| Policy |
4.1 |
The Policy relating to the Duty Exemption/Remission
Scheme is prescribed in Chapter 4 of the Policy. |
| General Provision |
4.2 |
An application for grant of an Advance
Licence/ Advance Licence for Annual Requirement/DFRC/ DEPB may be
made by the Registered office or Head office or a branch office or
manufacturing unit of the eligible exporter, to the licensing authority
concerned. |
|
4.3 |
Where the applicant is the branch
office or manufacturing unit(s) of an exporter, it shall furnish (a)
Self certified copy of valid RCMC where the name of the branch office
or manufacturing unit is given and (b) an authority letter from the
Registered Office of a Company or Head Office of a firm, clearly indicating
that Registered/Head Office or its branches and manufacturing unit(s)
have not been declared defaulter or otherwise made ineligible for
import/ export under any of the provisions of the Policy.
However, this declaration shall not be required for those filing
applications electronically. |
| Advance Licence |
4.4 |
Where the SION have been published,
an application in Appendix-10B, along with documents prescribed therein,
shall be submitted to the licensing authority concerned. |
|
4.4.1 |
In case of export of gold/silver/platinum
jewellery and articles thereof, the quantity, wastage and the value
addition norms shall be as prescribed in Chapter-4 of the Policy and
this chapter. |
|
4.4.2 |
In case where norms have not been published,
an application in Appendix-10B (with Annexure-I), along with prescribed
documents, shall be furnished to ALC for fixation of Norms.
In such cases, the original copy of the application along with
prescribed fee shall be filed with the Regional Licensing Authority
concerned and a self attested copy of the same shall be filed with
ALC. The Licenses in such cases shall be issued by the RLA on the
basis of recommendation of ALC. |
|
|
The Committee shall also function as a recommendatory
authority for SION. The Director General of Foreign Trade may notify
such norms as recommended by the ALC. |
|
4.4.3 |
Applications, where Acetic Anhydride,
Ephedrine and Pseudo-ephedrine is required as an input for import,
either in such cases where norms are fixed or in such cases where
norms are not fixed, shall be filed with the regional licensing authorities
concerned. Copies of such applications shall also be simultaneously
endorsed to the Drug Controller of India, Nirman Bhawan, New Delhi,
Narcotics Commissioner, Central Bureau of Narcotics, Gwalior. and
the respective Zonal Director of the Narcotics Control Bureau, alongwith
a declaration that the applicant will maintain the prescribed records
and also submit the prescribed returns. |
|
4.4.4 |
The licensing authority, while issuing
the advance licence for the import of Acetic Anhydride, Ephedrine
and Pseudo- ephedrine, shall endorse a condition that before effecting
imports, NOC shall be obtained from the Narcotics Commissioner of
India, Central Bureau of Narcotics, Gwalior and shall also endorse
a copy of the licence to the Drug Controller, Nirman Bhawan, New Delhi
and the concerned Zonal Director of the Narcotics Control Bureau. |
|
4.4.5 |
Exports made against the Government
of India line of credit would be entitled for benefits under the Advance
Licence Scheme. |
| Advance Licence for applicants
with multi units |
4.5 |
While issuing advance licences in
case of multi unit companies, the RLAs should endorse the use of material
imported there under for a particular unit of a company and transfer
of any material from one unit of the company to another unit of the
same company shall be done with the permission of Excise Authorities
with a clear understanding that no benefit of CENVAT shall be claimed
on such transferred inputs. |
| Advance Licence for Free
of Cost and Paid Material |
4.6 |
In terms of paragraph 4.1.8 of the
Policy, an exporter may apply for an Advance Licence for import of
items mentioned in paragraph 4.1.3 of the Policy some or all of which
may also include items that are supplied free of cost. |
|
|
In such cases, a specific endorsement shall
be made on the exchange control copy of the Advance Licence disallowing
remittances for the material being supplied free of cost. All inputs
imported shall be utilised in the manufacturing of the product except
the wastage. The value addition in the case of such advance
licences would be computed by adding the notional value of the free
of cost material to both the CIF value of imports and FOB value
of exports. |
|
|
|
| Self Declared licences where
SION does not exist |
4.7 |
The licensing authority may also issue
Advance licences, where SION are not fixed, based on self declaration
and an undertaking by the applicant for a final adjustment as per
Adhoc/SION fixed by ALC. However, no Advance Licence for import of
horn, hoof and other organ of animal, or for any item for which DGFT
may so notify, shall be issued under paragraph 4.7 by the licensing
authority. |
| Entitlement |
4.7.1 |
The CIF value of one or more such
licences shall be Rs. 1 crore or 100% of the FOB and/or F.O.R value
of preceding year exports/supply, whichever is more. However status
holders can claim one or more such licences upto 200% of the FOB value
of preceding year exports. However, in cases where ALC has
already ratified the norms for the same export import product in
respect of a licence obtained under paragraph 4.7, such norms shall
be valid for a period of six months reckoned from the date of ratification.
The licence holder in such cases shall be entitled for further
licence(s) as per the norms ratified by ALC without the need for
subsequent ratification by ALC. In such cases the applicant would
file the application under Adhoc Norms Fixed category.
Licences shall be issued by the Licencing Authority concerned
under “ Adhoc Norms Fixed” category and in such cases the application
copies need not be forwarded to the ALC for fixation/ratification
of norms. The total value of licence(s) obtained on such norms shall
not exceed 100% of the FOB and/or FOR value of preceding year export/supply. |
|
4.7.2 |
Once the norms are fixed by ALC, the
value limits mentioned in sub paragraph 4.7.1, above would not be
applicable to advance licences issued under this paragraph. Such licences,
subsequent to fixation of norms by ALC, may be enhanced to a value
originally applied for or as decided by the competent authority. |
| Licence in Excess of Entitlement |
4.7.3 |
An applicant shall be entitled for licence
under this paragraph in excess of entitlement mentioned in paragraph
4.7.1 subject to furnishing of 100% Bank Guarantee to Customs authority
to cover the exemption from Customs duties. A specific endorsement
to this effect shall be made on the licence. |
|
4.7.4 |
The original application with prescribed
documents shall be submitted to the concerned Regional Licensing Authority.
The licensing authority shall forward a copy of the application within
7 days from the date of issue of such licences to ALC for fixation
of norms within the prescribed time. |
|
4.7.5 |
The applicant shall give an undertaking
that he shall abide by the norms fixed by ALC and accordingly pay
duty, together with 15% interest, on the unutilised inputs as per
norms fixed by ALC. |
|
4.7.6 |
In such cases, where the norms are
not finalised by ALC within four months from the date of issuance
of licence, the norms as applied for shall be treated as final and
no adjustment will be made. However, where the application for fixation
of adhoc/ SION is rejected on account of non-furnishing of required
documents/ information, the licence holder shall be liable for penalty
as stated in the above paragraph.
In such cases where the export obligation is completed pending
fixation of norms by ALC, the entitlement for the licence as given
in paragraph 4.7.1 may be re-credited upon production of documentary
evidence showing fulfillment of export obligation and realisation
of foreign exchange in respect of the previous licenses. However,
bond waiver/ redemption shall not be allowed pending fixation of
norms in such cases. |
| Financial Powers |
4.8 |
The financial powers of the licensing
authority and ALC are given in the table below: |
|
|
| Category of Application
|
On published norms and under
paragraph- 4.7 of this Handbook |
| Regional Licensing Authority |
Regional Licensing Authorities on
the recommendation of ALC. |
| Petroleum /Petrochemical products & Advance
Licence for Annual Requirements |
Others |
Petroleum / Petrochemical products & Advance
Licence for Annual Requirements |
Others |
| CIF value of Licence |
Upto Rs. 500 crore |
Upto Rs. 100 crore |
Rs.500 crore or above |
Upto Rs. 100 crore and above |
|
| Standardisation of Adhoc
Norms |
4.9 |
For standardization of norms, an application
may be made by the manufacturer exporter or merchant exporter tied
to supporting manufacturer, duly filled in with complete data. Such
applications shall be made to the Advance Licensing Committee (ALC)
in the form given in Appendix-10. Import of fuel may also
be allowed under SION by ALC subject to the following: - |
|
|
| (a) |
The facility of import of fuel shall be
allowed only to the manufacturer having captive power plant
. |
| (b) |
In cases where SION specifically allows
fuel, the same shall be permitted under advance licence. 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 |
| (c) |
Fuel should be allowed only against an actual
user licence |
| (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. |
| (e) |
The applications of fixation of 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 Advance Licencing Committee along
with the requisite data in Appendix 10 H pertaining to the "Data
Sheet for Fuel Rate". The Advance Licence holders
wishing to procure the fuel indigenously may apply for an
Advance Release Order or Back to Back Inland Letter of Credit.
The indigenous supplier supplying fuel shall be entitled for
deemed export benefits given in paragraph 8.3(a), (b) &
(c) of the Policy. In case the indigenous supplier is not
willing to avail of deemed exports benefits under such supplies
of fuel to the Advance Licence holder, he may issue a disclaimer
on the basis of which the Advance Licence holder can avail
of the deemed export benefits as per procedure given in Chapter
8 of the Handbook (Vol.1). |
|
| Modification of SION |
4.10 |
An application for modification of
existing SION may be filed before the ALC by manufacturer exporter
or merchant-exporter, tied to supporting manufacturer, in the form
given in Appendix-10. |
| Amendment of Export item
and inputs |
4.10A |
An application for amendment of an
export item or inputs under SION may be filed by any manufacturer
or merchant exporter as per Appendix 10 J of the Handbook (Vol 1).
The applicant would give justification in seeking the amendment
and the same would be considered by the Regional Office with the
specific approval of the Head of the Office.
However no such amendment would be permitted for advance licences
issued under adhoc norms or self certification. |
| Description of an Advance
Licence |
4.11 |
An Advance Licence shall specify: |
|
|
| (a) |
the names and description of items to be
imported and exported/supplied; |
| (b) |
the quantity of each item to be imported
or wherever the quantity cannot be indicated, the value of the
item shall be indicated. However, if in Standard input output
norms, the quantity and value of individual inputs is a limiting
factor, the same shall be applicable. |
| (c) |
the aggregate CIF value of imports; and |
| (d) |
the FOB/FOR value and quantity of exports/
supplies. |
|
| Exports in Anticipation
of Licence |
4.12 |
Exports/supplies made from the date of
issuance of file no for an Advance Licence by the licensing authority,
may be accepted towards discharge of export obligation. If the application
is approved, the licence shall be issued based on the input/output
norms in force on the date of receipt of the application by the licensing
authority in proportion to the provisional exports/ supplies already
made till any amendment in the norms is notified. For the remaining
exports, the Policy/ Procedures in force on the date of issue of the
licence shall be applicable. |
|
4.12.1 |
The exports/supplies made in anticipation
of the grant of an Advance Licence shall be entirely on the risk and
responsibility of the exporter. |
|
4.12.2 |
The conversion of duty free shipping
bills to drawback shipping bills may also be permitted by the customs
authorities in case the application for an Advance Licence is rejected
or modified by the licensing authority. |
| Note: |
Advance Licence, unless otherwise
stated, means Advance Licence for Physical Exports/ Intermediate Supply/
Deemed Exports. |
| Advance Licence or DFRC
for Intermediate Supplies |
4.13 |
The application for grant of Advance
License or DFRC for Intermediate supply may be made on the basis of
a tie-up agreement with the exporter holding an Advance license for
physical exports/deemed exports or DFRC. The licensing authority concerned
shall consider such requests.
The Advance License or DFRC for Intermediate supply shall be issued
after making the licence invalid for direct import of items to be
supplied by the intermediate manufacturer. In such cases, a copy
of the invalidation letter will be given to the licence holder and
copy thereof will be sent to the intermediate supplier as well as
the licensing authority of the intermediate supplier. The licensee
in such case has an option either to supply the intermediate product
to holder of Advance Licence for physical exports/deemed exports
or to export directly.
The facility of advance licence for intermediate supply shall
be available even in cases where the intermediate supplier has supplied
or intend to supply the material subsequent to fulfilment of export
obligation by the ultimate exporter holding the Advance Licence. |
| Advance Release Order |
4.14 |
An application may be made to the
Regional Licensing Authority concerned for grant of Advance Release
Order (ARO) to procure the inputs from indigenous sources/State Trading
Enterprises. |
|
4.14.1 |
The application shall specify (i)
the name, description and quantity of the items and (ii) the individual
value of items to be procured. An ARO may be issued along with the
Advance Licence for Physical Exports/Intermediate Supplies/ Deemed
Exports/DFRC or subsequently, and its validity shall be co-terminus
with the validity of the Advance Licence for Physical Exports/Intermediate
Supplies/Deemed Exports. An ARO issued for the procurement of an individual
item shall be automatically valid for procurement from one or more
indigenous sources. |
| Back to Back Inland Letter
of Credit (LC) |
4.15 |
The exporter may alternatively avail
the facility of a back to back inland letter of credit from the banks.
An Advance Licence holder, and a DFRC holder, may approach a bank
for opening an inland letter of credit (LC) in favour of an indigenous
supplier. |
|
4.15.1 |
Before opening the LC, the bank will
ensure that the necessary BG / LUT has been executed by the Advance
Licence holder and an endorsement to that effect has been made on
the licence. However, execution of BG/LUT shall not be required
against DFRC. After opening the inland LC, the bank shall make the
following endorsement on the Exchange Control and Customs copy of
the Advance Licence for Physical Exports/ Deemed Exports/DFRC; |
|
|
The value of this Advance Licence for Physical
Exports/ Deemed Exports/ DFRC stands reduced by a sum of Rs. ________
, being the value of the inland LC No.________ opened today by the
licensee in favour of M/s ____________________ (name and address of
the indigenous supplier). |
|
4.15.2 |
The licence shall be invalidated by the
bank for direct import only in respect of the full quantity and value
of the item being sourced indigenously. |
|
4.15.3 |
The original Letter of credit (L/C)
may be retained by the bank for negotiation and only the non-negotiable
copy of the L/C may be given to the indigenous supplier. |
|
4.15.4 |
The responsibility of the bank shall
be confined to making the endorsement. The bank shall not be liable
for any misrepresentation or false statement made by the licensee
while requesting the bank to make the endorsement. The inland LC opened
by the bank in favour of the indigenous supplier shall not be canceled
for any reason whatsoever. |
|
4.15.5 |
The non negotiable copy of inland
LC together with the photocopy of the Advance Licence duly carrying
endorsements made by the bank shall be sufficient for the indigenous
supplier to claim deemed export benefits. LC issued against DFRC shall,
however, be entitled only to benefit given in paragraph 8.3(b) of
Policy, whereas LC for other categories shall be entitled to benefits
given in paragraph 8.3 (b) and (c) of the Policy. |
|
4.15.6 |
Where the import of gold/silver is
permitted as an input under this scheme, such gold/silver can be sourced
through the nominated agencies as given in Chapter-4 of the Policy
for supply against the Advance Licences issued in this behalf. Before
supply of the material, the nominated agencies should follow the same
procedure as given in paragraph 4.15.1 above. |
| Facility of Supporting
Manufacturers/ Jobber |
4.16 |
The imported material may be used
in any of the units of the licence holder or jobber/ supporting manufacturer
provided the same is endorsed on the licence by the regional office.
However if the licence holder is registered with the Central Excise,
he has an option of getting the names of the jobber endorsed by
the Central Excise as per the Central Excise Rules in lieu of the
endorsement on the licence by the regional office. However, the
licence holder shall be solely responsible for the imported items
and fulfillment of export obligation. |
| Facility Of Co-Licensee |
4.17 |
If the applicant desires to have the
name of any manufacturer or jobber added to the licence, he may apply
for such endorsement. Such endorsement shall be mandatory where prior
import before export is a condition for Advance Licence for physical
exports and the licence holder desires to have the material processed
through any other manufacturer or jobber. |
|
|
Upon such endorsement made by the licensing
authority, the licence holder and co-licensees shall jointly and severally
be liable for completion of export obligation. Any one of the co-licensees
may import the goods in his name or in the joint names. The BG/LUT
shall also be furnished in their joint names. |
| Acceptance of BG/LUT |
4.18 |
At the time of issue of the licence,
the acceptance of the undertaking given by the applicant to the licensing
authority concerned in the form given in Appendix-10B will be endorsed
on the reverse of the Advance Licence. |
| Note :- |
| (a) |
No BG/LUT will be required where the specified
export obligation has been fulfilled before making any import.
In case of partial fulfillment of export obligation before effecting
any imports, the BG/ LUT may be reduced proportionately.
The licence holder shall also produce EP copy of the shipping
bills and Bank Certificate of Export and Realisation, and
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 substantiating
the completion or the partial fulfillment of the export obligation
to the licensing authority concerned.
However, realization of export proceeds shall not be insisted
if the shipments are made against irrevocable letter of credit
or bill of exchange is unconditionally Avalised/ Co- Accepted/
Guaranteed by a bank and the same is confirmed by the exporters
bank. In both these arrangements, certification of this is
to be made by the bank in column 14/ 15 of Appendix 22. |
| (b) |
In respect of an advance licence on which
"No BG/LUT" facility has been provided, the licensing authority
shall forward a copy of the "No Bond Certificate" indicating
the shipping bill number, date, FOB value as per shipping bill
and description of export product, in respect of shipment which
were taken into account for calculating fulfilment of export
obligation to the customs authorities with whom the licence
is/required to be registered.
Before allowing the imports against Advance Licence,
the Customs shall verify that the details of the exports as
given in the "No Bond Certificate" are as per their records. |
| (c) |
The cancellation of BG/LUT would be undertaken
by the Customs within 30 days of issue of EODC /bond waiver
by the regional licencing office. |
|
| Port of Registration |
4.19 |
The licence and the Advance Licence
shall be issued for the purpose of import and export through one of
the sea ports or airports or ICDs or LCS specified below. The licence
holder shall register the licence, the port specified in the licence
and thereafter all imports against the said licence shall be made
only through that port, unless he obtains permission from the customs
authority concerned to import through any other specified port. However,
exports may be made through any of the specified ports. |
|
|
| Sea Ports |
Mumbai, Kolkata, Cochin, Kakinada, Kandla,
Mangalore, Marmagoa, Chennai, Nhavasheva, Paradeep, Pipavav,
Sikka, Tuticorin Vishakhapatnam, Dahej, Nagapattinam, Okha,
Mundhra , Surat (Magdalla) and Jamnagar |
| Air-ports |
Ahmedabad, Bangalore, Bhubaneshwar Mumbai,
Kolkata Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad,
Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur and Chennai. |
| ICDs: |
Agra, Bangalore, Coimbatore, Delhi, Faridabad,
Gauhati (Amingaon), Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur,
Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore),
Surat, Tirupur, Varanasi, Nasik, Rudrapur(Nainital), Dighi (Pune),
Vadodara, Daulatabad, (Wanjarwadi and Maliwada), Waluj (Aurangabad),
Anaparthy, Salem Mallanpur, Singanalur, Jodhpur, Kota, Udaipur,
Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry ,Garhi Harsaru
Bhatinda, Dappar, Chheharata ( Amritsar), Karur, Miraj and Rewari. |
| LCS |
Ranaghat , Singhabad , Raxaul, Jogbani, Nautanva
( Sonauli), Petrapole and Mahadipur |
|
|
|
The following ports would be treated as
a single port for the purposes of imports and exports: |
|
|
| i |
Mumbai seaport, Nhava Sheva
& Mumbai Airport |
| ii |
Delhi airport and ICDs in Delhi |
| iii |
Kolkata seaport, Kolkata airport |
| iv |
Chennai airport and Chennai
seaport |
| v |
Bangalore airport and Bangalore ICD |
| vi |
Hyderabad Airport and Hyderabad ICD |
|
|
4.19.1 |
The Commissioner of Customs may, either
by a public notice or on the written request of the licence holder,
by a special order and subject to such conditions as may be specified
by him, also permit imports and exports from any seaport/airport/ICD
or land custom station other than those mentioned above. |
|
4.19.2 |
In such cases, where the licence has
not been registered at the port specified in the licence and no import
has taken place, the request for change in the Port of Registration
may be considered by the licensing authority concerned provided the
licence has not been redeemed. |
|
4.19.3 |
For imports from the Airport/Seaport/ICD
other than the port of registration, a Telegraphic Release Advice(TRA)
shall also be issued by the customs authority at the port of registration
to the customs authority at the port of import. |
| Facility of Clubbing |
4.20 |
The facility of clubbing shall be
available only for redemption/ regularisation of the cases and no
further import or export shall be allowed. For this facility, licences
are required to have been issued under similar Customs notification. |
|
4.20.1 |
The regional licensing authority, under
whose jurisdiction the licence is issued or ALC in other cases, shall
consider a request for clubbing all imports and exports of more than
one Advance Licence of the same category only provided the imported
inputs are properly accounted for as per norms. Hence an Advance Licence
for physical export can not be clubbed with Advance Licence for Intermediate
supplies or Advance Licence for deemed exports and vice versa. Similarly
an Advance Licence for Intermediate supplies cannot be clubbed with
an Advance Licence for deemed exports and vice versa.The value addition
of the licences so clubbed shall be the average of the value addition
imposed on individual licences. Upon clubbing, the licences shall,
for all purposes, be deemed to be one licence. |
|
|
Upon clubbing, the licences shall, for all
purposes, be deemed to be one licence. |
|
4.20.2 |
The accountability of imports and
exports shall be restricted in relation to the individual categories
of advance licences including advance licence for annual requirements
issued under this scheme. |
|
4.20.3 |
The facility is available only for
Advance Licence(s) where there is shortfall in fulfillment of export
obligation, and which is sought to be clubbed with an advance licence(s)
which is valid for imports. For expired licence(s) with EO shortfall
and which is sought to be clubbed with an advance licence(s) which
is valid for imports ,the applicant shall pay the composition fee
for E.O. period extension as per the provision of paragraph 4.22. |
|
4.20.4 |
In such cases, the exports effected
36 months after the issuance of the earliest licence shall not be
considered for clubbing. |
|
4.20.5 |
Notwithstanding the provisions of para
4.20.3 and 4.20.4 above, Clubbing of all expired licences may also
be permitted provided all the expired licences have been issued during
the Exim Policy 1997-2002 i.e. 1st April, 1997 to 31st March, 2002. |
| Enhancement/ Reduction In
the Value of Licence |
4.21 |
In respect of an Advance Licence,
the licensing authority concerned (as per their financial powers)
may consider a request for enhancement/ reduction in the CIF value
of the licence, provided the value addition after such enhancement
does not fall below the stipulated minimum value addition and provided
there is no change in the input-output norms and the Policy under
which the licence was issued. |
|
4.21.1 |
The licensing authority concerned
(as per their financial powers) may also consider the request for
enhancement/ reduction in CIF value, quantity of inputs, FOB value
of export obligation and quantity of exports of an advance licence
provided there is no change in the input output norms and value addition
after such enhancement does not fall below the stipulated minimum
value addition. |
|
4.21.2 |
The request for prorata enhancement
in value and quantity may be made either before or after exports.
In such cases where there is a change in the SION prior to the export
of the said product, the prorata enhancement shall be given after
calculating the entitlement on the revised SION. |
|
4.21.3 |
The application for the enhancement/
reduction in the value of the licence shall be made in Appendix 10
F of the Handbook (Vol 1). |
| Application fee for enhancement |
4.21.4 |
The application fee leviable for enhancement
would be on the difference in the CIF values of the original and final
licence. However, no application fee would be charged if the value
of the licence is being reduced or the applicant has paid the maximum
fee of Rs 150,000 ( for manual applications) and Rs 75,000 (for digitally
signed applications) respectively in the original application for
Advance Licence. |
| Export Obligation Period
and its Extension |
4.22 |
The period of fulfillment of export
obligation under an Advance Licence shall commence from the date of
issuance of licence. The export obligation shall be fulfilled within
a period of 24 months except in the case of supplies under Advance
Licence for Deemed Exports/ Advance Licence to the projects/turnkey
projects in India/abroad where the export obligation must be fulfilled
during the contracted duration of execution of the project/ turnkey
project.
However, in case of Advance Licences for drugs, which have
been issued against a specific export order and with pre-import
condition the period of fulfillment of export obligation shall commence
from the date of import of the first consignment and shall be fulfilled
within a period of 6 months. |
|
4.22.1 |
The request for extension in export obligation
period may be made in the form given in Appendix-10G. The regional
licensing authority shall grant one extension for a period of six
months from the date of expiry of the original export obligation period
to the licensee subject to payment of 2% of the duty saved on all
the unutilized imported items as per licence; |
|
|
|
|
|
Request for a further extension of six months
may be considered by the regional licensing authorities subject to
payment of composition fee of 5% of the duty based on all the unutilized
imported items as per licence. |
|
|
However any further extensions beyond 36
months upto a period of 48 months from the date of issue of the Advance
Licence or the duration of the contracted project (in the case of
Advance Licence for Deemed Exports) or on the lapse of any other extension
(s) granted by this office would be permitted on payment of the composition
fee of 2% per month of duty saved. For all the three cases
of export obligation extension above, the composition fee on the
duty saved on all the unutilized imported items would be computed
with reference to the actual exports and imports made by the licence
holder |
|
|
However such extensions would not be permitted
in the case of the erstwhile Value Based Advance Licences (VABALs)
and Advance Licence for Annual Requirement. Additionally, no extension
in export obligation would be allowed in respect of licences where
misrepresentation/ fraud has come to the notice of the licencing authorities.
Further, in respect of licences where adjudication orders have already
been passed, no extension in export obligation period shall be admissible |
|
4.22.2 |
The Customs may allow provisional
clearance of export consignment as and when the licence holder produces
documentary evidence of having applied for EO extension to the concerned
RLA provided the shipments are effected within 48 months from the
date of issuance of licence. |
| Revalidation Of Licence |
4.23 |
The regional licensing authority may
consider a request of the original licence holder and grant one revalidation
for a period of six months from the date of expiry of the original
licence. The request(s) for revalidation of licence shall be made
in the form given in Appendix-10G |
| Monitoring of Obligation |
4.24 |
The licensing authority, with whom
the Undertaking is executed by the Advance Licence holder, shall maintain
a proper record in a master register indicating the starting and closing
dates of obligation period and other particulars to monitor the export
obligation. Within two months from the date of expiry of
the period of obligation, the licence holder shall submit requisite
evidence in discharge of the export obligation in accordance with
paragraph 4.25 of the Handbook.
However, in respect of shipments where six months period for realisation
of foreign exchange has not become due, the licensing authority
shall not take action for non submission of bank certificate of
exports and realisation provided the other document substantiating
fulfillment of EO have been furnished. |
|
4.24.1 |
In case the licence holder fails to complete
the export obligation or fails to submit the relevant information/
documents, the licensing authority shall take action by refusing further
licences, shall enforce the condition of the licence and Undertaking
and also initiate penal action as per law. |
| Advance Licence for Annual
Requirement |
4.24A |
|
|
(a) |
The exporters eligible for such licences
shall file an application in Appendix-10-I to the licensing authority
under whose jurisdiction the manufacturing unit of the applicant is
located. The Head office/Registered office of the company
can also file an application on behalf of the manufacturing unit.
In such cases, the Head office/Registered office shall furnish full
address of the factory where the inputs shall be used in the resultant
product for exports.
In case of merchant exporters, the application shall be made by
the Head office/ Registered office mentioning the name and address
of the supporting manufacturer shall be endorsed on the condition
sheet attached to the licence.
|
|
(b) |
The applicant shall have the flexibility
to import any input in respect of items mentioned in the licence.
However, the licence holder shall have to account for the inputs as
per SION/ individual norms fixed by Advance Licensing Committee within
the time period prescribed in this regard. In respect of
export products for which Standard Input Output Norms does not exist,
the licence holder shall submit an application in Appendix-10 alongwith
prescribed documents to ALC before making the shipment. The applicant
shall also furnish Advance Licence for Annual Requirement number
and date alongwith the file number from which the same was issued
in the covering letter to the application.
In such cases where there is a change in SION/ individual norms
fixed by Advance Licensing Committee during the validity period
of the licence, the licence holder shall account for raw material
in respect of the exports made prior to the date of amendment, as
per pre-revised norms and for exports made on or after the date
of amendment as per revised norms. |
|
(c) |
At the time of imports, the licence
holder shall furnish the details of inputs, including its specification
and technical characteristics, to the Customs authorities for making
entries in the imports column. The licence holder shall maintain the
nexus in the imported inputs and the resultant product. |
|
(d) |
The applicant shall furnish details of
the export product group, CIF value of licence and FOB value of the
export obligation. However, the licence holder shall have the flexibility
to export any product falling under the export product group using
the duty exempted material. |
|
(e) |
The licence shall be valid for 24
months for imports and exports from the date of its issuance. Each
licence will have One port of registration for imports. Exports can
take place from any port mentioned in paragraph 4.19. The
regional licensing authority may consider a request of the license
holder and grant one revalidation for a period of six months from
the date of expiry of the original licence. No further revalidation
may be considered by the regional licensing authorities.
The regional licensing authority may also grant extension in export
obligation period in terms of paragraph 4.22 and 4.22.1 of the Handbook
of Procedure subject to the payment of composition fee as prescribed
therein. Such export obligation period extension should not exceed
12 months from the date of expiry of original export obligation
period of the licence.
The request(s) for revalidation of licence and/or extension of
the export obligation period shall be made in the form given in
appendix-10G. |
|
(f) |
Within the eligibility, an exporter
may apply for one or more than one licences in a licensing year, subject
to the condition that against one port of registration only one licence
can be issued. On completion of export obligation against
one or more licences, all issued in the same licensing year, the
entitlement of an exporter shall be deemed to be revived by an amount
equivalent to the export obligation completed against the licence(s). |
|
(g) |
After expiry of 24 months the licence holder
shall furnish proof of having fulfilled export obligation by submitting
the documents prescribing in paragraph 4.25. In case of bonafide default
in fulfillment of export obligation, the licence holder can apply
for regularization in terms of paragraph 4.28. |
|
4.24 B |
The provisions contained in paragraph
4.24A shall also be applicable to “Advance Licence for Annual Requirement
for intermediate supplies” so far as they are not inconsistent with
the following. The facility of ‘Advance Licence for annual
Requirement for intermediate supplies’ is available for the cases
where the intermediate supplier intends to supply the material against
invalidation letters issue to the holders of Advance license for
physical exports/deemed exports. In such cases, a copy of the invalidation
which makes the licence invalid for direct import of items to be
supplied by the intermediate manufacturer will be given to the licence
holder and copy thereof will be sent to the intermediate supplier
as well as the licensing authority of the intermediate supplier.
Further the invalidation letters should also contain the licence
number and date of ‘Advance Licence for annual Requirement for intermediate
supplies’ to enable proper accounting of the invalidation letters.
These would be submitted to the Licensing authority concerned by
the intermediate supplier for the purpose of closure of licence. |
| Fulfillment Of Export Obligation |
4.25 |
The licence holder shall furnish
the following documents in support of having fulfilled the export
obligation:- |
|
|
For physical exports:- |
|
|
| (i) |
Bank Certificate of Exports
and Realisation in the form given at Appendix-22 or Foreign
Inward Remittance Certificate (FIRC) in the case of direct negotiation
of documents or Appendix –22B in case of offsetting of export
proceeds. However, realisation of export proceeds
shall not be insisted 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. |
|
|
The stipulations at (a) or (b) above
must be certified by the bank in column 14/15 of Appendix- 22. |
| (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/EHTP/ STP/ BTP, a
copy of ARE-3 duly signed by the jurisdictional excise authorities
certifying the item of supply, its quantity, value and date
of such supply can be furnished in lieu of the excise attested
invoice (s) or statement of invoices as given above. |
| (ii) |
Payment certificate from the project authority
in the form given in Appendix-12A. In the case of Advance Licence
for Intermediate Supplies/ deemed exports, supplies to the EOUs/
EHTPs/STPs/ BTPs, documentary evidence from the bank substantiating
the realisation of proceeds from the Licence holder or EOUs/EHTPs/
STPs/ BTPs, as the case may be, through the normal banking channel,
shall be furnished in the form given at Appendix-22A.
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- 22A. |
| (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. |
|
| Redemption |
4.26 |
In case the export obligation has been
fulfilled, the licensing authority shall redeem the case.
After redemption, the licensing authority shall 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.
Before discharging BG/LUT against the Advance Licence for Physical
Exports, the Customs shall verify that the details of the exports
as given in the "Redemption Certificate" are as per their records.
However before discharging BG/LUT against Advance Licence for Intermediate
Supplies and Deemed Exports, the Customs shall verify the details
of the supplies from the Central Excise authorities. |
|
|
Ordinarily, redemption of BG/LUT shall not
preclude the customs authority from taking action against the licence
holder for any misrepresentation, mis-declaration and default detected
subsequently. |
| Transitional Arrangement
for licences issued upto 31.8.2004 |
4.27 |
The Advance Licence including Advance
Licence for Annual Requirement issued upto 31.8.2004 shall be governed
by the provisions contained in Chapter-7 of the Handbook (Vol.1) (RE-2001)
and Chapter 4 of the Handbook (RE-2002) respectively as amended from
time to time, excepting the provision relating to clubbing which will
be governed by the provisions of para 4.20 of this Handbook.
However, wherever Customs duty is to be paid on unutilised material,
the same shall be paid alongwith interest @15% per annum thereon.
This facility shall be available to all pending cases of regularisation
of bonafide default advance licences irrespective of the date of
its issuance including Advance licence (Advance Licence for physical
exports), Annual Advance Licence (Advance Licence for annual requirement),
Advance Licence for deemed exports (Special Imprest Licence), Advance
Licence for Intermediate supply (Intermediate licence). |
|
|
|
| Regularisation Of Bonafide
Default |
4.28 |
The cases of a bonafide default in fulfillment
of export obligation may be regularised by the licensing authority
in the manner indicated below: |
|
|
| (i) |
If the export obligation is fulfilled in
terms of value, but there is a shortfall in terms of quantity,
the licence holder shall, for the regularisation, pay:- |
| |
| a) |
To the customs authority,
customs duty on the unutilised value of the imported material
alongwith interest at the rate of 15% per annum thereon;
and |
| b) |
An amount equivalent to
3% of the CIF value of unutilised imported material through
a TR in the authorised branch of central bank of India
indicating the "Head Account: 1453, Foreign Trade and
Export Promotion and Minor Head 102". However, the provisions
of this sub paragraph shall not be applicable if the unutilised
imported material was freely importable on the date of
import. |
|
| (ii) |
If the export obligation is fulfilled in terms
of quantity but there is shortfall in terms of value, no penalty
shall be imposed if the licence holder has achieved the positive
value addition. However, if the value addition falls below positive,
the licence holder shall be required to deposit an equivalent
amount through TR in the authorised branch of Central Bank of
India indicating the "Head of Account-1453 Foreign Trade and
Export Promotion- Minor Head –102" so that the 100 times the
deposited amount and the FOB value realised in Indian rupees
together account for positive value addition over the CIF value.
This shall be calculated with reference to actual quantity
of exports and FOB value of realisation with reference to
prorata quantity of imports and CIF value. For example, if
the export performance is only 50% quantitywise but import
has been for the complete CIF value permitted, then the value
addition would be calculated on a prorata basis, i.e with
reference to 50% of the CIF value of imports. This would accordingly
imply that where the licence holder is unable to export, no
penalty on valuewise shortfall shall be imposed. |
| (iii) |
If the export obligation is not fulfilled
both in terms of quantity and value, the licence holder shall,
for the regularisation, pay as per (i) and (ii) above. |
| (iv) |
In case an exporter is unable to complete
the export obligation undertaken in full and he has not made
any import under the licence, the licence holder will also have
an option to get the licence canceled and apply for drawback
after obtaining permission from the Customs authorities for
conversion of shipping bills to Drawback Shipping Bills. |
|
| Time Period For Depositing
Fines, Customs Duty, Etc. |
4.29 |
The customs duty with interest to be recovered
from the licencee on account of regularisation or enforcement of BG/LUT,
as the case may be, shall be deposited by the licence holder in relevant
Head of Account of Customs Revenue i.e. "Major Head 0037 - Customs
and minor head 001- Import Duties in prescribed T.R. Challan within
30 days of the demand raised by the licensing/ customs authority and
documentary evidence shall be produced to this effect to the licencing/customs
authority immediately. On receipt of such documentary evidence
from the licence holder, the licensing authority shall intimate
the details of the recovery/ deposits made to the customs authority
at the port of registration under intimation to Joint Secretary
(Drawback), Department of Revenue, Ministry of Finance, Jeevan Deep
Building, New Delhi. |
|
|
The payment of amount of duty,
interest and any dues for regularisation shall, however, be without
prejudice to any other action that may be taken by the customs authorities
at any stage under the Customs Act, 1962 |
| Maintenance of Proper Accounts. |
4.30 |
Every licence holder shall maintain
a true and proper account of licence-wise consumption and utilisation
of imported goods in Appendix-18. Such records should be preserved
for a period of at least three years from the date of redemption. |
| Duty Free Replenishment
Certificate |
4.31 |
The Policy of Duty Free Replenishment
Certificate (DFRC) is given in Chapter 4 of the Policy. The exporter
exporting under DFRC shall be required to give a declaration in the
EP copy of the Shipping Bill indicating the serial number and product
group of SION of the export product. In case of export of
gold/silver/platinum jewellery and articles thereof, the wastage
norms as per paragraph 4.56 of the Handbook of Procedures (Vol.1)
may be indicated on the EP copy of the shipping bill.
However in respect of the following items, the exporter shall
be required to give declaration with regard to technical characteristics,
quality and specification in the shipping bill. The licencing authority
while issuing Duty Free replenishment Certificate shall mention
the technical characteristics, quality and specification in respect
of such inputs:
Alloy Steel including Stainless Steel, Copper Alloy, Synthetic
Rubber, Bearings, Brass Scrap, Additives, Paper/ Paper Board, Dyestuffs,
Solvent, Perfumes/ Essential Oil/ Aromatic Chemicals, Surfactants,
Relevant Fabrics, Marble. |
|
4.31A |
DFRC shall also be available for
supplies mentioned in Chapter 8 of the Policy except for supplies
made to DFRC holders. Such DFRC shall be issued with a single port
of registration mentioned in paragraph 4.19 of the Handbook (Vol.1)
as per option of the applicant. The CIF value of DFRC shall
be arrived at after discounting 20% from the FOR value of supply.
The FOR shall be calculated on the basis of the document mentioned
in sub-paragraph ii) below. The application shall be accompanied
by the following:- |
|
|
|
|
|
| i) |
A copy of the Invoice 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. |
| Notwithstanding the above, in respect of supplies
to EOU/EHTP/ STP/ BTP, a copy of ARE-3 duly signed by the jurisdictional
excise authorities certifying the item of supply, its quantity,
value and date of such supply shall be furnished. |
| ii) |
Payment certificate from the project authority
in the form given in Appendix-12A. In the case of Advance Licence
for Intermediate Supplies/ deemed exports, supplies to the EOUs/
EHTPs/STPs/ BTPs, documentary evidence from the bank substantiating
the realisation of proceeds from the Licence holder or EOUs/
EHTPs/ STPs/ BTPs, as the case may be, through the normal banking
channel, shall be furnished in the form given at Appendix- 22A. |
| However realisation of export 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- 22A. |
| Export/ Imports under DFRC |
4.32 |
Export shipments under DFRC can be
effected from any port mentioned in paragraph 4.19 of the Handbook.
The DFRC shall be issued with single port of registration, which will
be the port from where the exports have been effected. However for
import from a port other then the port of export, TRA shall be issued
by the Customs authority at the port of export to the Customs authority
to the port of import. |
| Filing of Application |
4.33 |
An application for grant of DFRC
may be made to the licensing authority concerned in the form given
in Appendix-10-D alongwith the documents prescribed therein. An application
for DFRC shall be filed only after realisation of export proceeds.
However, in case of exports 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; |
|
|
|
the application may be filed after exports |
|
|
The CIF value of DFRC shall be arrived at
after discounting 20% from the FOB value of exports. The FOB value
shall be calculated on the basis of the Bank Realisation Certificate.
However in case of exports of gold/ silver/ platinum jewellery and
articles thereof, the CIF value would be computed from the FOB value
as per the value addition given in paragraph 4.56.1 of Handbook of
Procedures (Vol.1). |
| Time Period |
4.34 |
The application for DFRC shall be
filed within six months from the date of realisation in respect of
all shipments/supply for which DFRC is being claimed. |
|
4.34.1 |
In case of exports against irrevocable
Letter of Credit or bill of exchange is unconditionally Avalised/
Co- Accepted/ Guaranteed by a bank and the same is confirmed by the
exporters bank, the DFRC shall be filed within six months from the
date of exports/supply for all shipments in respect of which DFRC
is being claimed. |
|
4.34.2 |
For exports/supply against advance
payment, DFRC shall be filed within six months from the date of exports
against advance payment. |
|
4.34.3 |
Wherever provisional shipment has been
allowed by the customs authorities, DFRC against such exports shall
be issued only after the release of the shipping bill by the Customs.
The time limit for filing of application in such cases shall be six
months from the date of release of shipping bill or three months from
date of realisation, whichever is later. |
| Frequency of Application |
4.35 |
The applicant shall file one application
relating to one export product group from one port of export. Where
export product falling under one product group have been exported
from different ports, the exporter shall file more than one application
for the same export product group. |
| Verification by Customs |
4.36 |
The licensing authority shall ensure
that while issuing the DFRC, the Shipping Bill no(s) and date(s),
FOB value in Indian rupees as per Shipping Bill(s) and description
of export product are endorsed on the reverse of DFRC. Before allowing
the imports against DFRC, the Customs shall verify that the details
of the exports as given on the DFRC are as per their records.
The licensing authority while issuing DFRC for deemed exports
shall endorse a copy of the same to the Customs at the port of registration
and a copy to Excise Authorities having jurisdiction over recipient
unit of the deemed exports alongwith details of invoice giving item
of supply, its quantity, value and date of such supply.
In case there is any variation in the details furnished by the
licensing authority and the record verified by the Excise authority,
the Excise authority shall intimate to the licensing authority and
Customs at the port of registration immediately. |
| Duty Entitlement Passbook
Scheme |
4.37 |
The Policy relating to Duty Entitlement
Passbook Scheme (DEPB) Scheme is given in Chapter-4 of the Policy.
The duty credit under the scheme shall be calculated by taking into
account the deemed import content of the said export product as per
SION and the basic custom duty) payable on such deemed imports. The
value addition achieved by export of such product shall also be taken
into account while determining the rate of duty credit under the scheme. |
| Fixation of DEPB Rate |
4.38 |
Appendix-10A prescribes the form regarding
fixation of DEPB rates. All applications for fixation of DEPB rates
shall be routed through the concerned Export Promotion Council which
shall verify the FOB value of exports as well as the international
price of inputs covered under SION. |
| Provisional DEPB Rate |
4.38A |
To encourage diversification and to
promote export of new products, the DEPB Committee would be empowered
to notifying provisional DEPB rates. However, such DEPB rates would
be valid for a limited period of time during which the exporter would
furnish the data on export and import for the regular fixation of
rates. |
| Exports in anticipation
of DEPB Rate |
4.39 |
No exports shall be allowed under
DEPB scheme unless the DEPB rate of the concerned export product is
notified. |
| Port of Registration |
4.40 |
The exports/imports made from the
specified ports given shall be entitled for DEPB. |
|
|
| Sea Ports |
Mumbai, Kolkata, Cochin, Dahej,
Kakinada, Kandla, Mangalore, Marmagoa, Mundra, Chennai, Nhavasheva,
Paradeep, Pipavav, Sikka, Tuticorin Vishakhapatnam, Surat (Magdalla),
Nagapattinam, Okha , Dharamtar and Jamnagar. |
| Airports |
Ahmedabad, Bangalore, Bhubaneshwar
Mumbai, Kolkata Coimbatore Air Cargo Complex, Cochin, Delhi,
Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur and
Chennai. |
| ICDs |
Agra, Ahmedabad, Bangalore,
Bhiwadi, Coimbatore, Daulatabad, (Wanjarwadi and Maliwada),
Delhi, Dighi (Pune), Faridabad, Guntur, Hyderabad, Jaipur, Jallandhar,
Jodhpur, Kanpur, Kota, Ludhiana, Madurai and the land Customs
station at Ranaghat Mallanpur, Moradabad, Meerut Nagpur, Nasik,
Gauhati (Amingaon), Pimpri (Pune), Pitampur (Indore), Rudrapur
(Nainital), Salem Singanalur, Surat, Tirupur, Udaipur, Vadodara,
Varanasi, Waluj, Bhilwara, Pondicherry ,Garhi-Harsaru, Bhatinda,
Dappar, Chheharata ( Amritsar), Karur, Miraj and Rewari. |
| LCS |
Ranaghat, Singhabad , Raxaul
, Jogbani, Nautanva ( Sonauli), Petrapole and Mahadipur. |
|
|
|
The exports made to the following Special
Economic Zones (SEZ) are also entitled to DEPB |
|
|
| SEZ |
Santacruz , Kandla, Kochi, Vishakhapatnam,
Chennai, FALTA, Surat, NOIDA |
|
|
Provided further that the Commissioner
of Customs may, either by a public notice or on the written request
of the licence holder, by special orders and subject to such conditions
as may be specified by him permit imports or exports from any other
sea port, airport, inland container depot or through a land Customs. |
|
The following ports would be
treated as a single port for the purposes of imports and exports: |
|
|
| i |
Mumbai seaport, Nhava Sheva & Mumbai
Airport |
| ii |
Delhi airport and ICDs in Delhi |
| iii |
Kolkata seaport, Kolkata airport |
| iv |
Chennai airport and Chennai seaport |
| v |
Bangalore airport and Bangalore ICD |
| vi |
Hyderabad Airport and Hyderabad ICD |
|
|
4.40.1 |
The DEPB shall be issued with single
port of registration, which will be the port from where the exports
have been effected. |
| Maintenance of Record |
4.40.2 |
Each Custom House at the ports shall
maintain a separate record of the details of the exports made under
the DEPB shipping bill. |
| Credit under DEPB and Present
Market Value |
4.41 |
In respect of products where the rate
of credit entitlement under DEPB Scheme comes to 10% or more, the
amount of credit against each such export product shall not exceed
50% of the Present Market Value (PMV) of the export product. At the
time of export, the exporter shall declare on the shipping bill that
the benefit under DEPB Scheme against the export product would not
exceed 50% of the PMV of the export product. However PMV
declaration shall not be applicable for products for which value
cap exists irrespective of the DEPB rate of the product. |
| Utilisation of DEPB credit |
4.42 |
The credit under DEPB may also be utilised
for payment of customs duty on any item which is freely importable. |
| Application for DEPB |
4.43 |
An application for grant of credit
under DEPB may be made to the licensing authority concerned in the
form given in Appendix-10C alongwith the documents prescribed therein.
The FOB value in free foreign exchange shall be converted into Indian
rupees as per the exchange rate for exports, notified by Ministry
of Finance, as applicable on the date of order of "Let Export" by
the Customs. |
|
4.43A |
In respect of consignment exports
wherein the exporter has declared the FOB value of the product on
a provisional basis, the exporter shall be eligible for final assessment
of such shipping bill based on the actual FOB realised upon sale of
such goods in freely convertible currency. However, the FOB value
of foreign exchange shall be converted into Indian rupees as per the
exchange rate for exports, notified by Ministry of Finance, as applicable
on the date of order of "Let Export" by the Customs. |
|
4.43B |
An application for grant of credit
for supplies from DTA to SEZ units shall be made to the Development
Commissioner concerned in the form given in Appendix 10 J along with
the following documents: |
|
|
| 1. |
Bank receipt (in duplicate)/ demand draft
evidencing payment of application fee in terms of Appendix 29 |
| 2. |
A copy of bill of exports issued by Customs
in the SEZ. |
| 3. |
A copy of invoice showing FOR value of supply,
DEPB entitlement on such supply and total value realised from
such sale. |
| 4. |
Bank certificate of realisation in the form
given in Appendix 22A. |
| 5. |
Disclaimer certificate from DTA unit declaring
that the DTA unit shall not claim any benefit on such supplies
and authorising SEZ units to claim DEPB benefit on such supplies. |
|
|
4.44 |
In cases where the applicant applies for
DEPB after realisation or shipments are made against irrevocable letter
of credit or bill of exchange is unconditionally Avalised/ Co- Accepted/
Guaranteed by a bank and the same is confirmed by the exporters bank
and certified by the bank in the relevant Bank certificate of export
and Realisation, the DEPB shall be issued with transferable endorsement.
In other cases, the DEPB shall be initially issued with non-transferable
endorsement. Upon realisation of export proceeds, such DEPBs can be
endorsed as transferable, if the applicant so desires. |
| Monitoring of Realisation |
4.45 |
The Regional Licensing Authorities
shall monitor the cases where the DEPB has been granted prior to realisation
of export proceeds (except the cases where shipments are made against
irrevocable letter of credit or bill of exchange is unconditionally
Avalised/ Co- Accepted/ Guaranteed by a bank and the same is confirmed
by the exporters bank) so as to ensure that realisation takes place
within the prescribed time failing which they shall initiate action
for recovery of an amount equivalent to DEPB credit with 15% interest.
The recovered amount in such cases shall be deposited in the head
of account of Customs as stated in paragraph 4.29. |
|
4.45.1 |
If the export proceeds is not realised
within six months or such extended period as may be allowed by RBI,
the DEPB holder shall pay in cash an amount equivalent to the duty
free credit utilised on imports, against such exports with 15% interest
from the date of import till the date of deposit. In such cases, where
the amount realised in foreign exchange is less than the amount on
which DEPB credit has been obtained, the holder of DEPB shall pay,
in cash, an amount proportionate to the duty free credit utilised
on imports, with 15% interest from the date of imports till the date
of deposit. |
| Time Period |
4.46 |
The application for obtaining credit shall
be filed within a period of twelve months from the date of exports
or within six months from the date of realization or within three
months from the date of printing/ release of shipping bill , whichever
is later, in respect of shipments for which the claim have been filed. |
|
4.47 |
Wherever provisional shipment has
been allowed by the customs authorities, DEPB against such exports
shall be issued only after the release of the shipping bill by the
Customs. In such cases, application for DEPB shall be filed within
six months from the date of release of such shipping bill or six months
from the date of realisation, whichever is later. |
| Frequency of Application |
4.48 |
The applicant may file one or more
applications subject to the condition that each application shall
contain not more than 25 shipping bills. All the shipping bills in
any one application must relate to exports made from one Custom House
only. This limit shall not apply to the applications filed through
EDI mode. |
| Verification by Customs |
4.49 |
The licensing authority shall ensure
that while issuing the DEPB, the Shipping Bill no(s). and date(s),
FOB value in Indian rupees as per Shipping Bill(s) and description
of export product are endorsed on the DEPB. Before allowing the imports
against DEPB, the Customs shall verify that the details of the exports,
as given on the DEPB, are as per their records. Once EDI becomes functional
between DGFT and Customs, such verification would be done electronically. |
| Revalidation |
4.50 |
No revalidation shall be granted beyond
the original period of validity of DEPB unless it expires in the custody
of the Licencing/ Customs Authorities as per the provisions under
para 2.13 of the Handbook. |
| Re-export of goods imported
under DEPB Scheme |
4.51 |
Goods imported under DEPB scheme,
which are found defective or unfit for use, may be re-exported, as
per the guidelines issued by the Department of Revenue. In such cases
98% of the credit amount debited against DEPB for the export of such
goods, shall be generated by the concerned Commissioner of Customs
in the form of a Certificate, containing the amount generated and
the details of the original DEPB. Based on the certificate, a fresh
DEPB shall be issued by the concerned Licensing Authority. The fresh
DEPB, so issued, shall have the same port of registration and shall
be valid for a period equivalent to the balance period available on
the date of import of such defective/unfit goods. |
| Issuance of DEPB and other
duty credit certificates/ DFRC against lost EP copy of the Shipping
Bills |
4.52 |
In case where EP copy of the Shipping
Bill has been lost, the DEPB and other duty credit certificates /DFRC
claim can be considered subject to submission of the following documents:-
| a) |
A duplicate/certified copy of the Shipping
Bill issued by the Customs authority in lieu of original; |
| b) |
An application fee equivalent to 2% of the
DEPB or other duty credit entitlement or 1% of DFRC entitlement,
as the case may be, in respect of lost Shipping Bills. However,
no fee shall be charged when the Shipping Bill is lost by the
Government agencies and a documentary proof to this effect is
submitted; |
| c) |
An affidavit by the exporter about the loss
of Shipping Bills and an undertaking to surrender it immediately
to the concerned licencing authorities, in case the same is
found subsequently. |
| d) |
An indemnity bond by the exporter to the
effect that he would indemnify the Government for the financial
loss if any on account of DEPB or other duty credit certificate
/DFRC issued against lost Shipping Bills. |
|
|
|
The Customs authority, before allowing clearance,
shall ensure that no DEPB/DFRC benefit has been availed against the
same shipping bill. |
|
4.52.1 |
The claim against the lost Shipping
Bill shall be preferred within a period of six months from the date
of release of duplicate copy of shipping bill and any application
received thereafter will be rejected. However, if a provisionally
assessed DEPB shipping bill is lost, the time period for filing an
application for DEPB would be six months from the date of release
of the finally assessed shipping bill. |
| Loss Of Original Bank Certificate |
4.53 |
In such cases where original bank
certificate has been lost, the DEPB/DFRC claim can be considered subject
to submission of following documents: |
|
|
| a) |
A duplicate copy of the Bank Certificate
issued by the bank authority in lieu of original loss. |
| b) |
An application fee equivalent to 2% of the
DEPB entitlement or 1% of DFRC entitlement, as the case may
be, in respect of lost Bank Realisation Certificate. |
| c) |
An affidavit by the exporter about the loss
of Bank Certificate and an undertaking to surrender it immediately
to the concerned licencing authorities, in case the same is
found subsequently. |
| d) |
An indemnity bond by the exporter to the
effect that he would indemnify the Government for the financial
loss if any on account of DEPB/DFRC issued against lost Bank
Certificate. |
|
|
|
The claim against the lost Bank Certificate
shall be preferred within a period of six months from the date of
realisation and application received thereafter will be rejected.
In such cases, where both the documents have been lost, the exporter
shall follow the procedure laid down in paragraph 4.51 and 4.52. |
| Policy |
4.54 |
The Policy relating to Gem Replenishment
Licence, and scheme for gold/ silver/platinum jewellery is given in
Chapter-4 of the Policy. |
| Replenishment Licence |
4.55 |
An application for REP Licence may
be made in the form given in Appendix-13 alongwith the documents prescribed
therein to the licensing authority concerned as given in Appendix-25 |
|
4.55.1 |
The application shall be filed within
six months following the month/quarter during which the export proceeds
are realised. For export proceeds realised during the month/ quarter,
consolidated application for entire month/ quarter shall be filed.
However, if any supplementary application is to be filed, it may be
accepted with a cut of 10% on entitlement. In case of third party
exports, Replenishment benefit shall be admissible provided the EP
copy of the Shipping Bill shows the names of both the manufacturer
and the third party and REP licence against such exports is claimed
by either of the parties after furnishing a disclaimer from the other
party. REP licences will be transferable. |
|
4.55.2 |
In case where part payment has been
realised against an invoice, the application for REP licence may be
made within six months following the month during which part payment
was realised, provided; |
|
|
| a) |
Not more than two such applications
may be made for each such invoice; and |
| b) |
The first such application
shall be made only after 50% of the proceeds of the invoice
is realised. |
|
|
4.55.3 |
In case where payment is received in advance
and exports take place subsequently, the application for REP licence
shall be filed within six months following the month during which
the exports are made. |
|
4.55.4 |
For the purpose of clarity, it is
again reiterated that the month in which the export has been made
in the case of advance payment and the month in which export proceeds
have been realised in part or full after making of the exports, shall
be excluded while calculating the period of six months for the purpose
of filing of application for REP licence. |
| Wastage Norms |
4.56 |
The wastage or manufacturing loss on gold/silver/
platinum jewellery and articles thereof is as follows:
|
|
|
| WASTAGE NORMS |
| Item of exports |
Percentage of wastage
by weight with reference to Gold/ Platinum/ Silver content in
the export item |
| |
|
Gold/ Platinum |
Silver |
| a. |
Plain jewellery and articles and
ornaments like Mangalsutra containing gold and black beads/
imitation stones, cubic zirconia etc. but excluding diamonds,
precious, semi-precious stones. However, if the per gram value
of the semi-precious stones utilised in the making of the jewellery/
articles is less than the per gram value of gold/ silver/ platinum,
the wastage norms of plain jewellery shall be applicable. |
|
