Execution of BG/LUT in case of indigenous sources - DGFT - Trade Notice No. 15/AM16

GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY OFFICE OF THE JOINT DIRECTOR GENERAL OF FOREIGN TRADE C BLOCK, PMT COMMERCIAL COMPLEX SHANKARSETH ROAD, SWARGATE, PUNE 411037 Tele No. 020-24442783/24449598 Fax No. 020-24441577 Email : [email protected] Trade Notice No. 15/AM16 dated 09.06.2016 Sub: Execution of BG/LUT in case of indigenous sources As per Para 2.9 of Hand Book of Procedures 2015-2020, in case of indigenous sourcing Advance Authorization and EPCG Authorization holders have to execute BG/LUT to the Regional Authority as per Customs Circular No: 58/2004-cus dated 21/10/2004 as amended from time to time. This customs circular prescribes bond backed by 25% bank guarantee/cash security to the manufacturer exporters who are not covered under (a), (b), (c), (d) and (e) in the Para 3.1 of this circular (Subsequently the quantum has been reduced to 15% vide Customs Circular No. 17/2009-cus dated 25/05/2009 ). Trade feels that whomsoever has got his title as manufacturer exporter in the IEC/Authorization/RCMC authomatically gets covered under this clause (f) of para 3.1 of this circular. They are taking support of Public Notice of JNPT, which has limited application to JNPT alone. Attention of the trade is invited to Public Notice No. 58/2015-2020 dated 01/02/2016 , which clearly states at Point No. (viii) that Persons seeking any benefit from any authority, by claiming status as manufacturer exporter, have to prove its credence for the same independently to that authority So the firms, who have commenced manufacturing alone, will be eligible for bond backed by 15% bank guarantee/cash security. Other exporters who are not covered under clause (a) to (e) of Para 3.1 of Customs Circular No. 58/2004-cus dated 21/10/2004 , as amended by Customs Circular No. 17/2009-cus dated 25/05/2009 have to execute bond backed by bank guarantee to the extent of 100% Excise duty saved amount even though they may have their title as manufacturer exporter: . Incidentally, Para 9.32 of FTP also does not include an intending manufacturer although para 9.21 of FTP defines the intending exporter also as an exporter. (S. SASIKUMAR) JOINT DIRECTOR GENERAL OF FOREIGN TRADE