisation

Based on SION or Adhoc Norms

Exemption from payment of Basic Customs DutyAdditional Customs DutyEducation CessAnti-dumping Duty if any Safeguard Duty if any

However, the imports for supplies covered under paragraph 8.2 (i) [projects funded by UN agencies] & (j) nuclear power projects through competitive bidding] will not be exempted from the payment of applicable anti-dumping and safeguard duty, if any.


Exemption from payment of Special CVD:In terms of notification No. 20/2006-Cus. dated 1.3.2006 (vide Sr.No.1 of the table to the said notification), all goods which are exempt from basic customs duty and additional duty [leviable under Section 3(1) of CTA, 1975] are exempt from the 4% special CVD. Hence payment of Special CVD is also exempted under Advance Authorisation. [clarified vide Customs Circular No. 18/2006 dtd. 15.06.2006]


Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s):i) for Physical exports (including exports to SEZ); and/orii) for Intermediate supplies; and /oriii) to the main contractor for supply of goods to the categories mentioned in paragraph 8.2 (b), (c), (d), (e), (f), (g), (i) and (j) of the Policy; for import of inputs required in the manufacture of goods. iv) supply of ship stores on board of the foreign going vessel/aircraft subject to the condition that there is specific SION in respect of the item(s) supplied.

Subject to actual user condition

Positive Value Addition


Transferability: Advance Authorisation and/or materials imported there under shall not be transferable even after completion of export obligation. However, the Authorisation Holder will have the option to dispose off the product manufactured out of the duty free inputs once the export obligation is completed.

Validity: 24 months.

Revalidation: One revalidation for 6 month is granted.

Value Addition: Advance Authorisation shall be issued with positive value addition.

Import through registered port as mentioned in Para 4.19 of HBP. Export can take place from any port.


Standardization of Adhoc Norms: An application may be made by the manufacturer exporter or merchant exporter tied to supporting manufacturer, duly filled in with complete data.

applications shall be made to the Norms Committee (NC) in the form given in ‘Aayaat Niryaat Form’.

Import of fuel may also be allowed under SION by NC subject to the following: -

(a) The facility of import of fuel shall be allowed only to the manufacturer having captive power plant.


Standardization of Adhoc Norms:

(b) In cases where SION specifically allows fuel, the same shall be permitted under advance authorisation. However, if fuel is not covered specifically under SION, it may be allowed as per general fuel Policy for products covered under SION or under paragraph 4.7 of HBP.

(c) Fuel should be allowed only against an actual user authorisation. However in case of transferable DFIA/DFRC, fuel can only be transferred to agencies granted marketing rights by the Ministry of Petroleum and Natural Gas.

(d) Even where fuel is included as an input under SION, it shall not be taken into account while fixing the DEPB rate for such products against which fuel has been allowed as an input.


Standardization of Adhoc Norms:

(e) The applications of fixation for fuel entitlement for new sectors and modification of the existing entitlement as per the General Note for Fuel in the Handbook of Procedures (Vol.2) would be made to the Norms Committee along with the requisite data in ‘Aayaat Niryaat Form’ pertaining to the “Data Sheet for Fuel Rate”.

The Advance Authorisation holders wishing to procure the fuel indigenously may apply for an Advance Release Order or Back to Back Inland Letter of Credit.


Standardization of Adhoc Norms: The indigenous supplier supplying fuel shall be entitled for deemed export benefits given in paragraph 8.3(a), (b) & (c) of the Policy, as the case may be. In case the indigenous supplier is not willing to avail of deemed exports benefits under such supplies of fuel to the Advance Authorisation holder, he may issue a disclaimer (along with his IEC Number enclosed on it) on the basis of which the Advance Authorisation holder can avail of the deemed export benefits as per procedure given in Chapter 8 of this Handbook.

[Note: All oil Companies can issue Disclaimer and recipient can claim Deemed Export benefits. Quoting of IEC no. on Disclaimer is mandatory.]


Financial Powers for Petroleum and Petrochemical Products:

Regional Authority : if CIF value of authorisation is less then 500 crores.

Regional Authorities on the recommendation of Norms Committee : if CIF value of authorisation is 500 crores or above.


Port of Registration:To facilitate accounting of duties exempted, accounts need to be maintained at a particular port. The port of registration, therefore, plays a very vital role.

In application, one has to give specific port where Authorisation would be registered. The authorisation holder is permitted to import only through registered port unless permission is taken from the Customs.

Exports, however, can take place from any port.


Port of Registration:If imports are desired from any other port than the port of registration, authorisation holder can make an application for Telegraphic Release Advice (TRA) to the customs authorities at the port of registration.

The list of such seaports, airports, ICDs, LCSs is given in Para 4.19 of HBP.


Export Obligation:Export obligation [EO] has two limiting factors –

quantity and value.

Hence, export obligation is treated as complete only when quantity stated is physically exported and value stated is actually realized. Any shortfall is required to be regularized by paying applicable duty plus interest on unutilised inputs and penalty if any.


Fulfillment of Export Obligation [EO]:Export obligation is to be fulfilled by the Advance Authorisation Holder.

Where merchant exporter is authorisation holder and (supporting manufacturer is endorsed on the authorisation), export obligation is his responsibility.

Once the export obligation is fulfilled in terms of value and quantity both, the licence holder needs to submit documents [as per Para 4.25 of HBP] in support of having fulfilled the EO.


For Physical Exports (i) Bank Certificate of Exports and Realisation in the form given at Appendix-22A or Appendix 22B or Foreign Inward Remittance Certificate (FIRC) in the case of direct negotiation of documents. Realisation is not insisted upon if the shipments are made against :

(a) confirmed irrevocable letter of credit or

(b) bill of exchange is unconditionally Avalised/ Co-Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank.

In above mentioned cases, column 14/15 of Appendix- 22A must be certified by the Bank.

Contd…..


For Physical Exports

(ii) EP copy of the shipping bill(s) containing details of shipment effected or bill of export in case of export to SEZ.

(iii) A statement of exports giving details of shipping bill wise exports indicating the shipping bill number, date, FOB value as per shipping bill and description of export product.

(iv) A statement of imports indicating bill of entry wise item of imports, quantity of imports and its CIF value.


For Deemed Exports

(i) A copy of the invoice or a statement of invoices duly signed by the unit receiving the material and their jurisdictional excise authorities certifying the item of supply, its quantity, value and date of such supply.

However in case of supply of items which are non excisable or supply of excisable items to a unit producing non excisable product(s), a project authority certificate (PAC) certifying quantity, value and date of supply would be acceptable in lieu of excise certification.

However, in respect of supplies to EOU, the supplier has the additional option to furnish a copy of CT-3/ARE-3 duly signed by the jurisdictional excise authorities/Bond Officer certifying the item of supply, quantity, value and date of such supply in lieu of the excise attested invoice (s) or statement of invoices as given above.

Contd…..


For Deemed Exports

(ii) Payment certificate from the project authority in the form given in Appendix-22C. In the case of supplies to EOUs, deemed exports (including Intermediate Supplies), documentary evidence from the bank substantiating the realisation of proceeds from the Authorisation holder or EOUs or the Project Authority, as the case may be, through the normal banking channel, shall be furnished in the form given at Appendix-22B. However realisation of proceeds shall not be insisted upon if the shipments are made against:

(a) confirmed irrevocable inland letter of credit or(b) inland bill of exchange is unconditionally Avalised/Co- Accepted/ Guaranteed by a bank and the same is confirmed by the exporters bank.

The stipulations at (a) or (b) above must be certified by the bank in column 5/6/7 of Appendix- 22B.

Contd…..


For Deemed Exports

(iii) A statement of supplies giving details of supply invoices and indicating the invoice number, date, FOR value as per invoices and description of product.

(iv) A statement of imports indicating bill of entry wise item of imports, quantity of imports and its CIF value.

Contd…..


Extension of Export Obligation Period The period of fulfillment of export obligation under an Advance Authorisation will commence from the date of issuance of licence.

The export obligation shall be fulfilled within aperiod of 24 months except in the case of supplies to the projects/turnkey projects in India/abroad under deemed exports category where the export obligation must be fulfilled during the contracted duration of execution of the project/ turnkey project.


Extension of Export Obligation Period Application in Aayaat Niryaat Form – Sub section XI

1st Extension for 6 months – subject to payment of composition fees of 2% of the duty saved on all the unutilized imported items as per authorisation.

2nd Extension for 6 months – subject to payment of composition fees of 5% of the duty saved on all the unutilized imported items as per authorisation.

The composition fee on the duty saved on all the unutilized imported items is to be computed with reference to the actual exports and imports made by the Authorisation holder. Contd…..


Extension of Export Obligation Period The Customs may allow provisional clearance of export consignment as and when the Authorisation holder produces documentary evidence of having applied for EO extension to the concerned Regional Authority.


Facility of Clubbing:

The facility of clubbing shall be available only for redemption/regularisation of the cases.

No further import or export is allowed.

For this facility, authorisations are required to have been issued under similar Customs notification even pertaining to different financial years.

However in case of authorisations issued in 2004-09 period, Advance Authorisations of different customs notification can be clubbed.



The Regional Authority, under whose jurisdiction the authorisation is issued or NC in other cases, can consider a request for clubbing all imports and exports of more than one Advance Authorisation.

Provided The imported inputs are properly accounted for as per norms. The value addition of the authorisations so clubbed shall be the average of the minimum value addition prescribed in the Policy and the Procedure laid thereunder, imposed on individual authorisations. Upon clubbing, the authorisations can, for all purposes, be deemed to be one authorisation.



The accountability of imports and exports shall be restricted in relation to the individual categories of Advance Authorisations including Advance Authorisation for annual requirements issued under this scheme.

The facility is available only for Advance Authorisation(s) where there is shortfall in fulfillment of export obligation, and which is sought to be clubbed with an Advance Authorisation(s) which is valid for imports.


Facility of Clubbing:For expired authorisation(s) with EO shortfall and which is sought to be clubbed with an Advance Authorisation(s) which is valid for imports, the applicant will have to pay the composition fee for E.O. period extension

In such cases, the exports effected beyond the E.O. extension period after the issuance of the earliest authorisation can not be considered for clubbing.

Clubbing of all expired licences may also be permitted provided all the expired licences have been issued during the Exim Policy period 1992-1997 & 1997-2002 i.e., 1st April, 1992 to 31st March, 2002.

However clubbing of erstwhile Value Based Advance licences is not allowed.

Advance Authorisation for Annual Advance Authorisation for Annual RequirementRequirement

Advance Authorisation can also be issued on the basis of annual requirement for physical exports, intermediate supplies and / or deemed exports.

One to Five Star Export House can be entitled for the Advance Authorisation for annual requirement.

All other categories of exporters having past export performance (in the preceding two years) shall also be entitled for the Advance Authorisation for annual requirement.

A merchant exporter can also be issued the Advance Authorisation for Annual Requirement provided they agree to the endorsement of the name(s) of the supporting manufacturer(s) on the relevant Authorisation.

Advance Authorisation for Advance Authorisation for Annual RequirementAnnual Requirement

The entitlement in terms of CIF value of imports under this scheme is upto 300% of the FOB value of physical export and / or FOR value of deemed export in the preceding licensing year or Rs 1 crore, whichever is higher.

Advance Authorisation can be issued with a positive value addition.

Validity : 24 months. One revalidation for six months is granted.

Extension of Export Obligation : Same as Advance Authorisation.

Indigenous procurement against Indigenous procurement against the Authorisation the Authorisation

Many times the input covered by the Authorisation is also available indigenously. In such cases it would be wise to examine whether indigenous procurement against the Authorisation is cost-effective and commercially viable. There are a number of reasons for opting out in favour of indigenous procurement. Some of them are as under:

Shorter delivery timeLogistical advantagesFinancial ease (local supplier may not insist on letter of credit)


The same material may be available at cheaper cost if the supplier is in a position to claim benefits available under deemed exports.

Possibility of inspecting the cargo (since the supplier is within the country, there is comparative ease to inspect the cargo)

Indigenous procurement is free of currency risk since payment can be made in Indian Rupees.


Owing to these reasons, Authorisation holder may look to procure goods indigenously. To facilitate such procurement, following instruments are available :

Advance Authorisation [for Intermediate Supplies]Advance Authorisation [for Deemed Exports]Advance Release OrderBack-to-Back Letter of Credit

Advance Authorisation for Advance Authorisation for Intermediate SuppliesIntermediate Supplies

Original Advance Authorisation is made invalid for direct import of one or more inputs and invalidation letter is issued in favour of local supplier.

The supply price would be a negotiated price as the indigenous supplier is entitled to obtain an Advance Authorisation against such invalidation letter.

This in turn allows the indigenous supplier to claim duty-free inputs thereby neutralising the duty component for such imports.

Advance Authorisation for Advance Authorisation for Intermediate SuppliesIntermediate Supplies

Indigenous supplier can supply the goods without payment of excise duty following the conditionalities of excise notification no. 44-CE(NT) dtd. 26.06.200.

In this case the indigenous supplier is entitled to duty free imports of inputs and clearance of goods without payment of excise duty under bond.

Advance Authorisation for Deemed Advance Authorisation for Deemed Exports Exports

Advance Authorisation for Deemed Exports offer benefits similar to those of Advance Authorisation for Intermediate Supplies. The only difference is that the recipient of the goods is not an Advance Authorisation holder.

Instead the recipient is an EOU/SEZ unit or project authority.

The inputs required by the local supplier can be imported duty free.

Advance Authorisation for Deemed Advance Authorisation for Deemed Exports Exports

When local supplier supplies the goods indigenously, he may not be able to execute a bond for supply purposes without payment of excise duty particularly in respect of projects which are not registered under excise.

In such cases the holder of Advance Authorisation for Deemed Exports can pay Terminal Excise Duty (TED) and ask for refund from DGFT office. As per the provisions of Foreign Trade Policy, excise duty exemption is available if goods are supplied against International Competitive Bidding.

Advance Release Order Advance Release Order (ARO)(ARO)

ARO is useful in case where indigenous supplier do not want to import his inputs.

The indigenous supplier is entitled to Deemed Exports Drawback in lieu of duty free import of inputs.

For this purpose the original Advance Licence is invalidated for direct imports and a document called Advance Release Order is issued to the local supplier.

The purpose of ARO is to help the indigenous supplier claim Deemed Exports Duty Drawback and refund of Terminal Excise Duty.

Back to Back Letter of Back to Back Letter of CreditCredit

Back to Back Letter of Credit is similar in operation. The only difference is ARO is issued by Regional Authority whereas Back to Back Letter of Credit is issued by the Bank directly making and endorsement on the Authorisation copy towards invalidation of direct imports.

Before opening the LC, the bank will ensure that the necessary BG / LUT has been executed by the Advance Authorisation holder and an endorsement to that effect has been made on the Authorisation.

Back to Back Letter of Back to Back Letter of CreditCredit

The non negotiable copy of inland LC together with the photocopy of the Advance Authorisation duly carrying endorsements made by the bank shall be sufficient for the indigenous supplier to claim deemed export benefits.

LC for Advance Authorisation shall be entitled to benefits of Deemed Export Drawback and Refund of Terminal Excise duty.


Redemption: In case the export obligation has been fulfilled, the Regional Authority will redeem the case.

After redemption, the Regional Authority will forward a copy of the redemption letter indicating

the shipping bill number(s), date(s), FOB value in Indian rupees as per shipping bill(s) and description of export product

to the Customs Authority at the port of registration.


Redemption:

Discharge of BG/LUT: Before discharging BG/LUT,

in case of physical exports, Customs will verify all the details as given in Redemption Letter as per their records.in case of intermediate supplies and deemed exports, Customs will verify details of supplies from the Central Excise Authority/Bond Officer.


Redemption: After verification, Customs will discharge BG/LUT within 30 days of issuance of EODC/bond waiver by the Regional Authority.

The Regional Authority can also take action against the Authorisation holder in case of non-submission of Appendix 23, or for any misrepresentation, misdeclaration and default detected subsequently in the details declared and furnished in Appendix 23. An endorsement to this effect will be made by the Regional Authority in the redemption certificate.


Maintenance of Proper Accounts True and proper account of consumption and utilisation of duty free imported / domestically procured goods against each authorisation is to be maintained as prescribed in Appendix-23.

Appendix 23 is to be submitted at the beginning of each licensing year for all those Authorisations which have been redeemed in the previous licensing year.

These records in Appendix 23 are mandatory to be submitted for authorisations issued on or after 13-05-2005. This does not however mean that you are not required to maintain details for licences issued prior to 13.05.2005.

Records is to be preserved for a period of atleast 3 years from the date of redemption.

Checklist Checklist

WHILE PREPARATION OF APPLICATIONWhether product is covered under SIONs

Product group and Sr. No.

Application for ad-hoc norms (Only in case of Advance Authorisation)

Input-output ratio (quantity required per unit of resultant product)

Quantity and value of resultant products / inputs

Port of registration

Value addition (Positive or Minimum prescribed value addition)

Checklist Checklist WHILE PREPARATION OF APPLICATION

Application fees (Mode of payment – on Electronic Fund Transfer mode) - EFT transaction status, BID number (Proof of successful transactions) etc.Outstanding authorisation detailsPast export performance, if anyAny changes in provisions related to policy and proceduresCustoms notification under which the scheme falls.Exact classification of the products [ITC (HS) Code].Transferable or Non transferable (Only in case of DFIA) Declarations

Checklist Checklist WHILE PREPARATION OF APPLICATION

Additional Precautions to be taken only in case of Application for Adhoc Norms (Only in case of Advance Authorisation)

Detailed manufacturing process flow chart with stage wise generation of wastages.

Generation of by-product with quantity and value.

Production and consumption data of Manufacturer/supporting manufacturer for last three years.

Checklist Checklist POST SUBMISSION OF ONLINE APPLICATION

Creation of file number (Electronically generated)POST-RECEIVING THE AUTHORISATION

Checking details on the authorisationAny specific endorsement by regional authority (BG/LUT, etc)Description, quantity, value of inputs and resultant productsEndorsement of notification pertaining to the authorisationPort of registrationDetails of supporting manufacturerCurrency area (GCA/RPA)Export product group and serial no. Contd….

Checklist Checklist

POST-RECEIVING THE AUTHORISATIONChecking details on the authorisation

Signature and seal of officer of the regional authorityIn case of amendments, endorsement of amendment on the authorisation/ amendment sheet Any specific condition incorporated in condition sheet.Submission of authorisation for registration at portExecution of LUT/Bank Guarantee. In case of local procurement, it should be submitted to regional authority

Checklist Checklist

MAINTENANCE OF AUTHORISATIONDay to day monitoring of imports and exports taking place against the authorisationEnhancement / ReductionApplication to be made before or after exports when requiredRevalidation / ExtensionOne month prior to the expiry of the authorisation, if required.Consumption register in Appendix 23 to be maintained

Checklist Checklist

MAINTENANCE OF AUTHORISATIONClubbingIn case of redemption/regularization, clubbing provisions as per Para 4.20 of HBP Vol.I should be checked.

Redemption of licenceDescription on shipping bill should tally with description of resultant product. Exempted material list should also be given.Correlation with ARE also to be kept in mindBank Realisation Certificate

REFERENCE:Input Output norms (SION), refer Hand Book of Procedure Vol. 2ITC (HS) Code, Duty Structure and Import Policy notes.

GENERAL NOTE FOR FUELGENERAL NOTE FOR FUEL

Duty free import of fuel shall be allowed as per the quantity indicated in the relevant Standard Input Output Norms (SION). However, in cases where fuel has not been specifically included in the SION, duty free imports of fuel shall also be allowed under Actual User Advance Authorisation subject to the condition given in the Foreign Trade Policy/Handbook of Procedures as per percentage rate indicated against each product as under:


Sl. No.

Product Group Value of fuel to be permitted as percentage FOB value of exports.

1. Bulk Drug and Drug Intermediates

5%

2. Dye and Dye Intermediates 4%

3. Glass 5%

4. Ceramic Products 5%

5. Paper made from wood pulp/waste paper

5%

6. Pesticides (Technical)/ Pesticides formulation from Basic Stage

5%


Sl. No.


7. Refractory items of the following types:-

a. Shaped and Fired 7%

b. Shaped and Tempered 3%

c. Others 2%

8. Ferrous engineering products manufactured through forging/castings process

7%

9. Non-ferrous basic metals (including down-stream products of aluminium)

4%


Sl. No.


10. Plastic and plastic products from Basic/Monomer Stage

5%

11. Fibre to yarn 4%

12. Yarn to finished fabrics/made-ups

3%

13. Fibre to finished fabrics/made-ups

7%

14. Organic Chemicals 4%

15. Inorganic Chemicals 3%


Sl. No.


16. Glass Artwares 3%

17. Leather Footwears and its Leather components

3%

18. Graphite Electrodes (against SION at C-485)

6%

19. Bras Art Wares 2%


Sl. No.


20. For export of Rice, fuel is allowed at the rate of 2% of FOB value with a value cap of Rs. 15 per kg of rice with the condition that

(a) The fuel entitlement will be only for those firms having captive power plant (installed and in running condition)(b) Licence / ARO will be subject to actual user condition.(c) No DFRC will issued.(d) HSD will be procured only through the canalizing agency.(e) Export of rice will be subject to export policy in vogue


Sl. No.


21. Finished fabric to garment 2%

22. Yarn to garment 5%

23. Carbon Steel submerged Arc welded pipes coated/uncoated

4%


For the purpose of import of fuel under Actual User Advance Licence, the applicant shall indicate the name of the specific fuel sought for import in their application. Import of fuel however shall not be permitted against DFRC or under para 7.5 of Handbook of Procedures or against Ad hoc Norms. Also, for the calculation of DEPB rates, the cost of the fuel shall not be taken into account.

Note: In any case, as per above General Note, the fuel shall not be allowed more than 7% of FOB value of exports.

Standard Input Output Norms [SION]Standard Input Output Norms [SION]

In addition to the above norms, there are specific norms where fuel is used as an input and not for generation of power.

Wherever, such products are exported the exporter is entitled to claim duty free import of fuel as per specific norm.

A list of such norms is as under:


SION Sl. No.

Description of export product

Description of input

Qty. allowed

Chemical and Allied Products

A2691 Paraxylene Naphtha 1.58 MT

A2692 Orthoxylene Naphtha 1.44 MT

A2693 Benzene Naphtha 1.04 MT

A3174 White Cement Clinker

Furnace Oil 0.100 MT


SION Sl. No.



Qty. allowed

Engineering Product

C258 PVC 3 Core Flat Cable suitable upto 1100 V of size - 3x4.0 sq.mm(57/.3) Overall Dimension = Width(mm)xThickness(mm) i.e. 17.2x7.4

Lubricants 1.36 KG.


SION Sl. No.



Qty. allowed

Leather Products

G1 All type Leather garments including coats/jackets having consumption of finished leather above 25 Sq.ft.

HSD 4.76 litre

HSD (High Speed Diesel) is allowed subject to actual user condition. These norms for fuel are applicable only to those units having facilities for captive power generation using HSD as fuel


Standard norms for your own products are covered under following sr. nos.

A2689 – for LDO & HSDA2688 – for Naphtha & Motor Spirit A2687 – for LPGA2690 – for LSHS & Furnace Oil A2897 and A3238– Lubricating Oil Additives A1806 – Lubricants

For comparison purpose related DEPB rate is given along with SION. [Wherever such rates are available].


All Industry Rate of Drawback is not available for Chapter 27

However Drawback can be availed on furnace oil and HSD as per following Notifications issued by DGFT.

NOTIFICATION NO. 49/2005 DT. 02/03/2006 – for Furnace Oil

NOTIFICATION NO. 29/2005, DT. 06/10/2005 – for HSD

ITC HS Classifications

SION Sr. No. and description of the product under SION.

Description of Export Item [as per SION]

Description of the import items

Qty. allowed DEPB Rates

Drawback Rates

2710 19 30[HSD]

A2689

Note:- This norm does not include lubricating oils and petrochemical products like Benzene, Toluene, MTBE etc.

Middle Dietlliates (MD) viz., ATF, SKO, HSD (Gas Oil) MTO, LABFS, AROMEX, JBO, LDO, VGO, Solvents

1 Crude Oil

2 Relevant catalysts and chemicals used in refineries

1.072 MT

CIF value limited to 0.1% of FOB value of export. However, for HSD and ATF CIF value shall be limited to 0.25% of FOB value of export.

N.A N.A.





Qty. allowed DEPB

DBK

Motor spiriti) 2710 11ii) 27101111iii) 27101112iv) 27101113v) 27101119

A2688

Note:- This norm does not include lubricating oils and petrochemical products like Benzene, Toluene, MTBE, etc.

Light Ends (LE) viz., Naphtha, Motor Spirit (Gasoline) solvents, Reformate, Hexane, TAME, excluding C3,C4 Hydrocarb-ons and mixtures thereof

1 Crude Oil


1.265 MT

CIF value limited to 0.1% of FOB value of export. However, for Naphtha and Motor Spirit CIF value shall be limited to 0.25% and 1% of FOB value of export respectively.

N.A.

N.A.





Qty. allowed DEPB

DBK

2710 19 40

LDO

A2689

Note:- This norm does not include lubricating oils and petrochemical products like Benzene, Toluene, MTBE etc

Middle Dietlliates (MD) viz., ATF, SKO, HSD, Gas Oil, MTO, LABFS, AROMEX, JBO, LDO, VGO, Solvents

1 Crude Oil


1.072 MT

CIF value limited to 0.1% of FOB value of export. However, for HSD and ATF CIF value shall be limited to 0.25% of FOB value of export.

N.A.

N.A





Qty. allowed

DEPB

DBK

2710 19 50

Furnace Oil

A2690

Note:- This norm does not include lubricating oils and petrochemicals products like Benzene, Toluene, MTBE, etc

Heavy Ends (HE) viz., FO, Furnace Oil, Fuel Oil, LSHS, HPS, Puch, Asphalt, Petroleum Bitumen, Raw Petroleum Coke & Calcined Petroleum Coke, Slack Wax Paraffin Wax, Microcrystallin Wax, CBFS, RPO, Sulphur

1 Crude Oil


0.820 MT

CIF value limited to 0.1% of FOB value of export.

N.A.

N.A.





Qty. allowed

DEPB

DBK

2710 1119

Naphtha

A2688


Light Ends (LE) viz., Naphtha, Motor Spirit (Gasoline) solvents, Reformate, Hexane, TAME, excluding C3,C4 Hydrocarbons and mixtures thereof

1 Crude Oil


1.265 MT

CIF value limited to 0.1% of FOB value of export. However, for Naphtha and Motor Spirit CIF value shall be limited to 0.25% and 1% of FOB value of export respectively.

N.A.

N.A.





Qty. allowed

DEPB

DBK

2710 1990

LSHS

A2690

Note:- This norm does not include lubricating oils and petrochemicals products like Benzene, Toluene, MTBE, etc

Heavy Ends (HE) viz., FO, Furnace Oil, Fuel Oil, LSHS, HPS, Puch, Asphalt, Petroleum Bitumen, Raw Petroleum Coke & Calcined Petroleum Coke, Slack Wax Paraffin Wax, Microcrystallin Wax, CBFS, RPO, Sulphur

1 Crude Oil


0.820 MT

CIF value limited to 0.1% of FOB value of export.

N.A.

N.A.





Qty. allowed

DEPB

DBK

2711 19 00

A2687


C3/C4 Hydrocarbons Viz. Propane, Propylene, Butane, Butylene/ Butene (Various grades), Liquified Petroleum Gas (LPG) (Various grades) and mixtures thereof

1 Crude Oil


1.564 MT

CIF value limited to 1% of FOB value of exports.

N.A.

N.A.





Qty. allowed

DEPB DBK

2710 19 80

Lubricating Oil

A2897 Calcium Dodecyl Phenate Detergent (Lubricating Oil Additive) Containing Calcium Dodecyl Phenate 40% Min.

1. Dodecyl Phenol 2. Isodecyl Alcohol

3. C20-C24 Linear Alkyl Benzene Sulfonic Acid

4. Slaked Lime

5. Filter Aid

6. Monoethelene Glycol (MEG)

7. Base Oil

0.367 KG

0.010 KG

0.023 KG

0.141 KG

0.015 KG/KG0.0724 KG/KG

0.387 KG/KG

Sr. No. 769

Speciallity Textile Lubricating Oil (STLO)

DEPB RATE: 4%

N.A.





Qty. allowed

DEPB DBK

2710 19 80

Lubricating Oil

A3238 Lubricating Oil Additive (200 TBN) containing Calcium Dodecyl Phenate 40% Min. and Polybutene Succinic Anhydride 4.5%

1. Dodecyl Phenol

2. 150 Solvent Neutral

3. Polybutene

4. Hydrated Lime

5. Filter Aid (Diatomaceous Earth)

0.409 KG

0.395 KG

0.042 KG

0.141 KG

0.015 KG

Same as Above

N.A.





Qty. allowed

DEPB DBK

2710 19 80

A1806 Industrial/Automotive Lubricants

1 Base Mineral Oil (Industrial grade)

2 Lube Oil Additives

1.03 kg/kg content in the export product

1.03 kg/kg content in the export product

Sr. No. 545Industrial/automotive lubricantsDEPB RATE: 7%VALUE CAPRs. 140/kg

N.A.

workshop on foreign trade policy. agenda co-relation between the departments various export...

Documents

exports slide

foreign trade policy

circular rbi slide

customs act

duty credit

duplicate copy

central excise act

policy circular