Chapter 3 - PROMOTIONAL MEASURES - Foreign Trade Procedure (RE - 2009) / 2009-14 (Upto 22-8-2010)

CHAPTER - 3 PROMOTIONAL MEASURES Status Certificate 3.1 Policy for Status Holder is given in Chapter 3 of FTP. Application for grant of Status Certificate 3.2 Application for grant of status shall be filed by 31 st March, in ANF 3A. An existing status holder shall be automatically treated to be an equivalent status holder as given in Para 3.10 of FTP. 3.2.1 Application shall be filed with jurisdictional RA / Development Commissioner (DC). However, in cases where export performance of EOUs / SEZs is clubbed together with company / firm / Group Company in DTA, the same will be considered by jurisdictional RA (in DGFT) only. 3.2.2 All newly issued Status certificates shall be valid from 1 st April of the year during which application for recognition was filed. For renewals, application filed before expiry of current validity, renewals shall have a validity commencing from 1 st April of next licensing year; otherwise validity period shall be 1 st April of year during which application was filed. All Status Certificates shall be valid for a period of 5 years reckoned from the 1 st April of the relevant year. All Status Certificates valid beyond 31.3.2014 shall continue to remain in force, in case provisions of Foreign Trade Policy (2014-19) continue to recognize the status. Pending the finalization of the applications for grant of recognition, existing status holders who have applied for recognition before the expiry of their status, shall have a grace period of 6 months. During this grace period of 6 months such status holders shall continue to be recognized as Status holders even after the expiry of earlier Status Certificate i.e. till September end, unless their applications are finally rejected or status recognition is granted once again, as the case may be. Maintenance of Accounts 3.3 Status Holder shall maintain true and proper accounts of its exports and imports based on which such recognition has been granted.Record shall also be maintained during validity period and for a minimum period of three years thereafter. These accounts shall be made available for inspection to RA concerned or any authority nominated by DGFT. Refusal / Suspension / Cancellation of Certificate 3.4 Status Certificate may be refused or suspended or cancelled by RA concerned, if status holder or any agent or employee or authorized representative acting on his behalf: (a) Fails to discharge export obligation imposed; (b) Tampers with Authorisations; (c) Misrepresents or has been a party to any corrupt or fraudulent practice in obtaining any Authorisation; (d) Commits a breach of FT (D R) Act, or Rules, Orders made there under and FTP; or (e) Fails to furnish information required by this Directorate. 3.4.1 A reasonable opportunity shall be given to Status Holder before taking any action under above paragraph. Appeal 3.5 An applicant, who is not satisfied with decision taken to suspend or cancel Status Certificate, may file an appeal to DGFT within 45 days. Decision of DGFT shall be final thereon. 3.6 SERVED FROM INDIA SCHEME (SFIS) (a) Policy for SFIS is given in Chapter 3 of FTP. (b) For foreign exchange earned during current financial year, application for Duty Credit Scrip shall be filed on monthly/quarterly/half-yearly/annual basis, at the option of the applicant to be exercised along with first application for the current financial year, with jurisdictional RA, in ANF 3B along with documents prescribed therein, for which the last date for filing application on time shall be 12 months from the end of relevant month / quarter / half-year /year periodicity. (c) Service provider shall within one month of completion of imports made or expiry of validity of Duty Credit scrip whichever is earlier, submit a statement of imports made under it to jurisdictional RA with a copy to jurisdictional Excise authorities (service tax cell) wherever applicable. Ineligible Remittances and Services for SFIS scheme 3.6.1 Foreign exchange remittances other than those that are earned for rendering of services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible. For calculation of entitlement, following shall not be taken into account. a) Foreign Exchange remittances: I. related to Financial Services Sector 1. Raising of all types of foreign currency Loans; 2. Export proceeds realization of clients; 3. Issuance of Foreign Equity through ADRs / GDRs or other similar instruments; 4. Issuance of foreign currency Bonds; 5. Sale of securities and other financial instruments; 6. Other receivables not connected with services rendered by financial institutions; and II. earned through contract/regular employment abroad (e.g. labour remittances); b) Payments for services received from EEFC Account; c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc. (However, remittances received on account of medical treatment, surgery, testing, consultancy and health care provided by the institution shall be eligible.); d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc. (However remittances received on account of the course fees and consultancy provided by the institution shall be eligible.); e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units; f) Clubbing of turnover of services rendered by SEZ / EOU / EHTP / STPI / BTP units with turnover of DTA Service Providers; g) Service Providers in Telecom Sector (Sr. No 2C of Appendix 10); h) Foreign Exchange earnings for Services provided by Airline and Shipping Lines Service providers for routes plying from any country X to any country Y only, not touching India at all; and i) Exports of Goods. 3.7 VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY) 3.7.1 Policy pertaining to VKGUY is given in Chapter 3 of FTP. Appendix 37A contains the list of VKGUY items along with the admissible date of export. Application for grant of Duty Credit scrip under VKGUY for exports made from 27.8.2009 onwards shall be made to RA concerned in ANF3C along with documents prescribed therein. Listed products shall be eligible for Duty Credit Scrip upon exports on or after the Date of Export indicated in the relevant Appendix. 3.7.2 Policy pertaining to the Agri. Infrastructure Incentive Scrip under VKGUY is given in Para 3.13.4 of Chapter 3 of FTP. All Status Holders may apply for grant of Duty Credit scrip for export made during current year to RA, CLA, New Delhi in 'ANF 3D - ANF for Policy Para 3.13.4.' along with documents prescribed therein. Applicants may file one application before the last date prescribed for each half year period (Apr-Sep / Oct-Mar). Applications for exports during Apr-Sept period shall be filed from 15 th January till 15 th February of current year and for exports during Oct-Mar period, applications shall be filed from 1 st May till 31 st May of the next licensing year. Applications received after the last date shall be summarily rejected, as Para 9.3 and Para 9.4 shall not be applicable. The allocation of duty credit scrips by RA, CLA, New Delhi, under Para 3.13.4 of FTP, shall be done proportionate to the eligible claims of individual applications, vis- -vis the total eligible claims of all the status holders put together, received for each half year (Apr-Sep/Oct-Mar) periods, in such a way that the total benefits granted for all status holders put together does not exceed the limit prescribed for each half year in Para 3.13.4 of FTP. Accordingly if the total eligible claim of all the status holders put together is, say, Rs 200 Cr, each applicant status holder would be granted one-fourth of the claim an applicant is eligible for. FOCUS MARKET SCHEME (FMS) 3.8 Policy pertaining to FMS is given in Chapter 3 of FTP. Notified Markets are listed in Appendix 37C. 3.8.1 An application for exports made from 27.8.2009 onwards shall be filed separately, with RA concerned in ANF3C along with documents prescribed therein. Eligibility of Focus Market (as in Appendix 37C) shall be determined from date of export as per Para 9.12 of HBP v1. Proof of Landing - for FMS and MLFPS 3.8.2 Applicant shall be required to submit proof of landing of export consignment in specified market. Any one of the following documents should suffice, as a proof of landing of export consignment in specified Focus Market: (i) A self attested copy of import bill of entry filed by importer in specified market, or (ii) Delivery order issued by port authorities, or (iii) Arrival notice issued by goods carrier, or (iv) Tracking report from the goods carrier (Shipping Line/Airline etc. or his accredited agent in India) duly certified by them, evidencing arrival of export cargo to destination Focus Market, or (v) For Land locked Focus Market, Rail/Lorry receipts of transportation of goods from Port to Land locked Focus Market, or (vi) Any other documents that may satisfactorily prove to RA concerned that goods have landed in / reached the Focus Market. In case of (iv) and (vi) above, the accredited agent of the Goods Carrier must certify that he is the accredited agent of the concerned Goods Carrier on the date of issuance of the tracking report / document. Further, in the case of issuance of any other document under (vi) above, the accredited agent must state that he has verified that this proof of landing of goods in relevant Focus Market is given based on information available in the Goods Carrier's backup database and he has issued this document accordingly. FOCUS PRODUCT SCHEME (FPS) 3.9 Policy pertaining to FPS is given in Chapter 3 of FTP. Notified Products are listed in Appendix 37D. 3.9.1 An application for exports made from 27.8.2009 onwards shall be filed, with RA concerned in ANF3C along with documents prescribed therein. Eligibility of Focus Product (as in Appendix 37D) shall be determined from date of export as per Para 9.12 of HBP v1. 3.9.2 The procedure for filing applications against export of Market Linked Focus Products under FPS (Para 3.15.3 of FTP) will be the same as laid down for Focus Product Scheme in Para 3.9.1 above. In case of applications for grant of benefit under Market Linked Focus Product scheme, for proof of landing of export consignment in specified market, Para 3.8.2 of HBP Vol.1 shall apply. 3.10 Procedure for Status Holders Incentive Scrip 3.10.1 Policy pertaining to Status Holders Incentive Scrip is given in Para 3.16 of Chapter 3 of FTP. 3.10.2 ANF3E and other conditions for claiming Status Holders Incentive Scrip shall be notified separately. 3 [3.10.2 Application for grant of Duty Credit Scrip under SHIS ( Para 3.16 of FTP ) for exports made during 2009-10 or for exports made during 2010-11, as the case may be, shall be made to jurisdictional RA concerned in ANF3E along with documents prescribed therein. 3.10.3 The last date of filing the application shall be 31st March 2011 for SHIS Application on exports made during 2009-10 (and 31st March 2012 for SHIS Application on exports made during 2010-11). 3.10.4 As Para 3.17.8 of FTP does not apply to SHIS, shipments where VKGUY, FMS, FPS (including MLFPS) benefits have been claimed/will be claimed by applicant or by the supporting manufacturer (based on disclaimer by the exporter) shall be entitled for SHIS benefits to the exporter Status Holder. SHIS is entitled for shipments where foreign exchange realisation is in the name of applicant Status Holder. 3.10.5 Merchant Status Holders shall have the facility to list the supporting manufacturer till the date of filing of the Application for claiming the SHIS benefits. To list the supporting manufacturer, proof of supporting manufacturer may be given to RA concerned by giving any of the export documents (Shipping Bill/Bill of Export/ARE forms/Customs/Bank attested Invoices) evidencing the same. Listed Supporting Manufacturers shall be co-licensee of the SHIS Scrip. 3.10.6 SHIS scrip can be used for payment of applicable duties on import of Capital Goods (as defined in FTP ) relating to the sectors specified in Para 3.16.4 of FTP . The Scrip / the goods so imported shall be with Actual User Condition. Imports of Capital Goods shall be related to any of the sectors listed in Para 3.16.4 of FTP , without any sector wise value limitation; even by the listed supporting manufacturers. 3.10.7 Para 3.11.8 of this HBP shall not apply to this Scheme. Further, Monitoring the realization of export proceeds shall be in terms of 3.11.12 3.11.13 of this HBP . ] 3.11 COMMON PROCEDURAL FEATURES FOR PROMOTIONAL SCHEMES, APPLICABLE TO ALL SCHEMES IN THIS CHAPTER, UNLESS SPECIFICALLY PROVIDED FOR: Jurisdictional RA / RA Concerned 3.11.1 Applicant shall have option to choose Jurisdictional RA on the basis of Corporate Office, Registered Office, Branch Office address endorsed on IEC. However, once opted, no change would be allowed. 3.11.2 Provisions contained in Chapter 2 and 9 of this HBP shall apply to all Promotional Schemes. 1 [ However, it is clarified that in case the importer wants to use a specific permission/license for import of a restricted item as well as pay the duty using Duty Credit Scrip, then Duty Credit Scrip shall be allowed to be used only if the item is also importable under the respective paras of Duty Credit Scrip (reference FTP Paras 3.12.6, 3.13.4, 3.16.4, and 3.17.5). ] Port of Registration 3.11.3 Duty Credit Scrip (including splits) shall be issued with a single port of registration which shall be the port of export. After issue of Duty Credit Scrip, but before registration with Customs, the Applicant can change the port of registration from RA concerned. Before registration, authorities shall verify genuineness of Duty Credit scrip, from RA concerned, until EDI system of message exchange is put in place. However, applicant may use Duty Credit Scrip for imports from any other port (that includes ICD/LCS) after obtaining TRA from authorities at port of registration. The above procedure shall be applicable only in respect of EDI enabled ports. In case of exports through non-EDI ports, the port of registration shall be the port of exports. Facility for Split Scrips 3.11.4 Split certificates of Duty Credit Scrip subject to a minimum of Rs 5 Lakh each and multiples thereof may also be issued, on request at the time of application with different port of registration. After issue, request of splits shall be permitted with same port of registration as appearing on the original scrip. The above procedure shall be applicable only in respect of EDI enabled ports. In case of exports through non-EDI ports, the facility of splits shall not be allowed, after issue of scrip. Import from private / public bonded warehouses 3.11.5 Entitlement can be used for import from private / public bonded warehouses subject to fulfillment of paragraph 2.28 of FTP and terms and conditions of DoR notification. Re-export of defective / unfit goods 3.11.6 Goods imported which are found defective or unfit for use, may be re-exported, as per DoR guidelines. Where Duty Credit scrip has been used for imports, Customs shall issue a certificate containing particulars of scrip used, date of import of reexported goods and amount debited while importing such goods. Based on this certificate, upon application, a fresh Scrip shall be issued by concerned RA to extent of 98% of debited amount, with same port of registration and valid for a period equivalent to balance period available on date of import of the defective / unfit goods. Validity Period Revalidation 2 [3.11.7 Duty Credit Scrip shall be valid for a period of 24 months Revalidation of Duty Credit Scrip shall not be permitted unless covered under paragraph 2.13.1 or paragraph 2.13.2A of HBP v1 . ] Declaration of Intent on Free Shipping Bills 4 [3.11.8 For products/markets listed in Appendix 37A , 37C , 37D that are eligible for benefit under Chapter 3 of FTP , exporters shall declare their intention to claim benefit by stating in all categories of Shipping Bills as under: 'I/We, hereby, declare that I/We shall claim the benefits, as admissible, under Chapter 3 of FTP '. This declaration shall also be required on export shipments under any of the Schemes of Chapter 4 or Chapter 5 or Chapter 6 of FTP as well as on Bills of Exports filed for Supply to SEZ. No claim under Chapter 3 shall be admissible without this declaration. However, Schemes names are not required to be mentioned in the declaration of intent. Further, for products / markets notified during the year, the declaration of intent shall be necessary for exports under all categories of Shipping Bills only after a grace period of one month from the date of relevant Public Notice which notifies such product / market. For exports made prior to date of notification (i.e. the date of the relevant Public Notice which notified such product / market), such a declaration will not be required since export shipments have already taken place. ] Last date of filing of application for Duty Credit Scrips, except for FTP Para 3.13.4 and FTP Para 3.16 3.11.9 Applications for obtaining Duty Credit Scrip shall be filed within a period of twelve months from the date of export or within six months from the date of realization or three months from the date of printing / release of shipping bill, whichever is later, in respect of shipments for which claim is being filed. Further, for shipments already made prior to the inclusion/modification of the items / markets in relevant appendices by various Public Notices issued from time to time; the last date for filing applications shall be six months from the end of the month of the relevant Public Notice that included/ modified the items/markets, or the time period permitted in the first sentence of this Para, whichever is later. For SFIS for current financial year, the last date shall be 12 months from the end of application frequency period. 3.11.10 Shipments from EDI Ports and Non-EDI Ports cannot be clubbed in one application. Port of registration for EDI enabled ports shall be the port of export. In case of exports through non-EDI port, the port of registration shall be the relevant non EDI port of exports. Accordingly separate application shall be filed for each non EDI port. 3.11.11 Freely Transferable Duty Credit Scrip shall be granted on FOB value of exports. FOB Value of Exports shall be taken from the Shipping Bill (FOB value in free foreign exchange declared on the Shipping Bill and converted into Indian Rupees at the Monthly Customs Rate of Exchange on the date of LEO). Date of export is determined as per Para 9.12 of HBPv1. Multiple Applications can be filed and supplementary cut shall not be applicable. However, an application shall contain a maximum of upto 50 shipping bills. 3.11.12 All the pre-realization cases are to be monitored by RA concerned with respect to realization of export proceeds. The procedure prescribed in Para 4.45 shall apply, mutatis mutandis, to freely transferable Duty Credit Scrips issued under Chapter 3 on the pre-realization basis. However for adjustment of excess / short realisation, procedure in Para 3.11.13 is to be followed. 3.11.13 (i) In case there is no pending claim and there is no cash deposit towards the amount immediately after the expiry of 12 months time period from the date of issuance of the Scrip, the RA shall initiate necessary action. If the Scrip holder does not pay the amount within 60 days of the expiry of aforesaid 12 months time period, the scrip holder shall be required to pay the said amount along with 15% interest per annum from the date of issuance of the Scrip(s) for the Duty Credit for which BRC or Documentary evidence (evidencing realisation of export proceeds as required under FTP or the Procedure laid thereunder) could not be produced. In case the Scrip holder surrenders the unutilized / partially unutilized Duty Credit Scrip, then unutilized / partially unutilized credit shall be deduced from the payable amount. (ii) In case the FOB value realized in free foreign exchange is higher as per BRC, when compared to the FOB value in free foreign exchange as declared on the Shipping Bill(s) on which the original duty credit scrip was issued, supplementary claim shall be filed within a period of six months from the date of realization. ----------------------------------------- Notes:- 1. Inserted vide PUBLIC NOTICE No. 03/2009-14, dated 31/08/2009 2. Replaced vide Public Notice No. 38/2009-14, dated 03/02/2010, before it was read as:- Duty Credit Scrip shall be valid for a period of 24 months. Revalidation of Duty Credit Scrip shall not be permitted. 3. Added vide Public Notice No. 54/2009-14, dated 08/04/2010 4. Replaced vide Public Notice No. 82/2009-2014, dated 16/07/2010, before it was read as:- For export shipments filed under Free Shipping Bill category, for exports of products / to markets eligible under Chapter 3 of FTP (Appendix 37A, 37C, 37D), the exporter shall state the intention to claim benefits under Chapter 3 of FTP by declaring on the Free Shipping Bills as under: 'I/We, hereby, declare that I/We shall claim the benefits, as admissible, under Chapter 3 of FTP'. This declaration shall not be required for export shipments under any of the schemes of Chapter 4 (including drawback) or Chapter 5 of FTP. Further for products, markets notified during the year, this declaration shall be necessary for exports under Free Shipping Bills, only after a grace period of one month from the date of relevant public notice. Moreover for exports made prior to date of notification of products / markets, such a declaration will not be required, since export shipments under Free Shipping Bills have already taken place.