Chapter 3 - PROMOTIONAL MEASURES - Foreign Trade Procedure (RE - 2008)/ 2004-09

CHAPTER-3 PROMOTIONAL MEASURES Status Certificates 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 31st March, in ANF 3A. An existing status holder shall be automatically treated to be an equivalent status holder as given in Para 3.2 of FTP (RE2007). 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 or firm / Group Company in DTA, the same will be considered by jurisdictional RA only. 3.2.2 All newly issued Status certificates shall be valid from 1st 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 1st April of next licensing year; otherwise validity period shall be 1st April of year during which application was filed. All Status Certificates shall be valid for a period of 5 years reckoned from the 1st April of the relevant year. All Status Certificates valid beyond 31.3.2009 shall continue to remain in force, in case provisions of Foreign Trade Policy (2009-14) 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 recognition granted once again as the case may be. 3.2.3 to 3.2.5 Deleted 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 to 3.12 Deleted 3.12.1 Deleted 3.12.1.1 Deleted 3.12.2 to 3.12.4 Deleted 3.13 to 3.17 Deleted 3.17.1 to 3.17.7 Deleted 3.18 SERVED FROM INDIA SCHEME (SFIS) (a) Policy for SFIS is given in Chapter 3 of FTP. 3 [(b) For FX earned during 2007-08 a single consolidated application for Duty Credit Scrip shall be filed with jurisdictional RA in ANF 3B along with documents prescribed therein. For FX earned during current financial year 2008-09, 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 3H along with documents prescribed therein, for which the last date for filing application on time shall be 12 months from the end of relevant monthly/quarterly/half--yearly/annual basis period or 31st March 2009 whichever is later.] (c) to (f) Deleted (g) 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. (h) (i) Deleted Ineligible Remittances and Services 3.18.1 Foreign exchange remittances other than those that are earnedfor 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; and (g) Exports of Goods. 3.18.2 Deleted 3.19 VISHESH KRISHI AND GRAM UDYOG YOJANA (VKGUY) 5 [3.19.1 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 shall be made to RA concerned in ANF 3C along with documents prescribed therein. Multiple Applications can be filed and supplementary cut shall not be applicable. However an application shall contain a maximum of upto 50 shipping bills. Listed products shall be eligible for Duty Credit Scrip upon exports on or after the Date of Export indicated in the relevant Appendix. Date of Export is determined in terms of Para 9.12 of HBPv1. Moreover, the Duty Credit Scrip value shall be computed on the FOB value realized as indicated in the BRC/FIRC."] 3.19.2 Deleted 3.19.3 Deleted. 3.19.4 to 3.19.9 Deleted. 3.19.10 Policy pertaining to the VKGUY benefits under Para 3.8.6 is given in Para 3.8.6 of Chapter 3 of FTP (RE2008), as amended. All Status Holders may apply for grant of Duty Credit scrip for export made during 2007-08 to RA, CLA, New Delhi in 'ANF 3G -ANF for Para 3.8.6' 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 2008 shall be filed from 15.1.2009 till 15.2.2009 and for exports during Oct-Mar 2009 applications shall be filed from 1.5.2009 till 31.5.2009. Applications received after the last date shall be summarily rejected, as Para 9.2 and Para 9.3 shall not be applicable. Date of exports shall be determined in terms of Para 9.12. Application fee shall be the same as it is for VKGUY benefits under Para 3.8.2. The allocation of duty credit scrips by RA, CLA, New Delhi, under Para 3.8.6 of FTP (RE2008), 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 2008 / Oct-Mar 2009) period, 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 3.8.6 of FTP (RE2008). 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) 3.20 Policy pertaining to FMS is given in Chapter 3 of FTP. Notified Markets are listed in Appendix 37C. 3.20.1 An application for exports made during 2006-07, 2007-08 and 2008-09 shall be filed separately, with RA concerned in ANF 3D along with documents prescribed therein. Applicant may file one or more applications subject to condition that each application shall contain not more than 50 shipping bills. For exporter with more than 50 shipping bills in one year, multiple applications can be filed and supplementary cut (Para 9.4 of HBP v1) shall not be applicable. 7 [****] Eligibility of Focus Market (as in Appendix 37C) shall be determined from date of export as per Para 9.12 of HBP v1. However, exports for which realizations have already been received till 17.1.2008, the last date of filing application shall be 30.7.2008. 3.20.2 Deleted. 3.20.3 Applicant shall be required to submit proof of landing of export consignment in specified market. Duty Credit scrip shall be granted on FOB value realized as per BRC / FIRC. 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 duly certified by them, evidencing arrival of export cargo to destination Focus Market, or (v) Lorry receipts of transportation of goods from Port into the Focus Market, or (vi) For Land locked Focus Market, Lorry receipts of transportation of goods from Port to Land locked Focus Market, or (vii) Any other documents that may satisfactorily prove to RA concerned that goods have landed in / reached the Focus Market. 3.20.4 to 3.20.8 Deleted FOCUS PRODUCT SCHEME (FPS) 3.21 Policy pertaining to FPS is given in Chapter 3 of FTP. Notified Products are listed in Appendix 37D. 3.21.1 An application for exports made during 2006-07, 2007-08 and 2008-09 shall be filed separately, with RA concerned in ANF 3E along with documents prescribed therein. Applicant may file one or more applications subject to condition that each application shall contain not more than 50 shipping bills. For exporter with more than 50 shipping bills in one year, multiple applications can be filed and supplementary cut (Para 9.4 of HBP v1) shall not be applicable. 8 [****] Eligibility of Focus Product (as in Appendix 37D) shall be determined from date of export as per Para 9.12 of HBP v1. However, exports for which realizations have already been received till 17.1.2008, the last date of filing application shall be 30.7.2008. 3.21.2 Deleted. 3.21.3 Duty Credit scrip shall be granted on FOB value realized as per BRC / FIRC. 3.21.4 to 3.21.8 Deleted 3.21.9 For Market linked Focus Product, the procedure will be notified separately. 3.22 HIGH-TECH PRODUCTS EXPORT PROMOTION SCHEME (HTPEPS) 3.22.1 Policy pertaining to HTPEPS is given in Chapter 3 of FTP. Notified High Tech Products are listed in Appendix 37E. 3.22.2 In case the applicant wishes to avail the option given in Para 3.11.2 (a), the Procedure prescribed for claiming Focus Product Scheme benefits shall apply. For others, application for obtaining Duty Credit scrip for incremental growth in exports during current licensing year 2008-09 shall be filed in ANF 3F within a period of twelve months after expiry of current licensing year. Application filed in ANF 3F, shipments from EDI Ports and Non-EDI Ports can be clubbed in one application and the port of registration shall be any one of the ports of exports, as per the choice of the applicant. 3.23 COMMON PROCEDURAL FEATURES FOR PROMOTIONAL SCHEMES, APPLICABLE TO ALL SCHEMES IN THIS CHAPTER, UNLESS SPECIFICALLY PROVIDED FOR: Jurisdictional RA / RA Concerned 3.23.1 Applicant shall have option to choose Jurisdictional RA on basis of Corporate Office, Registered Office, Branch Office address endorsed on IEC. However, once opted, no change would be allowed. 3.23.2 Provisions contained in Chapter 2, 9 of this HBP shall apply to all Promotional Schemes. Port of Registration 3.23.3 Duty Credit scrip (including splits) shall be issued with a single port of registration as per choice of applicant. Before registration, authorities shall verify genuineness of Duty Credit scrip, from RA concerned, until EDI system of message exchange is put in place. 1 [After issue of Duty Credit Scrip, but before registration with Customs, the Applicant can change the port of registration from RA concerned. 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 3.23.4 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. A fee of Rs 1000/- each shall be paid for each split certificate. 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 3.23.5 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 3.23.6 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 re-exported 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 3.23.7 Duty Credit scrip shall be valid for a period of 24 months. Revalidation of Duty Credit scrip shall not be allowed. Declaration of Intent on Free Shipping Bills 3.23.8 For export shipments filed under Free Shipping Bill category, for exports after 31.5.2008 of products / markets eligible under Chapter 3 of FTP (Appendix 37A, 37C, 37D, 37E), 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 two months 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. Utilization of Duty Credit Scrips under Chapter 3 for payment of duty under EPCG Scheme 3.23.9 From 1.1.2009, the duty credit scrips issued under Chapter 3 of FTP can also be utilized for payment of duty against imports under EPCG Scheme. Last date of filing of application for Duty Credit Scrips, except Para 3.8.6 2 [3.23.10 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. 4 [For SFIS of previous financial year, the last date shall be 30th June 2009. For SFIS for current financial year, the last date shall be 12 months from the end of application frequency period.] 6 [3.23.11 Shipments from EDI Ports and Non-EDI Ports cannot be clubbed in one application. Port of registration for EDI enabled ports shall be any one EDI port of exports, as per the choice of the applicant. 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.] 9 [3.23.11: Freely Transferable Duty Credit scrip shall be granted on FOB value of exports, including commission, discounts, if any. 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." "3.23.12: 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 3.23.13 is to be followed." "3.23.13: (i) In case the FOB value realized in free foreign exchange is lower 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, excess duty credit scrip so granted earlier shall be adjusted from any future claim(s) (of any Duty Credit Scrip, including DEPB), or by way of cash deposit (TR as proof of cash deposit in the Customs Head as indicated in Para 4.29). 10 [ 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. Has been added vide Public Notice No. 47/(RE-2008)/2004-2009 dated 08/07/2008 2. Has been replaced vide Public Notice No. 64 (RE-2008)/2004-2009 dated 14/8/2008 before it was read as, "Application for obtaining Duty Credit scrip shall be filed within a period of twelve months from date of exports or within six months from date of realization, or within three months from date of printing / release of shipping bill, whichever is later, in respect of shipments for which claim is being filed. For SFIS, last date shall be 31st December." 3. Has been substituted vide Public Notice No. 86/(RE 2008) 2004-09 dated 23/9/2008 before it was read as, "(b) A single consolidated application for Duty Credit scrip shall be filed with jurisdictional RA in ANF 3B along with documents prescribed therein." 4. Has been replaced vide Public Notice No. 86/(RE 2008) 2004-09 dated 23/9/2008 before it was read as, "For SFIS, the last date shall be 31st December, 2008." Further Substituted vide Public Notice No. 119 (RE-2008)/2004-2009, dated 24/12/2008, before it was read as:- For SFIS of previous financial year, the last date shall be 31st December, 2008. For SFIS for current financial year, the last date shall be 6 months from the end of application frequency period. 5. Has been corrected vide PUBLIC NOTICE NO 110 (RE-2008)/2004-2009 dated 21-11-2008 earlier it was read as under: 3.19.1 Policy pertaining to VKGUY is given in Chapter 3 of FTP. Appendix 37A contains the list of VKGUY items. Application for grant of Duty Credit scrip under VKGUY for export made from 1.4.2008 onwards shall be made to RA concerned in ANF 3C along with documents prescribed therein. Applicant may file one or more applications subject to condition that each application shall contain not more than 50 shipping bills. All shipping bills in any one application must relate to exports made from one Customs House only, which shall be the port of registration for Duty Credit Scrip. For exporter with more than 50 shipping bills in one year, multiple applications can be filed and supplementary cut (para 9.4 of HBPv1) shall not be applicable. 6. Has been added vide PUBLIC NOTICE NO 110 (RE-2008)/2004-2009 dated 21-11-2008 7. Has been deleted vide PUBLIC NOTICE NO 110 (RE-2008)/2004-2009 dated 21-11-2008 , earlier it was read as under: Shipments from EDI Ports and Non-EDI Ports cannot be clubbed in one application. Port of registration for EDI enabled ports shall be any one EDI port of exports, as per the choice of the applicant. 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. 8. Has been deleted vide PUBLIC NOTICE NO 110 (RE-2008)/2004-2009 dated 21-11-2008 , earlier it was read as under: Shipments from EDI Ports and Non-EDI Ports cannot be clubbed in one application. Port of registration for EDI enabled ports shall be any one EDI port of exports, as per the choice of the applicant. 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. 9. Added vide PUBLIC NOTICE No.151 (RE-2008)/2004-09, dated 26/02/2009 10 Substituted vide Public Notice No. 167 (RE-2008)/2004-09, dated 30/03/2009 , before it was read as:- In case there is no pending claim and there is no cash deposit towards recovery within 18 months of the issuance of duty credit scrip, then beneficiary applicant shall be declared defaulter and action under FTDR act should be initiated immediately.