For India to become a major player in world trade, an all
encompassing, comprehensive view needs to be taken for the overall development
of the country’s foreign trade. While increase in exports is of vital
importance, we have also to facilitate those imports which are required to
stimulate our economy. Coherence and consistency among trade and other economic
policies is important for maximizing the contribution of such policies to
development. Thus, while incorporating the existing practice of enunciating an
annual Exim Policy, it is necessary to go much beyond and take an integrated
approach to the developmental requirements of India’s foreign trade. This is the
context of the new Foreign Trade Policy.
Trade is not an end in itself, but a means to economic growth and national
development. The primary purpose is not the mere earning of foreign exchange,
but the stimulation of greater economic activity. The Foreign Trade Policy is
rooted in this belief and built around two major objectives. These are:
These objectives are proposed to be achieved by adopting, among others, the
following strategies:
The new Policy envisages merchant exporters and manufacturer exporters, business
and industry
as partners of Government in the achievement of its stated objectives and goals.
Prolonged and unnecessary litigation vitiates the premise of partnership. In
order to obviate the need for litigation and nurture a constructive and
conducive atmosphere, a suitable Grievance Redressal Mechanism will be
established which, it is hoped, would substantially reduce litigation and
further a relationship of partnership.
The dynamics of a liberalized trading system sometimes results in injury caused
to domestic industry on account of dumping. When this happens, effective
measures to redress such injury will be taken.
This Policy is essentially a roadmap for the development of India’s foreign
trade. It contains the basic principles and points the direction in which we
propose to go. By virtue of its very dynamics,
a trade policy cannot be fully comprehensive in all its details. It would
naturally require modification from time to time. We propose to do this through
continuous updation, based on the inevitable changing dynamics of international
trade. It is in partnership with business and industry that we propose to erect
milestones on this roadmap.
| Exports and Imports free unless regulated |
2.1 |
Exports and Imports shall be free, except in cases where they are
regulated by the provisions of this Policy or any other law for the time
being in force. The item wise export and import policy shall be, as
specified in ITC(HS) published and notified by Director General of
Foreign Trade, as amended from time to time.
|
| Compliance with Laws |
2.2 |
Every exporter or importer shall comply with the provisions of the
Foreign Trade (Development and Regulation) Act, 1992, the Rules and
Orders made thereunder, the provisions of this Policy and the terms and
conditions of any Licence/certificate/ permission/Authorisation granted
to him, as well as provisions of any other law for the time being in
force. 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 the shipment parcel is
accompanied by Kimberley Process (KP) Certificate required under the
procedure specified by the Gem & Jewellery Export Promotion Council
(GJEPC). |
| Interpretation of Policy |
2.3 |
If any question or doubt arises in respect of the interpretation of
any provision contained in this Policy, or regarding the classification
of any item in the ITC(HS) or Handbook (Vol.1) or Handbook (Vol.2), or
Schedule Of DEPB Rate the said question or doubt shall be referred to
the Director General of Foreign Trade whose decision thereon shall be
final and binding.
If any question or doubt arises whether a licence/ certificate/
permission has been issued in accordance with this Policy or if any
question or doubt arises touching upon the scope and content of such
documents, the same shall be referred to the Director General of Foreign
Trade whose decision thereon shall be final and binding. |
| Procedure |
2.4 |
The Director General of Foreign Trade may, in any case or class of
cases, specify the procedure to be followed by an exporter or importer
or by any licensing or any other competent authority for the purpose of
implementing the provisions of the Act, the Rules and the Orders made
thereunder and this Policy. Such procedures shall be included in the
Handbook (Vol.1), Handbook (Vol.2), Schedule of DEPB Rate and in ITC(HS)
and published by means of a Public Notice. Such procedures may, in like
manner, be amended from time to time.
The Handbook (Vol.1) is a supplement to the Foreign Trade Policy and
contains relevant procedures and other details. The procedure of
availing benefits under various schemes of the Policy are given in the
Handbook (Vol.1). |
| Exemption from Policy/Procedure |
2.5 |
Any request for relaxation of the provisions of this Policy or of
any procedure, on the ground that there is genuine hardship to the
applicant or that a strict application of the Policy or the procedure is
likely to have an adverse impact on trade, may be made to the Director
General of Foreign Trade for such relief as may be necessary. The
Director General of Foreign Trade may pass such orders or grant such
relaxation or relief, as he may deem fit and proper.
The Director General of Foreign Trade may, in public interest, exempt
any person or class or category of persons from any provision of this
Policy 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 Norms Committee (NC) if the request is in respect of a
provision of Chapter-4 (excluding any provision relating to Gem &
Jewellery sector) and EPCG Committee if the request is in respect of a
provision of Chapter-5 of the Policy/ Procedure. However, any such
request in respect of a provision other than Chapter-4, Chapter-5 and
Gem & Jewellery sector as given above may be considered only after
consulting Policy Relaxation Committee. |
| Principles of Restriction |
2.6 |
DGFT may, through a notification, adopt and enforce any measure
necessary for :
- Protection of public morals.
- Protection of human, animal or plant life or health.
- Protection of patents, trademarks and copyrights and the prevention of
deceptive practices.
- Prevention of use of prison labour.
- Protection of national treasures of artistic, historic or archaeological
value.
- Conservation of exhaustible natural resources.
- Protection of trade of fissionable material or material from which they
are derived; and
- Prevention of traffic in arms, ammunition and implements of war.
|
| Restricted Goods |
2.7 |
Any goods, the export or import of which is restricted under ITC(HS)
may be exported or imported only in accordance with a licence/
certificate/ permission or a public notice issued in this behalf. |
| Terms and Conditions of a licence/ Certificate/ Permission |
2.8 |
Every Licence/certificate/permission/Authorisation shall be valid
for the period of validity specified in the Licence/ certificate/
permission and shall contain such terms and conditions as may be
specified by the licensing authority which may include:
- The quantity, description and value of the
goods;
- Actual User condition;
- Export obligation;
- The value addition to be achieved; and
- The minimum export price.
|
| Authorisation / Licence / Certificate / Permission not a Right |
2.9 |
No person may claim a licence/certificate/ permission as a right and
the Director General of Foreign Trade or the regional authority shall
have the power to refuse to grant or renew a Licence/certificate/permission/Authorisation
in accordance with the provisions of the Act and the Rules made there
under. |
| Penalty |
2.10 |
If a Licence / certificate / permission / Authorisation holder
violates any condition of the Licence/certificate/ permission or fails
to fulfill the export obligation, he shall be liable for action in
accordance with the Act, the Rules and Orders made there under, the
Policy and any other law for the time being in force. |
| State Trading |
2.11 |
Any goods, the import or export of which is governed through
exclusive or special privileges granted to State Trading Enterprise(s),
may be imported or exported by the State Trading Enterprise(s) as
specified in the ITC(HS) Book subject to the conditions specified
therein. The Director General of Foreign Trade may, however, grant a
Licence/certificate/ permission/Authorisation to any other person to
import or export any of these goods.
In respect of goods the import or export of which is governed through
exclusive or special privileges granted to State Trading Enterprise(s),
the State Trading Enterprise(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. These
enterprises shall act in a non discriminatory manner and shall afford
the enterprises of other countries adequate opportunity, in accordance
with customary business practices, to compete for participation in such
purchases or sales. |
| Importer-Exporter Code Number |
2.12 |
No export or import shall be made by any person without an
Importer-Exporter Code (IEC) number unless specifically exempted. An
Importer-Exporter Code (IEC) number shall be granted on application by
the competent authority in accordance with the procedure specified in
the Handbook (Vol.1). |
| Trade with Neighbouring Countries |
2.13 |
The Director General of Foreign Trade may issue, from time to time,
such instructions or frame such schemes as may be required to promote
trade and strengthen economic ties with neighbouring countries. |
| Transit Facility |
2.14 |
Transit of goods through India from or to countries adjacent to
India shall be regulated in accordance with the 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. |
| Trade with Russia under Debt-Repayment Agreement |
2.15 |
In the case of trade with Russia under the Debt Repayment Agreement,
the Director General of Foreign Trade may issue, from time to time, such
instructions or frame such schemes as may be required, and anything
contained in this Policy, in so far as it is inconsistent with such
instructions or schemes, shall not apply. |
| Actual User Condition |
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 a licence/ certificate/ permission, the
actual user alone may import such goods unless the actual user condition
is specifically dispensed with by the licensing authority. |
| Second Hand Goods |
2.17 |
All second hand goods, except second hand capital goods, shall be
restricted for imports and may be imported only in accordance with the
provisions of this Policy, ITC(HS), Handbook (Vol.1), Public Notice or a
Licence/certificate/ permission/Authorisation issued in this behalf.
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 license issued in
this behalf.
Import of re-manufactured goods shall be allowed only against a licence
issued in this behalf. |
| Import of samples |
2.18 |
Import of samples shall be governed by the provisions given in
Handbook (Vol.1). |
| Import of Gifts |
2.19 |
Import of gifts shall be permitted where such goods are otherwise
freely importable under this Policy. In other cases, a Customs Clearance
Permit (CCP) shall be required from the DGFT. |
| Passenger Baggage |
2.20 |
Bonafide household goods and personal effects may be imported as
part of passenger baggage as per the limits, terms and conditions
thereof in the Baggage Rules notified by the Ministry of Finance.
Samples of such items that are otherwise freely importable under this
Policy may also be imported as part of passenger baggage without a
Licence/certificate/permission/ 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 a Licence/certificate/permission/ Authorisation. |
| Import on Export basis |
2.21 |
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 a Licence/certificate/permission/
Authorisation on execution of Legal Undertaking/Bank Guarantee with the
Customs Authorities provided that the item is freely exportable without
any conditionality/requirement of Licence/ permission as may be required
under ITC(HS) Schedule II. |
| Re-import of goods repaired abroad |
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 a
Licence/certificate/permission/ Authorisation. |
| Import of goods used in projects abroad |
2.23 |
After completion of the projects abroad, project contractors may
import, without a licence/ certificate/ permission, used goods including
capital goods provided they have been used for at least one year. |
| Sale on High Seas |
2.24 |
Sale of goods on high seas for import into India may be made subject
to this Policy or any other law for the time being in force. |
| Import under Lease Financing |
2.25 |
Permission of licensing authority is not required for import of new
capital goods under lease financing. |
| Clearance of Goods from Customs |
2.26 |
The goods already imported/shipped/arrived, in advance, but not
cleared from Customs may also be cleared against the Licence/
certificate/ permission issued subsequently. |
| Execution of BG/ LUT |
2.27 |
Wherever any duty free import is allowed or where otherwise
specifically stated, the importer shall execute a Legal Undertaking
(LUT)/Bank Guarantee (BG)/ Bond with the Customs Authority before
clearance of goods through the Customs, in the manner as may be
prescribed. In case of indigenous sourcing, the Licence/ certificate/
permission holder shall furnish LUT / BG / Bond to the licensing
authority before sourcing the material from the indigenous
supplier/nominated agency. |
| Exemption from Bank Guarantee |
2.27.1 |
All the exporters who have an export turnover of at least Rupees 5
crore in the current or preceding licencing year and have a good track
record of three years of exports will be exempted from furnishing a BG
for any of the schemes under this Policy and may furnish a LUT in lieu
of BG. |
| Private/ Public Bonded Warehouses for Imports |
2.28 |
Private/Public bonded warehouses may be set up in the Domestic
Tariff Area as per the terms and conditions of notification issued by
Department of Revenue.
Any person may import goods except prohibited items, arms and
ammunition, hazardous waste and chemicals and warehouse them in such
private/public bonded warehouses.
Such goods may be cleared for home consumption in accordance with the
provisions of this Policy and against Licence/certificate/ permission,
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,
the importer of such goods shall re-export the goods. |
| Free Exports |
2.29 |
All goods may be exported without any restriction except to the
extent such exports are regulated by ITC(HS) or any other provision of
this Policy or any other law for the time being in force.
The Director General of Foreign Trade may, however, specify through a
public notice such terms and conditions according to which any goods,
not included in the ITC(HS), may be exported without a licence/
certificate/ permission. |
| Export of Samples |
2.30 |
Export of samples and Free of charge goods shall be governed by the
provisions given in Handbook (Vol.1). |
| Export of Passenger Baggage |
2.31 |
Bonafide personal baggage may be exported either along with the
passenger or, if unaccompanied, within one year before or after the
passenger’s departure from India. However, items mentioned as Restricted
in ITC(HS) shall require a Licence/ certificate/permission/Authorisation. |
| Export of Gifts |
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 a Licence/certificate/ permission/Authorisation. |
| Export of Spares |
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 the main equipment
or subsequently but within the contracted warranty period of such goods
subject to approval of RBI. |
| Third Party Exports |
2.34 |
Third party exports, as defined in Chapter 9 shall be allowed under
the Policy. |
| Export of Imported Goods |
2.35 |
Goods imported, in accordance with this Policy, may be exported in
the same or substantially the same form without a Licence/certificate/permission/Authorisation
provided that the item to be imported or exported is not mentioned as
restricted for import or export in the ITC(HS).
Exports of such goods imported against payment in freely convertible
currency would be permitted against payment in freely convertible
currency. |
| |
2.36 |
Goods, including those mentioned as restricted item for import
(except prohibited items) may be imported under Customs Bond for export
in freely convertible currency without a licence/ certificate/
permission provided that the item is freely exportable without any
conditionality/ requirement of Licence/permission as may be required
under ITC (HS) Schedule II. |
| Export of Replacement Goods |
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 the customs
authorities provided that the replacement goods are not mentioned as
restricted items for exports in ITC(HS). |
| Export of Repaired Goods |
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 a licence/certificate/permission
and in accordance with customs notification issued in this behalf. |
| Private Bonded Warehouses for Exports |
2.39 |
Private bonded warehouses exclusively for exports may be set up in
DTA as per the terms and conditions of the notifications issued by
Department of Revenue.
Such warehouses shall be entitled to procure the goods from domestic
manufacturers without payment of duty. The supplies made by a domestic
supplier to the notified warehouses shall be treated as physical exports
provided the payments for the same are made in free foreign exchange. |
| Denomination of Export Contracts |
2.40 |
All export contracts and invoices shall be denominated either in
freely convertible currency or Indian rupees but the 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, the rupee payment through the
Vostro account must be against payment in free foreign currency by the
buyer in his non resident bank account. The free foreign exchange
remitted by the buyer to his non resident bank (after deducting the bank
service charges) on account of this transaction would be taken as the
export realization under the export promotion schemes of this Policy.
Contracts for which payments are received through the Asian Clearing
Union (ACU) shall be denominated in ACU Dollar. The Central Government
may relax the 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. |
| Realisation of Export Proceeds |
2.41 |
If an exporter fails to realise the export proceeds within the time
specified by the Reserve Bank of India, he shall, without prejudice to
any liability or penalty under any law for the time being in force, be
liable to action in accordance with the provisions of the Act, the Rules
and Orders made there under and the provisions of this Policy. |
| Free movement of export goods |
2.42 |
Consignments of items meant for exports shall not be
withheld/delayed for any reason by any agency of the Central/State
Government. In case of any doubt, the authorities concerned may ask for
an undertaking from the exporter. |
No seizure of Stock
|
2.42.1 |
No seizure of stock shall be made by any agency so as to disrupt the
manufacturing activity and delivery schedule of export goods. In
exceptional cases, the concerned agency may seize the stock on the basis
of prima facie evidence. However, such seizure should be lifted within 7
days. |
| Export Promotion Councils |
2.43 |
The basic objective of Export Promotion Councils is to promote and
develop the exports of the country. Each Council is responsible for the
promotion of a particular group of products, projects and services. The
list of the councils, and their main functions are given in Handbook
(Vol.1). |
| Registration -cum- Membership Certificate |
2.44 |
Any person, applying for (i) a licence/ authorisation/ certificate/
permission to import/ export, [except items listed as restricted items
in ITC(HS)] or (ii) any other benefit or concession under this policy
shall be required to furnish Registration-cum-Membership Certificate
(RCMC) granted by the competent authority in accordance with the
procedure specified in the Handbook (Vol.1) unless specifically exempted
under the Policy. |
| |
2.45 |
Deleted |
| Trade Facilitation through EDI Initiatives |
2.45.1 |
It is endeavor of the 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. |
| DGCI&S Commercial Trade Data |
2.45.2 |
To enable the 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. |
| Fiscal Incentives to promote EDI Initiatives adoption |
2.45.3 |
With a view to promote the use of Information Technology, DGFT will
provide fiscal incentives to the user community. The details are
enumerated in the Handbook (Vol.I). |
| Regularization of EO default and settlement of customs duty and
interest through Settlement Commission |
2.46 |
With a view to providing assistance to firms who have defaulted
under the Foreign Trade Policy for reasons beyond their control as also
facilitating the merger, acquisition and rehabilitation of sick units,
it has been decided to empower the Settlement Commission in the Central
Board of Excise and Customs to decide such cases also with effect from
01.04.2005. |
| Easing Of Documentation Requirement |
2.47 |
Pending the finalisation of Single Common Document (SCD)for
international trade, the Government Departments dealing with exports and
imports will honour the permission license/certificate issued by the
other Government departments based on the verification of the export
documents Like shipping bill, bank realization certificate, Packing
list, bill of lading etc .and will not insist upon fresh submission of
these documents. |
| Remission of Service Tax in DTA |
2.48.1 |
For all goods and services which are exported from units in Domestic
Tariff Area (DTA) and units in EOU/EHTP/STP/BTP remission of service tax
levied shall be allowed. |
| Exemption from Service Tax in SEZ |
2.48.2 |
Units in SEZ shall be exempted from service tax. |
| Assistance to States for Infrastructure Development of Exports
(ASIDE) |
3.1 |
The State Governments shall be encouraged to participate in
promoting exports from their respective States. For this purpose,
Department of Commerce has formulated a scheme called ASIDE.
Suitable provision has been made in the Annual Plan of the Department of
Commerce for allocation of funds to the States on the twin criteria of
gross exports and the rate of growth of exports.
The States shall utilise this amount for developing infrastructure such
as roads connecting production centers with the ports, setting up of
Inland Container Depots and Container Freight Stations, creation of new
State level export promotion industrial parks/zones, augmenting common
facilities in the existing zones, equity participation in infrastructure
projects, development of minor ports and jetties, assistance in setting
up of common effluent treatment facilities, stabilizing power supply and
any other activity as may be notified by Department of Commerce from
time to time. |
| Market Access Initiative (MAI) |
3.2 |
The Market Access Initiative (MAI) scheme is intended to provide
financial assistance for medium term export promotion efforts with a
sharp focus on a country and product.
The financial assistance is available for Export Promotion Councils,
Industry and Trade Associations, Agencies of State Governments, Indian
Commercial Missions abroad and other eligible entities as may be
notified from time to time.
A whole range of activities can be funded under the MAI scheme. These
include market studies, setting up of showroom/ warehouse, sales
promotion campaigns, international departmental stores, publicity
campaigns, participation in international trade fairs, brand promotion,
registration charges for pharmaceuticals and testing charges for
engineering products etc. Each of these export promotion activities can
receive financial assistance from the Government ranging from 25% to
100% of the total cost depending upon the activity and the implementing
agency, as indicated in the detailed guidelines. The full text of the
guidelines can be seen at http://commerce.nic.in. |
| Marketing Development Assistance (MDA) |
3.2.1 |
The Marketing Development Assistance (MDA) Scheme is intended to
provide financial assistance for a range of export promotion activities
implemented by export promotion councils, industry and trade
associations on a regular basis every year.
As per the revised MDA guidelines, assistance under MDA is available for
exporters with annual export turnover upto Rs 10 crores.
These include participation in Trade Fairs and Buyer Seller meets abroad
or in India, export promotion seminars etc.
Further, assistance for participation in Trade Fairs abroad and travel
grant is available to such exporters if they travel to countries in one
of the four Focus Areas, such as, Latin America, Africa, CIS Region,
ASEAN countries, Australia and New Zealand.
For participation in trade fairs etc., in other areas financial
assistance without travel grant is available. |
| Meeting Legal expenses for Trade related matters |
3.2.1.1 |
Financial assistance would be provided to deserving exporters on the
recommendation of Export Promotion Councils for meeting the cost of
legal expenses relating to trade related matters. |
| Towns of Export Excellence |
3.3 |
A number of towns in specific geographical locations 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. 1000 crore or more will be
notified as Towns of Exports Excellence on the basis of potential for
growth in exports. However for the Towns of Export Excellence in the
Handloom, Handicraft, Agriculture and Fisheries sector, the threshold
limit would be Rs 250 crores.
Common service providers in these areas shall be entitled for the
facility of the EPCG scheme.
The recognized associations of units will be able to access the funds
under the Market Access Initiative scheme for creating focused
technological services.
Further such areas will receive priority for assistance for rectifying
identified critical infrastructure gaps from the ASIDE scheme.
The notified towns of export excellence are listed in Appendix 7. |
| Brand Promotion and Quality |
3.4.1 |
The Central Government aims to encourage manufacturers and exporters
to attain internationally accepted standards of quality for their
products. The Central Government will extend support and assistance to
Trade and Industry to launch a nationwide programme on quality awareness
and to promote the concept of total quality management. |
| Test Houses |
3.4.2 |
The Central Government will assist in the modernisation and
upgradation of test houses and laboratories in order to bring them at
par with international standards. |
| Quality Complaints/Disputes |
3.4.3 |
The Regional Sub-Committee on Quality Complaints (RSCQC) set up at
the Regional Offices of the Directorate General of Foreign Trade shall
investigate quality complaints received from foreign buyers. The
guidelines for settlement of quality complaints, in particular, and such
other complaints, in general, are given in Appendix-16 of Handbook of
Procedures (Vol. I). |
| Trade disputes affecting trade relations |
3.4.4 |
If it comes to the notice of the Director General of Foreign Trade
or he has reason to believe that an export or import has been made in a
manner that
- is gravely prejudicial to the trade relations of India with any
other country; and/or
- is gravely prejudicial to the interest of other persons engaged
in exports or imports; and/or
- has brought disrepute to the country;
The Director General Foreign Trade may take action against the
exporter or importer concerned in accordance with the provisions of the
Act, the Rules and Orders made thereunder and this Policy.
|
| |
3.5 |
STAR EXPORT HOUSES |
| Star Export House |
3.5.1 |
Merchant as well as Manufacturer Exporters, Service Providers,
Export Oriented Units (EOUs) and Units located in Special Economic Zones
(SEZs), Agri Export Zone (AEZ’s), Electronic Hardware Technology Parks
(EHTPs), Software Technology Parks (STPs) and Bio Technology Parks
(BTPs) shall be eligible for applying for status as Star Export Houses. |
| Status Category |
3.5.2 |
The applicant shall be categorized depending on his total FOB (FOR -
for deemed exports) export performance during the current plus the
previous three years:
| 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 |
- Exporters in the Small Scale Industry/Tiny Sector/ Cottage
Sector, Units registered with KVICs/ KVIBs, Units located in North
Eastern States, Sikkim and J&K, 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 14000 (series)
/WHOGMP/ HACCP/SEI CMM level-II and above status granted by agencies
listed in Appendix-6, exports of services and exports of agro
products shall be entitled for double weightage on exports made for
grant of Star Export House status. The 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 the above
categories.
- (a) Transfer of export performance from one to another
is not permitted. Therefore disclaimer system shall not be allowed
for counting of export turnover.
- Exports made on re-export basis shall not be counted for the
purpose of recognition.
- Exports made by a subsidiary of a limited company shall be
counted towards export performance of the limited company for the
purpose of recognition only if the limited company has a majority
share holding in the subsidiary company.
- Recognition of One Star Export House status shall be considered
only in case the exporter has minimum export performance of Rs. 15
Crores or more during any two years out of the current and preceding
three years.
|
| Privileges |
3.5.2.1 |
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;
- Deleted
- 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.
|
| Validity Period |
3.5.3 |
All status certificates issued or renewed on or after 01.09.2004
shall be valid from 1st April of the licensing year during which the
application for the grant of such recognition is made upto 31st March,
2009, unless otherwise specified.
On the expiry of status certificate, application for grant of status
shall be required to be made within a period as prescribed in the
Handbook of Procedures (Vol. I), as a fresh application for continued
recognition. During the intervening period, the star export house shall
be eligible to claim the usual privileges under Para 3.5.2.1 above,
subject to furnishing of an undertaking by the applicant at the time of
claiming such facilities and benefits that they are eligible for
continued recognition as per current policy. |
| |
3.6 |
SERVICES EXPORTS |
| Services Exports |
3.6.1 |
Services include all the 161 tradable services covered under the
General Agreement on Trade in Services where payment for such services
is received in free foreign exchange or in Indian Rupees which are
otherwise considered as having been paid for in free foreign exchange by
RBI. A list of services is given in Appendix-10 of Handbook of
Procedures (Vol. I). All provisions of this Policy shall apply mutatis
mutandis to export of services as they apply to goods, unless otherwise
specified. |
| Export Promotion Council for Services |
3.6.2 |
Service exporters are required to register themselves with the
Federation of Indian Exporters Organisation. However, software exporters
shall register themselves with Electronic and Software Export Promotion
Council.
In order to give proper direction, guidance and encouragement to the
Services Sector, an exclusive Export Promotion Council for Services
shall be set up.
The Services Export Promotion Council shall:
- Map opportunities for key services in key markets and develop
strategic market access programmes for each component of the matrix.
- Co-ordinate with sectoral players in undertaking intensive brand
building and marketing programmes in target markets.
- Make necessary interventions with regard to policies, procedures
and bilateral/ multilateral issues, in co-ordination with recognised
nodal bodies of the services industry.
|
| Common Facility Centres |
3.6.3 |
Government shall promote the 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 the services export
arena. |
| |
3.6.4 |
SERVED FROM INDIA SCHEME |
| Objective |
3.6.4.1 |
The objective is to accelerate the growth in export of services so
as to create a powerful and unique ‘Served From India’ brand, instantly
recognized and respected world over. |
| Eligibility |
3.6.4.2 |
All Service providers of services listed in Appendix-10 of Handbook
of Procedures (Vol. I) who have a total foreign exchange earning or
earning in Indian Rupees which are otherwise considered as having been
paid for in free foreign exchange by RBI, of at least Rs.10 lakhs in the
preceding or current financial year shall be eligible to qualify for a
duty credit scrip.
For individuals who are service providers of services listed in
Appendix-10 of Handbook of Procedures (Vol. I), the total foreign
exchange earned or earning in Indian Rupees which are otherwise
considered as having been paid for in free foreign exchange by RBI
criteria would be Rs.5 lakhs in the preceding financial year. |
| Entitlement |
3.6.4.3 |
All Service providers; including Healthcare and Educational Service
providers as well as Engineering Process Outsourcing (EPO) and Knowledge
Process Outsourcing (KPO) service providers; of services listed in
Appendix-10 of Handbook of Procedures (Vol. I) (other than service
providers covered by Para 3.6.4.4) shall be entitled to duty credit
scrip equivalent to 10% of the foreign exchange earned by them in the
preceding financial year. However services or service providers as
listed in Para 3.18.1 of Handbook of Procedures (Vol. I) shall not be
entitled for benefits under the scheme. |
| Remittances |
3.6.4.3.1 |
The foreign exchange earned through International Credit Cards and
other instruments as permitted by RBI for rendering of service by the
service providers shall also be taken into account for the purposes of
computation of duty credit entitlement under the scheme. |
| Hotels & Restaurants |
3.6.4.4 |
Hotels of one-star and above (including managed hotels and heritage
hotels) approved by the Department of Tourism and other Service
providers in the tourism sector registered with the Department of
Tourism shall be entitled to duty credit equivalent to 5% of the foreign
exchange earned by them in the preceding financial year.
Stand-alone restaurants will be entitled to duty credit equivalent to
10% of the foreign exchange earned by them in the preceding financial
year. |
| Imports allowed |
3.6.4.5 |
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 under
ITC (HS) Classification of Export and Import items. The imports shall
relate to any service sector business of the applicant.
Utilization of duty credit earned under the scheme 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 the case of hotels, golf resorts and stand-alone restaurants having
catering facilities, the duty credit entitlement may also be used for
the import of consumables including food items and alcoholic beverages. |
| Non Transferability |
3.6.4.6 |
The entitlement and the goods imported shall be non-transferable.
However, transfer of duty credit scrips / goods imported under the
scheme shall be allowed within the service providers of the Group
Company as defined in chapter 9 and managed hotels, with actual user
condition. |
| Healthcare & Education |
3.6.4.7 |
Deleted |
| Special provisions |
3.6.4.8 |
Government reserves the right in public interest to specify from
time to time the category or type of service exports which shall not be
eligible for calculation of either eligibility or of entitlement.
Similarly, Government may from time to time also notify the goods, which
shall not be allowed for import under the duty free entitlement
certificate issued under the scheme. |
| Import under Lease financing |
3.6.4.9 |
Utilization of duty free credit scrip earned under the scheme 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 this Policy. |
| |
3.7 |
Deleted |
| |
3.8 |
VISHESH KRISHI AND GRAM UDYOG YOJANA (SPECIALAGRICULTURE AND
VILLAGE INDUSTRY SCHEME) |
| Objective |
3.8.1 |
The objective of Vishesh Krishi and Gram Udyog Yojana (Erstwhile
Vishesh Krishi Upaj Yojana) is to promote export of Fruits, Vegetables,
Flowers, Minor Forest produce, Dairy, Poultry and their value added
products, and Gram Udyog products by incentivising exporters of such
products. |
| Entitlement |
3.8.2 |
Exports of Fruits, Vegetables, Flowers, Minor Forest Produce, Dairy,
Poultry and their value added products shall be entitled for duty credit
scrip equivalent to 5% of the FOB value of exports. A detailed list of
these agricultural products and the period of exports for which this
entitlement is to be granted is given in Appendix 37A of the Handbook of
Procedures (Vol. I).
Gram Udyog products as listed in Appendix 37A of the Handbook of
Procedures (Vol. I) shall be entitled for duty credit scrip equivalent
to 5% of the FOB value of exports in respect of the exports made on or
after 1st April 2006.
However, the duty credit scrip shall be granted only at a reduced rate
of 3.5% of the FOB value of exports in such cases where the exporter has
availed the benefits under Chapter 4 of this Policy for import of
Agriculture Inputs (other than catalysts, consumables and packing
materials) relating to export item under this scheme.
The scrip and the items imported against it shall be freely
transferable. |
| |
3.8.2.1 |
Under the Scheme, exports of all eligible items (including the value
added variants) are eligible for benefits as per Para 3.8.2 above
provided they are specifically listed in Appendix- 37A of Handbook of
Procedures (Vol. I). Items which are restricted or prohibited for export
under Schedule-2 of the Export Policy in the ITC (HS) Classification of
Export and Import items shall not be eligible for any benefits under
Para 3.8.2. |
| |
3.8.2.2 |
Following exports shall not be taken into account for duty credit
entitlement under the scheme:
- Export of imported goods covered under Para 2.35 of the Foreign
Trade Policy or exports made through transshipment.
- Deemed Exports.
- Exports made by SEZs units and EOUs units.
|
| Imports allowed |
3.8.3 |
The Duty Credit may be used for import of inputs or goods, which are
otherwise freely importable under ITC (HS) Classifications of Export and
Import Items,
Imports from a port other than the port of export shall be allowed under
TRA facility as per the terms and conditions of the notification issued
by Department of Revenue. |
| |
3.8.3.1 |
Items listed in Appendix-37B of Handbook of Procedures (Vol. I)
shall not be allowed to be imported under the scheme. |
| Cenvat/ Drawback |
3.8.4 |
Additional customs duty/excise duty paid in cash or through debit
under Vishesh Krishi and Gram Udyog Yojana shall be adjusted as CENVAT
Credit or Duty Drawback as per rules framed by the Department of
Revenue. |
| Special Provision |
3.8.5 |
Government reserves the right in public interest, to specify from
time to time the export products, which shall not be eligible for
calculation of entitlement. |
| |
3.9 |
FOCUS MARKET SCHEME |
| Objective |
3.9.1 |
The objective is to offset the high freight cost and other
disabilities to select international markets with a view to enhance our
export competitiveness to these countries. |
| Eligibility |
3.9.2 |
Exports of all products to the notified countries shall be entitled
for duty credit scrip equivalent to 2.5% of the FOB value of exports for
each licensing year commencing from 1st April, 2006. The scrip and the
items imported against it would be freely transferable. |
| |
3.9.2.1 |
Under the Scheme, export to all countries as given in Appendix-37- C
of Handbook of Procedures (Vol. I) shall qualify for export benefits as
per Para 3.9.2 above. Items which are restricted or prohibited for
export under Schedule-2 of the Export Policy in the ITC (HS)
Classification of Export and Import items shall not be eligible for any
benefits under Para 3.9.2. |
| |
3.9.2.2 |
The following exports shall not be taken into account for
calculation of export performance or for computation of entitlement
under the scheme:
- Export of imported goods covered under Para 2.35 of the Foreign
Trade Policy or exports made through transshipment.
- Export turnover of units operating under SEZ/EOU/ EHTP/STPI/ BTP
Schemes or supplies made to such units or products manufactured by
them and exported through DTA units.
- Deemed Exports.
- Service Exports.
- Diamonds and other precious, semi precious stones.
- Gold, silver, platinum and other precious metals in any form,
including plain and studded Jewellery.
- Ores and Concentrates, of all types and in all forms.
- Cereals, of all types.
- Sugar, of all types and in all forms.
- Crude / Petroleum Oil & Crude / Petroleum based Products covered
under ITC HS codes 2709 to 2715, of all types and in all forms.
|
| |
3.9.2.3 |
Exporters shall have the option to apply for benefit either under
the Focus Market Scheme or under the Focus Product Scheme or under
Vishesh Krishi and Gram Udyog Yojana in respect of the same exported
product/s. |
| Imports allowed |
3.9.3 |
The Duty Credit may be used for import of inputs or goods including
capital goods, provided the same is freely importable under ITC (HS).
Imports from a port other than the port of export shall be allowed under
TRA facility as per the terms and conditions of the notification issued
by Department of Revenue. |
| Cenvat / Drawback |
3.9.4 |
Additional customs duty/excise duty paid in cash or through debit
under this scrip shall be adjusted as CENVAT Credit or Duty Drawback as
per rules framed by the Department of Revenue. |
| Special provisions |
3.9.5 |
Government reserves the right in public interest, to specify from
time to time the export products or exports to such countries, which
shall not be eligible for calculation of entitlement. |
| |
3.10 |
FOCUS PRODUCT SCHEME |
| Objective |
3.10.1 |
The objective is to incentivise export of such products which have
high employment intensity in rural and semi urban areas so as to offset
the inherent infrastructure inefficiencies and other associated costs
involved in marketing of these products. |
| Eligibility |
3.10.2 |
Exports of notified products to all countries shall be entitled for
duty credit scrip equivalent to 2.5% of the FOB value of exports for
each licensing year commencing from 1st April, 2006. However only 50% of
the export turnover of such products shall be counted for benefits under
the Scheme. The scrip and the items imported against it would be freely
transferable. |
| |
3.10.2.1 |
Under the Scheme, export of such products as given in Appendix-37-D
of Handbook of Procedures (Vol. I) shall qualify for export benefits as
per Para 3.10.2 above. |
| |
3.10.2.2 |
The following exports shall not be taken into account for
calculation of export performance or for computation of entitlement
under the scheme:
- Export of imported goods covered under Para 2.35 of the Foreign
Trade Policy or exports made through transshipment.
- Exports turnover of units operating under SEZ Scheme and 100%
EOU Scheme or products manufactured by them and exported through DTA
units.
- Deemed Exports.
|
| |
3.10.2.3 |
Exporters shall have the option to apply for benefit either under
the Focus Market Scheme or under the Focus Product Scheme or under
Vishesh Krishi and Gram Udyog Yojana in respect of the same exported
product/s. |
| Imports allowed |
3.10.3 |
The Duty Credit may be used for import of inputs or goods including
capital goods, provided the same is freely importable under ITC(HS).
Imports from a port other than the port of export shall be allowed under
TRA facility as per the terms and conditions of the notification issued
by Department of Revenue. |
| Cenvat /Drawback |
3.10.4 |
Additional customs duty/excise duty paid in cash or through debit
under this scrip shall be adjusted as CENVAT Credit or Duty Drawback as
per rules framed by the Department of Revenue. |
| Special provisions |
3.10.5 |
Government reserves the right in public interest, to specify from
time to time the export products or exports to such countries, which
shall not be eligible for calculation of entitlement. |
| Advance Authorisation |
4.1.3 |
An Advance Authorisation is issued to allow duty free import of
inputs, which are physically incorporated in the export product (making
normal allowance for wastage). In addition, fuel, oil, energy, catalysts
etc. which are consumed/utilised in the course of their use to obtain
the export product, may also be allowed under the scheme. However, the
Director General of Foreign Trade, by means of Public Notice, may in
public interest exclude any product(s) from the purview of advance
Authorisation.
Duty free import of mandatory spares upto 10% of the CIF value of the
Authorisation which are required to be exported/ supplied with the
resultant product may also be allowed under Advance Authorisation.
Advance Authorisations are issued on the basis of the inputs and export
items given under SION. However, they can also be issued on the basis of
Adhoc norms or self declared norms as per para 4.7 of Handbook of
Procedures (Vol. I). Advance Authorisation can be issued either to a
manufacturer exporter or merchant exporter tied to supporting
manufacturer(s):
- for Physical exports (including exports to SEZ); and/ or
- for Intermediate supplies; and /or
- 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;
- supply of 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.
for import of inputs required in the manufacture of goods. In
addition, in respect of supply of goods to specified projects mentioned
in paragraph 8.2 (d), (e), (f), (g) and (j) of the Policy, an Advance
Authorisation can also be availed by the sub- contractor of the main
contractor to such project provided the name of the sub contractor(s)
appears in the main contract.
Such Authorisation can also be issued for supplies made to United
Nations Organisations or under the Aid Programme of the United Nations
or other multilateral agencies and paid for in free foreign exchange.
|
| |
4.1.4 |
Advance Authorisation is issued for duty free import of inputs, as
defined in paragraph 4.1.3 subject to actual user condition. Such
Authorisations are exempted from payment of basic customs duty,
additional customs duty, education cess, anti dumping duty and safeguard
duty, if any. However, the imports for supplies covered under paragraph
8.2 (i) & (j) will not be exempted from the payment of applicable
anti-dumping and safeguard duty, if any. |
| |
4.1.5 |
Advance Authorisation and/or materials imported thereunder 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. |
| |
4.1.6 |
Advance Authorisations shall be issued with a positive value
addition.
However, for physical exports for which payments are not received in
freely convertible currency, the same shall be subject to value addition
as specified in Appendix-11 of Handbook of Procedures (Vol.1). In case
of supplies to SEZ Units, irrespective of the currency of realization,
Advance Authorisation shall be issued with a positive value addition.
In case of Tea, the minimum value addition under advance Authorisation
shall be 100%.
In case of spices (covered by Chapter 9 of the ITC(HS) Classification of
Export & Import Items, 2004-09), the minimum value addition under
advance Authorisation shall be 15%. |
| |
4.1.7 |
Advance Authorisation shall be issued in accordance with the Policy
and procedure in force on the date of issue of Authorisation.
The validity period of advance Authorisation for import shall be as
prescribed in the Handbook of Procedures (Vol.1). |
| |
4.1.8 |
The facility of Advance Authorisation shall also be available where
some or all of the inputs are supplied free of cost to the exporter.
In such cases, for calculation of value addition, the notional value of
free of cost inputs along with value of other duty- free inputs shall be
taken into consideration. However, if all the inputs are supplied free
of cost, the exporter shall also have the option to follow the provision
prescribed in paragraph 4.2.7 of the Policy. |
| Export Obligation |
4.1.9 |
The period for fulfilment of the export obligation under Advance
Authorisation shall be as prescribed in the Handbook of Procedures
(Vol.1). |
| Provision for BIFR units |
4.1.9 A |
Any firm/company registered with BIFR or any firm/ company acquiring
a unit, which is under BIFR shall be allowed EOP extension as per the
rehabilitation package prepared by the operating agency subject to
subsequent approval of BIFR.
However, in cases where the rehabilitation package does not specify the
EOP extension period, a time period upto 5 years reckoned from the date
of issue of authorisation would be permitted on merits of the case for
fulfillment of export obligation.
Similarly, SSI units shall also be entitled for similar facility as per
the rehabilitation scheme of the concerned State government. However, in
cases where the State rehabilitation scheme does not specify the export
obligation extension period, a time period upto 5 years reckoned from
the date of issue of authorisation would be permitted on merits of the
case for fulfillment of export obligation.
Export Obligation Period Extension, as mentioned above, shall be without
the payment of composition fee for cases where rehabilitation package
has been announced/ approved. |
| Advance Authorisation for Annual Requirement |
4.1.10 |
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 shall 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.
In addition, a merchant exporter shall 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.
The entitlement in terms of CIF value of imports under this scheme shall
be 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. Such Authorisation shall have value addition as specified in
para 4.1.6 of the Foreign Trade Policy. |
| Advance Release Orders |
4.1.11 |
An Advance Authorisation holder, holder of advance Authorisation for
annual requirement, holder of Diamond Imprest Authorisation, holder of
DFIA and holder of DFRC intending to source the inputs from indigenous
sources/State Trading Enterprises/ EOU/SEZ/ EHTP/STP/BTP units in lieu
of direct import has the option to source them against Advance Release
Orders denominated in free foreign exchange/ Indian rupees.
The transferee of a DFIA or a DFRC shall also be eligible for ARO
facility. However, supplies may be obtained against the Authorisation
from EOU/EHTP/BTP/STP/ SEZ units, without conversion into ARO.
The validity period of ARO shall be as prescribed in the Handbook of
Procedures (Vol.1). |
| Back-to-Back Inland Letter of Credit |
4.1.12 |
An Advance Authorisation holder, holder of advance Authorisation for
annual requirement, holder of DFIA, holder of Diamond Imprest
Authorisation and holder of DFRC may, instead of applying for an Advance
Release Order, avail of the facility of Back-to-Back Inland Letter of
Credit in accordance with the procedure specified in Handbook of
Procedures (Vol.1). |
| Prohibited Items |
4.1.13 |
Prohibited items of imports mentioned in ITC(HS) shall not be
imported under the Advance Authorisation/DFIA/DFRC. Further the items
reserved for imports by State Trading Enterprises cannot be imported
against advance Authorisation/ DFIA/DFRC. However those items can be
procured from State Trading Enterprises against ARO or Invalidation
letter issued to the holder of advance Authorisation/DFIA/DFRC.
The State Trading Enterprises are also allowed to sell the goods on High
Sea Sale basis to the holders of Advance Authorisation/DFIA/DFRC.
In addition, the State Trading Enterprises are permitted to issue “No
Objection Certificate (NOC)’ if they so desire, for import by holder of
advance Authorisation. DFIA holders would also be eligible to import
such items based on No Objection Certificate (NOC) from the STEs for
only such products as notified by DGFT. However, the Authorisation
Holder would be required to file Quarterly Returns of the imports
effected against such ‘No Objection Certificate’ to the concerned State
Trading Enterprises (STEs) and the STEs, in turn, would submit
Half-yearly import figures of such imports to the concerned
administrative Department for monitoring with a copy endorsed to the
Department of Commerce.
Similarly prohibited items of exports mentioned in the ITC(HS) shall not
be exported under the Authorisation issued under the Advance
Authorisation/DFIA/DFRC scheme. Further, 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). |
| Admissibility of Drawback |
4.1.14 |
In the case of an Advance Authorisation, the drawback shall be
available in respect of any of the duty paid materials, whether imported
or indigenous, used in the goods exported, as per the drawback rate
fixed by Ministry of Finance (Directorate of Drawback). The Drawback
shall however be restricted to the duty paid materials as mentioned in
the application. |
| Scheme for Gems and Jewellery |
4A |
Exporters of gems and Jewellery can import/procure duty free inputs
required for manufacture of gems and jewellery items. |
| Replenishment Authorisation |
4A.1 |
Exporters of gems and jewellery are eligible to import their inputs
duty free by obtaining Replenishment (REP) Authorisations from the
licensing authorities in accordance with the procedure specified in this
regard in the Handbook of Procedures of Procedure (Vol.1). |
| |
4A.1.1 |
The exporters of gems and jewellery products listed in Appendix-12A
of the Handbook of Procedures (Vol.1) shall be eligible for grant of
Replenishment Authorisations at the rate and for the items mentioned in
the said Appendix to import and replenish their inputs.
Replenishment authorisation may also be issued for import of consumables
as per the details given in paragraph 4A.28 of Handbook of Procedures
(Vol.1). |
| Export of Cut & Polished Diamonds for Certification/ Grading |
4A.2 |
Gem and Jewellery exporters may be permitted to send cut & polished
diamonds each weighing 0.25 of a carat and above for
certification/grading to Indian Diamond Institute, Surat, Gujarat. In
addition, Gem and Jewellery exporters with a track record of at least
three years and having an annual average turnover of Rs.5 crores and
above during the preceding three licensing years or the authorized
offices /agencies in India of Gemological Institute of America (GIA),
The Robert Mouawad Campus, International Gemological Institute (IGI) and
European Gemological Laboratory (EGL) in USA, Hoge Road Voor Diamond,
Antwerp, (HRD), World Diamond Centre of Diamonds High Council, Antwerp,
Belgium, Central Gem Laboratory, Miyagi Building, 5-15-14 Ueno Taito-Ku,
Tokyo, Japan, American Gem Society Laboratories (AGS Laboratories), 8917
West Sahara Avenue, Las Vegas, Nevada 89117 and Diamond Trading Company,
Maidenhead, U.K. may also be permitted to export cut & polished diamonds
each weighing 0.25 of a carat and above to the said
laboratories/agencies for the purpose of certification/grading reports
by them with a condition that the same should be re- imported with the
certificate/grading reports issued by them without any import duty at
the time of re-import. |
| |
4A.2.1 |
At the time of export of cut and polished diamonds for
certification/grading, exporter should give an undertaking to the
customs that the cut and polished diamonds will be re- imported within
three months of exports for certification/ grading.
The export invoice should clearly indicate the estimated value, height,
circumference, weight of each diamond to be exported for certification/
grading so that at the time of their import, the above specification
could be compared with the original ones to establish their identity.
Subsequently these cut and polished diamonds would be exported as per
the provisions of the Policy. |
| Schemes for Gold/Silver/ Platinum Jewellery |
4A.3 |
Exporters of gold/silver/platinum jewellery and articles thereof may
import their essential inputs such as gold, silver, platinum, mountings,
findings, rough gems, precious and semi-precious stones, synthetic
stones and unprocessed pearls etc. in accordance with the procedure
specified in this behalf. |
| Nominated Agencies |
4A.4 |
Exporters (excepting units operating under EOU/SEZ schemes) availing
the schemes of gold/ silver/platinum jewellery and articles thereof may
obtain gold/silver/platinum from the nominated agencies. The nominated
agencies are MMTC Ltd, Handicraft and Handloom Export Corporation
(HHEC), State Trading Corporation (STC), the Project and Equipment
Corporation of India Ltd (PEC) , Five Star Export House under Paragraph
3.5.2 of the Policy and any other agency authorised by Reserve Bank of
India (RBI).
A bank authorised by RBI is allowed export of gold scrap for refining
and import in the form of standard gold bars. The detailed procedure for
the import of gold will be as per the guidelines notified by RBI
separately. |
| Items of Export |
4A.5 |
The following items, if exported, would be eligible for the
facilities under the schemes stipulated in paragraph 4A of the Foreign
Trade Policy:
- Gold jewellery, including partly processed jewellery and any
articles including medallions and coins (excluding the coins of the
nature of legal tender), whether plain or studded, containing gold
of 8 carats and above;
- Silver jewellery including partly processed jewellery,
silverware, silver strips and any articles including medallions and
coins (excluding the coins of the nature of legal tender and any
engineering goods) containing more than 50% silver by weight;
- Platinum jewellery including partly processed jewellery and any
articles including medallions and coins (excluding the coins of the
nature of legal tender and any engineering goods) containing more
than 50% platinum by weight.
|
| Value Addition |
4A.6 |
The value addition for the purpose of gems and jewellery sector
shall be as per paragraph 4A.2.1 of Handbook of Procedures (Vol.1).
A – B
V.A. = ————— x 100, where
B
| V.A |
Value Addition, |
| A |
FOB value of the export realised / FOR value of supply
received. |
| B |
The Value of inputs such as gold / silver / platinum content
in the export product plus the admissible wastage along with the
value of the other items such as gemstone etc. ‘Value’ for this
purpose includes both imported as well as domestically procured
inputs. Wherever gold has been obtained on loan basis, the value
shall also include interest paid in free foreign exchange to the
foreign supplier. |
|
| Wastage Norms |
4A.7 |
Under the schemes for gold/silver/platinum jewellery, the wastage or
manufacturing loss shall be admissible as per paragraph 4A.2 of the
Handbook of Procedures (Vol.1). |
| Export against Supply by Foreign Buyer |
4A.8 |
Where export orders are placed on the nominated agencies/status
holder/ exporters of three years standing having an annual average
turnover of Rs. Five Crore during the preceding three licensing years,
the foreign buyer may supply to the nominated agencies/status
holder/exporter, in advance and free of charge, gold/ silver/ platinum,
alloys, findings and mountings of gold/ silver/ platinum for manufacture
and export.
The exports may be made by the nominated agencies directly or through
their associates or by the status holder/exporter as the case may be.
The import and export of findings shall be on net to net basis. The
foreign buyer may also supply to the nominated agencies/status holder/
exporter in advance and free of charge plain, semi finished
gold/silver/platinum jewellery including findings/ mountings/ components
for repairs/re-make and export subject to minimum value addition of 10%.
However, if the 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.
The procedures in this regard shall be as prescribed in the Handbook of
Procedures (Vol.1). |
| Export Against Supply by Nominated Agencies |
4A.9 |
The exporter may obtain the gold/silver/platinum as an input for
export products from nominated agencies in advance or as replenishment
after exports in accordance with the procedure specified in this behalf. |
| Export Against Advance Authorisation |
4A.10 |
An Advance Authorisation may be granted for the duty free import of:
- Gold of fineness not less than 0.995 and mountings, sockets,
frames and findings of 8 carats and above;
- Silver of fineness not less than 0.995 and mountings, sockets,
frames and findings containing more than 50% silver by weight;
- 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 which will be
required to be fulfilled in accordance with the procedure specified in
paragraph 4A of the Handbook of Procedures (Vol.I).
The Advance Authorisation holder may obtain gold/silver/ platinum from
the nominated agencies in lieu of direct import in accordance with the
procedure specified in this behalf. |
| Gem Replenishment Authorisation |
4A.12 |
Gem Replenishment (Gem & Jewellery REP) Authorisation may be issued
under the schemes for export of gold/ silver/ platinum jewellery and
articles thereof as given in paragraph 4A.8, 4A.9 and 4A.10 of the
Policy. In the case of plain gold/ silver/platinum jewellery and
articles, the value of such Authorisations shall be determined with
reference to the realisation in excess of the prescribed minimum value
addition.
In the case of studded gold/silver/platinum jewellery and articles
thereof, the value of Gem Replenishment Authorisation shall be
determined by taking into account the value of studdings used in items
exported, after accounting for the value addition on gold/ silver/
platinum including admissible wastage.
Such Gem REP Authorisations shall be freely transferable. |
| Gem REP Rate and Item |
4A.13 |
The scale of replenishment and the item of import will be as
prescribed in Appendix 12B of Handbook of Procedures (Vol.1). |
| Diamond Imprest Authorisation |
4A.14 |
Diamond Imprest Authorisation for import of cut & polished diamonds
including semi processed diamonds, half cut diamonds, broken in any
form, for mixing with cut & polished diamonds or for export as it is,
may be issued for export of cut & polished diamonds.
Such Authorisations shall carry an export obligation, which has to be
discharged in accordance with the procedure specified in this behalf. |
| Eligibility |
4A.14.1 |
An exporter of cut & polished diamonds who is status holder may be
issued a Authorisation for import of cut & polished diamonds upto 5% of
the export performance of the preceding year of cut & polished diamonds. |
| Export Obligation |
4A.14.2 |
The export obligation under the scheme will be governed by the
provisions of paragraph 4A of chapter 4 of the Handbook of Procedures (vol.I). |
| Export Promotion Tours/ Export of Branded Jewellery |
4A.15 |
The nominated agencies and their associates, with the approval of
Department of Commerce, and others, with the approval of Gem & Jewellery
Export Promotion Council (GJEPC), may export gold/ silver/platinum
jewellery and articles thereof for holding/participating in exhibitions
abroad.
Personal carriage of gold/ silver/platinum jewellery, precious,
semi-precious stones, beads and articles and export of branded jewellery
is also permitted. These exports shall be subject to the conditions as
given in the Handbook of Procedures (Vol.1). |
| Personal Carriage of Export/ Import Parcels |
4A.16 |
Personal carriage of gems and jewellery export
parcels by foreign bound passengers and personal carriage of gems &
jewellery import parcels by an Indian importer/foreign national may be
permitted as per the conditions given in Handbook of Procedures (Vol.1). |
| Export by Post |
4A.17 |
In case of exports through Foreign Post Office which may include
export via Speed Post through Foreign Post Office, the value of the
jewellery parcels shall not exceed US$50000 and 20 kg. by weight. The
detailed procedure is laid down in chapter 4 of the Handbook of
Procedures (vol.1). |
| Private/ Public Bonded Warehouse |
4A.18 |
Private/Public Bonded Warehouses may be set up in SEZ/ DTA for
import and re-export of cut & Polished diamonds, cut & polished coloured
gemstones, uncut & unset precious & semi-precious stones. Import &
re-export of cut & polished diamonds & cut & polished coloured gemstones
will be subject to achievement of minimum value addition of 5%. |
| Diamond & Jewellery Dollar Accounts |
4A.19 |
Firms and companies dealing in the 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 3 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. 5 crore or above during
preceding three licensing years may also carry out their business
through designated Diamond DollarAccounts.
The Diamond Dollar Account Scheme shall operate under the current
licensing scheme of this chapter. This scheme shall be optional and
those importers/exporters who wish to continue to use Rupee Accounts
shall be allowed to do so under the existing policies.
Dollars in such accounts available from bank finance and/or export
proceeds shall be used only for
- Import/purchase of rough diamonds from overseas/ local sources,
- Purchase of cut and polished diamonds, coloured gemstones and
plain gold jewellery from local sources,
- Import/purchase of gold from overseas/ nominated agencies and
repayment of dollar loans from the bank; and
- Transfer to the Rupee Account of the exporter. Details of this
Diamond Dollar Accounts Scheme (DDAS) are given in the Handbook of
Procedures (Vol.1). The procedure outlined in the Handbook of
Procedures (Vol.1) shall also apply to diamond studded jewellery.
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 the period of 7 days and cut and polished diamonds and
coloured gemstones so supplied by non-DDA holder will also be counted
towards the discharge of his export obligation and/or entitle him to
replenishment Authorisation as the case may be.
|
| Export of cut & Polished precious and semi-precious stones for
treatment and re-import |
4A.20.1 |
Gems & 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. |
| Import of precious metal scrap/used jewellery for melting and
re-export of jewellery. |
4A.21 |
Import of precious metal scrap/used jewellery shall be allowed for
melting, refining and re-export of jewellery as per the procedure laid
down in the Handbook of Procedures, Vol. I. However, such import shall
not be allowed through hand baggage. |
| Re-import of rejected jewellery |
4A.22 |
Gems & Jewellery exporters shall be allowed to re-import the
rejected precious metal jewellery as per the procedure laid down in para
4A.32 and 4A.32.1 of Handbook of Procedure, Vol. I. |
| Export of Jewellery on consignment basis |
4A.23 |
Gems & Jewellery exporters shall be allowed to export jewellery on
consignment basis as per the procedure given in chapter 4 of the
Handbook of Procedures, Vol. I and as per the Customs rules and
regulations in this behalf. |